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OCTOBER 27, 1905
. The, Commoner. - 5
WHEN WILL NATIONAL BANKERS GET ENOUGH?
The asset currency plan is being vigorously
pushed just now, and Secretary of the Treasury
Shaw is conspicuous among its advocates. Mr.
Shaw- explains that our currency system is "non-
elastic, that it fails to respond in volume to
the change in needs of seasons and of localities."
Mr. Shaw says that we came nearer to a panic
September 30, 1902, than most people appreciate
and that an "elastic system" is necessary in order
to avoid panics in the future. .
Evidently Mr. Shaw does not like the term
"asset currency," because he says that his remedy
does not contemplate asset currency nor even
"emergency currency" in the popular acceptation
of that term. He would authorize "additional
national bank circulation," explaining "this
method involves the right of national banks to
increase their circulation in an amount perhaps
equal to 50 per cent of their outstanding volume
of government secured circulation, on which the
bank should pay a tax of 5 or (5 per cent during
the time it is maintained, and the government
in consideration of this tax should guarantee its
redemption." Mr. Shaw would eliminate from
the national bank note the statement, "This note
is secured by bonds of the United States," and
the additional currency would then be identical
with that based on government bonds.
Mr. Shaw may apply whatever name he sees
fit to this plan, but it is nevertheless asset cur
rency. He says that bankers would not take
advantage of their privileges under his plan ex
cept in cases of dire public necessity, and as .i
argument in favor of the plan he says "The
comptroller of the currency and the bank, issuing
the currency would alone know of its existence,
it would not e ivertise its existence or our ex
tremity, and I can scarcely conceive of condi
tions under which it would remain out sixty
days. It 'would be retired by a deposit of money
at any sub-treasury."
Secrecy in public transactions is not desir
able and it is not likely that many people will
be influenced to support this plan on the theory
that bankers would not avail themselves of the
privileges offered to them. While conceding to
thesT gentlemen a reasonable amount of public
spiritedness, they are not so wholly unselfish and
so entirely devoted to the public welfare as to
overlook these advantages. It is reasonable to
believe that if the national bankers were given
the privilege which Secretary Shaw hopes to con
fer upon them and which he now describes as a
precautionary method to bo employed at times
of threatened panics, it would como to bo the rule
wherein these extraordinary boneflts are offered
and .greedily accepted by the national bankers.
It Is strange that the men who had so much
to say concerning "50 cent dollars" when they
applied that term to the silver money are so roady
to advocate no-cent dollars.
And what docs Secretary Shaw's plan in
volve? Let us first look at the present-day
privilege enjoyed by the national banker. By
depositing government bonds ho can now issue
national bank notes to the par value of the bonds.
He thus obtains permission to issue these na
tional bank notes and use them as money while
at the same time he draws from the government
interest on the bonds deposited as security' for
those notes. If Secretary Shaw's plan were
adopted the national banker could issue addi
tional currency to the amount of 50 per cent
of the value of bank notes he had already issued.
For instance, say there are under the present
law $450,000,000 in national bank notes out
standing. As security for these notes $450,000,000
in government bonds have been deposited. These
national bankers aro drawing from the federal
government interest on $450,000,000 in govern
ment bonds and they are at the same time using
$450,000,000 in national bank notes for the pur
pose of drawing interest from the people. Secre
tary Shaw's plan once put into effect would au
thorize these bankers to issuo $225,000,000 ad
ditional bank notes, thus having outstanding
$675,000,000 in national bank notes, with $450,
000,000 in government bonds as their security.
A national bank circulation $450,000,000 of which
is secured by government bonds and $225,000,000
of which is mere wind!
But Secretary Shaw assures us that this ad
ditional currency would be absolutely secure be
cause the faith of the government would be bo
hind it. If '"memory is not at fault, Secretary
Shaw and his associates were wont to laugh at
the populist when he talked about "the faith
of the government" in connection with the Issue
of money.
