egfv ff if
Vol. XVI.
LINCOLN, NEB., JANUARY 19, 1905.
No. 35
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Baaiks To, Mob iLDepositors
15he New Money
Legislation
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Editor Independent: How soon the
greenback currency will be destroyed
car. no i be certainly predicted, but it
Is evidently the intention of the pro
moters of the scheme embodied in this
bill to bring abort that result very
soon. When the national bank3 have
agreed to currently redeem $130,000,000
of the legal tender notes, $65,000,000
; will .be at onee destroyed, and the na
. tional -banks are, after this, prohibited
from paying out a dollar of the $151,
688,016 remaining, when it comes into
their hands. It must be returned by
them to the treasury where it will" be
redeemed and destroyed. This, as I
have said, provides for the immediate
destruction of every dollar of legal
tender government paper except the
$130,000,000 The only thing that will
prevent this is the proviso contained
in section three, as follows:
&ut it shall be the duty of the sec-
,.tpy of the treasury to maintain tne
'Mr"0 ni!!.;.raouBt not less
than 33 1-3 per centum of the united
States notes at any time outstanding."
It is impossible to tell from the bill
itself whether it is intended, by this
provision, that when the gold reserve
is reduced to 33 1-3 per centum of the
outstanding legal . tender government
currency the department must stop the
redemption and destruction, or wheth
er it means that' the secretary must
buy gold to keep the reserve up to the
required amount. Authority to issue
bonds has, in the past, been predicated
uron a not much less flimsy basis. ,
' The moment a presentation for can
cellation is made under this section,
that moment the paying out and is
suing of gold certificates stops; and,
' under section 15, the power to issue
geld certificates is transferred to pri-
vate Institutions or clearing houses
to which the board of control is auth
orized to grant charters for twenty
years. . '-- ' '
"Section 15. That said. board of con
trol may grant charters to clearing
houses for twenty years, with such cap-
ital and power to effect clearances be:
' tween banks, bankers, trustcompanies
and other financial associations, and
to do and perform such other business
and service incident to clearing-house
business as such board of control may
approve.
"And such clearing houses are here-
by authorized to receive deposits of
gold coin and to issue certificates
' therefor in denominations of not less
' than twenty dollars each.
S6e Coin Redemption ILyil
Editor Independent: It would seem
to me that it is not necessary to say
anything further x in regard to fusion
than what has already been said by
Mr. Watson. Teh years ago the pop
ulist party controlled states, had a
' dozen congressman and displayed an in
tegrity which frightened the old money
'power. It must be side-tracked. For
that purpose Wall street hatched out
' the silver nonsense, and of course some
brilliant adventurers were ready to
exploit it. The professional crowd,
who always have betrayed the people,
took It up and were able to drag the
populist party into the fusion folly.
Every succeeding election showed a
decreasing vote and a weakened or
ganization until 1904 found us dis
organized and powerless.
This record certainly ought to satis-
f y the lickspittles of W. J. Bryan, and
' Is al3o eminently satisfactory to Wall
street. The farmers made the party;
the lawyers destroyed It. This is the
history. Will it be repeated?
Of one thing you may be certain:
hereafter there will -be a straight popu
list party in this state uid natipn.
The recent election-dropped the dem
ocratic party right where . Cleveland
kft it in 1896 a traitor to the people,
a defamer of the nation's character, a
corrupt and abject tool of every scheme
of theft and exploitation which the re-
' publican bosses ha launched;' Two
' republican parties! It is just as hon
orable and effective to fuse with one
of them as the other.
Said certificates shall be receivable for
customs, taxes and all public dues, etc.,
etc." -
In a late debt and cash statement,
it appears that, of the amount of gold
certificates represented as outstanding,
there was over $40,000,0u0 in the gen
eral fund of the department, and
against which in the trust funds wtserviRg'an amount of asset currency
held that amount of goldStartrSs.
also aboutHhe s?jpimcunkof rgold
in the rixtfkX; fund. s All this will be
arilbli, and "a par, at least of the
gi res rye to redeem the legal tender
cik icy Enough will be available to
ma. ; it possible to destroy almost lm
mec cljljair legal tender except the
$130, 3,000, the current redemption of
whiclx the banks will have assumed. If
any VrtVfc it should not be redeemed
by the trei'&ury.no provision is made
for the ban3Uo pay it out again, and
it-will f 9 ti up, possibly as a part of
the bai:; rej&ryes.
It is a little doubtful if the men
who dr tsd ihjs bill know what will
resultdrom l tf-vnether they have not
allowed their desire to get the legal
tender currency put of their way, and
to comn.:ce the destruction of full
legal ten!-T V'iTer' to, cause them to
overlook L "i fcossibittties of. the bill
in other i J.n ctions.-The question
about the r :on for fixing the amount,
the current Coemption of which must
be assumed I x tie- banks, at $130,000,
000 may sugli ;t c'tself. At the time the
bill was repot ts4V;hls amount was very
little less thta 20 per centum of the
paid up capittl of tali national banks.
