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MARCH 27, 1901
The Commoner.
LAFOLLETTE'S GREAT SPEECH IN THE SENATE
With the galleries crowded, Senator LaFol
letto of Wisconsin, delivered a speech in the
senate on March 17 continuing it on the 19th.
Following is the Associated Press report:
Washington, March 17. "What I have to
say is made more pertinent, if possible, by the
action taken during the day with respect to the
Aldrich bill," said Mr. LaFollette in beginning
his speech in the senate on the currency bill
today. His reference was to the amendments
made to the bill by the item on finance.
Speaking of the "Morgan and Standard Oil
banks," and looking across the chamber toward
Senator Aldrich, Mr. LaFollette declared:
"I will show the connection of these great
groups with the bill pending here, notwithstand
ing the dexterous withdrawal of the proposition
to incorporate railway bonds into the bill."
Mr. Aldrich said the most earnest objection
to this bill was made by the National City bank
of New York and that Mr. Vanderlip, vice presi
dent of that bank has opposed the measure.
"It is," he added, "not only opposed by that
bank, but by all the banks of New York. 1
have received this morning a statement from
the New York clearing house association saying
we would better have no currency legislation
at all than have this bill, and stating reasons
why we should have an asset currency. I know
of no bank or banking man in favor of this bill.
The fact is the banks throughout the country
are against it, and the senator from Wisconsin
has studied this situation to little effect if ho
has failed to learn that."
"I will inquire," retorted Mr. LaFollette,
"what the position of Mr. Morgan is."
There was a chorus of laughter in the
galleries.
"I do not know," replied Mr. Aldrich. "I
know Mr. Morgan is a man of wide experience
and wise judgment and patriotism and I should
feel gratified if he approved this bill."
"Perhaps," replied Mr. LaFollette, and in
a tone of sarcasm, "in some way the chairman
of the finance committee will be able to find out
where Mr. Morgan stands. His countenance,
beaming from the gallery of this chamber while
the senator from Rhode Island spoke on this
measure, rather indicated that Mr. Morgan, the
head of one of these great groups, was not en
tirely adverse to the propositions embraced in
the bill."
"1 suppose," said Mr. Aldrich, "the senator
from Wisconsin will agree with me that this
proposition should be discussed on its merits as
to what it will do and not in view of what the
inen in the position of Mr. Morgan think of it."
"Let me say," Mr. LaFollette replied, "you
can not always tell from the lines of the bill. I
should say the proposition to withdraw the pro
vision to incorporate railway bonds in this bill
throws a floodlight upon the purpose of this
legislation. Let me say to the senator from
Rhode Island further, that it is not beyond
question that these great organizations might
put out here or there criticisms of this proposi
tion to give color to the idea that there is no
great and mighty power organized behind this
legislation."
After talking for two and a half hours,
Mr. LaFollette found himself unable to con
tinue further, and suspended his remarks until
tomorrow.
Mr. LaFollette was soon surrounded by sen
ators extending their congratulations, most of
them being from the democratic side.
Declaring the financial stringency in the
country was brought about by the influence of
"Standard Oil, and J. Pierpont Morgan, Senator
LaFollette of Wisconsin today, in a speech prac
tically closing the Aldrich currency bill debate,
entered a denunciation of men high in the finan
cial world.
"There were no commercial reasons for a
panic," said Mr. LaFollette. "There were spec
ulative, legislative and political reasons why a
panic might serve special interests. There were
business scores to settle. There was legislation
to be blocked and a currency measure suited
to the system to be secured. There was a third
term to be disposed of, and policies to be dis
credited. A panic came. I believe that it needs
only to be followed step by step to show that
It was planned and executed insofar as such a
proceeding is subject to control after once in
motion. Such a statement without support in
fact warranting it would deserve condemnation.
To withhold such a statement, to shrink from
plain speech setting forth the facts insofar as
they can be uncovered, is In the discussion of
this legislation, to shirk a plain public duty."
Ho recounted In vivid language his view of
the events of October 24, when Wall Street was
in the throes of currency stringency.
"For the first time since tho panic began,
11:30 a. m. arrived and everybody on tho floor
of the stock exchange was widely seeking monoy
at any price. Interest rates, which for several
days raged from twenty to fifty per cont, began
to climb higher. Settlement must bo made be
fore 3 o'clock. Monoy must bo forthcoming or
the close of the business day would see Wall
Street a mass of ruins and banks and trust com
panies on the brink of collapse.
"Mow perfect tho stage setting. How real
it all seemed. But back of the scenes Morgan
and Stillman were in conference. They made
their presentations at Washington. They knew
when the next installment of aid would reach
New York. They knew just how much it would
be. They awaited its arrival and deposit.
Thereupon they pooled an equal amount and
held it. They waited. Interest rates soared.
Wall Street was driven to a frenzy. Two o'clock
came and interest rates ran to 150 per cont.
The smashing of the market bocamo terrific.
Still they waited. Union Pacific and other stocks
went down in like proportion. Five minutes
passed ten minutes past two o'clock. Then,
precisely at 2:lo, the curtain went up with
Morgan and Standard Oil in the center of the
stage with money real money, twenty-five mil
lions of money giving it away at ten per cent.
"O, uncrowned king
None but himself can be his parallel.
Even to the dullest person standing by
Who cast on him a wondering eye,
He seemed the master spirit of the land."
"And so it ended the panic.
