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About The commoner. (Lincoln, Neb.) 1901-1923 | View Entire Issue (March 24, 1911)
rT'prrr'r r r, esp&s,auawa Moumm tmtv mm WiHtJHi jUimfeWn JBSffifflf&M i i'l I '.., r. i : J ' : , J )! ' i . i, 12 Old Bank of United States in New Form Undor anothor form tho old, old auosUon of tho Dank of tho Unit BtatOB, which was fought out by An drow Jackson whllo ho was presidont, is now boforo tho American pooplo 1 again. This timo it is called tho j "Rosorvo Association of America," , but it is to bo charted by tho United Statos government, and is to bo tho fiscal agent of tho government. Tho torritory of tho Unitod States is to bo divided into flftoon districts, each district to includo all tho national banks in its precincts. Nono but na tional banks are to bo allowed to subscribo to tho capital stock of tho association, Right In tho convention which for mulated and adopted tho constitu tion of tho United, States was tho struggle begun. A' section of tho constitution as originally introduced provided that tho United States gov ernment should have power "to bor row money and omit bills." In stantly there was opposition, and after long dobato, on motion of Gouvornour Morris, the clause "and to omit bills" was stricken out by a vote of nine states to two. "Tho framors of tho constitution novor moant that there should over bo paper monoy again," says W. L. Itoyall in his account of tho proceed ings. "Thoy had seen its curso, when $100 would not buy a bushel of moal." But although tho framors of tho constitution killed tho provision which would havo allowed the gov ernment to issue paper money, thoy forgot to prohibit tho char-i torlng of corporations which might issue paper. So it waB that in 1790 Alexander Hamilton, then secretary of tho treasury, drew a plan for tho first "Bank of tho Unitod Statos." This bank was permitted to issue papor monoy in this proportion of $3 papor socured by $1 of real coin. "This provision," says Royall, "con tains tho germ of all tho vices and errors of paper money." But congress granted tho chaTter, running for twenty years, with a cap ital of $10,000,000. And tho very firBt legislation that congress passed thereafter gave tho bank an undue advantage, for it fixed, arbitrarily, the ratio of gold and silver at 15 to 1, which was an undervaluation of gold. The immediate result was the retirement of gold from circulation, and tho substitution of paper for it. Not content with this, the bank had further laws passed declaring that foreign subsidiary coin was no longer legal tender. As the government had not yet coined any small money, it followed that Bmall paper bills also took tho placo of small coins. Tho bank prospered, of course, but peoplo wero doubtful of it, and in 1811, when its charter expired, con gress by a vote of tho vice president to decide a tie in the senate, refused to renew its charter. But its ex ample had been noted by lesser financiers, and stato banks sprang up all over tho country, which were per mitted to issue paper money, with slight security. And of course the people learned, after a tlmo, that they had Issued a great deal moro paper than they had coin to redeem, and began to demand real money. And again, of course, the banks had to suspend specie payments. But in 1816 congress had been brought round again to the point of chartering another big central bank. It granted a lease of life for twenty years to tho second Bank of the United States, with a capital of $35,000,000, and the power to estab lish a branch in each stato whoso legislature asked for it. Two of the The Commoner. twonty-flvO directors wero appointed - S'tho S orninont woro deposited In the bank. These largo deposits, of course, earned dividends, specio payments wero resumed, and apparently tho country was prosperous. Androw Jackson was elected presi dent in 1828. Ho had always been opposed to tho principle of the bank, and his opposition became open from tho day of his inauguration. In his very first message to congress ho called attention to tho fact that the bank's charter would expire in a few years more, and suggested that a re newal bo refused, for tho reason that it was "noxious In all its principles and tendencies." Instantly tho bank entered poli tics, and began the struggle which embittered Jackson's whole adminis tration. As a shrewd political stroke the bank applied for a renewal of its charter in 1832, on the eve of the presidential election, to force Jack son either to sign the charter or, vetoing it, bring on him condemna tion which would defeat him for re election. Jackson accepted the challenge and vetoed the. bill as soon as it reached him. There was a great out cry by the bank and the "interests," but tho people had learned to trust "Old Hickory," and he was re elected. Tho two government members of tho bank's directorate reported to the president that it was a mere politi cal machine trying to control elec tions, and had gone to the length of placing its funds at the disposal of the bank's president to sustain its political power, and was trying to start a panic by withholding accom-i moaations and holding gold from circulation. It was on this that Jackson based his famous veto mes sage, part of which reads: "Is thero no danger to our liberty and independence in a bank that in its nature has so little to bind it to our country. (One-third of its stock was hold abroad.) The president of the bank has told me that moat nf the state banks exist by its forbear ance. Should its influence become concentered in the hnnriR nf n self-elected directory whose interests are identified with those of foreign stockholders, will there not be cause to tremble for the purity of our elec tions in