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Monetary Commission

NELSON ALDRICH




r!Tc.

MISCEIIANY

FOIMi gly Important Declarations
n

(If true--and they are true) in re
A Sound, Honest, Economical Currency.
United States Legal Tender Notes,authorized by
Act of March 3, 1863, have been in use in an unduly
restricted volume for a large portion of the last
two score and more years. Of these notes there are
now outstanding more than Three Hundred Million
($300,000,000) Dollars. If these outstanding Legal
Tender Notes were made freely interchangeable,
at the option of holders, in sums of One Thousand
($1,000) Dollars and multiples thereof, with bonds
of the Government bearing an equitable rate of interest, a PER FECT solution of the Currency question
would soon result.
Very earnest students of National Finance declare, with emphasis, that United States Legal
Tender Notes uttered in sufficient volume and made
freely interchangeable with interest bearing bonds
of the Government, at holders'option, will give to the
people a sound, honest, economical Currency, excellent beyond compare—a Currency which will
promote equity and foster prosperity in marvelous
degree.

QUESTION.
Is it possible to name a valid objection to the
immediate enactment of such exceedingly simple
laws for the regulation of the Nation's Currency
"The Life Blood of Commerce "—as may be necessary to promptly carry into effect the spirit of the
foregoing, briefly outlined, declarations?


,•


Exceedingly Important Declarations
(If trite— and they are trne) in re

A Sound, Honest, Economical Currency.
United States Legal Tender Notes, authorized by
Act of March 3, 1863, have been in use in an unduly
restricted volume for a large portion of the last
Iwo score and more years. Of these notes there are
now outstanding more than Three Hundred Million
($300,000,000) Dollars. If these outstanding Legal
Tender Notes were made freely interchangeable.
at the option of holders, in sums of One Thousand
($1,000) Dollars and multiples thereof, with bonds
of the Government bearing an equitable rate of interest, a

solution of the Currency question
would soon result.
PER FECT

Very earnest students of National Finance declare, with emphasis, that United States Legal
Tender Notes uttered in sufficient volume and made
freely interchangeable with interest bearing bonds
of the Government, at holders'option, will give to the
people a sound, honest, economical Currency, excellent beyond compare--a Currency' which will
promote equity anti foster prosperity in marvelous
degree.

QUESTION.
Is it possible to name a valid objection to the
immediate enactment of such exceedingly simple
laws for the regulation of the Nation's Currency"The Life Blood of Commerce"
--as may be necessary to promptly carry into effect the spirit of the
foregoing, briefly outlined, declarations ?

,,unarquaphopr


',MOW"

Exceedingly Important Declarations
( If true—and they are true) in re
A Sound, Honest, Economical Currency.
United States Legal Tender Notes, authorized by
Act of March 3, 1863, have been in use in an unduly
restricted volume for a large portion of the last
two score and more years.

Of these notes there are
now outstanding more than Three Hundred Million
($300,000,000) Dollars. If these outstanding Legal
Tender Notes were made freely interchangeable.
at the option of holders, in sums of One Thousand
($1,0(X)) Dollars and multiples thereof, with bonds
of the Government bearing an equitable rate of interest, a PERFECT solution of the Currency question
would soon result.
Very earnest students of National Finance declare, with emphasis, that United States Legal
Tender Notes uttered in sufficient volume and made
freely interchangeable with interest bearing bonds
of the Government, at holders'option, will give to the
people a sound, honest, economical Currency, excellent beyond compare—a Currency

which will
promote equity and foster prosperity in marvelous

degree.

QUESTION.
Is it possible to na me a valid objection to the
immediate enactment of such exceedingly simple
laws for the regulation of the Nation's Currency"The Life Blood of Commerce "—as may be necessary to promptly carry into effect the spirit of the
foregoing, briefly outlined, declarations ?




Exceedingly Important Declarations
( If true—aud they are true) in re
A Sound, Honest, Economical Currency.
United States Legal Tender Notes, authorized by
Act of March 3, 1863, have been in use in an unduly
restricted volume for a large portion of the last
two score and more years. Of these notes there are
now outstanding more than Three Hundred Million
($300,0(J0,000) Dollars. If these outstanding Legal
Tender Notes were made freely interchangeable,
at the option of holders, in sums of One Thousand
($1,(XX)) Dollars and multiples thereof, with bonds
of the Government bearing an equitable rate of interest, a

PERFECT solution of the Currency questio
n
would soon result.

Very earnest students of National Finance declare, with emphasis, that United States Legal
Tender Notes uttered in sufficient volume and made
freely interchangeable with interest bearing bonds
of the Government, at holders'option, will give to the
people a sound, honest, economical Currency, excellent beyond compare— a Currency which will
promote equity and foster prosperity in marvelous
degree.
QUESTION.
Is it possible to name a valid objection to the
immediate enactment of such exceedingly simple
laws for the regulation of the Nation's Currency"The Life Blood of Commerce" as may be necessary to promptly carry into effect the spirit of the
foregoing, briefly outlined, declarations ?




Exceedingly Important Declarations
11 trite—an(1 they are trite) in re
.
A Sound, Honest, Economical Currency.
United States Legal Tender Notes, authorized by
Act of March 3, 1863, have been in use in an unduly
restricted volume for a large portion of the last
Iwo score and more years. Of these notes there are
now outstanding more than Three Hundred Million
($300,000,000) Dollars. If these outstanding Legal
Tender Notes were made freely interchangeable,
at the option of holders, in sums of One Thousand
($1,(XX)) Dollars and multiples thereof, with bonds
of the Government hearing an equitable rate of interest, a PERFECT solution of the Currency question
would soon result.
Very earnest students of National Finance declare, with emphasis, that United States Legal
Tender Notes uttered in sufficient volume and made
freely interchangeable with interest bearing bonds
of the Government, at holders'option, will give to the
people a sound, honest, economical Currency, excellent beyond compare—a Currency which will
promote equity and foster prosperity in marvelous
degree.

QUESTION.
Is it possible to name a valid objection to the
immediate enactment of such exceedingly simple
laws for the regulation of the Nation's Currency"The Life Blood of Commerce" -as may be necessary to promptly carry into effect the spirit of the
foregoing, briefly outlined, declarations ?

S.



Exceedingly Important Declarations
( If(rue— and they are true) in re
A Sound, Honest, Economical Currency.
United States Legal Tender Notes, authorized by
Act of March 3, 1863, have been in use in an unduly
restricted volume for a large portion of the last
two score and more years. Of these notes there are
now outstanding more than Three Hundred Million
($300,000,(00) Dollars. If these outstanding Legal
Tender Notes were made freely interchangeable,
at the option of holders, in sums of One Thousand
($1,((X)) Dollars and multiples thereof, with bonds
of the Government bearing an equitable rate of interest, a

PERFECT solution of the Currency questi
on
would soon result.

Very earnest students of National Finance declare, with emphasis, that United States Legal
Tender Notes uttered in sufficient volume and made
freely interchangeable with interest bearing bonds
of the Government, at holders'option, will give to the
people a sound, honest, economical Currency, excellent beyond compare—a Currency which will
promote equity and foster prosperity in marvelous
degree.

QUESTION.
Is it possible to name a valid objection to the
immediate enactment of such exceedingly simple
laws for the regulation of the Nation's Currency-'The Life Blood of Commerce "--as may be necessary to promptly carry into effect the spirit of the
foregoing, briefly outlined, declarations ?




Exceedingly Important Declarations
(If true-- and they are true) in re
A Sound, Honest, Economical Currency.
United States Legal Tender Notes, authorized by
Act of March 3, 1863, have been in use in an unduly
restricted volume for a large portion of the last
Iwo score and more years. Of these notes there are
now outstanding more than Three Hundred Million
($300,000,(M00) Dollars. If these outstanding Legal
Tender Notes were made freely interchangeable,
at the option of holders, in sums of One Thousand
($1,(X)0) Dollars and multiples thereof, with bonds
of the Government bearing an equitable rate of interest, a

solution of the Currency question
would soon result.
PERFECT

Very earnest students of National Finance declare, with emphasis, that United States Legal
Tender Notes uttered in sufficient volume and made
freely interchangeable with interest bearing bonds
of the Government, at holders'option, will give to the
people a sound, honest, economical Currency, excellent beyond compare— a Currency which will
promote equity and foster prosperity in marvelous
degree.

QUESTION.
Is it possible to name a valid objection to the
immediate enactment of such exceedingly simple
laws for the regulation of the Nation's Currency"The Life Blood of Commerce "- as may be necessary to promptly carry into effect the spirit of the
foregoing, briefly outlined, declarations ?




Exceedingly Important Declarations
( If true— and they are trite) in re
A Sound, Honest, Economical Currency.
United States Legal Tender Notes, authorized by
Act of March 3, 1863, have been in use in an unduly
restricted volume for a large portion of the last
Iwo store and more years. Of these notes there are
now outstanding more than Three Hundred Million
(S.300,000,000) Dollars. If these outstanding Legal
Tender Notes were made freely interchangeable,
at the option of holders, in sums of One Thousand
($1,(XX)) Dollars and multiples thereof, with bonds
of the Government bearing an equitable rate of interest, a

solution of the Currency question
would soon result.
PER FECT

Very earnest students of National Finance declare, with emphasis, that United States Legal
Tender Notes uttered in sufficient volume and made
freely interchangeable with interest bearing bonds
of the Government, at holders option, vs ill give to the
people a sound, honest, economical Currency, excellent beyond compare -- a Currency which will
promote equity and foster prosperity in marvelous
degree.
QUESTION.
Is it possible to name a valid objection to the
immediate enactment of such exceedingly simple
laws for the regulation of the Nation's Currency
"The Life Blood of Commerce" -as may be necessary to promptly carry into effect the spirit of the
foregoing, briefly outlined. declarations ?




Exceedingly Important Declarations
(if true—an(t they are true) In re
A Sound, honest, Economical Currency.
United States Legal Tender Notes,authorized by
Act of March 3, 1863, have been in use in an unduly
restricted volume for a large portion of the last
two score and more years. Of these notes there are
now outstanding more than Three Hundred Million
($300,000,000) Dollars. If these outstanding Legal
Tender Notes were made freely interchangeable,
at the option of holders, in sums of One Thousand
($1,((X)) Dollars and multiples thereof, with bonds
of the Government hearing an equitable rate of interest, a PERFECT solution of the Currency question
would soon result.
Very earnest students of National Finance declare, with emphasis, that United States Legal
Tender Notes uttered in sufficient volume and made
freely interchangeable with interest bearing bonds
of the Government, at holders'option, will give to the
people a sound, honest, economical Currency, excellent beyond compare—a Currency which will
pr .lote equity and foster prosperity in marvelous
degree.
QUESTION.
Is it possible to name a valid objection to the
immediate enactment of such exceedingly simple
laws for the regulation of the Nation's Currency-"The Life Blood of Commerce "—as may be necessary to promptly carry into effect the spirit of the
foregoing, briefly outlined, declarations?

