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The Commoner.'
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": VOLUME 6, NUMBER 23
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OH Schrolner 61 Cambridge Place, Brook- and St Louis) were evidently intended to provide
lyn Now' York who was for many years bank for redemption at such cities of circulating notes,
cashier and president, invites "all who view with and not to nullify, the plain demand of law.
concern the rapid growth of tendencies and con-r The requirement to so redeem was repealed by
anions 'which already dominate the American act of June 20, 1874, section 3, as above quoted,
lives and enable a few to drain the substance of - "The total of deposited reserves was less
the many, thereby undermining liberty itself," than $100,000,000 up to 1898, but has rapidly in,
to thoughtfully consider the situation, which he creased as follows from official reports:
somewhat graphically describes. Quoting Presi- September 20, 1898 $94,394,210.64
dent Roosevelt as saying: "About all we have a. September 7, 1899, 164514691.64
right to oxpect from government is that it will September 5, 1900 170,731,918.08
see that the cards are not 'stacked, Mr. Schrei- September 30, 1901. . . : 216,733 488.34
nor undertakes to point out how the cards are September 16 1902 253616065.97
.stacked in one Important particular. Mr. J3chrei- September 9, ,1903 227,780147 03
netlmVfSSof the currency is. 'charged SSft gjgfefg
with the execution of all laws relating to the Novem.ber ' 9, 1905:::::::::::::::;: 294;250;607:92
. issue and regulation of a national currency se- January 29 190G rmooHak
cured by United States bonds,' and with general JW 1JOb 296,942,972.45.
supervision of national banks. ' "An increase of over 200 per cent in seven
"Section 6,191 United States Revised Statutes, years, amounting at the latter date to nearly
(Act of June 3. 1864) required every national one-half of all reserves required throughout the
bank to 'at all times have on hand, in lawful United States except at 'central' reserve cities.
money of tho United States,' at least 25 per cent Trusts and financial juggles have grown apace
or 15 per centas the case may be of the therewith. Boston and Philadelphia national
amount- of its notes in circulation and its de- banks, these not being 'central' reserve cities,
posits. constantly contribute one-half of their reserves
"Section 5,192 provides that three-fifths of to the Wall Street money market by depositing
tho 15 per cent reserves, 'may consist of balances same in New York banks to obtain interest
due to an association, available for the redemption thereon, because they cannot lawfully loan same
of its circulating notes,' from associations in at home. November 9, 1905, Boston banks thus
designated ' cities. lacked at home, $20,730,259.62; November 9, 1905,
"Section 6,195 provides that each association Philadelphia banks thus lacked at home, $33,-
ln any of the cities named in section 5,191 (other 398,623.23.
reserve cities stated below) shall select an asso- The act of June 3, 1874, as stated above,
elation in the city of New York, 'at which it will repealed the previous requirements to keep on
redeem its circulating notes,' and may keep one- hand 15 per cent or- 25 per cent of notes
half of its lawful money reserve in cash deposits ln circulation, and replaced same by a
in the city of New York. requirement to keep only three per cent
"Act of June 20, 1874 (Section 2) provides thereof in the treasury of . the United States,
that associations shall thereafter 'Not be re. 'which sum shall be counted as a part of its
quired to' keep on hand any amount of money lawful reserve,' against deposits. But for this
whatever by reason of the amount of their re later singular requirement the amounts deposited
spective circulations;' but the moneys required as above stated would be greater, and on Novem-
to be kept at all times on hand shall be deter. oer 9, 1905, $314,501,483.61 instead of as above.
mined by the amount of deposits. Also (Section "The designated cities, are now as follows:
3) that every association shall at all times keep 'Central' reserve cities, New York, Chicago and
and have on deposit in the treasury of the United St Louis.
States, in lawful money, a sum equal to five " 'Other reserve cities,' Boston, Albany, Brook-
per centum of its circulation, to be held and used lyn Philadelphia, Pittsburg, Baltimore, "Washirig-
for the redemption of such circulation; which ton, D. C, Savannah, New Orleans, Louisville,
sum shall be counted as a part of its lawful Houston, Dallas, Cincinnati,, Cleveland, Columbus,
reserve.' Also that so mucli of said national lank Indianapolis, Detroit, Milwaukee, Des Moines, St.
