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Collection Title Series/Volume Shelf/Accession No. LC 77-38 (1/70) • Monetary • niPitv""f!'"1 aii1•1114•44. MAR nta V. d ( °P L- t / .2=z4-t4e, 2v1 aoit g.• oiN L vr` • og . 1.00 0-61 o•iL?-g,1 c-9 Board over FiderAl Reserve banks and their members, in fact over the entire banking business of the country, are vastly greater than any vAttiodancemsp4m-exercised by any central bank in existence. f/r / rrr-c-‘,.; (Lt.. , ask.,.‘.. 4 1#.64 ./ eL, A 0 sck kigg.t.....1 1 , 0 c8 /-011 o-of-the-act. A I Q:1 I-ItEtve---a-kready---44,64.41r-trhot -bn e establishment of the Federal Reserve Board Congress would create a Government central The Board istaass444tOmod a bank of issue, as all—af-the bank. k 4 i Government notes authorized liajimitilie=oreft are issued by it. It is a bank of discounts Vals4, because it 1s....0.4444er-iee4--4-e-make1$laans ..)cy.L...0...,.. ,CA, i-- ,::\ . based ,ou-Geriperinstont-notise to Federal Reserve banks; „,,, .......‘.. .., ..,,,e: ''.. ,:ls, ;'.4 . • 1 ' . a...,1,;;.,:•;$;. se-Gefidv---bay l , ."4.4.1011421.1110111.,..11., at • juLtate-pr."4-tritrtrir-wtith--I-have .-retTted. _.•Y• k11 , t .,4,, •:# irtees- .41- -lits.zantirei -Wee. c Fe4Leral Reserve bank9 is practically managed and dia , rected---br trre Federal Reserve- Board. The Itibihiazrzatigral Reserve banks and their offices scattered throughout the country are imr G, -e: P (-}•si f (tAgga-m.Ooly branches of the central , . •• ,i...********“. RA0AMOie Board, se-they ' s. 4%1A,1 reenarki,•4. .754,.6411g4 . 11410044 „ • /01 , • a's.A f 2 c\- ''ir 1/.. pse_r_tarm..alfirokfrILUaliona under fits direction. • 4 • •4 • ;• The powers granted and authority given the Federal Reserve ge " ;.) , 1. 1;ational banks /Xf _-& r -.1 X < aticnal Banks to subscribe t h ckpel Ara f r ,t 0 cA. to the stock of the Federal Reservt Banks t-- <7 CA. e- e banks a‹.Lar..t.c.in portion of their reserves* , eposit with t-i.re-6 tis.c penalty of dissolution in case of failure or refusal/ It <2 , -:f A' /KZ t is hardly necessary for me to reft!.r to the circumstances surrounding the creation of the national banking system. The national banks were established during the civil war to provide a safe and uniform currency for the country and to strengthen its credit by furnishing a large and profitable market for its bonds. Both of these purposes were successfully accom2lished. fect in our system of bank note issues is not due to ty or uniformity. Any de- kot of safe- The success of the various refunding, acts by which the interest on the public debt has been reduced from six to two per cent and vast sums r;aved to the people has been owing i,v.41 e 4.14A) National banks 2 to the use by the national banks of a considerable portion of out AL standing bonds. T,h44 use has been practically enforced by legis- lative provisions. The banks are now actlOunder charters gran- &4.4.4;144, ted for a fixed • w444-certsin definite conditions which have lott A.A.64-10 4011L4.4 011.6A..nr,..,c 6...0 AJ been faithfully lived up to with the result that 1,eoweis-4e de- ; Nat positors and shareholders had" been infinitesimal. zC<AL 12-4.-d it,ra 7 y I submit that it is not fair to impose upon these insti- 411 National banks 5 al to the state system would end in a financial panic such as we OA‘ have never seen in this country. 4=44; -zic.ft*LAr thte can however be d4.4p6-1.144 by makine the participation of the ilational banks in the scheme voluntary, or by aereeinE to some safe method by which the transfer to the state system can be carried out with- out danEerous contraction or imposing a ruinous loss on the banks on account of their holdinEs of 2 per cent bonds' 4 0 -74A-C-3.--- (2, Gt,‘A-4 )21' ,L-- ikt,t /6. As, /AeVi A • ( 7--Ocr It-1 1-% ) CA- e'ZIA4r.S. 4=P? t _2 4e. •;4 5.-thousa44.-.134,41•Sati,44.440x.e • a-4 It is, of course, problematical what „ portion of this vast amount could, by an insistent demand for money or by a desire on the part of the Reserve banks to increase --irn -4ir L4 ' their profits, be made available as security for loans of notes from the Board. firr: m If five per cent of this amount could be used we should then have a thousand millio ns of additional currency. 