.•



Non Partisan Banking and Currency
Legislation
Extract from speech delivered by
President Taft at Marion,
Ind., July 3, 1911

"I have said that upon the three issues I can appeal
to all political parties. With respect to arbitration,
certainly that has not become a party question. All
are in favor of peace, and all are in favor of these
instrumentalities by which peace may be honorably
secured. In respect to reciprocity with Canada, I am
sure that it can be reconciled to the most orthodox
Republican tariff views, and I am equally convinced
that no Democrat ought to oppose it because, according to his view, the reduction of duties must be a step
in the right direction. So with respect to the proposed new system of banking and currency. There



is nothing in it that in its nature is partisan. The
Commission from which it comes is composed almost
equally of Democrats and Republicans. It involves
nothing of the partisan discussions over the coinage
of monetary standards which have vexed both political parties. I earnestly hope that we may all
approach the subject with no prejudices against the
solution proposed, and with our minds alert to the
necessity for reform, and keen to sec the advantages
which the new system offers. I do not mean by
what I say here to indicate that I am not in favor of
a party government, for I am a party man, and I
believe that the solidarity of parties is necessary in
order to secure a conservative and stable administration by the Government. In no other way can the
public opinion of a majority of 15,000,000 of voters
be interpreted into law and enforced, and it must be
conceded that most measures and most issues acquire
a party flavor and become party tenets on one side
and the other, and must be fought out on party lines;
but sometimes, as here, the subject is so new, it has
so little in it that directly attracts the popular attention
or vote,and it involves so many complex considerations,
that perhaps we can keep partisanship out. I hope
we may, for if we do, I am quite certain that we
shall much more promptly reach a satisfactory conclusion."




Ours is the Worst Banking System
John V. Farwell, president of the National Citizens'
League for the Promotion of a Sound Banking System
outlined the plans of the League before a meeting of
visiting merchants in Chicago, Aug. 16. In his speech
he said:

"The panics of 1893 and 1907 showed every
thoughtful business man that something was wrong
with our monetary system. We all agree, I think, in
saying that we have many of the best banks and
bankers in the world. We must be equally ready to
admit that we have the worst banking system in any
civilized country.
'The National Citizens' League will work for
legislation by Congress, which will meet the defects
of our present lack of system and create confidence in
our banking stability, not only throughout this country
but the whole commercial world.
"The League has settled on three principles:
"First, the integrity of individual banks, both
national and state, should be preserved.
"Second, these units should be federated in such a
manner as to make it posiible to carry into effect
measures that involve cred:t transactions of national
scope, and to present a solid, front when the stability
of legitimate business in any section of the country is
in danger.
"Third, this should be accomplished through an
organization which is also alsolutely protected against
ambitious financial control by any class or section, and
placed beyond the reach of political influence.
"This practically means that we do not believe in
a central bank, doing a gene, banking business like
.al
the Bank of England, but that we do bclieve in what
has been called a National Reserve Association, controlled and managed so as to represent the democratic
spirit and the sound common sense of this nation.
"A good banking system, such as I believe this to
be, must help to bring about general prosperity, it
must help all sections and al! classes.-

THE NATIONAL CITIZENS' LEAGUE
FOR THE PROMOTION OF A SOUND BANKING SYSTEM
223 West Jackson Boulevard
• •
CHICAGO, ILL.
OFFICERS
President
JOHN V. FARWELL
John V. Farwell Co.

Vice-President
JOHN BARTON PAYNE
South Park Commission

Chairman of Executive Committee
J. LAURENCE LAUGHUN
The University of Chicago

Treasurer
A. C. BARTLETT
Hibbard, Spencer, Bartlett 6 Co.

Secretary of Organization
MURRAY S. WILDMAN
Northrsesnrn University
DIRECTORS
B. E. SUNNY
Chicago Telephone Co.
CYRUS H. McCORMICK
International Harvester Co.
HARRY A. WHEELER
Chicago Association of Commerce
JOHN G. SHEDD
Marshall Field & Co.
F. A. DELANO
The Wabash 'Railroad Co.
F. W. UPHAM
CNy Fuel Co.
MARVIN HUGHITT
Chicago & Northwestern Ry. Co.

JUUUS ROSENWALD
Sears, Roebuck 6. Co.
A. A. SPRAGUE
Sprague, Warner & Co.
CLYDE M. CARR
Joseph T. Ryerson & Son
F. H. ARMSTRONG
'Reid, Murdoch & Co.
GRAHAM TAYLOR
Chicago Commons.
C. H. WACKER
United Charities.
JOSEPH BACH
Siegel, Cooper & Co.

You may become a member of the League upon payment
of one dollar. Proceeds of this membership fee will be devoted
exclusively toward defraying the expenses of the campaign.
All remittances should be made to
The Treasurer,
National Citizens' League,
223 West Jackson Blvd.,
Chicago, Ill.




BASIS
OF

SOUND BANKING
The enclosed is a copy of a letter
written on October 24th, 1907, to the
NEW YORK EVENING POST
by Mr. Charles A. Conant, a wellknown writer on financial matters.
Our experience during the month following the date of this letter corroborates ebery statement made therein,
and we believe that it is conservative
to estimate, that during the month of
November at least one hundred millions
of purchased commercial paper was
paid off with very few renewals and
an infinitesimal proportion of failures;
whereas stocks and the finest railroad
bonds were practically unsalable during that period, and then only at great
•
•
•
sacrifice. . . •

E. NAUMBURG & CO.
33 WALL STREET
NEW YORK
Boston Chicago Philadelphia




St. Louis

BASIS OF SOUND BANKING
To THE EDITOR OF THE EVENING POST:
SIR : Present conditions in the financial world
throw light on the declaration of a well-known
English authority, that "nothing was easier to
conduct than the business of a banker, if he
would only learn the difference between a mortgage and a bill of exchange." The phrase "hill
of exchange," as here used, refers more particularly' to domestic bills, and is equivalent to our
term commercial paper.
It is the failure to distinguish between a mortgage and a bill of exchange which is causing
many of our present difficulties. The piling up
of loans upyi pyramids of inflated stocks and
bonds is due in large degree to the great development of industrial securities in recent years.
Such securities do not represent circulating capital, but fixed capital. They are simply obligations, or shares, in a mill, a railway, or mine,
which represent a permanent investment. They
are either mortgages or something which ranks
below mortgages. Securities circulate, but the
property they repre,ent is fixed. They are not,
therefore, in any proper economic sense circulathig capital, and are not the hest basis for the investment of deposits payable on demand.
THE TRUE BASIS OF SOUND BANKING
IS COMMERCIAL PAPER, because such paper
represents circulating capital. In other words,
it is the product of purchases of raw materials.
which are converted within a short time into




finished products, whose sale for consumption
:iffords the means to pay off the paper and thereby closes the transaction. When money is borrowed on sectirit;es, no transaction of this character takes place, and there is no natural and
normal date for closing the transaction. Nlanagers of banks and trust companies seek to give
the character of circulating capital to securities
by advancing money on them subject to repayment at call. This system works admirably in
periods of prosperity, but it causes convulsion in
tittles of adversity. The owner of a part of a
mill, railroad, or mine, cannot convert the property into circulating capital. In his efforts to get
rid of his share of it, when he finds that all the
banks are curtailing their loans, he is compelled to make great sacrifices or shoulder the
losses upon the banks by failing to make good his
margins. Undoubtedly, in most c-ses the banks
are foresighted enough to protect themselves
by throwing the burden upon the borrower, with
llw result of continuous crashes in the stock market until stocks fall far below their normal
value.
Nothing of this kind occurs in dealing with
commercial paper. There is, of course, some
field for speculation in commercial operations,
but it is limited. The losses on commercial paper
are calculable, like insurance losses, and arc a
fraction of T per cent. per annum. When the
merchant finds demand diminishing, he diminishes his purchases of raw materials and his creation of finished products, thus automatically reducing his demand upon the banks. He is not
tied up with a fixed volume of paper running
continuously, as are the owners of stocks and

bonds. The result is that he MEETS HIS OB,
LIGATIONS AS THEY MATURE, and if the
bank cannot continue his accommodation, he curtails his output. Never does commercial paper
fluctuate from par down to forty or fifty, like
ez.en good securities, save in the exceptional case
of the insolvency of the maker, and even then
there are usually endorsements to which to have
recourse.
Loans on securities are legitimate within certain limits, but within the last decade or two
they have come to constitute altogether too large
a percentage of the loans made from depositor*
money. On the part of the New York national
banks alone loans on collateral increased from
$162,361,654 on October 6, 18'96, to $442,210,765
on September 4, igo6, while commercial loans increased only from $151,795,029 to $259,840,272.
Where stocksrou d bonds are not the very best
and most convertible stock exchange securities,
loans upon them are only disguised participations
in permanent enterprises. Such participations, in
one form or another, nearly wrecked the German
banks in igoot and have proved a source of disaster on many other occasions. It is to be hoped
that after the present situation has cleared up,
our bankers will return to the sound principle of
the English writer quoted at the beginning, that
THEY SHOULD DEAL IN COMMERCIAL
PAPER REPRESENTING CIRCULATING
CAPITAL instead of dealing in the representatives of fixed capital, and try to shoulder the loss
on borrowers by looking farther ahead than they.
(1

CHARLES A. CONANT.

New York, October 24.




CHAPTER 25.
An Act respecting the Currency.
SHORT TITLE.

1. This Act may be cited as the Currency Act.

Short title.

STANDARD OF VALUE.

2. The currency of Canada shall be such, that the British Standard of
sovereign of the weight and fineness now prescribed by the currency.
vain"
f
laws of the United Kingdom, shall be equal to and shall pass
eur-ent for four dollars eighty-six cents and two-thirds of a cent
of the currency of Canada, and the half sovereign of proportionate weight and like fineness, for one-half the said sum.
R.S., c. 30, s. 2.
DENOMINATIONS.

3. The denominations of money in the currency of Canada, Denominashall be dollars, cents and mills,—the cent being one hundredth currency.
ti°n8 in
part of a dollar, and the mill one tenth part of a cent. R.S.,
c. 30, s. 1.




PUBLIC ACCOUNTS, DEBTS AND OBLIGATIONS.