- act requiring or permitting the redemption of its Paul, Minneapolis, Kansas City, Kan.; Kansas
circulating notes elsewhere than at-its own coun. City, Mo.; St Joseph, Lincoln, Omaha, Denver,
ter, except as provided for in this section, is San Francisco, Los Angeles, Portland, Ore. Ft
hereby repealed. Worth, Dubuque, Wichita, Salt Lake City, Cedar
"Act-March. 3, 1887, provides: That when- Rapids.
.ever three-fourths in number of the national "'Country banks:' Under this head are in-
banks located in any city having a population eluded banks of the following cities of 100 000
of 50,000 shall make application to the comptroller to 350,000 population, viz.: Buffalo Newark' N
asking that the name of the city in which such J-, Jersey City, Providence, Rochester Toledo
banks are located shall be added to the list of Allegheny, Worcester, Syracuse, New Haven Pa1
cities named in sections 5,191 and 5,192, the erson, Fall River, Memphis and Scranton 'Also
.comptroller may grant such requests, and every banks of 113 cities, below 100,000 population and
bank located in such city 'shall at all times there- over 25,000 and of all similar cities etc
after -have on hand in lawful money' an amount "The two hundred and eighty-three banks
equal to at least 25 per cent of its deposits. Also in thirty-five 'other reserve cities' as above thouch
(Section 2) whenever three-fourths of national themselves reserve agents for 'country banks ' are
ffiS? iSn, , in nny clty havin& a Population of permitted to deposit in banks of New York ' Chi-
200,000 shall make application asking that such cago or St. Louis, one-half of their own 25, ner
city may be a central reserve city, like the city cent reserves. P
of New York, in which one-half of the lawful "The greater proportion of deposited reserves
money reserves of banks located in other reserve is with banks in New Yo?k City f Such monTv
SmB TJ G dTsIt0(1' f B1 n section being subject to recall by banks depositing same;
5 193, such requests may be granted. And that is mainly loaned 'on demand' and short time
?w? ?VCated n Such clty 'sha11 at a11 time3 loans, to bankers and menTers of the New York
cent ft H tSVUf111 m0ney 25 ner stock change. OriginlTdbursed by natkma
ranksVavedS ed thereyofChiCag0 " Bt LUiS J"" lfc & byfitebSSSl
"Act of MfLrJh iJS . m, , trust companies, etc. The reserves disbursed at
ever threeSths of Sic? ?S2?f :, TImt T ?GW Yrk doubtle average more than $100,000
TTwonot&l iany Ci " f eleven hundred members of the stock
mnrril X .maCe a?!i: exchanee; ad estimated by the proportion of
SSchbSta aw looted rifni? Et C Vhh lanB and discounts ln a" banldng institutions in
dUes named in s25inS A Ji b ?ddKeito the Now York to tnoIr total cash held, each $100,000
mSSmSS ! !f G'l91 and 5'192' such cajm maintains more than $500,000 in loans! Thus
nasuch X WmTTiuVjriL lo?ted ver 50W00,000 in loans have been unnatural
L Bvfr.,clly ,?Im" at a11 Nines thereafter have and unjustly provided to cnnM nrnnmt tJ.
deposits mm mnGy' 25 Per Cent of its talizations to be toyed with, 'watered and 'S-
"The foregoing synopsis shows that the laws SL? NbwlKl blnkintiL?
ssa smm SchTSot aSAsra as
hS?n awfu , "MeLSnity and incitement, have
5,192 that threeXhs of M pSt SleTSw to ri SS7 T Vidd fr PGOple f sma11 means
consist of balances due from assocKHmm LSfJ ? r,B? tb,ei a11 Dn nrrow mar& ad for the
nated cities and in secS fSfffi J S alreaiJy v to exploit the railroads, industries
ciation'ird'eilgnad cmes m'ay'ket SSaS Tn mLl' T?7 by
cash deposits in New York, (nTwaS ZSn 'SSFSffiJ capitalizations, for
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Are fcfcStacked,
"Clearing house returns from 105 cities in
alone, owing to unnatural conditions and stimu
lated stock exchange transactions, amount to fas
more than all the rest combined. (Financial
Chronicle). The manager of New York clearina
house estimates them at 68 per cent of all
"Single memberships of the stock exciianira
have recently sold as high as $93,000.
