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NOyBMBBR 1,1 1,907
The Commoner.
B-
A Get Rich-Quick-Pa nip
Washlngton, D. C., October 28. This is
fcot a -Washington letter, although It Is written
rom Washington by a raati who knows his New
STork well; One who knows Now York always
remembers that the corner of Thirty-fourth
Street and Fifth Avenue is today the uptown
financial conter. un one corner is the Waldorf-Astoria,
the uptown headquarters of Wall Street,
the place where the big brokers and the promi
nent plungers gather after the market has closed
and excbango their views and make their uets
on tomorrow's market. On another corner is
the stately building of the Knickerbocker Trust
company, which on the day L write has closed
Its doors and gone down into ignominious fail
ure. Its building is perhaps the most beautiful
piece, of architecture on upper Fifth Avenue.
It stands on the site of the old mansion of A.
T. Stewart, a merchant whoso name is now al
most forgotten, but who made his money by
gelling goods for what they were worth with
a reasonable .profit. He built there a house
which for a time was the wonder of all New
iYork, but ho did, not know the ways of the
modern financier. Ho made his money by buy
ing and selling, not by borrowing, and borrow
ing, dnd borrowing again, and then making
other men buy securities which he did hot own
and unloading his -debts upon them.
The collapse of the Knickerbocker Trust
Company is described by various people in va
rious ways. One of the prominent bankers
of New York said that it was due to bad bank
ing methods applied by bad men. On being
pressed for a 'more definite rtatement he refused
to give it. Another prominent banker ascribed
. ltto the speeches of President Roosevelt; pos
sibly those speeches have hurt in some degree.
But as a matter of fact anyone who knows any
thing about the financial situation in the United
States today must recognize that the trouble
in New York Is due to the notorious fact that
the banks and the trust companies have been
giving their funds for the financing of specula
tive, companies. Such of the banks as are pro-
, teeted'by the clearing house may pull through,
but- the banks that have turned over their assets-
to speculators like Morse, Thomas, Heinze,
Harrlman.or1 men of that type are likely to
find hard going In the next two or three days.
THE BANKS AND THE INSURANCE
COMPANIES
. The same day that saw the run on the
Knickerbocker Trust company brought out the
Information. that'Mr. E. H. Harriman had been
able to borrow from the Mutual Life Associa
tion almost ten million dollars on securities
which are doubtless good, but which are not
quickly marketable. That fact was elicited in
an official investigation of the Mutual Life af
fairs. The ability to borrow ten million dollars
on-doubtful security is a very useful qualifica
tion' for a man who wants to become one of the
great captains of industry. It helps to buy con
trot of a bank and then borrow nine million
dollars from that bank and so on until he can .
handle hundreds of millions of dollars for
which he has put only a few hundred thousand.
This is what Is" being done by Harrfman and
by Ryan and has been done by Westinghouse,
who has gone to the bad. The Westinghouse
jfailure Is likely to extend the bank panic far
to the west. It will touch the securities of the
ateel trust and as they are held outside of New
York it. Is very likely to create financial difficul
ties where it had not been expected they would
appear.
And yet, after all, it is a rich man's panic.
It Is a fight In Wall Street between men who
were just as eager to get rich quick as any one
of those much-sorned western rubes who come
to New York to buy gold bricks, or green goods.
It is a panic bred of the determination of a
few men to -make themselves enormously rich
at the expense of the Investing public. It comes
out of the new financial scheme of building a
one million dollar corporation on a bateis of
about ope dollar at the bottom. '. .
' .
WHERE THE RESPONSIBILITY LIES
' Let me. quote: This is what Mr, William
Turnbull of the Knickerbocker Trust company
feaid' as that banking corporation closed Its door,
"This is the inevitable end of what has been In
progress for months. There, Is a. man high. In
authority who does not know tho moaning of
credit, and who has consistently done all ho
could to destroy this delicate constituent of
legitimate business. If disaster follows and
anyone wants .to know tho fundamental causo
of tho trouble, let him go back over tho Inst
six months and read the speeches of this man."
