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VOLUME 13, NUMBER 5
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THE C0N0I3NTHATI0N OF MONKY
An old-time contributor to Tho Commoner
writes tlilK letter: I am enclosing you an
Associated Press report of tho proceedings of
tho money trust Investigating committee, had
on December 12, (yesterday) which 1 clipped
from tho St. Louis Post-Dispatch. Note tho
marked paragraphs, which stale that an en
forced low or reasonable rate of Interest would
havo the result of keeping loose funds at home,
Instead of them being attracted to New York
City by tho high Interest rates for call loans
overy time tho "shorts" aro forced to increase
thoir margins by "bearish" manipulators. Tho
concentration of money at one place like New
York City necessarily leaves the balance of tho
'country without Hufllclent cash for the trans
action of legitimate business.
There is a reason for tho concentration of
Idle money at Now York and it is high and
usurious interest rates. In this connection at
tention is Invited to an article- I prepared for,
and was published by Tho Commoner In its issue
of January Jl, 1007, pago 4. In this article
will bo found tho following statements, which
tho testimony before tho committee proves to
havo been correct:
"Upon Investigation it is found that there is
no limit to the rate of interest that may bo
charged on call loans. In tUo foot notes under
a compilation of 'interest Laws and Statutes of
Limitations' on pago 77 of tho Now York World
Almnnac for 1905, may bo found tho following:
" 'Now York has by a recent, law legalized
any rate of Interest on call loans of $G,000 or
upward on collateral security.'
"As the speculators would hardly ask for tho
passage of such a law, it must be presumed that
it was passed at tho dictation of those having
money to loan, principally bankers. Hero wo
Unci the foundation upon which all the rascality
and thievery Is based. Tho money sharks had
all limits removed and then because their sup
ply of loanable funds became exhausted, they
now ask (and are still asking) congress to per
mit them to incroaso tho supply of loanable
funds by authorizing them to coin their credit
into nionoy. President Roosevelt
should put forth every effort to have his home
state repeal this law immediately.
Lot him throw his influence in favor of placing
n limit upon tho greed of tho Shylocks of Wall
street, and excessive rates for call loans will
cease. And when money can not bo loaned at
excessive rates in New York, all money tem
porarily out of uso will not bo drawn there.
Ihis will tone down speculation and leave
enough to transact the business of tho country
without resorting to 'rag baby' issues."
Muvuruur ouizer can perrorin no greater
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The Commoner.
vice to the country than by working for the pass
age of a law which will make usurious rates on
call loans a crime. Reference is made, in the
article referred to, to Secretary's Shaw state-,
ment that Now York City has the only call
money market in the world. Let her have a call
money market but let it bo governed by the same
laws regarding usury as govern other loans. To
further permit Wall street financiers to take
advantage of conditions which they scheme and
plan for, and force to come about by their wily
manipulations, places upon tho state of New
York the entire responsibility therefor.
The paragraphs in the Associated Press re
port to which the writer refers wero under
dale of December 12th, and were as follows:
"Tho committee also heard several money
brokers, operating in tho "loan crowd" on the
Nov York stock exchange, who testified that
an enforced low rate of interest would prevent
tho movement of money toward New York from
country banks, when the money was needed at
homo points."
Second paragraph relates to the testimony of
Griesel of New York:
" 'What would be tho result of fixing a rate of
interest on money in the stock exchange?' asked
Untormyer.
" 'Whv, it would keep the money at homo in
the country banks,' answered Griesel.
"C. V. Turner, loan broker for the National
City bank, snid that the bank he represents
never charged more than 6 per cent on loans
no matter what the rate on call money might
be on the exchange.
" 'What would be the result if all banks did
that?' asked Untermyer.
" 'Why, money would not be attractedto New
York,' answered Turner. He said that on the
day, recently, when money was at 20 per cpnt
he lent, for the account of tho National City
bank, $1,000,000 at G per cent. He described
ti'e general method of making loans on tho
floor of tho exchange and said that the total
dally loans on the exchange would amount to
more than $-10,000,000 or $50,000,000."
AMlliam S. Beck, Indianapolis: You
are absolutely right, there must bo no
backward steps, but onward and up
ward. In my judgment it behooves
overy democrat to keep watch until the
measures conceived in the mind, and so
ably presented to tho American people by
Col Bryan havo been written in our
statutes. For any democrat to slumber
at this stage of tho people's fight would
bo as nonsensical and as suicidal as the
action of tho delegates of tho Chicago
convention, and a crime against the
masses that aro now looking 8o longingly
yen h,opof,S ly t0 the democratic party for
relief Tho burdens that have been
heaped upon tho great middle class in
this country through the mis-rule of the
republican party are almost unbearable
and must be lifted by the doKatS
party, and the democratic party, if eve"?
democrat will do his duty will bo" more
than equal to tho occasion Would IZt
wo had more liko Col. Drvai wil
mighty tongue, and eloqut talk hS
done so much to bring about our prWenr
success, and my faith shall not falter "
long as Col. Bryan and President nl
havo life and health to keep tZ mJjLn
awake and thinking. However I ffiff868
it tho part of duty for every demoSSfT
aid in the dissemination ?of The troth L?