4 CL 12,5L.A3-eily- C-en The lai..11_11xes_Aa—r-a-tre —et L -ff inters-et—on 7t ,01-im-1-1. A-4 a- ovt-A laaas—e-f---mefiey-4nacle to the banks. If a bank could hire money eric"/ 0 at eo and loan 2/3 of it to its custom ers of 5% or 6%, the business would certainly be a profitabl e one, and if the notes 47 4c4.— cem4d be kept in circulation indefinit ely, as they probably Iwould be und-er—Ciipw-oixeratioa,44,tba Gre sham law, the amount of kta itoOd tme2"- loans aoteed be increased indefinit ely. px-fm,e,d t\ It ie-difficUlt t'á' Eitherthe aut hova_of the plan con- • . ) 4 ,7c42fri-eAvz 44, 41- 1" fr-e the chairman of theo r own Board of Director s and kept initIlaa 'vault on their own pr emises., .elle-415-ernr-k Ck.q.--420 e 4- Jet47 r‘ ?to-6C; m-eiternred----ert-emr-ttme I e got ile, (o ) 0-4 77& C a_ 9 0 ot- a-6 another form of currency would be added to the seven already in existence, and if the provisions in regard to the use of letters and serial numbers to distinguish notes which are to be ultimately redeemed by particular banks, should give a greater value to some (L, Afr1 , 1 trc, C 42A_ 7ellr2L1 tAi notes than other, we should have twelve additional forms of cur- rency. a-5 w soon as e-e-e-aa-sion for-the-IT use has passed, otit-r,.„etz_,,e_f2 7 60-- CI nc), 1;6— LAr,,, /fa y J14,--(0-=; _-- K2 wAeer—the4-8.r_e_11444aded t-e- become a permanent addition to the currency of the country. Whatever may be the, intention of the autd4orer it is safe to assume that currency of this character, A,04= once issued, will A.44L hn:L/t 190414T be retired, and that i a amount will con- " a‘ 16 ( ' -4-4.-c-4-4---•-4-4-1-12-Z4: stantly increase. Each one of the Federal Reserve banks, by the provisions of the bill, are forbidden to pay out the nOtes of any other Federal Reserve bank, the purpose being, I suppose, secure their prompt redemption. But no such prohibition applies to the twenty-fire thousand other banks in the country, or to th business men and people in whose possessioa the notes would be found. With the-pevehiter use of the new notes, a-8 IA \7cF s) \ /14Aat t!4+ It will -be said that the bill places the obligation for re demption upon the banks and requires that they should hold re- serves, and establishes a lien upon all the assets of the banks 'e eflvt rte f,tt t (11 tor security. I A CA--e /07-f144t;_:;(-e_f , 7t-04.t. But----suriagase-agalit-the eondttfons vf -rata-T, of what A_ k_ct ayadl would be a collection of miscellaneous paper held by the Federal Reserve board) . disposed of. The collateral certainly could not be It is impossible to say from the reading of the bill whether the title to the collateral is to be in the Federal • Reserve Board or in the 42reasury of the United States. ir 1T ; Ww The SI G?'FQ4444444 4fb th4 United State-L-18241es_ ilre-ebligationewut-the/1-t--ce.C-- .14 Abi-s-g4 t-, leCollateral is in the howl-s- of an agent of the Federal Reserve Board. The same uncertainty exists as to the lien upon th assets of the banks. to enforce it. How is the lien to be enforced, and who is Does it exist in behalf of the United Stlites or the bill holders? It is difficult to understand why, if the Government notes issued are to be redeemed and their safety in- sured by Federal Reserve banks, the United States should engage in the business of loaning money, when the obligations of the banks could be made as safe and as valuable as those of the Unitdd States, and all responsibility of the country and all danger of the possibility of suspension would be avoided. Heretofore in legislation looking to the regulation of cur- rency or to the issue of Government obligations Congress has sur- rounded their authorization with every possible precaution against fraud. Issues of currency are made through the appropti- ate bureau of the Treasury Department, and k4s—character and de- jkominations are fixed by Congress itself. In the case of the pending bill the Federal Reserve Board are authorized to Lssue a-10 ,f 1"-cct_ aatoamounts, to obligations of the United StaIei fix their character, form, and tenor. The transfer of this im- portant function of G6vernment to a Board whose acts are not subject to the supervision of any Department of the Government, with no requirement for reports or publicity of transactions, with no power on the part of any representative of the Govern- ment to digIsts detect or punish a flagrant abuse of power, has no precedent in the history of this or any other country. the If the Board should ex-hrt-tmg-4ritte-of"etzalay-ar--iii-Za4=-44 the notes which they IOWA- 7 'fi".