This limit isntrgenoughto enable
the remainder ti Be; destroyed, and
small enough i ir ale the banks to
hold every doll ? Qut of circulation -in
reserves until t. V treasury department
can call it in. Z 7 le ; time when the
bill was reported tf Capital of banks
has been increr l $100,000,000. At
that date the oi tir-dlng, bank cur
rency secured by t jndb was' only fk
little over $300,000(0?$ 5 less than 50
per centum of th r frigate paid up
capital. Since that:jte. the bank cur
rency has-- been -L iraaseC to almost
$420,000,000 and isi-rty aSoii 54 per
centum of the aggrtite paid up capi
tal. ' ' ' ' ':;
More than one-hali of the paid up
capital, of all nation. 1 banks is rep
resented by bonds hell by f the. secre
tary of the treasury to eecu.-e.the bank
notes outstanding. Just -what banks
are expected will assume tie' current
redemption of the $130,C0d,(.tS3 is' not
i
When one reads Miss TatsU's arti
cles on the Standard Oil Larson, on
Finance, and Folk's expert "r lnSt.
Louis; then add to them t-3 1 Bwtley
incident in Nebraska, we uad&mttjid
that the so-called upper crest. (The
rich and politically pqwerful) ls cop
posed of criminals and those rrLo f,o
done crime if it is profitably Bl'ea
the president and his attorney tcami
"particeps criminis," . to the K 'erfc
Securities crime by turning lc "tle
Criminals after the evidence 1 JLk
in and a conviction certain. Ti
uiciuuci ui a iouui uitom4auuuf
abiding and; honest, entitles a n: i
death or deportation, but to be a t rr
ber of a capitalistic organiza '"
proved to be criminal before the t,
est court in the land7 entitles on
wealth and. luxury, and the prose( -ing
attorney to a seat in the Uni I
States senate and the president; to
re-election. , j K , ;
I find that this condition of affairs I
as much endorsed by prominent demo,
crats as by: prominent republican
That men actuated by greed might do
unlawful act3 and commit crime, might
be accepted ; as certain, Without cast
ing any reflection upon the govern
ment, of the country. But when the
officials of the government become
wealthy by conniving ; and - conspiring
with the lawless, and when the crimes
are discovered let the criminals go un
punished or pardon them, then the
people should begin to understand that
their politicians and statesmen are hy
pocrlts and knaves, and that their
clear, because it is not clear whether
ttie banks that already have one-half
or more of their capital invested in
bonds held by the treasury can, by
assuming the current redemption
United fctates legal tender.tw$-;
to 20 per centujx-SitT1ir capita..
avail twJes of the privilege of re
equal to 10 per centum of their capi
tal. If this is the Intention of the pro
posed measure and I think it is then
the banks with one-half of their capi
tal tied up in "thT treasury can get an
issue of 10 per centum at once, and 10
per centum each year until the pres
ent bond issue and the asset currency
issue equals the entire national bank
capital. These banks now have 54 per
centum of their aggregate capital en
tirely out of their control and in case
of failure this amount can not be
reached to meet other liabilities. Keep
ing this in mind, the section of the
bill providing for the security of the
proposed currency ought to be consid
ered carefully.
"Section 7. That such notes shall be
a first Hen on the assets of the respec
tive banks, and shall be received on de
posit and for. all purposes of debt or
liability by every national bank at par,
etc.," etc., and such notes shall toe re
ceivable for all public dues, except
duties on Imports, etc."
To understand the full import of this
provision, a part-of another section
ought to be read, as follows:
"Section 11. The United States bonds
and gold coin deposited by the banks
in accordance with section 5, etc., all
the money received for taxes upon all
bank note circulation, all the
interest upon deposits, etc., when paid
into the treasury, shall be set aside
and constitute a fund which shall be
designated the guarantee.and redemp
tion fund. : : -.,
"First A fund to pay. circulating
notes of any national bank outstanding
at the time of failure. But the United
States treasury shall recover from the
assets of said failed banks an amount
equal to its outstanding notes, and the
same shall be paid into the guarantee
and redemption fund." : s
Under such a scheme, who furnishes
the ultimate security for asset cur
rency? Let us see. All United States
deposits at this time amount, in the
aggregate, to about 16 per centum of
the capital stock of national banks.
This deposit is secured by bonds in
the hand3 of the secretary of the treas
ury ,and in whose hands there is now
government is run for what there is
in it. ' '
i To one feat"' e of Mr. Watson's let
ter I object, viz.: His continual refer
ence to Bryan ; and his platformsas
populistic. Mr. ' Bryan makes : some
very populistic talKs and that 13 his
long suitr When you get down to his
remedies and how they are to be ap
plied you will discover no populism
whatever. He deals with incidents and
palliative measures, he wishes to re
tain the present systems land engraft
upon them changes, which he calls re
forms, whose effect would be immedi
ately nullified by the fundamental evils
of the system. Such is his proposition
tn hav a nnf fnnnl lnBoH nf ft stnt.
