fife
irAZYVl
Ill VII
Vol. XV.
LINCOLN NEB., DECEMBER 31,1903.
No. 32.
0 If ! 11 .1 W 'VII II At T II
Comptroller's Abstract No. 36
Analysis of the Fi
nancial Situation by
Flavius J. Van Vor
hls .
Editor Independent: The 36th ab
stract of the condition of. national
banks has been sent out by the
comptroller of the currency. It cov
ers the time from the 9th of Septem
ber to the 17th of November, 1903.
It shows that in 69 days (including
10 Sundays and 59 business days)
there has been a decrease of loans and
'' discounts amounting to $56,361,090.78.
Of this $49,125,186 was in the central
reserve banks (New York, Chicago
and St. Louis). Over $36,000,000 of
this decrease was in the New York
banks. In the 287, banks in the ,34 re
serve cities there was a small in
crease, of about $800,000. For the
first time the 4,770 country Banks are
shown to have decreased their loans
and discounts. This decrease, how
ever, is small. It is, Jn the aggregate,
only a little over $8,000,000. The ag
gregate decrease for each business
oay of the time covered by the ab
stract is almost $1,000,000. This de-
. crease js-a madked contrast with one
year ago when the banks were in-
- creasing their credits almost that
amount each business day.
It is also shown that there has been
an increase of a little less than $20,-
' 000,000 of individual deposits and al
most $13,000,000 of United States de
posits. The national banks have now
over $153,000,000 of government money
besides a disbursing officers account
of almost $10,000,000.' This amounts
to an aggregate loan, by the treasury
department, to these banks, of about
$163,000,000. For this large amount of
public money, of which the banks
have the use, the government does not
receive one cent. This money loaned
to the banks without interest is a
, part of their loan fund for which they
' receive the rates of bank interest. The
worst of it is that this enormous sum
must remain in the hands of the
, banks. It cannot be taken from them,
nor any considerable per cent of it,
without causing a financial panic that
would ruin thousands of business men
" and very probably close up quite a
number of banks. It must remain
where it is as a support to the na
tional .bank combination and J;he peo
ple must submit to taxation, not only
to pay current expenses and interest
on the public debt, but to furnish
more money to be loaned to these
banks from time to time. Was there
ever a more absurd, outrageous and
preposterous financial situation than
this? .
Notwithstanding there has been an
increase, as reported, of almost $33,
000,000 of individual and United States
deposits, during the time covered by
this abstract, it yet appears that the
total deposits on which reserves aie
counted have been decreased nearly
, $105,000,000. The whole of this de
crease is accounted for by the de
crease of the balance due other na
tional banks, state banks and trust
companies. Almost the whole of this
decrease in general deposits was in
the central reserve banks and shows
very conclusively that banks and trust
companies have been taking out of
New York, Chicago and St. Louis a
considerable per cent of what they
had on deposit on the 9th day of Sep
tember. All the changes shown have
taken place in the central reserve aud
the reserve cities; the larger part be
ing In the central reserve banks.
There has been almost no chauge in
the business of the country banks.
None except the rather small decreuse
of loans and discounts. The conclu
sion can hardly be avoided that there
la a very Intimate relation between
the depression In tho stock markets
and tho shrinkage In bank credits.
There can be little doubt thut tho
decrease In loans and discounts has
been alimvit wholly In ureeulativo
riedlts, The fact that almost tho en
tire BhrlnWo In bank credit enquired
In New York and that commercial
credit bavo not ben much disturbed
certainly ladle Me thU. Tho only ef
fect upon commercial credit ban bn
to prevent any considerable Increase
during the latt few rnnnth. Th In
ma of national bank credit ha
lcn during tho Ut threw or four
)fr tu.ut it.ftm.f'oo.ooo tu;
mount to an Increase of about
000 jer day for every buslne day
during the time. To have such an In
crease considerably curtailed v or
stopped as it has been since the 9th
day of September, must have a de
pressing effect upon many branches of
business. .
It is fortunate that the first effect
has fallen upon the gambling trans
actions of Wall street and that the
greatest losses have been in the spec
ulative prices of stocks. There can
be no activity in stock gambling un
less there is a continual expansion of
bank credits. If from any cause the
New York banks are unable to In
crease their loans and discounts the
inevitable result must be a depression
in the stock markets of Wall street.