->- 40,- c. 47:it frV- 10 ( have authority to issue they might easily, by providing for the issue of the new notes in small denominations of onPs, twos and f A-C) ' ekA fives, drive out of oneireenoe silver certificates and United in States notes of equivalent denominations and give t?re field ire- • (3 . unlitr-rted. ,' • ,,,;./014.retmiTfSe so, tha In considering the elan- cerous character et government Lote issue we must not lose sight 49N7 oiC e / of the ifet, that wirirr-t---igsue 4 7 AG, tcdtliC4.,--, strict- ly limited in amount and _urrounded by safecuerds and restrictions for the purpose of riving permanence to the value of the notes and insuring their circulation and convertibility, exixarie-e has-siteer o, sl;a5suL that in every case limitations, safeguards and restrictio ns 6. have been, one after t't 4:2-4 t nother, removed or modified. dr-e- krz. In this case 1-1 r4*-4.-4*,,e—ettite1r—th-cre i-e—nio practical limitation upon the initka i rt-4-4--tr71-1 issue ai % 1 —can ' that no ConEress will be able to reset the popular demand for the remcval of all impediments. ( -17'? 6c-r` / e_ A-44 c a-11 1.11,111 new form of ,Government- EZE The Supreme Court of the United States in the last legal ter* der case, affirmed the right of Congress to issue all obligations of the United States in such form and to impress upon them such qualities as currency for the purchase of merchandise and the payment of debts as accorded with the use of sovereign govern- ments, and under the power to borrow money on the credit of the United States and to issue circulating notes for the money bcr- rowed, its power to define the quality and force of those notes as currency is as broad as the like power over a metallic cur- rency under the power to coin money and regulate the value there- of. The issue of the Government notes under the bill under con- sideration is not for the purchase of merchandise or the payment ,,- •'"'"''.,,,. 4";1.-........,.. " ..,e a-12 -N,,,,..„...„...„-- of debts, nor can they be said to be issued under the power to borrow money for present or prospective needs of the Government. Notes are issued for the sole purpose of making advances to Fed- eral Reserve banks as definitely expressed in the measure. In other words, to enable a Board to exercise a purely banking function of loaning money on collateral, loaning the credit of the Government to private corporations. Grave questions may well arise as to whether Congress has the power to issue obligations of the United States, 44k,3 if it has the power, wilother it ire ex- pedient or wise to exercise it in the manner provided in the bill. • 52. The greenback sentiment in both parties Was strong enough to secure the passage of an act in is) United States notes in circulation. increasing the limit of The veto of this measure by General Grant was an effective check to the first a .donly post bell= attempt prior to 1913 to inflation through the increased , le • use of government money. /14-1 ,.While tile opponents of resumption and the friends of further inflation and of the free coinage of silvtx included members of both political parties, they were not strong enough in the early stags to induce either of the great parties to openly espouse their cause in national platforms. /The democratic platform of 1872 contained an emphatic declaration in favor of a return to specie payments and a ,Aaintenance of the public credit,and de- nounced repudiation in every for and guise. The &tilure of 53. the friends of inflation to secure the formal support of either of the great parties to their peculiar views led to the formation, successively, of the greenback, people's, and populist parties. 