kharter for corporations, a3 a remedy
jaw-ipr corporate expioitauou oi. tne peo'
pie, : a 1 proposition that isT absolutely
rally, and the coinage of silver at 16
to 1 as -a remedy to free the industrial
slave was just as impotent and foolish,
tj'hese are specimens of his plat
forms and statesmanship. As to hia
sincerity he has shown that he pre
tt rred! to see the people sold into
be adage for four years rather than
rbaridon his" party. His Chicago plat
"r ' reiterates the old republican
ulse of coin redemption and it is
af.med at Kansas City. This prom
Mndorsed;s and no relief for the
k 5e, ;for it pledges their labor to the
ti'cracy forever, in fact it creates
"ttstocracy and puts the power in
' hands to - keep up a perpetual
lipon the productive industry of
utry. Two hundred y6ars ago It
c ught necessary to own the land
t tiborer in order to get the
a.
tt
dr.
th
wa
anc
pnx
let A
on).
UlBit now they free the slave,
uaye iue una uo pay taxes
.tttct a precise of coin re-
about 70 per centum of the aggregate,
capital of the 5,477 national banks.
This amount of the aggregate capital
is covered by a preferred lien. Tti
'-""proposes to make the asset cur
.ency a first Hen on, to be recovered
y th departnent from, the assets of
ne bafks.
WhaV constitutes the assets of a
snk? Jertainbt not the capital alone.
p everything in its possession, in
c. 'ding he money of its depositors.
last? abstract of the comptroller
sir vs tltf aggregate paid up capital of
allatiom -banks to be $776,089,401, .
and' the resets $7496,991.995, and the
Hat 'ties .excluslve of capital, sur
plus ,nd undivided nrofits ahout. Sfi.-
OOO.Cv 000. k)t this liability nearly $4,-
500,00 000 re deposits. These deposits-
-nak?( over three-fifths of the
assets i,e national banks. -The
lien of, ssetrcurrency is to be a first
lien on -sett and is, of course, a first
liettas i al4t-the depositors on thb
money t,oted by them in these
banks. Tl Apartment Is required to
collect flrsAtlV amount of such cur
rency, andVVrip depositors will get
whatever theVan out of what is left.
As the law pnd3 now, an amount
oqual to 70 j r 'enVm of the paid up
"i"M S v xn-or xMf-wpref vrt ed lien;
and out of reani of the dftDosftors.
That is bad incgh; but underthU
scheme of tlu VTaanclal group" it is
possible to a preferred Hen
against the ass j.hat will exceed the
entire paid upCMtal. - The bill 13 a
fraud, and prpp?; t to legalize a rob
berv. The ultima? 'Vifitnirltv of this sn-
called asset curri V rests upon the
J . . ... mi. - ' . . - i a
Depositors, i ne q. v protection tney
will have will be i
esty of bankers; bu
bankers are not ho
individual hon-
nfortunately, all
t, and all who
are hone3t are not
had congress to ope
8. What right
i'uch an oppor-
of the "flnan-
t unity for the scound
dial group" and tt
nthara9 i
toolishness of
It is "difficult to'My patisat with
leaders, who ought to nrstand what
is proposed by this bi. I tlut . who- have
become as silent abot ' i , aa Parker .
was, before his nomim joLbcat the
"gold standard," except V)ay thit the
money question is less ' Wfrtazt than
it was in 1896. ' v .
This i3 but a part c' !wtnt 13 con
tained in (this magazin, - of I evil fur
poses. ". -v.- ' : : 1 .3 V : ' '
FLAVIUS J. VX I V 'RmC'. .
Indianapolis, Ind. tSi ;
(To be continue )
demption. Then the maste. draw
on the treasury and the trea irdrv"3
on. the people and they ca ti& for- '
ever, and the debt is never f d.This
promise of coin redemption aseea
fastened; upon the toiling m io cf
this and other nations under he pre
tense that it is an economic i ceity
in a just and correct moneO y ys
tem; in fact the very foundatic vsWiel
This is the most ab3urd and grC Hdiss
lie "to which a sane paople hiw evr
given credence. This promis a-.
stroys a jus monetary system Nef5
ever it is adopted; it has no ecoi.x Sil ;
relation to a monetary system v 'at i
ever, but cdmes under another d 1
It is a, grant of power, the ,"Mts .a)
Charto" of the invis.Dle empire, A -'
render T of national independence sr 1 ;
a betrayal of the people, an act of trl V
son by the legislative authority. . ; y
There Is no legitimate business t
industry In this country which is beni '
fitted by - this grant of power, but i
places all business to danger. The ex v
erclse of this power through the Units
States treasury can lower the market
value of property until iMs no lonssr
security. Then the domestic banker, ,
the merchant, the farmer, all are ban!:-
rupt together. This 1 generation ,fcj i
had several object lessons of the ti-
ercise of this power,-but have else d u , ,"
us eaucauonai ut'iieni
because Vrf
great statesmen always point to eoie
other than the true cause, for instpice,
the tariff or silver. Let me givs j our
readers a brief history of one cj them:
In 1890 a money gamblinghouse in
London defaulted for 15 mUlioas ster
ling interest in ArjJtSi? securities.
datioVi'oretn securities.! Arthat
ic'rT! the United States treasury wl?
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