The secretary of the treasury has
been assisting in keeping up this
gambling in Wall street by deposit
loans made to national banks, but the
time came when he was no longer
able to increase these loans or in any
way to mitigate the depression in the
stock markets. '
Since March, 1902, the whole In
crease of United States deposits in the
New York banks amounts to only
about $2,500,000. There was not 'suf
ficient money to keep up the expan
sion of loans and this drove out of
the central reserve banks a large
amount of the money they had. It
may be a matter of some surprise to
some business men to know that from
that date until now the central re
serve banks lost about $240,000,000 of
their aggregate deposits. The laTger
part of this, about $200,000,000, was
from the New York banks. The ex
pansion of gambling credits reached
their limit. They could not be in
creased without an increase of de
posits from some source. When the
depression in stocks followed, the
money that had been attracted to New
York by interest paid for its uae in
Wall street gambling, returned to the
country banks from which it had come
and where it ought to have remained
in, the first place, to be used, if used
at all, in legitimate commercial trans
actions. This is very clearly shown
by the fact that the country banks
have in the time Increased their de
posits almost $200,000,000 while the
banks in the reserve cities have made
very little change. It was a fortun
ate result when there might have
been a disaster
The situation is not now the same
that it was in 1893. Then the New
York banks were in a condition that
enabled them, if they did not actual
ly cause the panic of that year, to
take advantage of it and profit by it
or at . least to protect themselves
against It. Now, the probabilities are
(although . they deny it) that they
have a large amount of stocks as col
laterals and that makes it necessary
for them, if possible, to prevent a pan
ic, which, if it occurred now, would
involve them in the general catas
trophe. They are in danger of being
caught In their own trap. In their
avarice and their attempt to deceive
the country about their connection
with and their participation In stock
gambling they have deceived tnera
selvcs. Their great hope has been legisla
tion that would put them In a condi
tion and give them the power to con
tinue the expansion rf loans. They
will never forgive President Roose
velt for his opposition to financial leg
islation. It need not be a surprise If
In the coming campaign Wall street
and the eastern banking combination
desert him rta they deserted President
Harrison In 1892. They are almost cer
tain to do so If they can Induce tho
democratic convention to nominate
some one to suit their Interests.
FLAVIl'S J. VAN VOU1U&
I ml Una pull., Intl.
TO SECRETARY SHAW.
Mr. tirt Vf IU I.H u ik rUry
f lb Trtitff w York Jaurntl
Turn It !.
Home diyt ar,c George A. Groot, of
Cleveland, 0, member of the populUt
national committer, twomlnjc tired
of hearing ami readln the "roC about
"flattie" and "non elastic" eurency,
write a letter to Secretary Chaw re
garding the money question. A copy
of the letter was sent to the New York
Journal, but the Hearst forces turned
it down. They are great on playing
fast and loose with socialism (which
at all times Is "gold standard," ow
ing to the JMarxlan fallacy of "In
trinsic value"), but it Is a rare chance
for a "quantitative theory" correspon
dent to escape the blue pencil. Mr.
Groot said:
Hon. Leslie M. Shaw, Secretary of
the Treasury, Washington, D. C
Dear Sir: I have read with amaze
ment your statement as published in
one of the Cleveland dailies relative
to the currency. Among other things
you are reported to have said is:
"One well recognized weakness, how
ever, has been strongly emphasized
our currency system is non-elastic."
I can scarcely comprehend this state
ment and I have grave doubts whe
ther you understand what you are
talking about. Do you know what
"non-elastic" means? Do you think
money has the quality of rubber?
Then . why not make currency out of
rubber? Do you mean that currency
does not get about fast enough? My
notion is that it is on the go all the
time and is so elastic that one is
scarcely able to see It as it passes
along. Why do you not tell the truth
about this matter and tell the people
that there is too little money In this
country and that in order to relieve
the financial stress more money should
be manufactured? Do you propose to
make it more elastic by compelling all
money to be redeemed in gold which
would practically make every dollar,
paper and coin other than gold, a
promise of the government to be paid
in gold? Is this the sort of elasticity
that you are struggling to fasten, upon
the people?