6. The letter was written to a member of the Committee upon the eve 6 of the Democratic caucus.up4a, the bill and amendrrlents . While this frank and courageous declaration of Mr. Bryan's had 'Ile expected result of solidifying his followers in the support of the bill , ,e.k.441 4, t . i it s1124414 open the eyes of that numerous portion of the American public which is not and never has been in sympathy with his pecul4 iar views, t. the dangerous character of 14441 proposals. The Bryan proposition as now made gagese.Wrifotot.seartioAsintorv. AAA_ ô oci OL.0 tfr• , ( - whioh hee-ever-been"""suredsttd In' the natafe•• 0 ( 1 C ovitzwationt. ..e's ,ez. • 4 a A • r Tb.e..-ang....abtaal.e....343.1c1..hakkAulatalow4,4.64—in-4114o-way of a, 404 -.21 ci•-• the_fijAgt,1041.441° ,•••••••*LAv, '1N").* '34.! c"- •;• . 4 11' ‘ .v' d: Ct..- /4,1 ° ' fel •i ." # wh,teir-nataix-aoula be-clistributad. 41„..t.1 C. Mr. Bryan himself has not alwap t ttiA. 1 been clear upon this point. ( In a speech aade by him, he says:-- "If it is said that we must institute banks of issue in order to put money into circulation, I answer that there is a better way. •,• greenback thebries has 'beau 'te0-4.ind-o4m4-lay "th-rfa-646-7c ....t.rwervotw, C.17 The issue of money by the Government directly the 8. danger of the placing so great a power, that is the power to loan money, in the hands of a dominant party. It would seem that Mr. Bryan's ideas upon the subject are progressive Awl could no /( have anticipated in 1894 that it would be possible for him to secure the adoption of a plan of distribution more compre- hensive and radical in its character than he at that time thought wise to advocate. Mr. Bryan in his letter to which I have re- ferred reiterates with increasing emphasis the statement that a government issue of notes through a Board of government officials waea distinct triumph for the people. If the method of distribu46 tion by loaning notes to a class of banks is a triumph, why not make the triumph more definite and beneficial by loans to all banks or, b.ettea..443.1 1 to all individuals or corporations doing L " FL, A wordt. business or directly to all the people. If the tile...cajt,g4 .9g.i48 • ^e. •_.- ( afftractIteit'aki cr e L q ADA are really in the interests of the 9. people, why not make them comprehensiv e and include all the people rather than a certain privileged class 9 It is not -„ surprising that Mr. Bryan and his follower s should be but little , concerned as to the other details of the bill when they have achieved a victory of such transcendent importance. I have no disposition to detract from the cred it which Mr. Bryan entitled to for the victory he has atta ined but I think we have A 4 Nkb , a right to ask that the American peop le should, be given an oppordg„ it 4 tunity, under the circumstances, %7.54 for a full hearing an.a-question , before judgment is rendered adverse to their highest interests. There can be found no precedent for thds 41) remarkable el.• so' delegation of authority. -4t:h 4‘9"0K7eAdvs.4 Lk4v .z& ilr--e- - C 0(..,‘ c> L-- t .1 14 t. 6- l. 7 ,..... I- / 4 -.) \ t..- • ile". L it t i I C--.2,- 7--c-‘,%.. 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V I\ ( (;1. r_.) ••,, tAit• sP L'I V.k 1--) 0 ' ' 4 - is Ci-)- i g , \Cb Gt,-0-- t. z ( 2..--ae--1 /‘- Cr',?: / 4 II-a.' 2.S.., 11-- .0-1,.,.e."? CI-L A -4,4-4) .........--• C-t-& t,)1 1/ $.̀"- a. 11...N.•*.::A . i / s /1114,-44. „„•••••••. 4- • ‘,1 L • /, 7 -C„w ''' Lle.-..}....e. .• , 4.1. c4 d (2p. .e t iz tot_ 04. ti; ‹.t.k_se)‘ d*/ ) "(At C e 4.00:rium. - € 4„t Oa'j04 .-`4,1 ,44 )f 41: kit c_ $ cr-1, 4-4 ••"lei% 7-7 e-es, • 111 Irr4-9 Of sc • e --a-"\rvo ( I .c4c# 114 ) 7....11 . L-Yner plvrt,/,:t1,(JrD ivle? 2/, •"An40 )-7 0 W AL 7%-e- E4 9 OCLCA. Gt.A, 2ed_A-7- cov*Ae' #1, II-, ° ?,1 ;to / a , Is Je / 1 /$ /- 1 Al l''i (,, a , i 3 4 Cp ‘ / 0 a c4 y-4 other hand, the banks should take advantage as many of them would be sure to do, of the reduction of legal cash reserves from la to 6 % and extend their ciredits on this basis, the 1 general effect of the loan would/be a large inflation of credits/ vp. It is quite impossible to say p44ecisely what the effect of their"(. iv". a/ The immediate effect would be s wOuld t,')1 at-44r4t-tg contract credits -41wrio-Ptsres AGA' the necessary ad- T justments and transfers would certainly lead to great confusion/ After the first effects are over, whether the-rolite.14-omom44-be contraction or inflation depends upon the policy the national a-13 ‘ thituilitliFitt,000 C' two meth ds of relief, botatip.444,1. / ineffectjye. That the Central