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VOLUME 8, NUMBER f
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2
tlio Ibkuo of hunk notes upon certain specific so
curilloK deposited with tlio government. Tho
Kowlor bill contemplates an ontlro change in our
bank currency. It la oven more nullcul than Hint
proponed by tho Aldrich bill. At proHont tho
hunk notes rent on government bonds and I
do not Hi ink it is ho absurd, as Mr. Gago seems
to, that Iho government Hhould mako Its bonds
tlio basis of iioIpk, If wo are to liavo bank notes
or that (ho government Hhould guarantee tho
notes Unit rest upon ils own hondu. And tho
stringency Is not now as groat an it would havo
hpon If tlioro had boon doubt as to the ability
of tho bankH to redeem their notes. Tho best
feature of tho bank note is the government
guarantee; when men take it, they do not ask
whether the bank In a good one, they tako It
because the government 1h back of it. Hero is
the dlfliculty about tho emergency currency
propoKed. It must either be a bank currency
or a government currency, and those who want
a bank currency seem to he ho determined that
it ftluill be a bank currency that thoy are not
willing that (ho distress shall bo relieved by a
government currency. In other words, the prin
ciple Involved is to thorn more than tho need
to be supplied. Certainly, tho emergency is
not great if It can bo postponed or defeated
merely because you havo to accept a government
note Instead of a bank note. The first thing to
bo considered is whether this should bo a gov
ernment note or a bank note. If I were dis
cussing the Aldrich bill, there aro several feat
ures which 1 would criticize, one of thorn tho
uso of the railroad bond as a security. If I wcro
discussing Iho Fowler bill, there aro a number
of features of that bill that I would criticize.
Tho Aldrich bill proposes a bank note resting
on various kinds of bonds, and the Fowler bill
proposes a hank note resting upon no bonds,
but vu pon tho assets tf tho banks. I prefer that
tho o'morgoncy currency shall bo a United States
note, and not a bank noto at all. I am not
afraid to trust tho United Slates; I am not
afraid to havo its notes issued. And I remind
tlioso who aro fond of bank notes, that when
gold and Bllvor wont to a premium, the banker
did not tako tho troublo to go out and find
gold and silver. Tho greenback was good
enough for him; he redeemed bank notes with
It. Concede tho point that this noto shall bo
a government noto and it will bo easy then to
agree upon tho security upon which it shall bo
loaned. And, my frionds, I would not appre
ciate your courtesy as I do, if J did not speak
to you frankly. I do not livo in New York I
am somo distanco from Now York, but wo in
tho west havo had experience. How many banks
havo suspended in New York? How many in
Brooklyn? Our oxporionco teaches us that it
is bettor to trust the govornmont than to trust
tho financiers in tho control of money. If any
of you think that proposition unsound, present
the opposito proposition and give the votors a
chance to express themselves. This is a gov
ornmont of olghty millions of people and not
a govornmont of six thousand bank presidents.
No financial system can bo expected to bo por-
ST?illJ '? C0Untry thnt (l0GS not havo back
? 1 1 nXOt V,iirty WVrovnl of tho public. Wo aro
told that this must bo left to a commission made
heir ,S Wh,?, WilPUt Ulclr Datrlottam afcES
tliolr paity .Financiers aro not the only patri
otic mon You can find mon in every hamlet
who put their patriotism above their par y a
few people can not settle tlioso things for the
mission ' thoPSi?10' i H r appolnt "com
mission, tho bill, when it comes in, has to bo
passed upon by all tho people through thol?
SS"tft"IS in VSss. Now, i?Uygou cot
,o ,ZJ ' " VlLU0 eovernmont shall issuo
The Commoner.
collateral other than bonds. I will go further
than that. If we create a district and authorize
tho clearing house of the district to bind all
the banks of the district, tho government could
loan-money to it without any specific security,
for it has back of it all the assets of all the
banks. And If the loan was limited to a certain
per cent, say, for instance, to twenty or twenty
five per cent of the total capital and surplus
of the banks, there could be no loss to the gov
ernment. But there is no difficulty about details.