"How beautifully it all worked out. They
had the whole country terrorized. They had
the money of the deposits of banks of every
state in the union to the amount of five hundred
million, nearly all of which was in the vaults
of the big bank groups. It supplied big opera
tors with money to squeeze out investors and
speculators at the very bottom of the decline,
taking in the stock at an enormous profit. In
this connection the operations of Morgan and
Standard Oil furnish additional evidence of the
character of this panic. We have record proof
of their utter contempt for commercial interests,
not only for the country generally, but for legiti
mate trade in New York City as well."
The Morgan and Standard Oil banks, he
said, pursued in that critical moment the course
of the speculating bankers.
"They ministered," he said, "to tho needs
of Wall Street, quite deaf to the appeals of com
merce. Their course was 'hat of men who were
playing with the credit of the country for a
purpose."
Mr. LaFollette reviewed the growth of in
dustrial reorganization from the year 1898,
which, he said, saw the beginning of that move
ment. "These reorganizations were at the outset
limited to those turning out finished products,
similar in kind," he said.
"Within a period of three years following,
142 reorganizations were effected. In main
taining these reorganizations, the opportunity
for a large paper capitalization offered too great
a temptation to be resisted. This was but the
first stage in the creation of fictitious wealth.
The success of these organizations led quickly
on to a consolidation of combined industries un
til a mere handful of men controlled the indus
trial 'production of tho country. The opportu
nity to associate the reorganizations of the in
dustrial institutions of the country with bank
ing capital presented itself. Such connections
were a powerful aid to reorganization, and re
organization offered an unlimited field for spec
ulation. It was a tremendous temptation."
He discussed the economic development of
the country and laid especial stress upon the
growth of financial combinations.
"The bare names of the directors of two
great bank groups (Standard Oil and Morgan),
given in connection with their business associa
tions, is all the evidence that need be offered
of the absolute community of interest between
banks, railroads and all the great industries,"
declared Mr. LaFollette.
"There are twenty-three directors of the
National City bank (Standard Oil); there are
thirty-nine directors of tho National Bank of
Commorco (Morgan). Examination of theao
directors shows that theao two groups are being
knit togethor in businoss associations, suggest
ing their full identification.
"Subject to differences which may arlHo
botwecn powerful individuals of those different
groups, resulting in occasional collision, they
aro practically a monopoly, and as far as the
public is concerned, practically one group. The
business partner of the head of tho Morgan
group is found on tho directorate of tho chief
financial institution which heads tho Standard
Oil group. Ono or the directors of tho National
City bank (Standard Oil) is a member of tho
board of directors of the principal financial in
stitution In tho Morgan group. The directors
of tho leading organization comprising the two
principal groups arc bound together in mutual
interest as shareholders in the various Industrial
concerns which havo been financed by ono or
the other of these groups in recent years.
"Kcmember that these fifty-two men who
are directors of tho two important bank groups
arc not additional to the list of less than one
hundred to whom I havo roferrod as controlling
the industrial life of the nation, but a part of it.
"Fourteen of tho directors of the National
City bank are at the head of four great combina
tions representing thirty-eight per cent of the
capitalization of all tho industrial trusts of tho
country.
"Tho railroad lines represented on the
board of this ono bank cover the country liko
a network. Chief among them are the Lacka
wanna, tho Chicago, Burlington & Qulncy, tho
Union Pacific, the Alton, the Missouri Pacific,
the Chicago', Milwaukoo & St. Paul, the Chicago
& Northwestern, tho Rock Island, the Denver
& Rio Grande, tho Mexican National, the Balti
more & Ohio, the Northern Pacific, the New
York Central, the Texas & Pacific, the Erie, tho
New York, New Haven & Hardford, the Dela
ware & Hudson, tho Illinois Central, the Man
hattan Elevated of New York City, and tho
Rapid Transit lines of Brooklyn. These same
twenty-three directors, through their variouB
connections, represent more than three hundred
and fifty other banks, trust companies, railroads
and industrial corporations, with an aggregate
capitalization of more than twelve hundred mil
lion dollars."
Speaking of the great stores of money in
New York, in connection with various Industrial
institutions, Mr. LaFollette continued:
"With this enormous concentration of busi
ness it is possible to create artificially periods of
prosperity and periods of panic. Prices can be
lowered or advanced at the will of the 'system
When the farmer must move his crops, a scar
city of money may be created and the prices
lowered. When tho crop passes into the control
of the speculator the artificial stringency may
be relieved and prices advanced, and the Illegiti
mate profit raked off the agricultural industry
may be pocketed in Wall Street.
"If an effort is made to make any one of
these great interests obey the law, It Is easy
for them to enter into a conspiracy to destroy
whoever may be responsible for the under
taking." He severely criticised the provision of tho
Aldrich bill by which railroad bonds are to be
made security for emergency circulation, and
charged that it was a scheme to defeat legisla
tion which might lower railroad rates.
"As a common carrier," said Mr. LaFollette,
"the railway company is entitled to charge suffi
ciently high rates to pay operating expenses and
a reasonably fair return upon the fair value of
the property which it uses for the convenience
of the public, i This is the standard and the
only standard by which to measure reasonable
rates. To secure the application of this standard
to the railway rates of the country has been the
object of a struggle extending over many years.
The courts have sanctioned it. The Interstate
commerce commission has urged It upon the at
tention of congress, and common justice to the
public interest demands It. Tried by the stand
ard, if a railway company has grossly over capi
talized its property, it can not rightfully Impose
upon the public a transportation charge to pay
any return of dividend upon this fictitious capi
talization. It does not signify that the public
has not yet been able to secure the application
of this standard to the rates of the country.
Their cause is just, and its defeat from year
to year has been accomplished only through the
powerful influences which the great transporta
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