But suppose some of these banks should
fail? Secretary Shaw's proposed tax would not
provide the redemption fund. From 1893 to 1904
inclusive, according to Bradstreets, we had 308
national bank failures. The assets of
these banks were of course not sufficient to pay
their liabilities. Suppose Secretary Shaw's plan
MR. BRYAN ABROAD
Mr. Bryan landed in Yokohama Saturday, Oc
tober 14. The Associated Press reports concern
ing his experiences follow:
Tokio, Oct. i5. William J. Bryan and his
family, who arrived at Yokohama Saturday, will
spend two weeks in Japan. They will make a
visit of five days to Tokio and Marquis Ito, presi
dent of the privy council, and Count Okuma leader
of the progressive party, will invite Mr. Bryan
to a dinner. The Japan-American society will
invite Mr. Bryan to address its members at the
Young Men's hall October 17. Count Okuma will
preside at the function.
Tokio, Oct. 18. William J. Bryan today ad
dressed an audience of about 10,000 persons, with
Count Okuma, the former foreign minister and
leader of the progressive party, in the chair.
His simple style and clear pronunciation made
his speech, which lasted forty minutes, intelligible
even to the younger students and called forth ap
preciative remarks. Later Mr. Bryan took lunch
eon with Count Okuma.
The municipality of Tokio has invited Mr.
Bryan to attend a public reception, but his time
here will not permit him to accept the invitation.
Tokio, Oct. 19. The American minister, Lloyd
C. Griscom, will present William J. Bryan to the
emperor on October 21. Huntington Wilson, sec
retary of the American legation, gave a luncheon
today in honor of Mr. Bryan. Viscount Aoki,
former minister of foreign affairs; Baron Kentaro
Kaneko, member of the house or peers, and M.
Sakatani, the vice minister of finance, were pres
ent. The last mentioned official is a pronounced
advocate of the gold standard. Mr. Griscom will
give a dinner to Mr. Bryan tomorrow. Marquis
Ito, president of the privy council, and Count
Okuma, leader of the progressive party, are ex
pected to be present.
PUSHING THE COMMONER'S CIRCULATION
Many Commoner readers are taking advan
tage of the special subscription offer In the effort
to widen The Commoner's sphere of influence.
Yearly subscriptions have been received in num
ber as follows: O. G. Whltcomb, Andover, N. Y.,
21; J. B. Sunderland, Spencerville, Ohio, 10; W.
D. Terhune, Trafalgar, Ind., G; Joel Stockberger,
Rochester, Ind., 7; B. D. Tull, Windsor, 111., 6;
M. M. Gaunce, Okmulgee, I. T., 6; Malachl
Bauter, Watertown, N. Y., 11; N. W. Culp, Alan
son, Mich., 6; C. J. Loy, Louise, Tex., 10; F. F.
Burns, Penn Yan. N. Y., 10; Otto Blievernicht,
Chicago, 111., G; John C. Rhodes, Akron, N. Y.,
6; W. B. Tull, Magnolia, Miss., G; Henry Moran,
Canton, 111., 7; M. A. Hoyt, Carroll, la., 6t H.
M. Shilling, Carthage, nil., 7; W. W. Baylor,
Scranton, Pa., G; James Novinger, Novinger,
Mo., 6.
The following named subscribers have each
sent five yearly subscriptions: L. I. Kingsolvor,
Powder Springs, Tenn.; M. C. Ufford, Ames, la.;
J. V. Phillips, Wellington, 111.; I. S. HenjUm,
Ellis, S. Dak.; Dr. B. L. Dawson, Chickasha, I..
T.; Joseph Roop, Frankfort, Ind.; Enoch Baker,
Huntington, W. Va.; John Finley, Dowagiac,
Mich.; F. H. Jackson, Winchester, Ky.; G. H.
