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FAPRIL 7, 1905
.,
tho legal restrictions of any one of
them. Llko electricity, tho exact nature
or a trust' does not admit of rieid dfifu
iiition, hut it is a force which can only
he exerted in conjunction with finan
cial organisms, which It joins and yet
ireieases, adds powers to, and exempts
nrfr::? ,t.ua suppose
?ii.r Jv "luue into a "trust'
this human combine hw.nmia f
.free from the hondanre of mntroi. o,i
I the sensessees out of the. back of its
Eoeaa ana passes In and out through
solid walls. It has all tho nnmiiin,i
I'strength and more than the two men
f uuu aua mi tneir numan privileges and
'possessions, but it evades nature's laws
a iu muivmuais ana tho laws of man
both as to individuals and other mate
rial things.
"To put the description in still an
other way, a 'tfust' is an institution
which endowa itself with the right to
use any or all of the seven institutions
of the people as the people use them
uut au muuu mat its user derives from
the institutions the benefits the people
intended for themselves, and yet is
immune from the legal consequences of
appropriating such benefits. Two or
more men make a 'trust' by combining
acquiring the control of an insur
ance company, a trust company, and a
savings bank. The new organization
is all of these institutions, performs the
functions of all of them, yet can legally
do with their incomes, capital, and sur
pluses things which, from the very na
ture of each, none of the institutions
is allowed to dothe new organization
is all of these institutions until the law
attempts to bring it to book; then it
so evades being any of them. The trust
company is empowered to lena money
on speculative ventures which the in
surance company vast accumulations
may not do, so the 'trust' lends the is
suance company's vast accumulations
and the savings bank's hoard through
the trust company with great profit
or tremendous, loss and enjoya immun
ity from the consequences which should
follow such disobedience of the law.
Moreover, when the trust company
shows a profit the 'trust' appropriates
it, and when a tremendous 103s" is sus
tained the insurance company or the
savings bank must bear it.
"An illustration: A, B and C form
a 'trust.' A and B are president and
controller of a savings bank and an in
surance company respectively. They
organize a trust company with $1,000,
000 capital, of which the insurance
company furnishes the majority; they
then elect C president and controller
of the trust company, and make him
their associate cr a dummy. The trust
company receives $5,000,000 of the peo
ple's money on deposit. The insur
ance company deposits $5,000,000 of its
surplus fund3, and the saving hank
$5,000,000 more. The 'trust' then pur
chases for $5,000,000 the stock of an
industrial corporation. It borrows the
$5,000,000 and an additional $5,000,000,
which represents its own first profit,
from the trust company through irre
sponsible dummies, depositing the in
dustrial stock as collateral. The 'trust'
next causes the trust company to issue
bonds for $15,000,000. These bonds are
based upon and secured by nothing of
worth but the stock. The trust com
pany offers these bond3 for sale. The
insurance company buys $7,600,000 of
the bonds and the trust company,
through dummies, tho other $7,500,000.
By tho operation so far the 'trust'
shows a profit of $10,000,000. After
making this profit and the true worth
of the bonds , becoming lcnown, these
decline back to the original worth of
the stock upon which they are based,
$5,000,000, and there is the tremendous
loss of $10,000,000 made. The trust
The Commoner.
AVwiajnExvipHpH3n7i3
IB
company Tjusts and there is a loss to
? eJY8 t0rs of O'MWO. This loss
is divided as follows: $3,333,000 to tho
savings bank, $3,333,000 to tho insur
ance company, and $3,333,000 directly
tT3 PPle' ss tho small amount
which will bo recovered from the stock
holders. (These losses will bo affected
ta an unimportant way by the $1,000.
000 original capital.)
"In. this case tho 'trust' has dono
nothing for which those responsible
f?ri C- ,b? held civilly or criminally
liable. Neither has the insurance com
pany, the savings bank, nor the trust
company, and yet if there had been no
trust and any one of the three institu
tions had made the loss directly
through Its own actions the officers of
that institution Wmilrl Vioirn V --
illy and perhaps criminally held re
sponsible. "The utility and convenience of the
'trust' having been demonstrated it
became a popular instrument for finan
ciers desiring to accomplish all manner
of illegal purposes. Especially was it
an- apt tool for the 'system' which was
then perfecting its control of the peo
ple's institutions. The owners of rail
roads running through the same terri
tory finding cumbersome and hamper
ing the restrictions with which the
community they served had safe
guarded its interests formed 'trusts.'