Board shall It_ia—piceia4aad;(1 require one reserv, bank to discount the paper of another. It is not clear whether this requirement means that the paper should be the direct obligation of the borrowing bank or that it should be a rediscount of the commercial paper held by such bank/. In any event, it would be almost i.dpossible to put tiommossolvoimory ofti/ 0<. . be pre relief into operation. suppose an intimate knowledge, on the part of the central board, of each of the of the financial condition and loan i4A t:. to,„X7 reserve banks otherwise the transacticn. worun ,of itself, pre- cipitate a crisis. The other method by which it is proposed to afford relief 1/ to communities ort2110=Pme in trouble, • transfer zovernment a-14 deposits from one reserve bank to another. equally peri]ous with the other. This ci. would be / Tille.o.e /(yansactions woula appear the weekly reports r-e-quized.-.4-1.t.k..-11 and the knowledge that t( 1 banks in any section of the country were in-4o eteeft-wouldabmtrost LL ' car_tainly cause a run upon the suspeoted institutions and the `; 1. attempt to relieve w.o.44,14" not only prove futile uut d-a-rtEeratte. I- ,„. rct oil t k....Govgrnment-spoidief,eas efficaciou6 in 1907 to rest ore confidence '.... , t• , ,-..0 ..- ,. 1 -0....v / I' , but Li that case the money was taken from the Treasury. 1.4i-tt cei COA.d tia,...14,en withdrawn from one bank t( deposit in another, the • beneficial effects would have been lost . Lf-r, The antZn of these 444.4pc-e-e.....tmake the resources of,ti relCa, '441 1 we-! *- ti e. reserve uank at,I)Lgig...Y.Ax.k, available for the relief of, a--1144alc..,.ix. 01ailorna, disclose s the inherent weakness of t /.,,,,e, • 3 1 A-c-t.ei.A. 0 t‘ the 44944.eme. / the capital and resources of each reserve banks a-15 id be concentrated in one organizat ion, its name is unimportant, of which ,the seve:ral reserve banks wou ld be rose47 branches, an organization under the joint contro l of the government and its stock holders, an organization wit h the authority and means to promptly afford liper instinted pro tection and support whenever )6'4" VIndsmv needed, such an institution would command confidence at home • .., j- • , 6 f and ebroad.r1.46.-p-14Ale4.19.-ietr-of an institution of this kind, in ••••' /the scheme we are considering, with carefully limited powers and strictly defined functions wou ld furnish an easy solution of all the problems that disturb us. 1 ; .s legislation as aAnouneed EY by its friends t i ame4w.....t.44----t-4--.41e.a.pla.c..olilx..3.1 — crre-n—ithe:±oska ad banking r,,. iJa, PiT V. riterests of the country bri-41moweseaCifs- )t,. .12 CAA " , 7 kistrrtri 04) taw Pedetal Reserve Board, (IA 1441---e-e-€*4+d , to prevent the concentration of 'Lite money of—tbilkty in I:ew York and other great financii-d centres by the crtation of tLe federal reser ve . banks. ) 01, A.A.,- 0- The banks are 474,4 472 1.s.1 AAA, hold the reserves now held in reserve and central reserve batiks, with a view of weakening, if not of destroying, the supremacy of the money power, or of the money trust, as it is sometimes @Ailed. To aid in the accomplis1- 44.' ment of this purpose a new system of reserves is propose(. Keeping these 1:urposes in mind it is desirarle to exami ne some- what in c.etail the methods for their accomplishment. Fifty-nine per cent of the national banking capital of the Lit 7 tor ••••• ; t Otr ' ' ' 'ANie . )7 LJ el 'r • Ze't-71-11.1 9-2 -7 .014 A t,1 a-2 1'v1-1 r , country is located in 13 States, classified in the Comptroller's report as Eastern and Middleestern States, while the other 36 States have 41,1: of the capital. The ]3 States have 675 of the bankinE resources of the country, while the other 36 have 33% of these resouroei3. The capital of the federal reserve Ganks is fixed by percentaEe of the capitalization of the national banks 0f-44esporca46Q4exio• It follows that 59;': of the capital or these banks will be located in the 13 States. 11, e) The deposits of theoe . reserve banks, outside of government deposits, will be 67', those of tne country. States will have A of If we asoulae that the banks in these - - potential voice in the management of the . 