Of course Mr. Turnbull decllnod to say
who tho man ho referred to was. Perhaps it
might be left to tho guoss of tho reader.
Curiously enough when tho vice president
of tho Knickerbocker Trust company was giv
ing out tho statomont which Is here quoted,
President Roosevelt at Natchez, Miss., was say
ing this:
"These policies represent tho effort to pun
ish dishonesty. I doubt 11 they havo helped
to bring about the trouble, but if they liavo Jt
will not alter in tho slightest degree my deter
mination that for tho romalning sixteen months
of my term these policies Bhall tie persevered
in unswervingly. I am responsible for
turning pn the light, but I am not responsible
for wha,t tho light .showed,"
Now after all how has Mr. Roosevelt turned
on any light which might affect the Knicker
bocker Trust company which has failed, or its
subordinate branches, qr .what did he do In
the way of. turning on tho light to illuminate
anything wrong In tho Westinghouse company
which is one of the great Industrial concorns
of tho United States, and which Is not in any
sense a trust? What has the president done,
except to agitate and aftor all an agitator is
useful. Why should tho speculative Now York
banks bo suffering on his account? Ho hns
done nothing except to pernilt his secretary of
tho treasury to offer them something like two
hundred million dollars to Hide them over a
pinch. He has talked, it Is true, somewhat at
random against monopolies, and he has discov
ered that dishonest men ought to be punished.
But must wo believe that tho discovery of pun
ishment for dishonesty rosts with Roosevelt?
He has never been explicit; he hns nevor gono
further than to say that predatory wealth
should bo frowned upon, and that dishonesty-In
great financial institutions should be penalized.
Both statements seem to rank with tho moBt
ordinary platitudes.
.
THIS STOCK EXCHANGE AND THE
INVESTOR
I remember very well some years ago when
tho failure of certain gentlemen, now very rich,
known as tho Moore brothers and tho Coincident
collapse of the Chicago Traction companies
owned at that time by Charles T, Yorkes led
tho Chicago stock exchange to close its doors
for some weeks. If. an ordinary little "plkor"
who stood to lose four or five thousand dollars
forsaw trouble, there would not be any closing
of the stock exchange. When Yerkes, who
.robbed thQ city of Chicago of millions of dol
lars, and when the Moores who had taken mil
lions away from .small Investors were in danger
of losing, tho stock exchange cheerfully closed
up for their bepefit. So now tho Pittsburg stock
exchange Is closing for the benefit of the West
inghouse cpnipanles, In brief it seems fair to
say that the ordinary Investor would do better to
keep out of the stock exchanges. If he loses,
he will be closed out at the ring of the gong.
If the big man loses, thp stock exchange will
be closed in order that- he may be able to tfde
over a . pinchi t
WILLIS J. ABBOT.
XXX
, ,AN INTERESTING REVIEW
The New York -Evening Post prints from
the pen of Charles JB. Clarke the following let
ter addressed to the Ppst editor:
Sir: The charge is frequently made In tho
eastern press that Bryan has wrecked the demo
cratic party, q.ti& that so long as ho Is premlnent
in the councils pf the party success is impossible.
TJnese who mae this charge manage to so mar
shal the- few facts at their command as to mis
lead all but careful students of elections and
current politics. Cleveland as the democratic
leader and candidate led the party to victory
in 1892, whilo four and eight years later tho
party nnder" Bryan met with defeat. Nothing
more Is said. This is their whole argument.