Straightway there were valuable re
sults the combination was emanci
pated from the regulations which had
bound its individual members; compe
tition was eliminated and rates were
raised.
"As time went on new 'trust' possi
bilities were discovered and other in
stitutions linked upcorporations of
all kinds, insurance companies and na
tional banks and savings banks, were
brought together for the benefit of the
'system' and the detriment of tho pub
lic. The end of the trustification of the
institutions of the nation Is not "yet,
but the people are to be shown a way
by which the plundering process can
be reversed and through which they
can make their freedom complete and
absolute by the complete and absolute
enslavement of the 'system' itself."
"We will take five national banks in
different parts of the country, "each
having a capital of $200,000, and de
posits of $2,000,000. One is in the farm
ing district of Kansas; another is in
Louisiana in a cotton district; a third
is in the orange groves of Cali
fornia; in the mining district of Mon
tana i3 a fourth; the fifth is in the
logging and lumber country of Maine.
These $10,000,000 of deposits represent
savings earned by the type of men who
have made America what she is. and
who laugh when they read in their lo
cal papers: 'Panic m Wall street;
stocks shrink a billion dollars a day.'
'Fools and their money are easilv
parted," they say, 'but Wall street gets
none of our honestly earned money.'
Now the officers of these five banks ara
honest men and they know nothing of
tho 'system,' yet the day of the panic
they all telegraph to their Illinois cor
respondent; the big Chicago bank,
Loan our balance, $200,000, at best
rate.' That day the Chicago bank with
Similar telegrams from forty-five other
correspondents In various parts of the
country, wires its New Yonc correspon
dent, the big Wall 3treet bank, 'Loan
our balance, $2,000,000, at best rates.'
"Thereupon the great New York
bank sends its brokers out upon 'the
street' to loan on inflated securities
of one kind' or another which its offi
cers, the votaries or tne 'system,' Had
purchased in immense quantities at
slaughter prices the millions belonging
to the Chicago bank and tc other cor
respondents of Jts own in "Cincinnati
and Omaha and St. Louis and other big
cities. The decline is stayed, and then
the world learns that the panic is over
and that the stocks, of which the- peo
ple have been 'shaken out' to the ex
tent of a billion dollars, have recov
ered in a day $500,000,000 of it, and that
probably in a few days more will re
cover tho other five hundred million.
Who has recovered this vast sum? Tho
people who had been 'shaken out?'
No, indeed! The votaries of tho 'sys
tem' havo made it they and tho fren
zied financiers whoso haunt is Wall
street, and whoso harvest Is in such
wreckage.
"Tho part that the five little 1mnks
innocently played In this terrific rob
bery was unimportant. What is Im
portant Is that it was the funds of
their depositors and others like them
which tho 'system' used to turn tho
stock market and make an Immense
profit out of the recovery of values.
It Is true tho banks received but two
and one-half or three per cent for the
uso of their balances, and their officers
would scorn the suggestion that they
had put any of their money in jeopardy
In a Wall strcot gamble. But what I
havo outlined happened, and has hap
pened niany a Urao beforo an'd slnco,
and goes to prove my assortlon lhat
overy financial Institution which ia
taking the money of tho people for tho
ostonslblo purposo of safeguarding it
or putting it to uso for them, is a part
of tho machinery for tho plundering of
tho people.
"Sooner or later, every dollar taken
by tho 'system' through Wall' street's
manipulation of stocks directly affects
every man, woman, and child in tho
United States."
It would bo well if every American
citizen could read Mr. Lawson's entire
article. Tho above extracts are printed
through tho courtesy of the publishers
of "Everybody's Magazine" but it is
not possible for The Commoner to re
produce the entiro article.
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