4 ' reserve banks 4iat....1.1i4 friends of the measure claim t001 Y-oftre7 the supremacy of the money power of the country will be OA,t-•44 . Jo/ etrenther1ed rather than weakened by the1.4.-4p04544*Ilon 110 • rt• cv t. % es. ' efr""ti e/• °^- t '4 •-• • 1,.•/. " -• A te,. CIV1L-"" 4""" A...a.... it •••.• t-3 the promoters and advocates of the plan. fC/ ' 1 4 Kly 4g,the terms of the bill national banks are obliged to fur) ; ; nish the capital and the deposits of the Pedt;ral Reserve banks, the only other depositor being the United States. They are obliged to invest a part of their funds and di-nrtree—of—it much 4y, f • 61:14 w I 4, t f '• V 4' • /*/ Large-r part of their resources i.414.-44...1.21,....zaw_ag. to submit to p- t-- nftjo business. ation of their eialimireieproperty and )., e, This leurree-vrrt44)44-4,f,--t-litetr- e-apital --anti res-ourevera-Pie, ; rip t . as_ stated, /7 - Jo' f\ rk ,e 11 (1f7 frr laced under the-contlul, baLJL,,memagocei—br political appointees, the Itajority of whom cannot have knowledge or experience to qualify them for the important 4A,, tr. tse: . f , -tarok a.oxacia-tte41--44---th.e.i.r..chargie. et/ (.„ :• Tha aaonal banks,41Auirigg..Ween forced into the position of stockholders and principal creditors of the Reserve banks, in / , • if"..tr1 • • /;; C ctt. 1. 4fe't ele- ce A t k , _ sr' ) • , ,A14- • - It' 4TN, •..•4".„. .4 )1, % r. t' %.,....,,, .11. -'.14, , '..4' . "..'"...''' : LA 4\ i-'1,-. ek,..6-4-1 4IA ..e. 4.. ' / ' a)-"Y‘' CL. t4 iiE11•41. ••••• •41,8'-• ei? )h , 4 .4 • 1,-k - ...ii , - • k. 41 t / 4.41, • 1*"11•„ C.-1-'1', (17 d c 6 / ..A- / 'V".1 k *Okik,,,..,-‘,0 P , ......, 1(.k -te.„..,,,, 1 AN..4.. ,...... % 11lI/ 4,- i\-4,..4., 7 ill 4, 7 Cs ' t 0 ”' il,Pt.,4 • t ,A I ir. f i • rc%t - t t, • fI ••••%-ti'6. 41. are AAA.- — tt permitted to in the 4nagement of " ic I ' ' 4 .4 4 16Atsa VW T t. tile-Reserve banks"' and national banks r , „. 4 7 , , i' _ .;, lc7, . :,. ,. ", , ;,,,tr iii generally, furniishe9 t4 only reason for .the creation and exis, .L4 kl.L.. , -,..0, , ,.„.„ .s.., , ._ / „.,,._...&0„..--.....r.r.,,.. • • /° 11 / tence of the central Bard. 'question whether the ift cDntrol of this central Board shall be given to the banks, but ether they shall have any voice whatever in the management of property. • popular control. The f'.,1ntions of the Board are exercised in provision secret and there is no padiricity for publicity of any kind r .4. • ,I • I , \ # There can be no review of their opinions and no appeal from their deoisions. It is doubtful whether they could be impeached for flaErant abuse of power. They are creatures of the President and responsible only to him for the mariner in which they discharge Al their duties. ey are- te4a zg.a tOTOPartJto_thc,fippaker ._ . . of the , House Of 1enre4entatt'rez In the pract42941 management of a great bankint; system ques- tions affectini important interests are constantly un/er consider/ L c.k -44.-attoa. 411-121 attempt to givc to a political olizarchy the power‘e'''''-.4 to :o tr-ol-the Iltrreet—butinees •intrreists of the country at their / discretion, without restrain and with no means of preventi: - or 4r )trw ) r 4,.• punishing abuses,,is-contemporaneoua t4 t•-• - y thea4A4 • , t-17 1,04 identAir ethe power to dominate his party and to dictate to Con- ore2s 1 if he was at the same time a.ribitious for tile succession, _ might be tempted to use an organization whose influenc(/would be irresistible to accomplish his purpose. 0 row'' 0400,4tpe 114 c A . \ --- ..., / .) 4 LI,C;1,14,f-vi, i (ir rL, , %OA._ t -v '• )' 4 P ce) , L.. 'CI 0 • 1 Rxtracts from Tucker on Money and Banks. Page 266 2 et seq. In times of great party excitement, that course of favoritism by which pecuniary consideration would be made to yield to political, andwhich the stockholders of a bank would be sure to discountenance, might meet with favor rather than censure from the governiaent. If party zeal is sometimes a screen for moral delinquency, we might suppose it would prove a coat of mail for mere imprudence. As public officers then would have neither the means of doing right, nor the checks against doing wrong, which we might expect in the directors of joint stock banks, their banking operations might prove a source of loss to the public, instead of gain. .1x1--tykte—rtext place, t. Tucker--4 of the public revenue, though men of hit character for probity, have not been able to resist the applications of their friends for temporary loans, until the practice became habitual, and terminated in their own ruin and the public loss; which loss, their character, by preventing stopicion and delaying detection, served but to aggravate. t-16 • IA yy-ty-e--0,. /I4,4 ( ctu. vtt-t„-;, 7/1. r4reaeatativ4._of thc ame_party, to secure legislative action vthri-041. will- destroy monopolies and repeal all grants of special privilege . 