Now what ig the truth? Two years after
Cleveland's election, in a campaign all over the
country Iermember of congress, when .Cleve
land was still in control of tho party, his ad
ministration tho issue, and his lieutenants In
T?i0 iho ,!cct,0 machinery, and eighteen
months before Bryan was dreamed of as a can
didate or leador, tho democratic party was over
whelmingly dofoated, tho republicans electing a
largo majority of mombors of tho lower house of
congress and carrying sovoral state legislatures
which chose United States senators. Congress
n2!li? l0,lh. ,pftrty ,n 18M not on account of
S,SL i Ut 1Vccau of tho administration
dbn Inatcd by tfio very men tho so-called km-
o? V1?1"00 Wftnt t0 l,ut "Kft, ,n ntrol
Tfv iftPr?rty, W,l?n ,F3rynn waa nomlnnlod In
JUiy. 1896, tho outlook was hopeless, tho party
had boon really wreckod, not by Bryan, but by
Cleveland; it wns discredited and distrusted by
the masses who wore prepared for McKInley
2Sr?iiUn y flh?.uSl1'. Pro8',or,t' ftlao. To havo
asserted that MeKlnloy wns in any danger of
defeat at the time tho Chicago convention mot
which nominated Bryan was to writo one's self
down a monumental ass. Bryan was nominated
--young, poor, practically unknown, deserted by
most of tho trainod loaders of tho party, together
in" f. l lfIoni,,n .Pnpom. business men; and largo
capitalists that had up to that time aided tho
democratic party. Without funds, with nowor-
in nTulT1' V11 lh. ,ftrg03t campaign fund
in ho history of American politics used against
nnVn flfI,notl,ln! ,f th0 """representation and
intimidation resorted to by somo enthusiastic
McKInley employers of labor, and many other
things to contend wlthln spite of it allf Bryan
was nearly elected, and the late Mark Han na
s said to have told a certain committee that hXd
it not been for tho monoy they contributed
Bryan would havo swept tho country; 20,000
votes properly distributed would havo changed
tho result. It was tho hardest fought campaign
since tho civil war. Does this prove Bryan a
wrecker of tho party? Imagine tho result had
Cleveland or ono of his allies boon .tho demo
cratic candldato In 1896.
Tho 1900 campaign did not turn out so woll
for Bryan, but considering all tho circumstances,
he did well and bettor than any other candldato
could havo dono. Times had improved, a suc
cessful war had been ondod, and the acquisition '
?LZ WP, "P1010'1' No ono could havo
defeated McKInley In that campaign. Yet tho
Cleveland element managed to got control of
the party again, and ih 1904, with Judge Parker
as their candidate and In a year more favorable
to the democrats than 1890 and 1900, the party
.jnot with tho worst defeat In thirty yearn. It
must ho plain to Qvcry one who studies tho elec
tion returns for 1892, 1891, 189C, 1900, and
1901 that Bryan, far from being a wrecker of
the- democratic party', Wns really a saviour. His
has been a hard and thankless task, but it must
bo a source of extreme satisfaction to him to
see the president praised for carrying out many
of the policies which Bryan advocated and for
wh,Igb ho was callod an anarchist and other ridic
ulous terms. . CHARLES E. CLARKE
New York, August 30.
rxoo
A LATE ADVANCE
Tho dispatches of October 20 announce
that tho Western Union Telegraph company
will increase tho wages of Its telegraphers but
will no longer pay tho "bonus" offered to those
who remained "loyal" to tho company when
the strike vas called. That is usually the case.
The men who make tho fight for bettor condi
tions and submit to the discomforts, aro re
warded by seeing- those who neither fought
nor sacrificed reap tho benefits. Had the West
ern Union Telegraph company granted a simi
lar .increase to its old employes there would
havo been no strike, the company would havo
saved money, the public would not have been
discommoded and the old employes would not
havo suffered.
oooo
THE PRIMARY PLEDGE
Xs this copy of The Commoner may be read
by some one not familiar with tho details of the
primary pledge plan, it Is necessary tc say that
according to the terms of this plan every demo
crat is asked to pledge himself to attend all of
the primaries of his party to bo held between
now and the next democratic national convention
unless unavoidably prevented, and to secure a
clear, honest and straightforward declaration of
the party's position on every question upon
which the voters of tho party desire to speak.
Those desiring to be enrolled can either write
Tho Commoner approving the object of the or
ganization and asking to have their names en
tered on the roll, or they can fill out and mail
the blank pledge, which Is printed on page 12.
tM4&UmmMt .JMllafch:. ittiU jtivi niftiftfr&wijifcttfiai