If wo need emergency currency, if elasticity is
desired, it is possible to provide it without any
change in our monetary system. Without any
innovations at all, it is possible to provide all
the elasticity for which anybody can show a
need. And aro wo asking too much when wo
insist that this shall be in the control of the
government and not in the hands of individuals?
What we need, I think, even more than
an Increase in our currency is confidence. Think
of it! (Applause.) I am now tho evangel of
confidence. I am now the "advance agent" of
confidence. If we can bring money from hiding
and hoarding and get it into the banks, the
banks will have more money to loan than we
can possibly furnish them by any emergency
currency. What we need today is to restore
confidence in tho depositors. John Wanamaker
was quoted as saying I can not rely entirely
on what the newspapers say but he was quoted
as saying .that a billion dollars was hidden under
carpets, iho government only loaned the banks
about 250 million dollars and if Mr. Wanna
makcr is right we havo four times as much in
hiding. The postmaster general in recommend
ing a postal savings bank, says that wo ore send
ing out many millions every year to be de
posited in government banks in Europe, by
people who are not willing to trust our banks.
The people of this country are being driven to
tho postal savings bank because they need a
place to deposit their money where they can
get it whon they want it. Some of you have
thought me very anxious to enlarge the work
of the government. I have never insisted that
the government should undertake any business
that could bo done satisfactorily by the indi
vidual. I believe in individualism; I want the
individual to have tho largest possible sphere
of action.
' And only where it is impossible for the
individual to act, or unsafe for the community
that ho should act, havo I suggested that the
government should act. I have believed for
years that if tho banks did not allow the bank
ing to bo made safe they would drive the coun
try to the postal savings bank. I would rather
have tho banking done by the bankers than by
tho government. (Applause.) I am in favor
of the postal savings bank, but a postal savings
bank is only an alternative to be selected if
wo can not get the security that the people de
mand. l
i , ,An,(1 l?,(lay' the Sr(test need we have is
legislation that will make people feel that when
they deposit money in tho banks they can go
and get it whenever they want it; the stringency
that has spread over this country in a night has
aught tho people the necessity for this pro
tection. l
They tell us that the timidity which people
have manifested is not justified. That i gen
erally true. I am not prepared to speak for
his community, but I am sure that in ho west
there s no reasonable excuse for this timidity
(Laughter.) Our crops have been bountiful-'
our prices have been good; our people iivo
money; they fill the banks' with the?r L fey
and thero was so much that thov ",.!'
the money then it hmVZrotVl? lT f lt down herG to New York to be Iiiveat
The govornmont can meet tho need simnlv an i n11J1 they have been siting, waiUng waiting
;' -" " muuus, wnen a bank que.
ponds payment on chocks you need no m
prised if the ultra-timid hP?nm!?i?L?? sur:
want to get their money out (Laughter j u
foivthe issue bv tho ;;" r"u" UG ao
States notes, like our grnbas in form Za
n redemption, and that these United Kto?
notes should bo loaned by tho KovoViimpnt ,,n?f
sufficient security and at a ,-ate of in ores w fie!
will compel tho retirement of the notes wo
tho oniorgoncy is ovor. I am not s 1 '
could combine the suggestion"1 mSdoTd?f?erJnt
bills. One suggests that bonds bo deposS
state, county mul nnmiMnni n , . "M'osicea,
between two and three billions of hmW0 S,avfl
Ja sopd basis. Til Vh"t K
. M H L
v m
communities. M0 sukcos tht n ""ioront
houses Ut borroSiJ !
I wore a banker I would not bo nron?i J' U
tern that had to run rivalry ithTei S5'S"
safety deposit vault, and have the car o
f erred in times of stress. (LauglUei l a IT
does not hide money under a enrnot if i an
mid any safer place. ( Laugh S? t Can
that what we need today iS te mo'L rTpeat
safe. You may laugh down here in v!hevban1k
but in Oklahomayou call t n Sim Y?Pk'
state tho first thing they did vZ I western
law to guarantee bank depos s Z t1!I)ass a
do it? They authoriVeri n L ,?0W did they
collect an assessmeu on "the ift to
of one per cent on the finL n t this month
I think it is highe S?ndSSr7 1ba,?ks'
one por cont would linvo bon mll! 'i one"half of
fourth of ono per ce, t wo Hd T ?hovenne
eiont, but l&ltZvm
powered tho board to assess at any time and
to any extent necessary to keep that reserve in
tact. And thus they put behind every bank
tho assets of all tho banks. In anticipation of
the operation of that law, the bankers of. Kan
sas petitioned their governor -to call a special
session of the legislature to pass a law like it
so as to keep tho money from being drawn out
of Kansas banks and deposited in Oklahoma.
