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The
WILLIAn J. BRYAN, EDITOR AND PROPRIETOR.
Vol, 3. No. 38.
Lincoln, Nebraska, October 9, 1903.
Whole No. 142.
imiipunnmWMJW "'IM.'
Commoner.
DODGING THE ISSUE
On another pago will bo found an editorial
from the Register and Leader of Des Moines, la.
It ia reproduced because it present $ a good speci
men of the reasoning used to support an asset
currency. It will be noticed that the Des Moines
paper starts out with a denial that there "is likely
to be an asset currency measure enacted. It denies
that there is any expression of public sentiment
that would justify the expectation of the passage
of such a bill. It then suggests that congress is
likely to make provision for an emergency cur
rency. It will be noted that cue Register and
Leader avoids a general discussion of the prin
ciple and hides behind an exigency. It quotes,
however, with arprovaban argument made in be
half of an asset currency by tho United States In
vestor, and It is to A,-' argument that attention
is now directed. The Investor takes tho total
amount of assets and the total amount of liabili
ties of the national banks, and from that con
structs an argument in favor of a currency based
on assets. And note the argument. We are grave
ly told that there would still be a margin of $483,
000,000 between the assets and the liabilities, but
as the liabilities are $4,386,000,000, it would seem
that the margin of assets would only be a little
more ,than 10 per cent above the liabilities. Would
any bank bo. willing to loan a merchant $9,000 if
his total assets w,ere only $10,000? In loaning on
.real estate, the most permanent form of property,
.the money loaners . insist that the loffn shall not
be. more than two-thirds of tho present market
value of the property, and yet we are told that
an asset cu. y Is safe if tho ,,-,', tties are. near
ly 90 per cent of tho face valuo ol the assets.
The weakest point in this argument is that It
is based on averages, wherea-. the currency would
bo issued by individual banks. Nothing is more
deceptive than an "average." Those rho apolo
gize for any evil condition always hide behind an
average. If you point out to '-hem that an in
creasing number of people are being endangered
by a bad system, they tell you that "the average"
wealth of the United States is increasing. While
money is being taken from f.he many and put. Into
the pockets of the few, the apologists for the sys
tem use the average to retur . in figures what tho
poor lose in fact Those who study social and
economic conditions must consider not merely the
total accumulation of wealth, but the equity of Its
distribution. So, In considering an asset currency.
It is not sufficient to take the total assets of tho
banks, and thoir total liabilities, and insist that
there is a sufficient margin to permit the issue of
an asset currency (even upon this basis the mar
gin Is not sufficient to cover the dangers of a panic
or of an industrial depression), we must remem
ber that an asset curency is issued by individual
banks and tho .value of such a currency depends,
not upon the margin between the total assets of
all the banks and the total liabilities of all tho
banks, but upon the margin between this partic
ular bank's assets and liabilities. If a bank Issues
an asset currency and then its officials embezzle
the money, what is to become of the currency? A
few failures of this kind would soon throw dis
credit on the entire system and currency issued by
good banks would share the odium with the cur-,
rency issued by !md banks.
Tho present bank currency, whllo obnoxious
to democratic principles and gross favoritism to
tho banking element, has at least tho morlt of be
ing secure. Tho government holds tho bonds and
tho currency is therefore sao, but an asset cur
rency is not safo and Duld not be made safo for,
if the bank had to put up security tho very pur
pose of tho emergency currency would bo de
feated. If,. for Insjanc a bank had to put up any
kind of bonds it would have 'jo first buy tho bonds,
and probably at a premium, so that it would ob
tain in currency less money than it paid for tho
bonds. Such a currency could not, thoreforo, bo
of any assistance in rn onorfency. If the cur
rency is unsecured it might possibly relieve tho
bank in ono way, but it would be almost sure to
embarrass It in another, for wr-'le it might give it
moro ready money today it would be likely to de
prive it of deposits tomorrow.
The Des Moines Register and Leader is wise
in avoiding any general discussion of the asset cur
rency, for it cannot bo defend' d, but it is a little
inconsistent to dodge the question itself and, while
protesting that the enactment of an asset currency
is improbable, yet at tho same time presont by
indirection an argument in favor of such a depart
ure from sound finance.
Legitimate Banking.
The Wall Street Journal accuses Mr. Bryan of
being opposed to banks, and then It proceeds to
quote Daniel Webster on the usefulness of banks.