3578 for $3.2o, and for which you win
please place on your subscription list Tin
enclosed names and addressed orone0
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STATUS OF THE INCOME TAX
Tho following is believed to be a correct list
of all the states that have ratified the income
tax amendment to the national constitution
together with the date of adoption: '
ioiTT' A,,ff17' fl: Arizona, April 9
V innT' APril2' 1911; CaHfoniirJan:
'11qf;o;n;,' F?. 20. 1911; Georgia
(Vuk. j, 1910: Idaho, .Tan. 20 1011- tiiiiwU
FelTV lVl: -' 0 1911 "
ky Feb s :ifian.8aT8, Yarch 6 19ll: K
iH kj, ier. s, 1910: Louisiana, July 1 IQ19.
JJ, 912; Mississippi, March 11 iom. Vr"
sonri. March 16, mil ; Mont-ma Tor qi :ioI?"
11. 1911; North Dakota i Feb 21 ?? v'?"
Tan. 19 toil: OklalSmi? iflrch 141 mo.'
?Q?nVn?V 2' lflll: Sotb Carilona Ko 2V
1910; South Dakota Feb 3 iqio. w '
April 11 ini. T;' 7 d L12; Tennessee,
throe-fourths These two mTcw the I
following states; none of whS, S?e fr.m the
on tho amendment- 'a3 yet aetea
West Virginia . wSXj"1' Vermont- Virginia;
"onM:0'' state, are in
tho income tax? si oSdTe'i t"e frlemls o
go by. " not Iet tllP opportunity
tAZl tt'are-'Co'nT .W8 "
shire, ,o,leIslaT,d;tItan0!tlCUt' New H"P-
prMt,!!? ?o0anrr ta,tcn a"-
lopted in tho neeessanr 8S " a"?namont
This about marks the mtatoum of f States
to make a ehange , tttSLotS
THE RAKE-OFF
J. P. Morgan & Co. are to pay 93 Vo for in
000,000 of 6 per cent Interborough bond 5''
issued under the pending contract with th !u
From the columns of esteemed contemn..! , .
that defend this amazing transaction wo 25'
a number of actual sales of 5 per cent h 6
the stock exchange: Donds
Five per cent bonds of the Atchison, TW,
and Santa Fe, without public guarantee, sold
Five per cent bonds of the Georgia Centm
without public guaranteo, sold at 107
Five per cent bonds of the Jersey' Centm
without public guarantee, sold at 11 8 V
Five per cent bonds of the Chesapeake and
Ohio sold at 109. u
Five per cent bonds of the interborough itself
not yet protected by public guarantee, sold it
104. ai
Five per cent bonds of' the Third Avenue line
recently reorganized out of bankruptcy and with
out public guarantee, sold at 106.
Second-mortgage 5 per cent bonds of the
steel trust, which may be dissolved as illeeal
sold at 101. ga,
The "rake-off" on the interborough's $170
000,000 may bo computed as follows: '
If the bonds are worth only par, it is $11.
050,000. '
If they are worth what interborough bonds
now sell at in the market, it is $18,700,000.
If they are worth 110, at which price the com
bine itself plans to retire part of them, it is
$28,050,000.
Commissioner Wilcox is quoted as saying that
the city is not concerned in the price, the inter
borough gets for its bonds; only in the cash it
turns in for the subways.
The city is much concerned. Either in fares
or in taxes, the people will pay- for everything.
They will pay for construction and equipment.
They will pay principal, interest, depreciation,
brokerage, amortization allowance.
They must also pliy the rake-off.
We may suppose from the commissioner's an
nouncement that in this he has been misquoted.
We may suppose that the majority of the com
mission and of the board of estimate have come
to see in the pending contracts less considera
tion of the public interest than they had been
able to see before. New York World.
LOOKING BACKWARD
Lyons (Neb.) Mirror: General Daniel E.
Sickles of New York has been arrested for
embezzling $23,476 of monument funds. He
is ono of those war generals who paraded over
the country telling tho people that Bryan was
not a fit man to be president. But tho day of
fooling the people has gone by, they are get
ting their "eyes open."
POPULAR ELECTION OP SENATORS
Colorado, Iowa, Idaho and Nevada have rati
fied the proposed amendment providing for the
direct election of United States senators. This
great reform has made more rapid progress
than the income tax, although !it is now likely
that the latter will be formally' ratified first.
, r
,', QUERY '
How many 'state's rights" democrats will
surrender thein conviction, on, (the demand of
the liquor lobby? If a republican senate is
willing to recognize the rightn of , the state to
control liquor shipments how, can-a democratic
nouso of representatives refuse?
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' wVIRTUE REWARDED
The abolition of the inaugurWl-'hall will save
a large sum to democratic husbands almost
enough to make Up for their campaign contribu
tions. This is virtue rewarded. '
GREAT IMPROVERD3NT
The editorial page of th w
Courant for SaturX t e Hartford Daily
marked improvement lTTy 25th- ows
considerable porUoTof S eStoSS deVOtGB a
Jligest of Commoner editor S vPa to
Courant readers have no? ft Verily the
such a treat as they enlLSi ?lany a day hd
orial columns of CoS5ectteurUeh th edI"
issue referred to. VjnnecMcut s paper in the
LDXE BAKING POWDER
Ex-Senator Beveridge is still insistine; that
tho progressive republican party is like baking
powder, "absolutely pure." Other parties con
tain more or less of alloy, but a harp and crown
aro given to P. R. by T. R." and Albert J.
Munsey must be a fallen angel.' l '
REFORM IS MARCHING ON
' Governor Wilson's inspiring words are doing
the work whereunto they were. sent. Men who
havo been counted as reactionary are now say
ing that tho country expects progress and that
the pledges of the party must' bo carried out.
ihis is (true ;in the various states also. Tho
'harvest Is ripe-and the reapers are numerous.
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