(Great laughter.)
And the legislature is now in session. It
will enact such a law. It has been introduced
in Illinois. It has been introduced in Ohio, and
I had the honor to receive an invitation from tho
republican legislature of Ohio to come and ad
dress that legislature on a guaranteed bank.
Possibly, I was invited because some fourteen
years ago I tried to secure the enactment of
such a law by congress. We had a -failure in
our town and many poor people suffered the loss
of their savings, and the hardships visited upon
our community caused such a cry of distress,
that someone came to me I wish I could re
member his name and suggested a guarantee
fund, and I introduced in congress a bill that
provided for the collection of a small tax each
year until a guarantee fund was provided. Tho
bill provided that when a bank failed, the comp
troller should from this fund pay every deposi
tor immediately, so that there would be no in
terruption of business to tho community and no
loss to the depositor, and then proceed to col
lect the assets of the bank and reimburse tho
fund as far as the assets would go.
Now that was some thirteen or fourteen
years ago. What was the objection raised?
That if all the banks were good, the big banks
would not have any advantage over the little
ones that the depositors should all bo
unsecured that the big banks might have an
advantage over the little banks. Where is the
patriotism that we have been hearing about in
our financiers? Do they insist upon a system
that requires that the depositor shall have his
interests jeopardized, and that the community
shall suffer that the big banks may have an
advantage over the little banks?
' I went out to Nebraska and got that bill
introduced there. I thought, surely, if we can
not have it in the United States, we can have it
in Nebraska. (Laughter.) But when the -bill
came up there was a lobby of national bankers
to oppose it. "Why," they said, "if state banks
are safe, people will not deposit in national
banks." (Laughter.) What is the objection
now? Mr. Forgan, the head of one of the larg
est banks in Chicago stated as his objection
that it would make all banks secure. (Laugh
ter.) What an objection! He said that, under
such a system, you could just step in any bank
and deposit your money! That would be awful!
(Applause.) I ask you this question, my friends,
must we leave the depositor helpless? Must
we leave the community helpless rather than
havo all banks secure? What is more impor
tant than the security of the depositor? Why
not look at this question once from the stand
point of eighty millions of people who have lost
hundreds of millions of dollars in this particular
crisis that they never can get back? Is that
not sufficient reason for a different plan, or shall
we sit back and say "No, it would not do to
make all banks secure, for then the big banks
would not have any advantage over the little
banks.' The big bank will still have an ad
vantage over the little bank. It does not need
to rest upon the insecurity of all. The fact that
it has a large capital and surplus enables it to
loan more to one individual than the small banks
can. A bank can only loan one-tenth of its
capital and surplus to one person, and a bank
that has ten times the capital and surplus of
another can accommodate the man who wants
to borrow large sums. Isn't that an advantage?
Ana then there is another advantage. It has
an advantage resting upon vanity. People like
to do business with the big "banks; they like
to go in and have the president of the biggest
bank bow to them and smile. (Laughter.) Isn't
that some advantage? Wouldn't that remain,
even when all banks were safe?
tw YJiat,sl, th? otller objection? They say
mat, it all the banks are secure and the de
positor can not lose, the banks will bd reck
lessly managed. I am glad that that argument
noi-T fniOW' wllen we have seen e extreme
n o;ia S e?ercised under present conditions.
Ph??rmi mrc?fn? apPlause ) My good friend here,
ii! stetson, suggested that a difference as
ih tnian Cean sePated him from somo of
SirftDi0irB,.and bought I could notice a
fT?i of th0 head in y direction,
in if S f) I wondr there can be a large
?l Lf", us on this subject. The manager
becomes careless! Why, my friends, the officers
-csss
. m'i