1/ No ert44147-of mo nopol:r or spe;:ial privilege But it may be urged that while the Governme nt would be unfit to manage a bank of discount, it might safely supply the country with a paper currency, by issuing notes, redeemable at the treasury and its offices, in paym ent of its debts; and that in thus supplying the nation with a circ u- lation which would have a solidity that the paper of no jointstock bank could possess, they might hake a correspondent profit in aid of the revenue. # •• ( , .44 *r10 r ..-1-114 , 2 • • Agoo , changes in Germany, which were made by the _Government tkpork the r-, report of a commission thet.-44, had considered the matter exhaus• , I tively from an economic and practical standpoint and Med heard the views of representative men tA all classes. It seemt-tMOS• V • /( sill-Lept cons ve that_in autocirtitic 4 ermany t1a3r7otould excilite t / 0.V? r 1 froi4 / VI e C,61Siderat i ; A ......v question e*eryone whof)e views did / 11 with tiliose of the ruling powers. In no country of ,. i! 111 i , Europe couldlegislation of this 4ort be enacted without opportun4 nOtqC0iVQide tics for public discussion in advance of a partisan or executive decree from which no appeal would be permitted. In the preparation of the bill we have under consideration, the democratic members rf the house Committee on Banking and air/ rency called before them parties oX-4.4044,-erti-ev+e,e44 who we7 // ;144- qua.644-erretrW'reeg.rd to the plan *which they tho1rrht should k if.. )/1.(a.(crT" - AAA The first declaration in 6.41gotty platform in favor bf a further issue of United States notes was made by the greenback convention of 1876, which declared for a United States note issue directly by the Government, and convertible on demand into United States obligations. The democratic platform of 186811,0e declared in favor of the paymentjof United States bonds in a depreciated i greehback currency, Vut in 1872 the i i declaraticn in f v i i / elocrats made an emphatic f ! f a return to sliecie payments and td the ' maintenance of the public credit, an denounced repudiation in every form and guise. In 1875 the democrats of Ohio demanded that the policy of contracticn should be abandoned, that the resumpton law should be ; s repealed, and that the volume of currency and United States notes otkiji fia-qc ?' ei fritk (3 r) should be made and kept equal to the wants of trade. The not- able campaign in Ohio in this year between General Thomas Ewing 2 A e"I • and President Hayes resulted in the cLov-t-ke*—trfit.gyes. In the following national campaign the democrats repudiated the Ohio idea and nominated Mr. Tilden for President on a platform which declared that reform wao necessary to establish a sound curre ncy, restore the public credit, and maintain the national honor. Notwithstanding the fact hat thar-e-ireAr-elyrrelderatle 7. t t4on throughout the country in favor of enlarged coinage of sil- ver, resultix in the passage of the Bland-Allison act of 1878, el (1( the resumption of specie payments la 1879 140 ( & democrats in their platform in 1880 te. re-affirm the declaration of 1876 and declarCfor honest money and strict maintenance of public faith. The greenback platform of tit-is year declared that all money, whether metallic or paper, should be issued and its volume controlled by the Government and not through or by banking cor- 4 I; fluctuating currency, -reeermi•ottied—tinre—reperal of-----the—tevr-7 111—etirt—rerWr'Sfrate""intnir-tirsue8. The farmers' alliance convention of 1690 Wimi declared for the abolition of nOdonal banks and the substitution of legal tender treas4ry noes in lieu of national bank notes in suffi- cient volume to do the business dlf the country. The populist or national peeples' party at' 