To admit that the currency is not
elastic enough it to admit that the
quantity of money in the United
States is too small. To state that our
currency is non-elastic is to admit
that there is a shortage of money,
and, if there be a shortage of money,
the only possible way that I know of
to relieve the situation is to manufac
ture additional dollars and put them
Into circulation. You and your pre
decessors and those In charge of
things now seem to think that It Is
the duty of the government to devise
some scheme or other to prevent the
manufacture of money and thereby
assist the money barons In their ef
forts to skin the people through the
channels of usury. Why do you not
advise the congress to open the mints
to the free coinage of silver at the
present coinage rate and thereby in
crease the quantity of money in circu
lation? Would that not make the
currency more "elastic?" If that
would not increase the elasticity of
money sufficiently, then money could
be coined out of paper in such quanti
ties as to make it sufficiently "elas
tic." But no doubt you would say if
such a thing should be done the par
ity between gold and silver would be
destroyed. You have no doubt seen
much money In your time and know
how it looks. I would like to a&k you
if you ever saw a single dollar that
had the power by virtue of law to pay
debts, public and private, that was
not the equal In purchasing power of
any other dollar that had the same
power to pay debts? Under free coin
age would not a silver dollar be worth
a gold dollar and would not silver at
once rise in price to correspond with
the mint rate? If not, why nott
Would not a dollar coined out of
paper,, which has the power to pay
debts, public and private, be of the
same value as money as a gold dollar
or a silver dollar? If not, why notT
Would not a gold dollar, a silver dol
lar, or a paper dollar, if each had the
power to pay debts, public and pri
vate, be of tho value of a dollar and
would they not be on a parity with
each other as dollars? If not, why
not? It seems to me they would.
Since it is the province of congress
to manufacture money for the people
and the quantity of money confessed
ly is less than the people require,
would It not be wiser for you and
others to demand that congress coin
dollars out of gold, silver and paper
and put them into circulation In such
quantities as would make the cur
rency sufficiently "elastic?" It strikes
me that this would be the proper
thing to do and the quantity should be
Increased so that there would be not
less than $100 per capita In circula
tion and each dollar should have full
power to pay debts, public and pri
vate. All notes now outstanding
should be taken up and redeemed In
such dollars. The people should hava
dollars and not promises to pay dol
lars to do their business with. Our
financial system, If system It may be
called, Is monstrous, but how can we
expect any better when the people
who have control of such things have
no conception of the money question?
It is a system devised for the purpose
of swindling through usury all people
who produce wealth. I have read all
the reports of the secretaries -of tho
treasury, Including your own, relating
to the money question, and I am cer
tain that not a single one of them, if
what they have written on the sub
ject is evidence of what they know of
it, has any comprehension of It, simple
as it is. It is certain from ray view
point that you have as little knowl
edge of the subject as any person I
know of, and, if your notions are to
prevail, this country will never see
the time when it will be any better off
financially than it is now. It Is al
ready in a condition to be declared
bankrupt. It is certain that the peo
ple, and they constitute the govern
ment, are collectively, hopelessly in
solvent and this Is the result of the
financial system that has been fast
ened upon us. I would be glad if you
would read a. bill that I prepared that
was Introduced in the senate by Sena
tor Butler of North Carolina and
which appears in the Congressional
Record under date of February 15,
1900. That bill expresses my views
as to what should be done, and, If it
were enacted into law, there never
would be in this country any more
talk about "elastic" currency nor
about financial panics. But I suppose
you will not read that bill and possi
bly will not read this letter, but that
will not deprive me of the satisfac
tion of expressing my views to you
upon this question, crude as they may
appear to be to you. Respectfully.
GEO. A. GHOOT.
Cleveland, O.
The Old Giard
Report of lha Third
Week's
Enrollment.
report of progress.
The Old Guard of Populism has now
pasr.ed the Btage of experiment and we
may fully expect to seo the enroll
ment grow at n gratifying rath dur
ing January and February. There are
now moro than 200 recorded mem
bers, a few having, for pood rcn-oin.
asked that th lr name bo left out of
tho printed Mrt for the prtwut.
Tho 1'jS names r ported represent '
Btiitca and t rrltorh, and something
n.oro than V') count le. The ruie
Miit In the natiK-n of about pop
ultn, to whom the Old Guard printed
mutter U belna out, with an Imita
tion to enroll. Jnt a oot, z:. tf.: en
rollment beRln to n,time a drflrlte
form, arrangements will b made
through tho Old Guard members to
effect a temporary organisation la
counties where no populist organiza
tion exists at present. I should be
glad to have tho members who now
live In counties without a populist or
Eanteation, to look about them, talk
with other popullata fn tho county,
and If possible secure tho name of a
populist In each township or precinct
tu act temporarily a committeeman
until tho regular organization can bo
made.
Now, n.i to the matter of making
our national nominations by direct
vote: ThU question must bo nt
tied definitely at tho fit. lout meet
ing. February If 2, 1901. The Denver
eonferet.it e agreement by no means
j.ff-ii,Hs direct nomination, if th
populist of the United Sis ten Uetlre
It. I niKKest that every member of
tho Oil Guard of populism wrllo a
letter to tho national committeeman
for Ms itate, urging the durability