Moore, Vassar, Mich.; Clinton Babbitt, Beloit,
Wise; H. W. Ford, Lodi, Calif.; Francis M. En
banks, Choctaw, Ark.r J. F. Neill, Hlgginsville,
Mo.; T. M. Elkins, Duffau, Tex.; J. F. Richard
son, Dongola, 111.; E. L. Durham, Bvansville, Ind.;
A. E. Lonsway, Tiffin, Ohioj J. J. Moore, Okmul
gee I T.; George J. Shelton, Windsor, Mo.;
James Stroup, Lorimor, Iowa T. W. Jackson,
Colony Centre, Calif.; J. A. Oxford, Elizabeth
town, 111.; G. W. Bains, Birmingham, Ala.; W.
S. McCollum, Eagleville, Mo.; C. C. Counts Ken
tuck, W. Va.; B. M. Nye, Santa Rosa, Calif.;
Frank S. Culp, Butler, Ohio; S. A. Porter, Hager
City. Wise; R. T. McDaniel, Republic, Mo.
Everyone who approves of the work The
had been In force and thoHO three hundred and
eight banks had issued under the government
bond plnn, say, $10,000,000 in nnllonal bank notes,
and then under Secretary Shaw's plan had taken
advantage of their 50 per cent privilege and Is
sued $5,000,000 additional. Would that have been
"sound money?" The advocates or the asset cur
rency will say Yes, becauso tho faith of the
government bolng behind tho wind currency It
would be "as good as gold," ana tho holders of
notes would not Buffer loss. But tho govern
ment would lose, and it would bo nocossary for
tho government to pay those note-holders out of
tho pockets of tho people
Tho logic of tho frenzied financier Ik fear
fully and wonderfully made. Ho objects to a
law which will rcstoro tho white metal to its
functions and remove from It tho disadvantages
under which that metal's price has decreased.
Ho docs this becnuso he says no Is opposed lo
"50 cont dollars;" ho wants "every dollar to bo
as good as every othor dollar;" lie wants "honest
money," ho is so opposed to tho government it
self issuing money that ho Is already clamoring
for tho retirement of tho good old greenbacks,
And ho does all UiIb claiming that ho Is zealous
for the integrity of our currency system. Yet ho
is pleading for tho establishment of a system
whereby individuals may be given tho privilege
of issuing a largo volumo of paper money for
tho redemption of which tho government and Ihe
government alono shall stand responsible. He
boasts that we have tho greatest of monetary
systems; that the money question has been set
tled and he objects to any further discussion of
that question; yet ho is so fearful that panfes
may occur becauso of a scarcity of money that
ho wants tho peoplo to confer upon tho national
bankers tho power to issue a considerable por
tion of tho national bank circulation upon mere
wind. Whero in 189G ho contondod that wo had
money enough, in 1905 ho is pointing with pride
to tho marked Increase In tho volumo of our mon
ey, and now he Is demanding a further Increase to
the extent, doubtless, of several hundred million
dollars In national bank notes, without any se
curity whatever for their redemption so far as
concerns the men who issue them and are given
them to loan to tho peoplo.
And, strange to say, with all them Incon
sistencies and absurditfes the frenzied financier
has convinced some well meaning people I hat
his plan deserves the support of patriotic, Intelli
gent citizens.
Commoner is doing Is invited to co-operate along
the lines of this special subscription offer. Ac
cording to tho terms of this offer cards each
good for one year's subscription to The Com
moner will be furnished In lots of five, at tho rate
of $3 per lot. This places the yearly subscription
rato at GO cents.
Any one ordering these cards may sell them
for $1 each, thus earning a commission of $2
on each lot sold, or ho may sell them at tho cost
price and find compensation in the fact that he
has contributed t,o the educational campaign.
These cards may be paid for when ordered,
or they may be ordered and remittance made after
they have been sold. A coupon is printed below
for the convenience of those who desire to par
ticipate in this effort to increase The Commoner's
circulation:
THE COMMONER'S SPECIAL OFFER
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Publisher Commoner. L am interested In In-
1 r creasing The Commoner's circulation, undde-'
LU biro you to .send me a supply oi subscription
cards. I agree to use my utmost endeavor to
If) sell the cards, and. "will rendt for them attbe.
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