1892 demanded a national currency, sufficient, sound and flexible, issued by the general Government only, without the use of banking corporations, and for a just, equitable and efficient distribution direct to the people. The socialist labor convention of the same year declaried that , i 11 / l / / the United States shoOld have the exclusive right to issue money. t. The democrats, in the national convention of 1896, which it‘ • 49s # nominated Mr. Bryan for the presidency, for the first time a4ftptet 14 J.! 41-` k • 74. I. 4,, r AAer, , 2t A/i,(2Lt /5cc C C./ s)•,t7"3 1-1 ci/14 e -e Jogusloni ioa ( Ot. tJ " r -),T4L TREASURY DEPARTMENT, Orricz OF THE SECRETARY, Diviaion of Loans and Currency. Forum 1028.— Ed. Oct. 2-13-2,600. IBC ULA_TION STATEMENT-October 1, 191 GENERAL STOCK OF MONEY IN THE UNITED STATES. Gold coin (including bullion in Treasury)_ _ _ _ September 2, 1913. October 1, 1913. $1,881,440,176 $1,895,438,245 Gold Certificates b Standard Silver Dollars 565,649,020 565,666,263 Silver Certificates b Subsidiary Silver Treasury Notes of 1890 United States Notes National Bank Notes Total Olt.% - 175,645,870 175,617,585 allimp IN TREASURY AS ASSETS OF MONEY THE GOV ERN M ENT. September 2, 1913. October 1, 1913. September 2, 1913. October 1, $174,031,112 $193,697,046 $605,566,895 $610,735 95,822,940 61,178,010 1,006,0,19,229 1,029,828 5,276,262 2,214,733 71 \ 0,758 3,284 16,056,827 11,429,278 471,796,173 478,735 19,493,192 17,829,718 156,152,678, ' -1 N30 157,787 • 2,629,000 2,607,000 3,195 4,250 2,625,805 346,681,016 :346,681,016 7,436,157 6,854,562 339,244,859 339,826 761,720,029 759,030,694 49,789,651 49,353,596 711,930,378 709,677 3,733,765,111 3,745,040,803 367,909,336 342,563,233 3,365,855,775 3,402,477 2,602, Population of continental United States. October 1, 1913, estimated at 97,759,000; circulation per capita, $34.Sk a This statement of money held in the Treasury SS assets of the Government does not include deposits of public money in National Bank Depositaries to the credit of the'Treasurer of t For a full statement of assets see Public Debt statement. bFor redemption of outstanding certificates an exact equivalent in amount of the appropriate kinds of money is held in the Treasury, and is not included in the account of money held c Includes $33,190,000 Cmirrenv Certificates, Act June 8, 1872. -CVA —4Z° " , -11* Nr414,„-•.-4,4%,316M NJ c." ; • 1VIk '26% S* . _•••: CULA_TION STATEMENT-October 1,1:916. —.... '---- GENERAL STOCK OF MONEY IN THE UNITED STATES. _ _ _ September 2, 1913. October 1, 1913. $1,881,440,176 $1,895,438,245 565,649,020 565,666,263 a HELD IN TREASURY AS ASSETS OF NIONEY IN CIRCULATION. THE GOVERNMENT. September 2, 1913. September 2, 1913. • October 1, 1913. October 1, 1913. October 1, 1912. January 1;4879. $174,031,112 $193,697,046 $605,566,895 $610,735,030 $609,910,326 $96,262,850 95,822,940 61,178,010 1,006,019,229 1 029,828,159 946,242,270 21,189,280 r 3,284,490 68,975,061 5,790,721 ,../ 5,276,2622,2(4,7'3 72,6'10,758 16,056,827 11,429,278 471,796,173 4 478,735,722 482,367,666 413,360 156,152,678 —..., 157,787,867 1-. slb 2,602,750 .,625,805 144,147,954 67,982,601 175,645,870 175,617,585 19,493,192 17,829,718 2,629,000 2,607,000 3,195 4,250 _ 346,681,016 346,681,016 7,436,157 6,854,562 339,244,859 339,826,154 341,385,059 c 310,288,511 - 761,720,029 759,030,694 49,789,651 49,353,596 711,930,378 709,677,098 711,009,328 314,339,398 . 3,733,765,111 3,745,040,803 367,909,336 342,563,233 3,365,855,775 3,402,477,570 3,306,883,924 816,266,721 . ir • - 2,846,260 ---------------. . 10 tober 1, 1913, estimated at 97,759,000; circulation per capita, $34.8tk of the Government does not include deposits of public money in National Bank Depositaries to the credit cf the'Treasurer of the United states, amounting to $78,259,089.10. ment. valent in amount of the appropriate kinds of money is held in the Treasury, and is not included in the account of money held as.s4catets of the Government. 1872. ...111( • 44k ' .411. • 4111i.,3 • C tre_ - c=.-1 z-)- 2 L_q 44: - AL ac-a . et al C < 174- /11) t0-1- 1--• &_1) ca)Cch 4 0/7 41 ati\ t / c>) .friaui R 4-L1 cI e42...t et- kbt- eL-t- ,607. / 9..v 4,1 4 kLi , 1-t 7e 4 , 1- •- ÷z oLX I L) A_„. /3 V- a.tet 01- Occ,7e6., `4". SENATE CHAMBER WASHINGTON. di