Mf-A
MARCH 22, 19f2
banker, if the bankers' ring wanted a banker,
and the president couldn't belp himself; or, if
not a banker technically, at any rate a bankers'
satellite.
So there you haye 27 bankers as directors of
the National Reserve association, and only 19
independents, in a total directorate of 46 a
clear majority of 7 for the bankors' ring at all
times, with two-thirds "on call" and never diffi
cult to got.
Yet the Record-Herald echoes the banker
crowd and their satellites in assuring its con
fiding readers that the Aldrich plan, as now
altered, "involves no. 'domination' or concentra
tion of power in bankers' hands!"
III.
But the prospect as to control by bankers is
rpo 11 v worse than we have outlined it above.
Thus far we assume that the bankers would be
(except for power to remove the governor of
the central associationO absolutely dependent
upon powers given them directly. But that view
is altogether too favorable. Their indirect,
powers would be enormous, if "needed in their
business."
Readers "from Mizzoura" and all readers
ought to be "from Mizzoura" while this extra
ordinary measure is under consideration will
want to know why they should trust the 4 federal
officials in the central directorate to be indepen
dent of the banking ring. Don't comptrollers of
the currency and secretaries of the treasury pass
out of office into banking service as gracefully
as they go to dinner?
The man "from Mizzoura" will also want to
know, as he ought to, why he should trust to
the Spartauic independence of any, or of all 15,
of the non-financial directors whom bankers are
to elect. Are bankers likely to elect outsiders
whose financial interests are not sufficiently
tangled up with their owri to make them amen
able to "safe and sane" advice wisely given?
And if "the man from Mizzoura"' insists upon
"being shown" he will find that the more he is
shown the greater is the justification for his
incredulity.
Among the additional reasons for incredulity
the "man from Mizzoura" will find, if he inter
rogates the Aldrich bill as it now lies in con
gressawaiting action'y "the job session" next
year, as Mr. Bryan intimatessome highly sig
nificant provisions.' Observe that. we tkkej no
account here of the uses',' g6od or bad, 'to which
the control of this gigantic organization may
be put. This consideration we postpone to a
further inquiry. At present we confine our in
quiry exclusively to the question of 'whether or
not that control, whatever the possibilities of
its use, would be lodged with bankers.
1) Wo have already shown control by bank
ers directly through an absolute majority in the
central directorate if they want it, and further
control indirectly' if they resort to their influence
as money lenders or credit brokers.
(2) An ihspecUon of the pending bill will
show that under no circumstances can any per
son or interest, public or private, invest in or
hold, directly or indirectly, any shares of the
National Reserve association, except national
banks, state banks and trust companies (well
known adjuncts of banks and participators in
banking interests) ; and that the banks and trust
companies may hold neither more nor less than
an amount of bucIi shares equal to 20 per cent
of their paid in and unimpaired capital. A wise
provision, we make no question, provided the
organization itself is necessary or desirable; but
a provision which strongly emphasizes the in
ference of control by bankers. .
(3) Districts and branches in addition to
the 15 fixed by the bill can be and may bo
created only by the directors of the central body;
and so of readjustments of all districts, creation
of new local associations, and readjustment of
all local associations. Their power is absolute
in this respect. In so far, then, as either public
or private interest is concerned in this matter,
the central board" of directors, with its majority
of bankers, could be dictatorial. This arrange
ment also may bo very well regarded as neces
sary, provided the scheme itself is necessary or
desirable. We raise no question here as to that.
Our inquiry still rests upttn the question of
the power of bankers over the organization; and
this clause also adds emphasis to the inference
that bankers could' control.
. (4) The directors of branches are to be 12
in number, or more (in addition to ex-offlcio
members), and one-half are to be elected by the
constituent local associations, each of the local
associations having for that purpose one vote
for eacji branch director. The same local asso
ciations would vote in the ratio of the holdings
py their respective constituent banks of shares
n the central association, for one-third of the
The Commoner.