4. All public accounts throughout Canada shall be kept Public
in the currency of Canada and in any statement as to money accounts, etc.
or money value, in any indictment or legal proceeding, the
same shall be stated in such currency.
2. In all private accounts and agreements rendered or entered Private
i
into, on or subsequent to the first day of July, one thousand reoultsetc.,
eight hundred and seventy-one, all sums mentioned shall be Ist,1118'71.Y
()1
understood to be in the currency of Canada, unless some other
is clearly expressed, or must, from the circumstances of the
ease, have been intended by the parties. R.S., c. 30, s. 2.
5. All sums mentioned in dollars and cents in The British Sums menNorth America Act, 1867, and in all Acts of the Parliament 00 (1 inActs
certain n
of Canada shall, unless it is otherwise expressed, be understood be
currency.
to be sums in the currency of Canada as by this Act established.
R.S., C. 30, s. 12.
311
6
.
R.S., 1906.

Chap. 25.
Payments in
Nova Scotia
from July
1st, 1871, to
be in Canada
currency.

Currency.

6. All sums of money payable on and after the first day of
July, one thousand eight hundred and seventy-one, to Her la t
Majesty Queen Victoria, or to any person, under any Act or
law in force in Nova Scotia, passed before the said day, or
under any bill, note, contract, agreement or other document or
instrument, made before the said day in and with reference to
that province, or made after the said day out of Nova Scotia
and with reference thereto, and which were intended to be,
and but for such alteration would have been payable in the
currency of Nova Scotia, as fixed by law previous to the fourteenth day of April, one thousand eight hundred and seventycne, shall hereafter be represented and payable, respectively,
by equivalent sums in the currency of Canada, that is to say,
for every seventy-five cents of Nova Scotia currency, by
seventy-three cents of Canada currency, and so in proportion
for any greater or less sum; and if in any such sum there
is a fraction of a cent in the equivalent in Canada currency,
the nearest whole cent shall be taken. R.S., c. 30, s. 10.

As to debts
7. Any debt or obligation contracted before the first day
in B. C. and
hundred and eightyP. E. I. con- of July, in the year one thousand eight
tracted be- one, in the currency then lawfully used in the province of
fore July 1st,
British Columbia, or in the province of Prince Edward Island,
1881.

shall, if payable thereafter, be payable by an equivalent sum
in the currency of Canada as hereby established. R.S., c. 30,
s. 11.
DOMINION AND BANK NOTES.

No bank
notes, etc.,
to be issued
in other
currency.

8. No Dominion note or bank note payable in any other
currency than the currency of Canada, shall be issued or
reissued by the Government of Canada, or by any bank, and all
such notes issued before the first day of July, one thousand eight
hundred and seventy-one, shall be redeemed, or notes payable
in the currency of Canada shall be substituted or exchanged for
them. R.S., c. 30, s. 3.
COINS LEGAL TENDER

9. Any gold coins struck for circulation in Canada by
authority of the Crown, of the standard of fineness prescribed
by law for the gold coins of the United Kingdom, and bearing
the same proportion in weight to that of the British sovereign,
which five dollars bear to four dollars eighty-six cents and twothirds of ft cent, shall pass current and be a legal tender in
Canada for five dollars; and any multiples or division of such
coin, struck by the same authority for like purposes, shall pass
current and be a legal tender in Canada at rates proportionate
to their intrinsic value respectively; and any such coins shall
pass by such names as are assigned to them by Royal Proclamation
312
R.S., 1906.

Gold coins
ma y be
struck for
Canada.




ETC.

Currency.

Chap. 25.

3

ation declaring them a legal tender, and shall be subject to the
like allowance for remedy as British coin. R.S., c. 30, s. 4.
10. The silver, copper or bronze coins heretofore struck by
Silver, copper
authority of the Crown for circulation in the provinces of or bronze
on
Ontario, Quebec and New Brunswick under the Acts at the coins estruck
Contime in force in the said provinces respectively, shall be current federation.
and a legal tender throughout Canada, at the rates in the said Legal tender.
currency of Canada assigned to them respectively by the said
Acts, and under the like conditions and provisions
2. Such other silver, copper or bronze coins as are by the Likewise
3r
same authority struck for circulation in Canada, shall pass cur- those strck
rent and be a legal tender in Canada, at the rates assigned to tioncirculain
them respectively by Royal proclamation, such silver coins Canada.
being of the fineness now fixed by the laws of the United Kingdom, and of weights bearing respectively the same proportion
to the value to be assigned to them which the weights of the
silver coins of the United Kingdom bear to their nominal value.
3. All such silver coins aforesaid, shall be a legal tender to To what
the amount of ten dollars, and such copper or bronze coins to amount.
the amount of twenty-five cents, in any one payment.
4. The holder of the notes of any person to the amount of As to holders
more than ten dollars, shall not be bound to receive more than of notes.
that amount in such silver coins in payment of such notes, if
presented for payment at one time, although any of such notes
is for a less sum. R.S., c. 30, s. 5.
11. No other silver, copper or bronze coins than those which No other
the Crown has heretofore caused to be struck or may hereafter coins ofr
silver
cause to be struck for circulation in Canada, or in some pro- copper to
vince thereof, shall be a legal tender in Canada. R.S., C. 30, be le
s. 6.
12. His Majesty may, by proclamation, from time to time, As to foreign
fix the rates at which any foreign gold coins of the description, gold coins.
d'ite, weight and fineness mentioned in such proclamation, shall
pass current, and be a legal tender in Canada: Provided that Proviso as to
umtil it is otherwise ordered by any such proclamation, the gold U. S. eagle'
eagle of the United States of America, coined after the first day
of July, one thousand eight hundred and thirty-four, and
before the first day of January, one thousand eight hundred and
fifty-two or after the said last-mentioned day, but while the
standard of fineness for gold coins then fixed by the laws of the
'
sfi id United States remains unchanged, and weighing ten pennyweights, eighteen grains, troy weight, shall pass current and be
a legal tender in Canada for ten dollars.
2. The gold coins of the said United States being multiples U. S. gold
and halves of the said eagle, and of like date and proportio'
nate ins.
weights, shall pass current and be a legal tender in Canada for
proportionate sums. R.S., c. 30, s. 7.
313
13.
R.S., 1906.




4

Chap. 25.

Proof of
date, etc. of
,
coins.

13. The stamp of the year on any foreign coin made current
by this Act, or any proclamation issued under it, shall establish
prima facie the fact of its having been coined in that year; and
the stamp of the country on any foreign coin shalt establish
prima facie the fact of its being of the coinage of such country.
R.S., c. 30, s. 8.

Defaced coin
not a legal
tender.

14. No tender of payment in money in any gold, silver or
copper coin which has been defaced by stamping thereon any
name or word, whether such coin is or is not thereby diminished
or lightened, shall be a legal tender. R.S., c. 30, s. 9.

Currency.

REDEMPTION OF COINS.

Redemption
of light coin.

15. The Minister of Finance may, under regulations of the
Governor in Council, redeem any silver, copper or bronze coins
issued for circulation in Canada which by reason of abrasion
through legitimate usage are no longer deemed fit for circulation. 6 E. VII., c. 8, s. 1.
COUNTERFEIT OR DIMINISHED COIN TO BE BROKEN.

16. If any coin is tendered as current gold or silver coin to
any person who suspects the same to be diminished otherwise
than by reasonable wearing, or to be counterfeit, such person
may cut, break, bend or deface such coin, and if any coin so cut,
broken, bent or defaced appears to be diminished otherwise than
Who shall
by reasonable wearing, or to be counterfeit, the person tenderhear the loss. •
mg the same shall bear the loss thereof; but if the coin is of
due weight, and appears to be lawful coin, the person cutting,
breaking, bending or defacing it, shall be bound to receive the
coin at the rate for which it was coined.
Disputes,
2. If any dispute arises whether the coin so cut, broken, bent
how decided.
or defaced, is diminished in manner aforesaid, or counterfeit,
it shall be heard and finally determined in a summary manner
by any justice of the peace, who may examine, upon oath, the
parties as well as any other person, for the purpose of deciding
such dispute, and if he entertains any doubt in that behalf, he
may summon three persons, the decision of a majority of whom
shall be final.
Revenue
3. Every officer employed in the collection of the revenue in
officers to
destroy such Canada shall cut, break or deface, or cause to be cut, broken or
coin.
defaced, every piece of counterfeit or unlawfully diminished
gold or silver coin which is tendered to him in payment of any
part of the revenue in Canada.
4. For the purposes of this section 'current gold or silver
Definition.
coin' includes any coin which it is by Part IX. of the Criminal
Code defined to include. R.S., c. 167, s. 26.

By person
to whom
tendered.

OTTAWA: Printed by SAMUEL EDWARD DAWSON, Law Printer to the King's
most Excellent Majesty.

R.S•/ 1906.




314

SUPPLEMENTiTO THE CANADA GAZETTE, DECEMBER 19, 1908

1908

NOVEMBER.

1908

_RiPORTT
OF TIIE
I.

CHARTERED BANKS OF THE DOMINION OF CANADt




MADE TO THE MINISTER OF FINANCE
IN CONFORMITY WITH

SECTION 112 OF THE BANK ACT, CHAPTER 29, REVISED STATUTES OF CANADA. 1906

25

OTTAWA
Printed by S. E. DAWSON, Printer to the King's Most Excellent Majesty
1908

STATEMENT OF BANKS ACTING UNDER CHARTER, for the month ending 30th
LIABILITIES

CAPITAL STOCK.
NAME

OF BANK.
Capital
Authorized.

NOM

DE

LA

Capital
Subscribed.

BANQUE.
Capital
autorise.

Capital
souscrit.

Amount
of Rest
or Reserve
Fund.

Capital
Paid up.

Balance due to
Rate per
Dominion
cent
Balance
Government,
due to
of last
Notes
after deducting
Dividend
Provincial
Declared. n Circulation. advances for Cre- Governments.
dits, Pay-Listsate.

Balance due au
gouvernement
Billets
Balance due
Taux
Montant du
en circulation. federal, deduction
aux
pour cent
fonds
faite des avances gouvernements
dernie
de reserve. du
Capital verse.
sur credits ouprovinciaux.
dividende
verts, bordereaux
declare.
de paie, etc.

1

59,936

1,268,410

698,460

30,909

1,806,943

16,015

69,000

3

2,898,975

352,592

12 ,869

4

172,140

10,338
94,324

14,400,000

14,400,000

12,000,000

735,400

1,000,000

735,400

bee Bank

3 000 000

2,500,006

2,500,001

ik of Nova Scotia.

3000 000

3,000,000

3,000,000

5,400,000

200,1100

200,000

200,000

10

1,250,000

52,500

ik of New Brunswick

Stephen's Bank
ik of British North America

4,866,666

1,866,666

4,866,666

8

12,049,521

14 400 000

ik of Montreal

2

12

3,553,061

1
2

5

3,257,053

2,336,000

16,600

3,674,244

31,141

167,119

7

6

10,000,000

4,000,000

4,000,000

4,500,000

111

aeons Bank

5,000,000

3,416,100

3,416,100

3,416,100

10

2,880,878

36,566

334,667

8

stern Townships Bank.

