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CURRENCY REFORM.
REAL INWARDNESS OF THE CRY OF
THE SMOOTH FINANCIERS.
Infnmr *• MeClerr Bill. WTM^h
It* Snpportern Will K* DUonm.
“The Tlfrrrai Han Come Ilnelf Wllh
1 All Her Whelpe.”
Senator Henry Wilson, Feb. 18. 1862.
referred to the efforts of onr govern
ment, then in peril, to relieve its finan
cial distress through the legal tender
act in theee words, “It is a struggle
bet ween the brokers, jobbers and money
changera on the one side and the people
of tiie United States on the other. ’’
Hugh McCulloch, in his report ns
comptroller of the currency in 1864,
wrote, “Hostility to the government
has been as decidedly manifested in the
effort that has been made in the com
mercial metropolis of the nation to de
preciate the money hs it has' been by
the enemy in the field. ”
William Pitt Fessenden reported, as
secretary of the treasury in 1864, that
“the solution of the problem (the vio
lent fluctuations in the price of gold)
may be found in the unpatriotic and
criminal efforts of specuh tors to raise
the price of coin regardless of the in
jury inflicted upon tho country or de
siring to inflict it. ”
Thomas Jefferson wrote to John Tay
lor in 1816. “1 sincerely believe with
you that banking establishments are
more dangerous than standing armies. ’
When Jackson protested in his mes
sago of 1882 against the “exclusive
privileges, which undertake to make the
rich richer and the potent more power
ful. ” Nicholas Biddle, president of the
United States bank, wrote “As to the
president's message, 1 am delighted
with it It has all the fury of a chained
panther biting the bars of his cage. It
is really a manifesto of anarchy, snch
as Marut or Robespierre might have is
sued to the mob of the Faubourg St
Antoine, and my hope is it will con
tribute to relieve the country from the
dominion of these miserable people. ’’
The United States hank went down
under Jackson’s attack, but Benton
well prophesied from tire floor of the
senate “The tigress has been driven
from her lair, but she has not been
killed. She will come forth again sur
rounded by all her whelps. ”
These are the utterances of earlier
statesmen who attempted to defend the
people against the aggressions of those
who. as Jefferson said in 1816, “have
an interest as distinct from that of the
community as that of drones is from
that of bees. ”
There yet remains a Democratic
party which is pledged to this work.
There are yet public men willing to de
vote themselves to the same defense of
the popular rights, even though they
realize that there was no idle threat in
the utterance of the president of the
New York State Bankers’ association,
April 27, 1895, “The politician, high
or low, who today turns from the
straight course of Bound money and the
gold standard stabs dead once for all
his every chance of political success,
especially if he wants to be president.”
The money forces are now organized
and have their headquarters at Indian
apolis, where tho Wall street dominion
will not be so apparent. They have a
large establishment devoted to propa
ganda work and, though a voluntary
association, have had sufficient influ
ence to secure recognition in a special
message of President McKinley to con
gress. They have their own representa
tive at the head of the United States
treasury, whose special mission is dem
onstrated by the fact that he was ap
pointed by a Republican and protec
tionist president when he was a free
trader and called himself a Democrat
It is common knowledge that President
Cleveland was urged to appoint the
same gentlemen to the same place in
1898 What Secretary Gage’s miesion
is he himself has made clear He calls
it “currency reform,” a euphemism for
“currency revolution. ” The sum and
substance of this so called reform ap
pears in the secretary’s testimony before
the banking and currency committee,
the culmination of which may be found
in the banking measure now pending
before the house of representatives
(house bill No. 10,289).
This bill proposes to retire all govern
ment paper and to place our currency
system under the exclusive control of
the united banks As the gold standard
defenders have dubbed their ruinous
product “sound money,” so they now
put forward this cataclysmal scheme
under the innocent title “currency re
form. ” In no Republican newspaper,
in no utterance of Republican leaders,
in the late campaign has there been
even an inadvertent reference to this
banking bill. Its existence is ignored,
and “currency reform” is its synonym.