?r!n?nw C !eLr resntive branches. The re-
Sltff"1 ?i the brauch dlrectorB "u?d
on sixth 1, M1" five-sixths. This taggod
f,,i ust, , fairly represent the agricul-
o ft L TcSTf11' indl!strial other interests
winip 0nifrICtS ,and slla11 not be alto, nor.
!?nLBr,n8, Sectors of banks, trust com
FnJl i?8,f inau,1,'anc companies or other financial
institutions." Ex-officio memberships in the
branch association would be created and their
incumbents elected by the other directors, ex
cept that the brancli manager must be one of
ee,aml chairman of the board. The manner
ot miing vacancies is to be determined by tho
;,7ua uuu- iuere aoesnt appear to be any
thing here to weaken the inference of control by
bankers.
(5) Tho directors of the local associations,
composed of banks holding shares in the central
association, are elected by those banks three
fifths by one vote from each bank for each direc
tor and two-fifths in the ratio of holdings of
shares by tho banks respectively in the central
association. Still unimpaired seems to be tho
inference of control by bankers.
Were we to turn, then, to the official report of
the monetary commission which recommends this
measure and of which Senator Aldrich is chair
man, we might hope to find some explanation or
excuse for the benefit of "the man from" Miz
zoura," of the wisdom or the necessity for lodg
ing the powers of this great corporation, what
ever those powers may prove to be, so completely
in the control of bankers.
But we should be disappointed. The incredu
lity of "the man from Mizzoura" would hardly
be allayed. There is nothing in this report to
"show him," if his incredulity has any civic
sense back of it.
Among the arguments of the report in favor
of the plan as now submitted to congress, the
only one of moment in so far as the plan re
lates to control .by bankers (the point we are
now exclusively considering), is a well guarded
implication that the plan is "democratic!"
Why democratic and how?
Because the associations are grouped in
analogy to the county, state and national group
ings of our. political system; because "the indi
vidual bank is the voting unit" in the local
associations; because a majority of banks elect
three-fifths of the directors of local associations,
and a majority in stock interest elect the rest;
because, "the source of authority" of the cen
tral body being "democratic and not autocratic,"
the central body "instead of overshadowing
banks" is "their-representative." So reads the
report.
If this is democracy, it is democracy of that
intra-financial kind which is more commonly
known as plutocracy. But be it democratic or
not, in that sense, bankers themselves must
judge. It is a question for them, and con--cerns
the general public not at all unless tho
system is to have jurisdiction and power over
public affairs. One might as well discuss the
democracy that is said to prevail in Masonic
lodges, if the system is to have no cinch upon
public interests. The question of control whether
in Masonry by Masons or in banking organiza
tions by bankers, is without public concern un
less power over the public is involved. Instant
ly thereupon, however, the question of control
looms up. If Masonry were to be given power
over public affairs, it would not be enough to
be assured that Masonry is "democratic" among
Masons; it must be democratic in respect of all
concerned. And isn't the same thing true of
banking? To say that an organization of bank
ers to be given power over public interests is
"democratic" because banks are federalized
among themselves, or because individual banks
are the voting units, or because the central body
represents banks instead of overshadowing
them, is to trifle with public interests in a play
11PI? the AM rich scheme Is in fact to give power
over public affairs to a private profit-making
corporation, that organization can not safely be
entrusted to the control of bankers as a class.
And that a power over public affairs is in
fact involved, tlfe report of tho monetary com
mission Quite clearly discloses. But this ques
Hon we reserve for consideration later. The
nuestion in hand, the only question we are now
Considering, is whether the organization pro
Sd bv the Aldrich bill would be under the
control of bankers; and that it would be absolu-
telv so, seems incontrovertible.
a now drawn and pending, before congress,
tin bill of the Aldrich monetary commission
would beyond all reasonable grounds for dis
S dace the National Reserve association
?omnletely within the control of a bankers' ring.