3,000,000

3,000,000

3,000,000

2,000,000

8

2,147,520

20,167

22,308

9

lion Bank of Halifax

3,000,000

1,500,000

1,500,0(X)

1,175,000

1,424,295

26,797

Lnque Nationale

2,000,000

1,800,000

1,800,000

900,000

1,775,127

22,311i

144,512

11

erchants' Bank of Canada

6,000,010

6,000,000

6,000,000

4,000,000

8

4,740,478

211,918

160,791

12

200,003

ak of Toronto

10

anque Provinciale du Canada.

2,000,00

1,009,075

1.000.030

5

997,368

12,729

214,219

13

nion Bank of Canada.

4,000,000

3,207,200

3,200,410

1,800,000

7

3,0'27,093

25,1176

1,076,630

14

anadian Bank of Coninierce

15,000,000

10,000,000

10,000,000

6,000,00(1

8

9,610,845

261,375

4,466,932

15

:oyal Bank of Canada

10,000,000

3,900,600

3,900,000

4,390,000

3,632,872

157,271

1,518

16

5,000,000

3,983,700

3,981,070

4,970,177

12

3,820,169

36,446

75,686

17

tank of Hamilton

3,000,000

2,476,2(Y)

2,472,860

2,472,860

10

2,384,342

28,698

487,123

18

tandard Bank of Canada.

2,000,000

1,562,5(10

1,560,110

1,760,110

12

1,385,737

16,053

41,494

19

;anque de St. Jean

1,000,000

500,200

.anque d'Hochelaga

4,000,000

2,500,000

2,500,000

2,150,000

33,565

60,638

•anque de St. Hyacinthe

1,000,000

504,600

334,145

75,(X10

/ominion Bank

14,174
8

2,058,762

43,016 '20

35,885

21
22

5,000,000

3,0(10,0(10

3,000,000

3,000,000

10

2,835,320

23,938

107,712

23

aiperial Bank of Canada

10,0110,000

5,000,000

5,000,000

5,009,00)

11

3,860,615

55,422

88,712

24

Vestern Bank of Canada

1,000,000

555,0(Y)

555,000

350,000

'raders Bank of Canada

5,000,000

4,367,500

4,353,092

2,000,000

.overeign Bank of Canada

3,000,( 00

3,000,000

3,000,000

4etropo1ltan Bank

2,000,000

1,000,000

1,000,000

Lome Bank of Canada

2,000,000

979,000

iorthern Crown Bank

6,000,000

2,207,500

1,000,000

875,700

807,458

5,000,000

635,500

501,612

Nil.

1,000,000

1,000,000

541,881

Nil.

143,466,666

97,672,841

96,244,2%3

.ank of Ottawa.....

;terling Bank of Canada
Tnitnd Empire Bank of Canada
Farmers Bank of Canada
Total

••

a-

481,545

23

7

2,901,990

82,368

26

•

113,280

611

27

1,000,000

8

983,860

3,483

28

916,921

297,7%5

6

944,895

64,383

29

2,201,568

50,000

5

2,092,975

618,565

30

183,749

5

734,5(33

'27,153

31

0 4

74,000,611

172,1181)
4

43,328

32

313,720

3,490

33

811,287,724

1,489,377

12,038,715

-

Return of Canadian Bank of Commerce. Amount under heading "Other assets not included under foregoing heads," includes gold bit lion.
Return of Bank of British North America, The figures for the Dawson Branch are taken from thp last returns received, viz: 14th November, 1908. Asset No.22, includes bullion.
Return of Bank of Nova Scotia. The latest returns from Branches in Jamaica, are dated 23rd November, 1908, and the figures thereof are incorporated herein.




November, 1908, according to




Returns

furnished by them to the Department of Finance.
Grate
amo
No
circulit
at any It
during t
month

PASSIF.
Deposits
Deposits
by the public.
by the public, payable after
payable
notice or on a
on demand in
fixed day in
Canada.
Canada.

1)eposits
elsewhere
than in
Canada.

Balances due to
Loans from
Deposits made Balances due to Agencies of the Bank,
other Banks in
by and
Agencies of the
Liabilities
or to other Banks or
Canada secured, balances due Bank, or to other
Agencies elsewhere
not included
including
to other Banks Banks or Agencies than in Canada and under foregoing
bills rediscounted. in Canada. in United Kingdom. the United Kingdom.
Heads.

Total
Liabilities.

Chiffre
le plus e•li
des bilk
DOtots
Del)(^As du
Depia.-;
Hanprunts
1)epots faits Balances dues a des Balances dues a des Engagements
en
du public
public
melts aillettrs faits a d'autres
par d'autres
agences de la
agences de la banque
non compris
circulat i
remboursables remboursables qu'en Canada.
banques en
banques en banque on it d'autres ou a d'autres banques dans les item Total du passif.
en aueu
a domande,en apres ay is ou
Canada, garan
Canada et
banques ou
Oil agences, ailleurs qui precedent.
temps
Canada.
une date fixe
y commis les
balances dues
agences dans le qu'on Canada et dans
durant
en Canada.
billets renouveles. Et ces banques.
Hoyaume-Uni.
le Royaume-Uni.
mois.
4

1

5

40,582,357

71,122,663

991,929

3,858,478

130,280

1,957,185

6,696,863

146,645

16,775,276

6,746,692

88,914

2.57,806

8,02'2,370

15,203,726

8,404,333

6

7

8

36,080,181

9

10

11

3,337,131

166,781,852

12,819.

116,420

5,826,478

723

61,169

10,881,874

2,030,

596,775

1,485

34,183,752

2,971,

540,205

128,047

6,613,409

185,675

10.897

108

2,773,434

80,811

13,905

153,382

4,812,221

34,427,826

182,3,549,

18.334,307

181,699

1,256

44,150

101.698

30,882,853

3,939,7
.

6,176,368

18,045,905

116,118

37,491

129,632

100,916

27,858,545

2,757,955

10,871,124

16,247,965

3,204,8
1
2,766,8:

1,331,976

6 558.959

1,011,091

116,521

10,974,027

1,466,64,
1.

2,473,909

7,246,190

113,297

162,519

12,012,624

2,118,69'

11,977,209

25,880,153

164,612

2,1133,156

625,299

2,661,958

10,308,321

14,324,317

27,185,633

51,848,245

12,275,605

165,108

8,000,241

18,301,892

9,089,784

76,031

652,865

10,297,111

26,65,1)01

336,211

131,136

7,489,234

17,778.335

19,121

4,089,849

11,510,538

25,426

270,107

3,864,784

8,988,351

63,435

609.244

5,893,887

18,059,877

1.503

11,637,014

21,473,581

153,449

556,955

4,103,054

6,190,917

17.716,988

51,909

732,821

1,107,082

3,003,883

1,690,749

3,849,519

3,613,256

4,604,878

1,087,040

2,153,513

415,744

532,829

282,112

894,571

206,315,809

419,920,274

128,s89
183,267

260,975

30,142

74,722
8,412

12(1,865

83,782

22,190

46,197,627

3,588

144,340

4,659,504

1,160,02

28,877,767

1
3,224,583

9,695

5,155,494,

1,131,386

201,532

106,176,969

9,663,0007

542,572

422

40,458,476
41,408,480

40,097

28,226,952

2,422,4221

17,048,226

1,43'2,907:

9,486

1,5.53

35,811

3,742,000
3
4,044,130

387,211

14,239.

190,222

15,267,379

••
•

25,000
71,055

8,511

5,300

552,312
4,262

4,032

1.908

151,728

22

4,170,340

5,254,482

518,715

27,649,922

200,015

45

43.565
2,973,315

37,268,79.5
2,039

717,076
26,957,664

35,125

110,888

7,239,789

2,367,502

3,086,220

8,146,75.5

124,070

5,712
74'895

999,200
2,159,175

3,359

2,540

4.083,065

776,505

257,691

87,586

18,744

1,528,004

189,550

206

1,557,215

408,480

5,786,368

815,538,495

116
68,234,029

1,140,070

10,914,470

9,084

5,551,969
6,549,547

7,384,129

8,348,1/22

2,387,698

3,345,676

85,589,891 ,

8
2
1

The Western Bank of Canada gives bonus of & of one p.c. equal in all to a dividend of 8 p.c. por annum.

STATEMENT OF BANKS ACTING UNDER CHARTER, for the month ending

rity of note on other
circulaBanks.
lion.

NAME OF BANK.

-

-

-

-

I
NOM DE LA BANQUF:.
,

Especes.

Depot fait
Billets
an gouvernement d'autres
fe erets
llillau x. enegari n. baciaquneseset
tl
f dera
sur
tie de la
circulation d'autres
banques.
des
billets.

Frets faits a d'autres banques en Canada, garantis, y compris lea billets renouveles.

Specie.

Deposits
with Dominion Go- Notes of
1/(:ptason ve rnine nt Cibnd
\o i
tecines
i
.
fnr snen

Loans to other Banks in Canada, secured, includlag bills rediscounted.

ASSETS
.
c., ..1
:.• c.
=•-•
c, 0
Balances
"
-..
.
I)eposits,
due from,1
71
...
made with Agencies of
2,.
i
the Bank, or .4 E
and
!-_,...-±'
from other ii i
balances
Banks or
due from
other Banks Agencies in i..rio .gi it
in Canada. the United `E:a
= ° i‘-•
c.t
Kingdom.
°v
Balances
° &.."-:!
"'c
7.-1
F.
par les t ,-. 4 '
°.jat
' E ©13 - 4
• , .,-,
Depots faits dues 1
agences de
dans d'au- la hanque, P.11.0 4Ell
tres banques
1 if. Et: q
on par
en Canada,
d'autres..,,°,01 -3Z3."."-)
et balances banques ou r,. 2 r, ...e,
3::,
dues par ces agencrS
:
.
.
T C i 1g,
i
dans c
banques.
-t
c
l
Royaume- Il
if

tl'
i
Doii:lion lit
tni

iE

8
tit. :
14
'
. .g ?:
i = , ,. Securities. ..... .=..
Provincial
oveTGnie

Obl'u-1;
• 1-`
3iv
zpa 11
tions ou It
effets du - v
At
gouverne- 508
ment federal ou des
e n t s pr .
0
rll N-Crri0

vinciaux.

ii

1

1
II

2

3

4

5

6

7

8

9

10

$

11

$

$

$

I

$

$

$

$

$

5,132,114

8,054,460

600,000

4,800,847

of New Brunswick

264,899

515,775

35,000

cc Bank

381,429

461,929

87,360

484,4.
22

of Nova Scotia
; ,ephen's Bank

of British North America

..