In the recent monetary debate at Oma
ha two members of the banking and
currency committee of the house were
put forward to oppose government is
sues of paper—Mr McCleary, who has
given his name to tho bill, and Mr
Fowler, whose name the bill atone time
bore. Under repeated challenges and
tannts these gentlemen declined to dis
cuss their own measure or even to
mention it That such silence was pre
concerted needs no proof
i In the recent political campaign no
champions or this Tanking measure sp
peared on the Republican platform, al
though challenges were issued from
Democratic quarters to indorse or re
pudiate the bill now pending before
congress. In Massachusetts it was de
liberately and repeatedly charged by
Democrats that it was the Republican
purpose to smuggle this great measure
through the campaign without inform
ing the Republican constituency of its
nature Yet no Republican senator,
congTeeawran or newspaper would speak
or publish a line concerning the bill
Yet, with Republican success in the
election, the same newspapers are teem
ing with surmises whether the presi
dent will call an extra session of con
gress lor the sole purpose of securing
“currency reform. ”
Plainly, a matter which is of suffi
cient importance to call for an extra
session of congress is of sufficient im
portance to be explained to the voters.
Yet at the end of a congressional cam
paign ninoty-nine-one-hundredths of
the people are ignorant of the contents
and purport of the measure which con
stitutes “currency reform,” in the ad
ministration’s meaning of the phrase
It ought, indeed, to be apparent now
that there was a preconcerted plan to
keep the voters in ignorance of the new
banking scheme, and one need not go
far to find the reason Nine-tenths of
the people, regardless of party, would
oppose this measure if they understood
it. * * *
If the bill passes the Fifty-sixth con
gress. its passage will be a deliberate
deception of the Republican voters
There is no line in the Republican plat
form of 1896 which foreshadows such a
measure. The treasury is filled with
gold to repletion; the revenues will be
ample when the war expenditures cease;
the treasury balance is too large; the
gold standard is established to the ut
most limit of its devoteek Why, then,
should there be any “currency re
form V They who ask this question are
uninatructed. From the very beginning
the gold standard has covered the plan
of the bankers to obtain absolute con
trol of the currency eystein of tho Unit
ed States. Secretary Gage is the prod
uct of that plan, and the president
must reckon with bis political obliga
tions incurred without the knowledge
or consent of the people The Indian
apolis movement is the money power
organized with a purpose. It is “the
tigress with all her whelps” come for her
prey, as Benton promised. The charter
of the United States bank was a small
matter compared with this. That bank
was one of many; this is a matter of
many in one. OhV'whole currency sys
tem is to be taken from the control of
the people, and the united banks are to
assume command of it. They propose to
maintain the gold standard and gold
redemption of their own notes, to regu
late the rates of interest, to control the
volume of money, and all this without
responsibility to the people.
This is a stupendous plan, bnt it can
not now be misunderstood. The house
bill No. 10,289 was framed at request
of Secretary Gage, and the Indianapolis
authorities, in an address to the busi
ness men of the United States, say
“The recommendations (of this bill) in
clude the features of reform sought by
the monetary commission in its report.
Every advocate of change in our cur
rency laws and every citizen and busi
ness man who seeks safe and stable
things in finance should immediately
recognize the vital importance of com
plete support of the measure.” The
great banks of New York and their as
sociates are afteT a great prize. The
Republican leaders see the danger of
yielding to their demands, and no doubt
there will be a contest within the ad
ministration ranks- We await the re
sult.
The essential points of the proposed
banking measure are as follows: Pro
vision is made for a division of issue
and redemption in the treasury, which
is to take charge of redemption and ex
changes of money with funds delivered
for the purpose by the secretary of the
treasury. All obligations of the govern
ment are to be paid in gold, and even
the 460,000.000 silver dollars are made
redeemable in gold by the treasury on
demand.
It may be noted here that the claim
of relief to the treasury from the so
called “endless chain’’ of note redemp
tions must be stamped as a mere pre
tense, when one of the first provisions
of the bill is an addition to the govern
ment’s redeemable obligations of silver
dollars amounting to more than the
total of the United States notes and
treasury notes combined. This first
step, then, increases from $445,000,000
to the euormous total of $909,000,000,
the liability of the treasury to redeem
in gold.