Or lest "ring" seem unparliamentary, we hasten
7
to substitute tho phrasing of the monetary com
mission's report "a co-opcratlvo union of all
the banks of the country."
Whatever else it may be, for good or'bad, tho
pending bill to incorporate tho National UcBervo
association and to give it for fifty years vested
rights in law to all the privileges directly or
indirectly conferred by its proposod charter,
whatever those privileges may turn out to be,
is to make of that association an association of
bankors. Senator Aldrich was thus far right in
his, Chicago speech, whether his tongue slipped
or not, when he characterized it as an organiza
tion "of bankers and for bankers."
DEMOCRATIC CONVENTIONS
A Hutchinson, Kan., dispatch, carried by the
Associated Press says: Clark supporters in
the democratic state convention won tho first
fight, indicating the relative strength of tho
Clark and Wilson forces, when Judge A. M.
Jackson of Winfiold was elected temporary
chairman of the convention over F. M. Pearl of
Hiawatha, by the state committee. The vote
stood: Jackson 45, Pearl 31. Jackson is a
staunch Clark man while Pearl had the con
centrated strength of the Wilson forces.
W. H. 1j. Pepperell of Concordia was named
temporary secretary. Jackson and Pepperell
probably also will be the permanent officers of
the convention.
B. J. Sheridan of Paola, who is looking after
Mr Clark's interest, issued a statement saying
the speaker would control tho organization of
the convention, the convention itself and that
the delegates to Baltimore would bo bound to
vote for the speaker until he was nominated.
To a suggestion from Wilson supporters that
an uninstructed delegation be chosen, thus
avoiding a fight, Mr. Sheridan was emphatic in
declaring the Clark men would insist on in
structions. "We've fought the fight in Kansas," Sheridan
said; "now let us see who is the better man,
Clark or Wilson. The issue must '-e met on the
convention iloor and I am confident of the re
sult" Taylor Riddle, of Marion, who is leading the
fight for Governor Wilson issued the following
statement:
"With all counties but six heard from the
contest between the Clark and Wilson forces
will be very close. If those should break over,
it would give the Wilson forces sufficient ma
jority to elect tho four delegates-at-large. Our
reports on congressional districts give Wilson
five and Clark three. This would make four
teen delegates for Wilson and six for Clark."
Finally the state convention instructed the
delegation to vote for, Clark in the national con
vention as long as he was in the field and until
two-thirds of the delegation were in favor of
voting for someone else. Then they were to
vote for Wilson as long as ho was in the field
and until two-thirds of the delegation were in
favor of voting for someone else. This means
Clark first choice and Wilson second choice.
DEMOCRATIC DATES
Democratic primaries or conventions will bo.
held as follows:
March 2G Primaries for New York.'
April 2 Primaries for Wisconsin.
April 9 Primaries for Illinois.-
April 12 New York democratic state con
vention. April 13 Primaries for Pennsylvania.
April 17 Illinois congressional district qonr
ventions.
April 19 Primaries for Nebraska.
April 19 Primaries for Oregon.
April 27 Primaries for Tennessee.
April 29 Colorado democratic state con
vention Apnl 30 Primaries for Florida.
May 1 Connecticut stato convention.
May 9 Iowa state convention.
May 14 California primaries.
May 28 Primaries for New Jersey.
June 4 Primaries for South Dakota.
SHAFROTH'S GOOD NAME
The Milwaukee Sentinel says that Governor
Shafroth "is almost as well known as Ebenezer
Hogwash, the leading citizen of Pumpkin
Corner." The readers of the Sentinel are to bo
pitied if its editor does not know Governor
Shafroth's official record. He has been in public
life for nearly twenty years first as congress
man and then as governor. Poor, ignorant edi
tor. There may be pecuniary advantages in
having one's face glued to Wall street, but it
has its drawbacks.
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