P.

na Ban Bank of Commerce
1
,
ya i Bank of Canada
,
nion Bank

134,064

81,312

2

457,445

150,633

152,626

3

540,610

1,767,928

4

1,548,157

6.52,810

1,475,692
27,800

3,235

13,000

17,761

26,700

847,030

1,970,791

873,367

1

390,943

21,827

414,006

1 Bank of Canada

9,0 3

9,568

Irti Townships Bank

,nq ue Provinciale du Canada

1

631,333

566,142

;re hants Bank of Canada

485,595

2,141,871

1,908,317

nq no Nationale

1.463,1174

150,110

3,919,297

n Bank of Halifax

11,480,3 11

2,723,068

)11's Bank
4

61,325

4,324,376

2,236,660

715,358

k of Toronto

955,977

1,514,9:9
60,503

142,323

of Montreal
S.

682,775

951,613

321.813

5,321

1,121,145

2,171,049

5

28,426
151,973

6

1,251,631

597,246

2,385

87,441

1,567,2 )1

111,467

145,000

1,231,436

157,395

288,392

806,628

1,129,389

476,269

766,321

8

123,000

613,056

34.5,457

646,018

5,317

1,941,759

167,073

471,100

9

370,718

600,781

295,110, :0

968.872

16,500

101,700

:1

12,625

609,071

635,453

.2

619,010

3

334,465

4

160,000

362,198

658,837.

75,000

755,899

305,314

139,705

496,415

90,600

915,703

53,979

1,569,822

3,013,220

240,000

2,276,482

40,448

39,922

45,519

190,601

228,391

18,952

73,555

560,0.58

5,510,735

150,000

2,146,956

172,130

116,3844

1.156,308

1).1,070

4,472.062

8,503,293

4.59,000

4,344,762 1,061,252

11,850

6,750,609

3,191.278

3,700

471,069

5
6

3,165,988

3,324,465

190,000

486,889

59,826

1,796

2,812,579

514,248

41,195

791,554

297.708

2,309,189

525,419

2,199,889

:435,456

509,431

7

1,149,2112

3,539,755

160,000

2,288,755

698,.:19

nk of Hamilton

558,714

3,379,771

125,000

1,505,360

254,417

52,181

173,913

724,730

377,513

3,189,756

In lard Bank of Canada

211,356

1,156,028

61,000

909,409

372,529

376,797

24,8811

2112,050

327,247

1,181,220

8
.9

10

18

11,427

631

8,986

289,924

1,495,239

102,996

1.525,567

193,624

852,151

655,361

1
!1

no de St. Jean
r ue d'Hochelaga
,n
tn no de St. Hyacinthe
tai : of Ottawa
4.
ip ;rial Bank of Canada
/.,
es.ern Bank of Canada
graders Bank of Canada

16,995
778,775

3,411,370

150,000

759,879

1,139,408

5,497,825

190,532

2,044,395

38,028

34,746

27,005

63,141

391,426

2,611,545

148,270

813,790

reign Bank of Canada

52.635

39,668
166,417 1
583,846

5,133

2

2,287,416

389,4.53

833,272

891,882

1,611,523

546,492

631,907

2,405,910

528,465

1,744,083

19,211

126,478

389,395

981,872

. 604,081

384,018

45,078

128,759

1,553,268
24,532

1,117,151

652,325

10,308

134

2,168

123,569

18,483

148,077

35

103,082

639,158

47,200

368,603

301,398

119,204

e Bank of Canada

51,864

493,485

35,000

301,788

34;7,610

16,310

313,840

orthorn Crown Bank

183,467

1,028,503

76,000

841,337

732,153

43,337

328,253

;ter ing Bank of Canada

30,627

477,839

33,718

319,346

Jni ed Empire Bank of Canada

13,585

29,318

12,000

45,218

258,813

271

24,7110

7,269

60,085

15,000

105,915

180,816

14,239

17,812

26,324,448

65,847,141

4,572,476

12,241,382

15.109,319

36,788,499

3V

;
let .opolitan
10

Bank

Far aerq Bank of Canada
Total

FINANCE DEPARTMENT,
OTTAWA, 16th December, 1908.




.

.....

36,989,587 6,602,012
,..._

10,092

613

3
,4
4

,7

43,778
165,000

,

241,917

i

125,527
,
9.063,184

19,596,214

30th November, 1908, according to Returns furnished by them to the Department of Finance.

Railway
and other
bonds,
debentures and
stocks.

V
MortOther
Call and
Call and
Current Loans to Loans to
Real
gages on
ASE401 S not
short loans short loans Current
Loans
the
ProReal
Estate,
Overdue
Bank
included
on stocks else w here
Loans
elsewhere Govern- v incial
Debts. other than Estate Premises. under the
and bonds
than
in Canada.
than
ment of GovernBank
sold by
foregoing
in Canada. in Canada.
in Canada. Canada. merits.
premises.
the
heads.
Bank.

Obliga- PrOs remtions,
boursa hies Prets remImmeuPrets
Pr6ts au Prets
deben- a demande boursables
Prets
cou rants gouver- aux gou- Creances bles autres
tures et et it courte A. domande
que les
ailleurs
nement verneen
actions de I echeance, et it courte courants
qu'en
du
ments souffrance. edifices
chemins 'sur obliga- echeance, on Canada.
de la
ailleurs
Canada. Canada. provinde fer
tions et
banque.
qu en
ciaux.
et autres. 'actions en
' Canada. Canada.

18

14

18

18

Hypotheques
sur des
ininieubles
vendus
par la
banque.

Edifices
de la
banque.

Autres
creances
non
cornprises
dans les
item
precedents.

Total
Assets.

Total
de

Aggregate
amount
Average
of Loans to amount of
Directors, specie held
and firms during
of which the month
't
they are
partners.
Montant
collettif
des prets
Chiffre
faits it des moyen dos
directeurs ospeces
et A. des possedees
raisons so- durant
ciales dont le mois.
us ferment
partie.

18

19

AO

91

92

$

17

$

$

$

$

$

$

$

600,000

2,976,708

191,252,104

1,091,000

5,256,198

82,322

153,045

7,936,549

135,755

268,785

1

7,388,133

2

269,338

529,130

3

779,8.50

1,461,432

4

1.13.5,561

2.007,645

5

22,982

10,000

6

259,591

1,511,017

7

2,219,262

1,597,429

26,688,230

10,853

8

1,486,904

2,899,239

84,801

140,749

9,770

500,000

9

332,401

899,511

22,411,582
•
13,192,228

66,321

368,108

19,903

509,272

10

212,710

163.692

8,534,502

16,439

8,105

11

226.720

865,575

10,560,017

12

5,708,770

1.957,782

8,958,351' 28,731.268

13

577,806

962.037

2,572,41•'

14

250,000

948,025

300,000

19,578,804

15

4,1 ,621

7,314,181

10,622,703

65,990.428

2,704,220

16

4,485,942

2,115,736

1,403,001

21,775,325

1.878,449

17

3,252.132

3,226,897

31,825,611

18

785,017

1,775,994

19,013,403

19

177,166

1,361,947

55,169,366

76,309,178

250,000

1,934,783

7,701,100 4,0611,368
70,000

290,308

267,039

1.376

6,727

9,863,620
4,008,051

12,754,465

35,611

510,839

17,778,085

59,351

70,900

1,215,73'
)

1,490

67,940

176,987

14,963,823

267,074

343,33.5

863,931

50,510

12,992,148

252,687

2,267,204

28,033
4,808,377

341,144

218,135

3,139,135

599,871
3.998.320

107,312

4,068

20,1)00

2,300

804,544

32,140

9,3.58

236,519

6,918

845,768

4,603,617

878,350

1

2,420

2,314

42,660,114

70,000

39,75.5,604

1,002,679

716,066

3.

176,583

35,184,953

331,678

566,881

1,

69,654

21,568,398

280,190

387,626

13,807,250

501.846

336,079

800,000

161,266

42,015

2,326

318,287

49,333

14,946,226

390,943

139,400

49,368

9,861

1,118,685

61,019

56,598,62.5

671,701

1,559,2 0

13.915

16,033

9,86.5

237,777

282,561

5,958,801

43,710

162,304

54,473

1,142,526

90,223

34.062.408

143,648

1,156,529

39.246

86,798

, 353
068,

36,325

27,1112

1,727,444

86,791

Nil.

2,7

37,835
554,402

4,8

4,138,000

508,117

8,7

2,547,721

4,1

1,136,000

3,f

21

18,475

22

33,000

23 • 748.382

595,761

75,276

80,000

42,086

1,054,546

9,938

51,033,038

1'383197 5
: °1
277,660

95,725

21,578

95,236

1,283,173

189,131

33,610,837

133,168

557,002

1.

13,522,336

106,160

10,000

279,716

22,754

20,605,601

8,725

211.643

1,1

1,154

20

1,348,829

313'599

109,117

17,000

4,800

153,145

22,152

200,093

83,798

19,949,102

372,935

29,631

1.122,627

20,149

100,957

10,200

12,70),338

11,002

58,191

931,030

537,529

2),799,295

3,410,769

25,001,579

298,000

3,457,547

1,800

122
49,641, 15
201
9

29,178

20,592
6,160

2,816

68,850

3.5,010

25,382

600,000

33,524,891

31,889

26,787

47,848

1,211,575

37,487

47,982,471

34,418

27,713

2,229

55,050

48,908

6,225,059

3,000

1,843,400

147,403

375,192

10
238,383

1,`g

292,332

781,312

2,1

311,072

1,133,960

5,4

7,455

36,368

34,258,289

34.5,822

393,100

22,689

10,590,139

47,094

126

7,8.54,687

293,858

113,407

24

997,133

25

256,117

26

570,936

1,69.5,63i

23,211,193

158,619

5,928

27

2,131,546

225,792

2,662,666

4,442,441

237,029

28

737.784

680,767

4,417,365

55,281

208,002

29

294,000

2,340,325

1287,943

33,104

151,131

81.281

7,811,526

50,181

51,154

517

30

663,529

350,157

8.28.5,836

58,759

352,862

44,706

13,411,246

172,200

183,027

1.078

31

280,918

666,294

3,02,4612

8,945

81,705

47,613

5,109,271

68,439

29,364

172

.1)9,150

1,241,751

56,564

303,294

317,783

902,825

14,304,323

42,730,261

85,220.631 515.695,476

32
33




1.6(13,533

3.650

15,430

56,026

7,711,203

7

1,486,540

4.51,470

2,035,143

57,375

11,163

21

152.898

14.176
27,899,016 1,060,368 3,222,133

2,8

44.438

2,136,610

29,958

8,052

31

18,492.413

9,877,370

994,885,648

9,753,086

24,880,511

64,359

T. C. BOVIILLE .
Deputy Minister

of Finance.

SAVINGS BANKS AND FEIENDLY SOCIETIES.