It will be found upon critical exam
ination that the alleged retirement of
the United States notes is really only a
substitution of other notes, identical
with the old notes, with the simple ad
dition of a bunk’s promise to redeem
the notes on demand in gold. If the
banks should be unable or unwilling at
any time to redeem these substituted
notes, they will be thrown upon the
government treasury for redemption,
just as the United States notes may
now be presented.
The note bo issued as a substitute for
the United States note is called a “na
tional reserve” note, identical in form
with the greenback, but containing the
gromiae of the national bank to which
{he note ia issued to pay the same In
gold on demand. These “reserve" notes
are issued to the banks in exchange for
a like amount of United States notes,
delivered by the bank to the treasury
A 5 per cent fund is deposited by the
banks to secure the redemption of these
“reserve” notes.
It is apparent that this substitution
is a mere subterfuge, as the govern
ment remains liable for the redemption
of all the reserve notes if the banks re
fuse to redeem them. As such refusal
would occur at any time when gold is
scarce, the government would be com
pelled to assume its liability at the
worst possible moment Bond sales at
such a time would be at a sacrifice, and
perhaps sufficient gold could not then
be obtained at any sacrifice. At the
same time the repudiating banks could
throw silver upon the government for
redemption Thus in the final analysis
the government’s present obligation to
redeem currently $445,000,000 in notes
is changed to a liability to redeem
$900,000,000 in a time of gold famine.
The scheme reaches the summit of folly
But the price to be paid for the
bank’s indorsement of the United States
notes is even more to be deprecated.
The banks are to receive the privilege
of issuing 80 per cent of the amount of
their capital in notes secured only by
the assets of the bank. A 5 per cent
“guarantee fund” for these so called
“currency” notes is deposited in gold
in the treasury, but as this fund is only
applicable upon default of the bank to
pay gold for its notes such a deposit
cannot be called “security. " It is mere
ly a stored asset of the bank, to be ap
plied to the note in process of liquida
tion. Other banks may be assessed 1
per cent in a single year toward this
security fund, but in case of a general
suspension of gold payments by the
banks such a levy would not raise an
appreciable amount toward the redemp
tion of the hundreds of millions of un
secured bank currenoy
It should be said in passing that the
present bond secured note is to be con
tinued for a time, but as the bond se
curity may be entirely withdrawn in
eight years, such a temporary provision
is not worth discussing in connection
with the ultimate and permanent con
ditions.
In concrete form the note issning
power is as follows: A bank with #ll,-
000,000 capital may deliver to the
treasury $400,000 in United States notes
and receive $400,000 in reserve notes
It may then have $BOO,OOO in circula
tion notes and operate with $1,200,000
in notes, together with its remaining
capital of $600,000, a total of $1,800,-
000. Their $1,200,000 of notes must be
paid on demand in gold. If such pay
ment be refused, the bank is to be
placed in liquidation It is apparent
however, that no such paocess is possi
ble in case of a genera] suspension of
gold payments, as the concurrent liqui
dation of all the banks, when the money
of these banks constituted the nation’s
currency, would create widespread ruin.
The limit of unsecured circulation, not
subject to special tax, is 80 per cent of
the bank’s capital. The present capital
of the national banks is $640,000,000
But state banks are invited by the bill
to enter the system. Such banks have a
reported capital of $325,000,000, thus
presenting a capitalization of nearly
$1,000,000,000 and note issuing power
of $800,000,000 The surplus and un
divided profits of such banks now
amount to over $500,000,000, which
may be capitalized. Thus $1,000,000,-
000 of note issuing power may fairly
be contemplated. * * *
Furthermore, it is familiar that the
process of attracting money by raising
the rate of interest means only a reduc
tion in the price of goods. Thus our
staple industries must pay the cost of
the needed gold in products. But if this
process were otherwise possible it is only
conceivable when the of the coun
try are combined into a practical mo
nopoly. Thousands of banks, acting in
dependently, will destroy any interest
rate. If they can be compelled to con
form, such controlling force is the real
ization of a banking trust.
