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Editorial
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WE S$g®flrtl@ AN
W66K IjllulLLg
Dec.23,1913
How the Government Aids Speculators and Hurts Farmers.
In the new Postal Savings Banks the deposits now amount
to more than $36,000,000. The Government pays only 2 per
cent interest on this large sum.
■A deposit as small as 10 cents is received by the Postal Sav
ings Banks, and no one is allowed to deposit more than $500.
More than 500,000 persons have thus left their savings with
the Government AT A LOWER INTEREST RATE THAN IS
PAID BY ANY OTHER GOVERNMENT IN CHRISTENDOM.
What does our Government do with this money? Does it
use these wise pennies of thrifty, patriotic people to aid the in
dustry and the production of the country, THE FARMS, FOR
INSTANCE, and so benefit the small consumer?
Not at all. The Government, in the Postal Savings Bank
Law, does not act as if the consumers of the country, or even the
postal depositors, were worthy of any special consideration. It
acts as if the interests of private bankers were of the first con
sideration or paramount in importance. Postmasters are re
quired immediately to redeposit all savings received by them in
the nearest “solvent bank willing to accept such deposits.” And
although part of these deposits may afterward be invested in
United States bonds, the banks MUST ALWAYS BE AL
LOWED TO KEEP THE GREATER PART, OR 65 PER CENT
OF THE TOTAL DEPOSITS OF POSTAL SAVINGS.
What does the national bank do with the money? It is for
bidden to loan any of it to any farmer upon the security of his
farm, no matter how good that real estate security may be.
But the bank is free to loan it to other customers, or to
send it to any “Central Reserve City” (New York, Chicago and
St. Louis), where the money is used for the most part to pro
mote speculative operations in the Stock Exchange or grain pit.
The Government of Germany has given direct aid to loan
associations making a specialty of lending money to farmers on
improved farms at 4y 2 per cent interest.
The Government of France helped to create a financial lend
ing agency to furnish money to French farmers at 4% per cent
interest.
Even the Government of England, traditionally cruel and
unjust to Ireland, has provided a Royal Commission and an Irish
Land act to improve the farm conditions of Ireland, providing
money for the farmer at about 3y 2 per cent.
But in the United States the Government takes the small
savings of the people, pays 2 per cent for them, and turns them
over to national banks expressly forbidden to make loans to
farmers.
THE AMERICAN FARMER IS FORCED TO PAY AN
AVERAGE OF 8i/ 2 PER CENT FOR THE MONEY ESSEN
TIAL TO HARVEST HIS CROPS.
The six million farms of the country carry an average debt
of $1,000. They support twenty million farm workers. They
feed the hundred million Americans. And they pay an EXCESS
INTEREST CHARGE OF 210 MILLION DOLLARS a year
alone (8V2 per cent instead of 5 per cent), while the reserves
of all the 7,473 national banks of the country, amounting at the
last Comptroller’s statement to 240 million dollars, are deposited
under the law, in Central Reserve Cities for the benefit of specu
lators in stocks and bonds and to finance new trusts.
Is there anywhere such a perversion of government as this?
Was any government ever guilty of more monstrous favorit
ism than the United States Government has long shown to the
speculator and the banker, who by themselves create nothing,
over the toiler and the actual producer, who by themselves'pro
duce everything that we eat or wear or require for our health
or well-being?
Was there ever a monarchical government in the world so
heartless and short-sighted as the Government of our own glori
ous country, when it takes the savings of poor people, who trust
the Government more than the banks, and then uses those sav
ings to show that the Government itself trusts the banks more
than the people, and is willing that the banks and speculators
shall prosper even at the expense of the people?
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Government Ownership of Telephones and Telegraphs Desirable and Inevitable
Eight years ago almost to a day, Representative William
Randolph Hearst introduced in the Fifty-ninth Congress “A bill
to enable the United States to acquire, maintain and operate
electric telegraphs,” etc. The bill very carefully provided a
specific method of fair, legal purchase of “any or all existing
lines,” and their operation for the benefit of the people as the
postoffice is.
Rates were to be adjusted to provide a reasonable profit
to pay off the government bonds issued at popular subscription
to buy the telegraph or telephone systems.
A stand-pat Republican Congress regarded Mr. Hearst’s bill
as dangerous, if not revolutionary.
It was neither dangerous nor revolutionary, nor impractica
ble, but only NEW—like the Panama Canal, election of United
States Senators by direct primaries, income tax, and so many
other things that Mr. Hearst advocated long in advance of their
realization.
Mr. Hearst’s bill of EIGHT YEARS AGO was reintroduced
in substance in the Sixtieth and Sixty-first Congresses.
TWO YEARS AGO, Postmaster General Hitchcock, a Re
publican, recommended it in a report to President Taft and to
Congress.
TO-DAY a Democratic Postmaster General makes the
recommendation the principal feature of his annual report.
President Wilson approves it in principle, although he has
not passed on any bill in detail.
Representative Lewis, of Maryland, to whose energy and
persistency we owe the parcel post law, is at work on the bill
for early presentation to Congress. It will first be submitted to
the Democratic caucus.
WHETHER APPROVED THIS WINTER OR NOT, IT IS
SURE TO BECOME LAW.
The telegraph, the telephone, the mail, owned by the gov
ernment, all operated together, united in one system.
The United States has thus talked government ownership
for eight years, but England has—since Mr. Hearst’s bill was in
troduced in Congress—actually accomplished it. The method
adopted was substantially that suggested in the Hearst bill. The
Government of Great Britain took possession of all the telephones
last year.
Competition is impossible between telephone companies.
There is no more excuse for two telephone or two telegraph
companies in the same place than for two postoffices side by side.
Duplication of offices is wasteful. The telephone now reaches
more remote and more numerous places than the telegraph. The
postoffice is even more universal. Every postoffice can be the
communicating nerve center of every community—with the *
choice always at hand of the slow mails, the quicker telegraph or
the telephone capable of annihilating both time and space.
This combination is inevitable. Its realization is much more
difficult now than it would have been when Mr. Hearst first advo
cated it, because much more expensive. Representative Lewis
estimates the cost at NINE HUNDRED MILLION DOLLARS.
Where will the money come from? All the money centers of the
world could not furnish so great a sum at the present juncture,
even for the richest nation of the earth.
The development of the telephone has been pushed in the
past decade by men of great genius who have spent more than
$500,000,000, and made it as easy for the New York business '
man to sit at his desk and talk to Chicago, Kansas City, or Den
ver, 2,000 miles away, as to the man in the next room.
The chief telephone system now has 50,036 stockholders,
and the stocks and bonds outstanding amount to $637,590,278.
The independent telephone companies not identified with the
American Telegraph and Telephone have stocks and bonds
amounting to $322,965,588 more, according to the Census figures.
The total, i>l,010,555,836. of the telephone securities alone (ex
cluding all telegraph lines) exceed the total present bonded debt
of the United States, which on December 1 was $966,823,490.
The rate charged for telephones in New York City ($48
minimum for private house or office) is more than in London
(£6 or $30), but is LESS than in Paris (400 francs, or about $80).
London and Paris telephones are now both under government
control.
The problem of administration is as certain to be overcome,
in time, as the obstacle of first cost. Our fleetest battleships are
those built by the government, not by the private shipyards, and
our Panama Canal could not have been finished under private
engineers, even at government expense. It took a government
engineer to do it.
The government can employ or train another VAIL or
BETHEL, and it will in time, for government ownership of all
telephones and telegraphs is BOTH DESIRABLE AND
INEVITABLE.