POST OFFICE SAYINGS BANKS FUND.
AN ACCOUNT for the Year ended 31st December 1907, showing the INTEREST accrued in
respect of the SECURITIES standing in the Names of the COMMISSIONERS for the REDUCTION
Of the NATIONAL DEBT to the Credit of the POST OFFICE SAVINGS BANKS FUND, the
INTEREST Paid and Credited to DEPOSITORS in pursuance of the ACTS relating to POST OFFICE
SAVINGS BANKS, and the Expenses incurred in the execution of' those Acts; prepared pursuant
to Acts 40 Vict. c. 13, s. 17, and 54 Sr 55 Viet. c. 21, s. 15.
SAVINGS BANKS FUND.
AN ACCOUNT for the Year ended 20th November 1907, showing the INTEREST accrued in
respect of the SECURITIES standing in the NaMes of the COMMISSIONERS for the REDUCTION
of' the NATIONAL DEBT to the Credit of the FUND for the BANKS for SAVINGS, and the
INTEREST Paid and Credited to TRUSTEES of SAVINGS BANKS; prepared pursuant to Acts
40 Vict. c. 13, s. 17, and 54 & 55 Viet. c. 21, s. 15.

FRIENDLY SOCIETIES FUND.
AN ACCOUNT for the Year ended 20th November 1907, showing the INTEREST accrued in
respect of the SECURITIES standing in the Names of the COMMISSIONERS for the REDUCTION
of the NATIONAL DEBT to the Credit of the FUND for FRIENDLY SOCIETIES, and the
INTEREST Paid and Credited to the TRUSTEES Of FRIENDLY SOCIETIES; prepared pursuant
to Acts 40 Vict. c. 13, s. 17, and 54 & 55 Viet. c. 21, s. 15.




Treasury Chambers,}
15 June 1908.

C. HOBHOUSE.

(Presented pursuant to Acts 40 Vict. c. 13, s. 17, and 54 4. 55 Viet. c. 21, s. 15.)

Ordered, by The House of Commons, to be Printed.
15 June 1908.

LONDON:
PRINTED FOR 141S MAJESTY'S STATIONERY OFFICt,
BY EYRE AND SPOTTISWOODE, LTD.,
PRINTERS TO THE KING'S MOST EXCELLENT MAJESTY.

And to be purchased, either directly or through any Bookseller, from
WYMAN AND SONS, LTD., FETTER LANE, E.O., and
32, ABINGDON STREET, WESTMINSTER, S.W.; or
OLIVER AND BOYD, TWEEDDALE COURT, EDINBURGH; or
E. PONSONBY, 116, GRA.FTON STREET, DUBLIN.

175.

[Price .1d.i




2

ACCOUNTS RELATING TO

POST OFFICE SAVINGS BANKS FUND.

Ow

AN ACCOUNT for the Year ended 31 December 1907, showing the INTEREST accrued in
of the NATIONAL DEBT to the Credit of the POST OFFICE SAVINGS BANKS FUND, the
OFFICE SAVINGS BANKS, and the Expenses incurred in the execution of those Acts;
f.

S. d.

Interest accrued on Securities standing to the credit of the Post Office Savings
Banks Fund

-

•

Excess paid and credited

4,219,330 17 10
•

86,246 19 11

•

4,305,577 17 9

SAVINGS BANKS FUND.

IM•

OS

AN ACCOUNT for the Year ended 20 November 1907, showing the
INTEREST accrued in
of the NATIONAL DEBT to the Credit of the FUND for the BANKS for
SAVINGS, and the
40 Vict. c. 13, s. 17, and 54 & 55 Vict. c. 21, s. 15.
C.
Interest accrued on Securities standing to the credit of the Fund for the
Banks for
Savings, after deducting expenses of Savings Banks Inspection
Committee, under
Section 4 (1) of 54 & 55 Viet. c. 21 -

s. d.

1,431,590 15 1

Excess of Interest paid and credited to Trustees of Savings Banks
by the National
Debt Commissioners -

7,327 19 5
1,438,918 14 6

FRIENDLY SOCIETIES FUND. -

•

•

AN ACCOUNT for the Year ended 20 November 1907, showing
the INTEREST accrued in
of the NATIONAL DEBT to the Credit of the FUND for FRIEN
DLY SOCIETIES, and the
to Acts 40 Via. c. 13, s. 17, and 54 & 55 Vict. c. 21, s. 15.

Interest accrued on Securities standing to the credit of the Fund for
Friendly Societies
Excess of Interest paid and credited to Trustees of Friendly Societi
es by the National
Debt Commissioners -

s. d.
32,347 8 5
14,194 13 4
46,542

National Debt Office,'
9 June 1908.

1

9




SAVINGS BANKS AND FRIENDLY SOCIETIES.

3

POST OFFICE SAVINGS BANKS FUND.
respect of the SECURITIES standing in the Names of the COMMISSIONERS for the REDUCTION
INTEREST Paid and Credited to DEPOSITORS in pursuance of the ACTS relating to POST
prepared pursuant to Acts 40 Vict. c. 13, s. 17, and 51 St 55 Viet. c. 21, s. 15.
X.
Interest paid and credited to Depositors

s. d.

3,719,975 --

Expenses incurred in the year

•

•

2

585,602 17

7

4,305,577 17 9

•

•

ON

OP

SAVINGS BANKS FUND.

respect of the SECURITIES standing in the Names of the COMMISSIONERS for the REDUCTION
INTEREST Paid and Credited to TRUSTEES of SAVINGS BANKS ; prepared pursuant to Acts

s. d.
Interest paid and credited to Trustees of Savings Banks -

•

1,438,918 14 6

•

1,438,918 14 6

FRIENDLY SOCIETIES FUND.
respect of the SECURITIES standing in the Names of the CO3IMISSIONERS for the REDUCTION
INTEREST Paid and Credited to the Titus TEES of FRIENDLY SOCIETIES; prepared pursuant
some,

s. d.

Interest paid and credited to Trustees of Friendly Societies

S

•

•

•

46,542

1 9

46,542

•

1

G. Hervey,
Comptroller-General.

175.

9




NATIONAL DEBT
(SAVINGS BANKS AND FRIENDLY SOCIETIES).

1.—AN ACCOUNT of the G-uoss AmouNT of all SI•Ms Received and Paid by the CoMMIS.
,
41„NERs for tit„ R E prc ri; or 013 NATI(); r.
•,.$)o to of BANKS for SAVINGS
and FRIENDLY SOCIETIEs in Great 1;r;1o;11 id lrcland from thcir Commencement at
lit ii August 1817 to Hi, 201h November 1907, in lusi ye :—
t h(, AGGREGATE AMOUNT
,
of the SEPARATE SURPLUS FUND of all SAVINGS BANKS at 20th November 1907, and of
tlte C Ross Amouvr of all Sums Transferred to or paid out of such Surplus Fund in the
course of the vear ended 20th November 1907 :—And, of all EXPENSES incurred by
the said CommisstoNEtts for S k I. k1:11:- of CLERK or other Incidental Expenses during
the year ended 20th November 1907.
N ACCOUNT setting forth 111 detail the whole of the several transactions which have
taken place during the year ended 20th November 1907, in the INVESTMENT of all MONEYS
which came into the hands of the CouNttssmxnus for the REDUCTION of the NATIONAL
DEBT, for SA‘INGs 11kNKIS and Fut EMMY SOCIETIES, and of
tlw Variations which
have taken place ditri!tg such Year in the Semitic. Ii hi hv the said ComutsstoxER- for
those Institutions.
STATEMENT :,1towing the AGGREGATE AMOUNT Of the LIABILITIES of the GOVERNMENT to the TRUSTE!' of SAVINGS BANKS and FRIENDLY SOCIETIES respectively, at
20th November 1907, iii I the Nature and Amount of the Securities held by flue
COMMISSIONERS for tlis, ItEnce rit IN of the NATIONAL DEBT to meet those Liabilities
at that date.

Treasury Chambers, t
24 February 1908.

WALTER RUNCIMAN.

13resente(1 putsuant to Acts of Parli(lment, 26 4. 27 Viet. c. 87, a. 60 and 4 Edw. 7. c. 8, a. 9.)

(b.dcr
(

hy The House of(
'ommon, to 1)('
.
24 Frhru(1,•,/

T. 0 N 1) 0 N :
!TIN 11,1) Ftn; Ills
Y'S S'I'AT I ON EH Y OFFICE,
i:Y
PE AND SPOTTISWOODE
11:1\ III:- I
I IIE K1N4.•- ‘14)ST EXcELLENT MAJESTY.
.knd lo be purchased, either directly or I h rowri, ;iii.\ nookseikr,fr„n)
%V 1' NI AN AND SONS. LTD.. FETTER LA\ E, E.C.. and
32, A III NODI)N STREET, W ESTMINSTER, S.W.: or
1)1.1 V I. 1: \I) It(,,)Y1). TWETDD ‘1.1.:
:
: Cr
INSONBY, 1 ii).
k 1 ,
1.1, 1)1 11.1\.

'1.1 re 1(1.]
.

•

a

•

•

ACCOUNTS RELATING TO SAVINGS RANKS AND FRIENDLY SOCIETIES.

11•1•••••

m.m01.111,

.11

•••

MID

SAVINGS BANKS AND FRIENDLY SOCIETIES. -

AN ACCOUNT of the Guoss AMOUNT of all SUMS Received and Paid by the Commissioners for the REDUCTION of the
Commencement at 6th August 1817 to 20th November 1907, inclusive :

()Koss AMOUNT
of all Sums
received from

From 6th August 1817

GROSS AMOUNT of all Stocks, Annuities, and other Securities standing
In the Names of the Commissioners on 20th November 1907.
GROSS MUM NT

Trustees,

of all SU1116
and Interest
credited to them, paid to Trustees,
including
Interest up to and
Intere t.
,
due upon

to
20th November 1907, inclusive.

Advances
In respect
of which
Annuities
had not
been
granted at
20th Nov.

Annuities
for Terms of
Years.

Dills and
Stock
Itonds.

20th Nov. 1907,

1907.

s. d.
REAT BRITAIN

and InimAN

Savings BallkS

S.

s. d.

:

•

•

1911,160,530 14 8

Fr:endiy Societies, per Act 59 41: ell Viet. c. 25 -

TOTAL SAVINGS BANNS aLia
Fit I EN 01,1 84 WI E'I' I ES

.