"Money in . circulation was below $14 enuivt
lent of gold per head of 35,000,000 population it
the close of the civil war in 1865, and is now over
$30 per head of 80,000,000 population, not includ
ing the disbursed reserves. The natural flow o
so great an increase should have furnished tho
only source of surplus supply to the monev
market. J
"Some classes of corporations, as banks and
insurance companies, are under rigid supervision
state or national, and can have no watered shares!
Others, organized for transportation, communica
tion, illumination, or production of constant ne
cessities to family and business life, are not so
controlled. Shares, and sometimes bonds issued
by these, are greatly watered at will of those
who organize or control them. Why- this distinc
tion between creatures of law? Lax and varying
state laws are availed of to violate public justice,
and accomplish this wrong.
"The just purpose of all business corporations
should have been honest co-operation of many in
dividuals in enterprises too large for the re
sources of one or a few, with limited liability.
Had all been alike rigidly held to honest capitali
zation, public demand would have regulated their
increase. There would have been fewer corpor
ations, slower development, and fewer great for
tunes, but public justice and equal rights would
have been maintained.
"Artificial persons (i. e. - corporations) , or
those who control them, should never have been
permitted to assume or usurp privileges, which
natural persons, however numerously associated,
can never collectively exercise; for the creator
is thereby made secondary and . tributary to tho
creature.
"To print and issue false tokens of single
dollars is to counterfeit. And they who do it are
condemned to imprisonment To print or issue
false tokens of capital or multiplied dollars, in
limitless amounts, is to finance. And they who do
it and gain most thereby, are lauded as ablest
exemplars of success among men.
"True capital is the friend and ally of labor
of every class and grade; but false capital, thus
fastened upon corporations, is Its oppressor, and
has estranged them; for the body of capital seek
ing income has been unnaturally and enormously
increased thereby, to enable selfishness and greed
to tax, oppress and defraud the people.
"The inter-state commerce commission finds
that the inter-state railroad system of the coun
try is owned by much less than one-half of one
per cent of the population. The regulative pro
cess would be a move in the right direction. But
it would not be curative of the underlying wrong
ful cause enabling most of this unnatural and con
centrated ownership, viz.: Unnatural concentra
tion of money, and of credits built thereon.
"The permissions enabing reserves to be de
posited and loaned, have converted the plain de
mand of the law as quoted above, to its very op
posite, and instead of being faithfully held for
the only justifiable purpose of law in compelling
the money to be withheld from local public use,
t viz.: To protect depositors, they are made a tender
for speculative money supply and basis for ille
gitimate ventures.
"The high protective tariff has long been a
bone of political contention, and democrats de
nounce it, as father of the trusts. But unnatural
and lopsided distribution of money reserves, and
of credits based thereon, has been the nourishing
mother of their great watered capitalizations.
Better no compulsory reserves whatever than the
wrongful distribution and use and disbursements
at favored localities.
"A veritable hot-bed for corporate syndicates,
mergers, trusts, 'corners' and monopolies has
been thus provided, individual competition and
opportunity thereby throttled and destroyed, and
Bmall industries of the many made profitless.
"Rich, indeed, Is our country, and great its
seeming prosperity. But multi-millionaires, and
, their colossal fortunes acquired by a magician's
wand, attest national injustice to T)e their found
ation. "The plain intent and Implication of law, was
and is, that the reserves should be maintained
sacred and unimpaired for the purpose for which
- (Continued on page 6) . -
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