The trouble with the Wall Street Journal Is
that it forms its opinions without regard to facts,
and then inflicts those opinions upon the public.
Mr. Bryan is not opposed tj banks, and nothing
that he has ever said can be tortured into support
of the Journal's statement Mr. Bryan is opposed
to banks of issue, and in that position he has
honorable company. Whether Daniel Webster can
be included in that number is not a matter of vital
importance, but it is certain that Thomas Jeffer
son and Andrew Jackson were among the number
of those who opposed banks of Issue, and they are
quite as good company, at least from a demo
cratic point, aa Daniel Webster and the Wall
Street Journal.
The democratic party is not opposed to banks
of deposit and discount, nor is it opposed to tho
use of credit There Is no reason, however, why
the government should loan the people's mney to
the banks and thus put tho national treasury under
the control of the financiers.
In another column will be found some reasons
why The Commoner opposes tho Aldrtch bill and
bills of that kind. If the Wall Street Journal de
sires to treat the matter In a candid and honest
way, let it answer the objections to the Aldrlch
bill and not bolster up a bad cause by misrepre
senting the position of those who are opposed to
Wall street's financial policies.
JJJ
The postoffice department Informs us that an
unusually large number of dead letters were left
undelivered in tho dead letter department last
year But thib may not be an indication of grow
ing carelessness on the part of the people. It may
be an indication that some of the employes were
too busy dong work on "side lines."
THE ALDRICH BILL
To Secretnry Shaw: You are quoted as having
expressed yoursolf In favor of tho Aldrlch bill or
of somo measure of like character. Tho object of
this bill 16 to onnblo tho government to deposit In
tho national banks a much larger sum than it has
been in the habit of depositing. It has been esti
mated that according to tho provisions of the
Aldrlch bill something like three hundred millions
of government monoy could bo deposited with var
ious national banks. Notwithstanding tho fact
that the republican nationnl platfor.n of 1888 con
demned tho loaning of tho government's monoy
"without interest to pot barks," you have loaned
more money to pot hanks without Interest than
any formor secretary of the treasury, and tho pur
. poso of tho Aldrlch bill is to still further increase
these loans.
There are cerLiln objections to tho Aldrlch
bill, and you ought to bo prepared to meet them
beforo you urgo such a measuro upon congress.
jTh tho first pmco tho loaning Of government money
to the banks is an act of favoritism. The secre-
tary of tho treasury has to select the banks.
Whether he selects justly or unjustly Is a ques
tion which tho public cannot pass upon, because
it has not tho facts beforo ltIt is a fact that
ono of tho Now York city banks urged Its claim
to consideration on tho grornu that its directors
rendered valuable assistance to tho republican
party In tho prcceeding campaign. Tho power of
tho government to thus reward political friends
and to withhold deroslts fror.. political opponents
is a tremendous power 'n tho hands of an ad
ministration that is disposed to uoo it for per
sonal or party adva"fago. What has happened
sinco 1888 to V . ko j loaning of government
monoy to pet tanks leas reprehensible than it was
then?
, 1 Second Tho leaning of fovrnment money to
. tho banks makes the government dependent upom
tho banks. If it loans a large sum (as it is doing
now) it is hardly at liberty to withdraw ths mon
oy, for tho withdrawal of a considerable sum
would disturb business and threaten a panic,! if
the government goes into tho business of loaning
money to tho banks it will bo difficult to with
draw deposits, and what is therefore regarded as
an emergency deposit is ve: aot to guw Into a
permanent deposit
Third By loaning the government's surplus
to tho national banks these powerful institutions
are given a pecuniary interest In tho maintenance
of high taxes and in the ccfjgction of large rev
enues, for the moro money tho government col
lects tho more It has to depositJUt is evident
that every banker who has a largo government
deposit is permanently interested in preventing
any reduction of taxation, hewever onerous the
burden may become to the people. Can we afford
to array so potent an Interest against a reduction
of taxation? Is it not difflcult'enougb now for ths
taxpayer to secure a hearing? Will it not je more
difficult when the national banks, profit largely
by heavy taxation? Can the people afford to use
their own money to hire the national banks to
work against them.
T Fourth The Aidrich hill provides for the pay
ment of Interest at tho rate of 1 per ccntj Some
opposition has been expressed to this provision,
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