10,170,791 7 1

2(51,331,322 1

137,232,463 11

31,574,403 5 4

8,824,767 18 10

32,835,108 5 9

1,855,156 17 10

111,o1;

1,130,000

1,855,186 17

10

16,017

1,260,705 - 5

9 146,057,231 9 10

1.130,001)

AN ACCOITNT of the Acit.;u1.:(;ATE A mi )t•vr of SII'.1AT E Sc tti.tVI
and

of

NI) of all SAVIN(Is 1IAxIts at 20th November 1907 ;
the G ItoSs A NioUNT Of all Sums Transferred to or paid Out of such Surplus Fund
ill the eluirse of the Year ended 20th _November 1907.

Not carrying
Interest.

Carrying Interest.

s. d.

S. 9. d.

Balance on Separate Surp111.4 Fund, at 20th November 190t;

:153.316 6 r)

366,4 18 1 3

Tiansferred to Separate S1111)1114 rum](hiring year ended 20th November
1907.

1,304
:151,650

' out of Separate Surplus Fund
,
Ito




1luring

year ended 20111 November 1907

lIalanee at 20th November 1907

-

2
II

7

1,1131 1 11
333,616 4

111,358

14

:185,776 15 3
4,800 —
380,976 15 3

TOTAL.

s.

9.

(1.

719,761 7
2(),462

740,427

14

2

I Iii

5,831 1 11
734,92 19 11

ACCOUNTS RELATING TO SAVINGS BANKS AND FRIENDLY SOCIETIES.

OMMMD

UND

- SAVINGS BANKS AND FRIENDLY SOCIETIES.

NATIONAL DEBT on account of BANKS for SAVINGS and FRIENDLY SOCIETIES
prepared under the following Heads, pursuant to 26 & 27 Vict. c. 87.

in

Great Britain and Irelaad, from their

SUMS PAID.

For
the Purchase of
Stocks, Annuities,
and
other Seenritie:,
after deduction
of
Sums reeeived
for Sales
and
for Return of
Capital
•
in Terminable
Annuities.

For
Expenses
charged on
the
Savings
Banks Fund.

L.

To
Exchequer,
per Act
40 Viet. c. 13,
s. 15,
being Excess
of
Interest
accrued
over
Interest
credited to
Trustees.

8. d.

a. d.

AMOUNT
of Intere.t,
Dividends and
Return of
Capital
T 0 TA L.

(69,847,3221. -1. 5d.)
in Terminable
Annuities
received by the
Commissioners.

Z.

s.d.

X.

a.

d.

160,020,159 17 11
50,506,870 11

9

82,224 15 10

102,201 5 3

50,691,296 12 10

82,224 15 10

102,201 5 3

C.

s. el.

764,763 15 -

and
Friendly Societies
by the
Commissioners,
Including Interest
up to and due
upon
20th November
1907.

X.

s. 41.

814,548 13 -

1,579,312 8 -

91,450,430 18 7

1,269,826 3

9
4,587,021 18 2

3,487,150 1 9

167,719,876 8 3

52,161,96; 17 5

99,046,02 16 9

Besides the above-named Securities, the following Balances rei11:1.110, 1111invested on the 20th November 1907, viz.:
1
in Banks of England and Ireland (less Drafts issued but nut pai(l) ; Savings Banks, United Kingdom
Balance
Ditto - Bank of England -

- ditto -

-

Friendly Societies, United Kingdom

ft. it
211)
331 13 3
•

X.

AN ACCOUNT

Of

all

a. IC

2,217,323 18 -

4,717,328 17 4

1,473,671 4 7

162,653,413 18 6
51,9411,541 16 4

OH
Seeurities.

GROSS AMOUNT
of Interest paid
and credited
to Savings Banks

163,002,547 10 11

2,632,954 - 7
1,173,671 4 7

AMOUNT
received from
Exchequer,
per Act
40 Viet. C. 13,
ss. 15 and 16,
being Excess
of
Interest
credited to
Trustees above
that accrued

RECEIVED
from
EXCHEQUER
on account
of Deficiency of
Capital.
-SAVINGS BANKS,
per Act
43 & 44 Viet. c. 36,
s. 1.
FRIENDLY
SOCIETIES,
per Acts
45 & 46 Viet.
e. 72, s. 21,
and
50 & 51 Vict. C. 16.

2,6159 2 10
213,990 16

EXPENSES incurred by the said COMMISSIONERS for SALARIES of CLERKS, or other Incidental
Expenses, during the Year ended 20th November 1907.

The t'HA IMES of MANAGEMENT under this head are not distinguished from the General Management of the Office of the Commissioners
hut, so far as the same can be estimated, they may have amounted to 4.000/.




A2

1




4

ACCOUNTS RELATING TO S1\ 1NGS RANKS AND FRIENDLY SOCIETIES.

-2.
AN ACCOUNT setting forth in Detail the whole
CommtssioNEns for the

of

411.

•

.10

the several Transactions which have taken 'da(t during the Year

R EDucnoN of the NATIONAL DEBT, for SAVINGS BANKS and FRIENDLY SOCIETIES, and

Com NI I ‘s'sIONERS for thoEe Institutions.
_
Si MS Receive I on account of Saving4 Bat,ks.
For Securities Sold and Securities Paid OIL
TOTAL
I) A l E.

War

Guaranteed

Stock.

Exchequer
Bonds
(1909).

Treasury

Land Stock.

Exchequer
Bonus
(1997).

£.

X.

£.

Z.

Consols.

,C.
Balance in Banks of
EttgIsn'i and IreIan.) at 0 November 1'46.

a. d.

-

•

•

•

Dills.

Greek
Irish Land
Guaranteed Commission
26 % Bowls.
Bonds.

4f..

Sums
PrI1 ;e.
4

x.

.C. s. d.

•

• •

RECEIVED.

61,500 1

1

1906.
:28 November
28

16,000

7 December •
15

par

5,500

par

5,500 - -

34 0 0 disc.
/

=IMO

9f

9,896 4 -

10,000
100,0041

1.

98,970 4 2

15,000

17
18

S6:

13,012 10 -

4,001

ft

18

16,000

ft

3,470 - 50,444(4

18

19,597 5 3

20,131)1

89 794 13 2
17000 ...
:

•
•

19

100,0140

-

S7

5,0 40

27

4,337 10 27

47,008 10 5

28

20,090 18 2

40,397 18 11
25,000 31

77,1u0

It

87

67,077 -

1907.
1 9,4 )0

9 February

140

16
18

20,000

26

19,000

10,000

20,00)

99

9,993 15

100

20,000

11

20,004)

414,1;04

1 March

40,000
5

50,000

19

I

19

30,000

25

20,009

49,617 12 9

^

27

I ke

^

10,000

97

29,100

964

19,375 -

974
28

38,850

99

4,950

par

100,000

5,000

”
1•110

30 May

^

100,000
40,400

27 June

100

46,400 - -

100,000

2 July

99,562 10 30 „

30,000

"

99:

29,925 -

50,000

,
6 A tigli t

100

50,000

40,5041

13

994
16

100,000

it

78,099 8 7

90,14(40

24,000

205,4041

175,500

230,000

177,100

40,297 10

iou,000 -

par

221,500

1,218,624 14 4

Sums rectuived from Trustees Dividends on Stook, Annuities for Terms of Years, and Interest
on other Securities (including Interest on Treasury
Bills) Received from Exchequer, per 93 & 44 Viet. c. 3e, being Annuity created to pay oft
the Total Capital Deficiency, on
Savings Banks, as it stood on 20th November 1880
account of Trustee

Af1,54e4

4

3

2,4;59,679 5 83,672 12 -

Received for Stock sold for Depositors

21,019 1

For Allowance to Trustees on the Grant and Payment of Annuities
•
Received from Exchequer, per Act 40 Viet. c. 13, 8. 15, being excess of Interest credited to
Trustees above that accrued on
Securities
Temporary Advances to Irish Land Purchase Fund repaid •
•

2

175 2
•

9,491

•

4041,000

2 6

4,960,247 I 3
During the year endo3 2
0th Novembe 1907 Certificates, issued at the request of Depositors,
Fnnd ; awl 60,725/. lOs. 9,1. sterling fromr the
were lodged with the Commissi
Post Office savings Banks Fund to the Fund for the
oners for the Reduction of
Batiks for Savings; further,
Trustee Savings Banks, and )48,2s7/. I Ss.
sterling was transferred front the Savings
Ban): Investment Account to the Fund the sum of •I75,559/ IOs.Rd.'sterling
(NH to the null for the Banks for slyingfi
for the Banks for Saving*, being
and the savings Bank Investment Acccunt, Were, at various
the
not being cash trausa,
periods during the year,
Aions, but m
merely SUMS written off fromm one Stwk Acloulit
to tie' other In each COM,do not appear in the converted, at the market price
above Return.




ACCOUNTS RELATING TO SAVINGS RANKS AND FRIENDLY SOCIETIES.

5

ended 20th Novoniber 1907, in the INVESTMENT of all MONEYS 111'11101 came into t1142 hands of the
of all tho Variations which Int\ e taken placc 1 ii tig such boar in the Securities hehil by the said

INVE8TMKNTS made nail Sums paid on account of Savings Banks.
In Stock and other Securities.
TOTAL
DATIL

eciit.
Annuities.

VI per cent.
Annuities
(19,5).
,

Guaranteed

Guarant .e(1 Trelsury
21 per
Land Stock. cent. Stock.
Bills.

1906.

t
.

Exchequer
Boum;
(1907).

Exchequer
Bonds
(1909).

SUMS PAID.

.e.

5. 11.

22 November
23
28

87
Mg
87

3 December

87;

1,900 -

3,515 - 1,933
790 17 6
1,669 12 6

90
92
991::

4,998 13 3

1907.
10 January )0
12
16
P.

5,000
5,400
100,004

99i
92a
• s (")" dise.

9,01111
1 t;

6,51)0
50,000

•/1

28 May
29 „
30 „
4 June 6
14
14

62,000
40,000
10,0041
15,000
_..„
-

18

II

.....

32,000
:111,01111

61,349 13 10
45,606 10 6
19,700

30
30

2.5,000
4,0011
1,310
- _
1,500 $00-2,800 - -

-

20,000
7,000
250,000 194 15 10
276 - 4
539 14 5

9
,

19

50,000

475,000
30,078
6,4145
5,523
31,941

6 9
7 1
H-

50,357
50,000
39,081
15,760
24,550
6,295
3,200
1,040

10 8
9
15 is
12 6
_
-

668
• 1,252
668
2,338

10
-

•,

3,11011
4,001)

83
99"
•

•••

•1

2,000

a_

20,0181

•

17,020

7o,51.7

1

1 871,821 13 4

75.00o

205000

,
lir,:fts paid to Trust( e.
Bank of EinaandFccs nalitlICIC of Commission, under Setton 3 of Savings Banks Act, ism) .
Paid for Stock bought for Depositors and placed to credit of the Saviugs Bank Investment Account
Expenditure of Trustee Saving, Banks inspection Committee
Advances under "Land Registry (New Buildings) Act 1900," 63 & 61 Viet. c. 19
Advances under"Hallways(Ireland) Act, 1896," 59 & 60 Viet. c. 34
.
Advances under "Light Railways Act,1896," 59 & 60 Viet. e. 48
•
Advances under Public Offices Site(Dublin) Act, 1903, 3 Edw. VII. c. 16
.
Temporary Advaileem to Irish Land Purchase Fund
•
•
Balance in Banks of lingi11.111i MA Ireland on 20th November 1907

4,996
4,993
2,527
3,355
4,993
1,677
19,909

99/
S

-

•.