peace, and for the indepen dence of our country in war? Controlling our currency, receiving our public moneys, and holding thousands of our citizens in depen dence, it would be more formidable and dangerous than the naval and mimary power of tho enemy." When President Jackson hnd ri termlned on his course he prepared a paper setting forth his reasons, and read it to his cabinet on Sep tember 18, 1833. Here is an ex tract: "Developments have been made from time to time of its faithlessness an a public agent, its misfinnHfnti of public funds, its interference in uiecuons, its efforts by tho machin ery of committees to deprive the gov ernment directors of a full knowledge of its concerns, and above all its flagrant misconduct as recently and unexpectedly disclosed in placing all tho funds of the bank, including the funds of tho government, at the dis position of tho president of the bank as a' means of operating upon public opinion and procuring a new char tor, without requiring him to render a voucher for tho disbursement." Again in his sixth annual message to congress, December 1, 1834, Pres ident JackBon said: "Tho bold effort the present bank has made to control the government tho distress it has wantonly, pro duced,' tho violence of which it has been tho occasion are but pre monitions of tho fato which awaits tho American people should they bo deluded into a perpetuation of this institution, or tho establishment of another like it." This last message was written after Jackson had delivered his master stroke against tho bank, and it was causing panic by way of revenge. For when he was convinced that tne bank was using the government's own funds to fight tho administra tion, Jackson ordered the removal of tho government deposits from the bank. This was a thing which the bank had thought ho would not dare, but he did. His secretary of the treasury resigned rather than make tho order, but Roger B. Taney was appointed ad interim, and he drew up the order. Tho money on deposit was not taken out in a lump, but gradually, as it was needed, and no more was deposited, in order to cre ate no hardship. The bank directors were wild with fury. They withheld accommoda tions from firms employing many operatives, causing failures and lack of employment, and started panics wherever they could. But Jackson stood firm. One of tho wildest scenes of all was in the United States senate, a judicial body which the constitution has vested with the power of trying the president by im peachment proceedings when he oversteps his authority. This sup posedly august body so far forgot itself in Its fury as to pass a resolu tion that tho president of tho United States had "assumed upon himself authority and power not conferred by the constitution and laws, but in abrogation of both." And this reso lution was introduced by Henry Clay. In other words, the proper court to try the president for an alleged offense, acccused him, debated his actions in his absence and without serving notice on him, and declared him guilty without a hearing. Despite all this Jackson stood firm against the rechartering of the bank, and it finally had to go out of business. Now, after long and careful prep aration, including the demonetiza tion of silver and the intrenchment of various friendly interests in the senate, comes Nelson W. Aldrich with his plan for turning over once more to a private corporation the en tire banking business of the United States, and his plea for a chaTter for the Reserve Association of America. Denver Post. A GROWING QUESTION The growing gravity of the ques tion, of alcoholism in France is ad mitted in a very striking way in Premier Briand's recent speech in the French senate on the m-nnnnori law for the regulation of the liquor trade. Announcing that the govern ment is determined to combat tho drink evil, he declared the present situation to be so "terrible" that "the very me or tne nation is at stake." Mr. Briand is a statesman usually well controlled in his utterances, so that his language on the occasion re ferred to may fairly compel atten tion. The first clause of the bill which the government indorsed in- uiuuuss me sore need of some restric tion upon the trade. It provides for gradually reducing the number of public drinking places to one for each 200 inhabitants, or three for 600 in habitants; and how far oven this re- m-iiuuuu wouia oe from equalizing the restriction under Massachusetts law may be seen in fact that in this state the number of saloons in a city are limited to one for evorv thousand Inhabitants. The senti ment is evidently growing in Ger .VOLUME 11, NUMBER If many, England and France that th liquor trade has hitherto been too littlo regulated. In Germany, tho kaiser has lately thrown, hig influence very strongly against excessive beer drinking, and in England the present government has had one of its moBt bitter fights against the brewers and the public houses. It is no exagger ation to say that the ravages of alco holism in those three leading Euro pean countries have been frightful in their social effects, and now that such acute questions as unemploy ment and poverty are forced upon the attention of the governments in a practical way by socialists and ad vanced radicals, the evil of excessive drink is beginning to be studied as never before. England literally stumbled into an effective measure of restriction when it was unexpect edly demonstrated that the Lloyd George liquor taxes had diminished the consumption of spirits. No party now would dare to reduce those taxes. Springfield (Mass.) Repub lican. Pimples Off In 5 Days ,?N Tho New Calcium Sulphide Treat. mont Does Wonders to Every Kind of Skin Eruption. V. 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