Such indeed seems to be the necessary
result of this banking measure, if it is
not its main purpose. The bill provides
for the establishment of branch banka
It is clear that such a provision is a
roving commission of piracy against
the small banka They must obey the
orders of the master banks under pen
alty of competition from the latter,
with their large capital and deposits to
back them. The very authority to enter
any community with a branch would
give the great banks the power speedily
to convert the small banks into
branchea
Another provision of the bill is equal
ly effieacioua Each country bank is
compelled to have a redemption agent
in the clearing house city of its district,
and its notes cannot be paid over the
counter of a bank in another clearing
house district unless the issuing bank
has a redemptive agency in the district
Thus, if a local bank desires the gen
eral circulation of its notes in the coun
try it must through its own clearing
house bank secure agencies throughout
the country. Its notes will thus remain
in general circulation and in bank re
serves in ordinary times. But if any
bank should offend the great banks its
notes could be collected at once and
sent in mass for redemption. This
(Continued on Page 4.)
Gainesville, Jefferson & Southern Railroad.
SAMUEL C. DUNLAP, Receiver.
Time table No. 12, taking effect 5. 50 a. m., Jan. 6, 1899,
MAIN LIME
NORTH BOUND. Between Social Circle BOUND,
Read Downward an d Gainesville. Read Upward.
First Class. " First Class.
93 91 8s 83 81 STATIONS. 82 84 86 j 92 94
x r>y M ." y n e" y % “*>'
only only Sun Sun Sun j • Sun Sun Sun only' only 5 ’
D am a m am pm Lv. Ar. am pm Ip m am
2 1100 74511 00 450 SOCIAL CIRCLE 9153306 05 c, •>„ £
2 Hl5 80211 20 505 GRESHAM 855 3 10 5 45 9 ,r. 2
3 1130 820 1140 525 MONROE. 835 250 5 c D
5 BS3 620 Us
-811 45 8551205 5 43 CAMPTON 815 3 30 4 55 „ 5
P 1168 9151220 5 57 BETHLEHEM BuO 216 4 35 ->o a
—l2 15 93512 40 615 WINDER 745 300 4 15 807-^-
9 55 l 50 7 40 12 25 4 04
S7 12 30 10 10 202 633 735 I 3 07 3 50 754 88
daily 1345 J' 233 6 4 HObCHTUN 710115033 0 7 39 “~
ex 108 11 10 2507 08 HICKORY IREE. 645u25 3 0 5 719
Sun ~
bun
a m -
640 1 15 11 15 300 715 BELLMONT 640 11 20 3 00 7 14 tTo
645 1 20am 306 720 KLONDIKE 635 11 14pm 7097 05
650 125 310 725 CANDLER 630 11 10 * 7 05 700
710 145 335 745 GAINESVILLE. 6 10 10 45 6 45 640
m P m 'P m Ipm Ar. Lv. a m ami ain pm
87 19 fBSTB3TBi i— j82j84i86 192,88
No. 82 will run to Social Circle regardless of No, 83, but Respect
ing No. 85.
No. 84 will run to Social Circle regardless of No. 81,
No. 83 will run to Winder regardless of No. 84, but Rerp’t’g No. 86.
No. 84 will run to Winder regardless of No. 83, but Resp’t’g N0.’85.
No. 92 will run to Social Circle regardles of No. 91.
No. 84 will approach Belmont with traiu under full control, ex
pecting to find No. 85 using main track.
JEFFERSON BRANCH.
Time Table No. 12, taking effect 5.50 am., Jan. 6, 1899.
NORTH BOUND Between Jefferson and SOUTH BOUND
Read Downward Bellmont. Read Upward.
First Class. First Class.
89 STATIONS.
Dally Daily Daily Daily
except except e xcept except
Bnn Sun Sun sun
P. M. A. M. Lv. Ar. Pi M. A mT
310 550 JEFFERSON 800 12 10 I
235 615 PENVERGRASS 788 11 40
300 640 BELLMONT 715 11 20
PM. AM. Ar. v.P. M. A. M.
89 I 87' 1 88 j 90
No 90 will run to Jefferson regardless of No. 89.
No. 90 will wait at Belmont until 12 30 for delayed No. 94 from
Gainesville.
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