20,072 5
6,27315
212,239 11
165 1
233 18
456 1
19,940 15

9914
89:
84 17 11 x.
841
84
84
99

5,4810

•I

i

s41
99 'so
99
90
991

5,000
5,0014

1 November
11

25,077 - 3

7,000

4 October
7
9

62,027 7 9
40,021 I 11

99;;
99
99R1I
.
100

s3i
831
$3
$3

30,4610
6,500

6,120

71

17,030 14 9
3,406 2 11
1,001 19 5

80
811

II

16 September
20
PI
24
91
311
l•

9

lion
$14
$34
$4)
% disc.

,560,471 19 6

IS

1 Auga4
12
16
20
21
22
'22
•
27
••

, 32 10
0141 -

100
100
11111

17,000
3,400
1,000

2 .1 uly
8 II

1(44,65 12 :97 - 8
44 913 3
6
3
5
13,875 - -

15,0044

841

•

2811,5011

11
8
9
6
3
1

*2
8
10
8
10
3

7
3
4
6

1,420,441 15 2

2,858,459
67
43,561
4,361

13
16
4
17
1

6
5
2
9

•

.
.

60F
1:,7
101
8,000 406,000 211,331 13 3

X. 4,960,247

1

Savings Thinks
the National Debt for the Tran4er of 37,528/. 16s. 11)d. sterling from the Fund for the Banhs for Savings to the Post Office
St4wk for Depositors iii
was transferred from I la 'iiii'1 for the Batiks for Savings to the Saving Bank Investment Account, for the purchase of
153. Id. sterling, respectively
amount realised by the sale of Stock for Depositors. The balanet'S 1,1 above sums, 23,1961. 13s. lb/. and 87.266/.
of these funds. These transfers
flay , into 27,7340. I As, 1114. ittit 14)3,320/. Is. Id. Stock, which was transforms' to the Stock standing to the erNlit
of the

A 3

3




SO

-

Z.

3.01)

3.000

•

10.000

5.004)
5.000

Exchequer Exchequer
Bonds
B4 M&'`
(1907).
09091.

61,249 18 9

3,329 S 3
1,727 13 3
1,743 4 1
5.873 14 4
4,725 6 5
3.764 15 3
5.21') 4 3
2.952 13 7
3,313 14; s
2.884 17 11
3,666 Is 5
3,371
9
6,088 5 7
315 10 3

1.159 8 5

3.743 - 1,451 14 9
726 6 7

s. d.

Consols.

991

991

81 g
81V,
84 t
8411
82 3
/-

861
100
85
86
861
854
844
85
83P
S3,1

5474
86f
85-U
.

Price.

Z.

Sums received from Trustees
- Dividends on Stock and Interest
on Securities
Received from Exchequer, per
Act
credited to Trustees above that 40 Viet. c. 13. s. 16, being excess of Interest
accrued on Securities
- • _
-

2 January
26 Fcbriviry
26 111are1i
10 April
11
30
10 May
21
13 June
21
25 .,
9 August
21
..
25 September
26 ,.
30 „
29 October 4 November

1907.

3 December
17
28

1906.

Balance in Bank of England
20 November 1906

DATE.

8. (1.

13 -

6 3
10
10

13 - 7

s

1

3 10

126,361 10 8

14.231

8.112 - 32,542 13 10

11,475

3(4)*))
•):774
5,000
259
4,987
4,987

2,347 11

,378 1
. 1153 19
2
4

3,4)00 4,086' 9 5
1,303 10 3
5,000 - 4,010 12 4
3,200 - 11

:. )
1.00(
i 000

5,000 - 1,252 2 6
624 3 9

6.823 0; 3

t.

TOTAL
Sums Received.

Sums Received and Securities Sold iu the Year
ended 20th November 1907.

Balance in the Bank of England, 20th November 1907

Drafts paid to Trustees

2 September 1907

16 January 1907 -

D A T E.

3.0451)

3.000

Z.

Exchequer
Bonds
(1907).

I

10.000

144,000

Exchequer
Bonds
(1909).

994

99i

Price.

1 11

126,361 10 8

2,659 2 10

110,706 15 4

12,995 12

9.991

3,004 10 7

t. s. d.

TOTAL
Sums Paid.

SuNts Paid and Securities Bought in the Year ended 20th November 1907.

FRIENDLY SOCIETIES, 59 & 60 Vict. c. 25.

2.—AN ACCOUNT setting forth in Ditail
the whole of the several Tramactions which have taken place during the
Year ended 20th November 1907, Ste. —continued.

ACCOUNTS RELATING TO SAVINGS




3.

do•

National Debt Office,
1
20th February 1908.

•

Amount of Principal and Interest due to the Trustees
Friendly Societies on 20th November 1907

Amount of Principal and Interest due to the Trustees
of Savings Ranks on 20th November 1907, including
734.592/. 19x. 11d. standing to the credit of the
Trustee: on the Separate Surplus Fund Account -

Liabilities.

d.

1,346,023 8 3

52,928,067 3

£.

•

-

Dividends accrued
Cash 1 filanee

21 per Cent. Consols
•

II. FRIENDLY SO4 IETIES.

Interest accrued
Cash Balance
•

•

•

Adrance$ for which Annuities had not been granted on November 20th, 1907

Annuities operating to replace Stock—amount of Stock still outstanding
Annuities operating to replace Cash—amount of Cash still outstanding -

Annuitiesfor Terms if Years:

Treasury Bills
Greek Guaranteed 21 per Cent. Bond:Excholuer Bonds(1909)

Bills and Bonds
:

•

•••

•

Nature and Amount of Securities held.

21 per Cent. Consols
21 per Cent. Annuities 21 per Cent. Annuities (1905)
Local Loans 3 per Cent. Stock
_
2/ per (lent. Guaranteed Land Stock
2t. per Cent. War Stock
_
_
Guaranteed 21 per Cent. Stock
.
Tran vaal Government 3 per Cent. Guaranteed Stock
,

Stock'?
:

i. TRUSTEE SAVINGS BANKS.

•

•

•

•

•

•

•

6
5
9
9
14
-

G. HERVEY,
Comptroller-General.

1,2641,746 3,933 10 6 `
2,659 9 10

422,758 15 9
211,331 13 3

16,017 -

5,798,048 10 s
14,710,992 15 10

-

9

4
1
10
6
5
-

s. d.

25,000 1,000,000 105,000 -

17.347,487
1.117,941
317,189
8.450,277
2.205,187
100,000
1.521,320
515,000

X.

A STATEMENT showing the AGGREGATE AMOUNT of the LIABILITIES of the GOVERNMENT to TRUSTEES OF SAVINGS BANKS and to FRIENDLY SOCIETIES respectively, at
90th November 1907, and the Nature and Amount of the Securities held by the CommissioNEns for the REDUCTION of the NATioNAL DEBT to meet those
Liabilities at that date.

"•••••••hoft

-DNIJ,V9111 SINI1000V

C'




TRUSTEE SAVINGS

BANKS.

REPORT
OF THE

PROCEEDINGS OF VIE INSPECTION COM M IrrEE
OF

TRUSTEE SAVINGS BANKS
FOR THE

Year ended 20th November 1907,
WITH

A

N

I C E S.

SIXTEENTH ANNUAL REPORT.
Treasury Chambers, t
27 February 1908.

WALTER RUNCIMAN.

(Presented to Parliament under Act 54 e3. 55 Vict. c. 21, s. 3, s-s.
7.)

Ordered, by The House of Commons, to be Printed,
27 February 1908.

L 0 N I)0 N :
PRINTED FOR HIS MAJESTY'S STATIONERY OFFICE,
BY EYRE AND SPOTTISWOODE,
PRINTER

TO THE KING'S MOST EXCELLENT MAJESTY.

And to be purchased, either directly or throng)) any Bookseller, from
WYMAN AND SONS, LTD., FErrEtt
E.C., and
32, A ItIN4:1)0N STREET, WEsTMINsTER, S.W. ; or
OLIVER AND BO Y D, ;WEEDDALE CI'r in', EDI N L R4.11 or
E. PONSONBY, 116, GRAFToN STREET,

DrmAN.

76.

[Price 2dd




T ABLE

C()NTENTs.

Pm.E

THE COMMITTEE

-

.

-

.

-

-

-

.

.

.

Re•appointment of Chairman and Standing Snh.Committoes

.

-

3

-3 . .
Special Sub-Committee
Member's vacation of office

-

.

-

Appointment of his successor-

•
3

-

-

-

-

Vacation of office by 3 members representing the 1:ziii1,- :111,1 ilichr re-appointment
_
_
Re-arrangement of Standing Sub-Committee- .

Expenses -

-

-

-

-

INSPECTION WORK

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

.

.

-

.

.

.

-

Dormant or Unclaimed Deposit Accounts .

.

.

Expenditure

-

_

.

-

Depositors' Interest

-

.

-

.

-

-

-

-

•

-

-

Profits

-

-

_

.

.

.

.

-

Statutory Notices not complied with -

.

.

.

.
•
.

TRUSTEE SAVINGS BANKS IN 1906-1907 -

.

-

•

-

-

•

-

-

ditto

Closed Banks -

-

_

Amalgamation of Banks New Bank

-

-

.

.

.

-

-

-

-

-

VACATION (U.' OFFICE 11Y TILI7STEE-,

ENERA I.
A I'VENDICEn

EM A RIC S

-

.5
6

_

6
7

-

ILL

•

.

.

.

7

•

•

•

-

8

-

-

-

-

-

8

-

-

.

8

.

8

.

9

-

9

.

9

-

9

_

9

.

10

.

10

-

10

-

•

•

-

-

.

-

.

-

-

-

_
'

-

-

-

-

".

"

,

-

-

Number of Banks open on 20th \0% eniher 1907 Penny Savings Banks
Hours of business

_

.

-

.

5
-

Special Investment Departments

.

New BrantAl Banks

.

.

Number of Depositors and Amount of Funds, General Departments
Ditto

-

-

-

-

I
1

_

-

Number of Banks

4

.

_

Premises -

4

-

-

-

.

_

..

•

-

,1

.

-

Audits

1

-

.

-

Accounts -

_

.
.

General results of Inspections
-

-

-

.

Number of Inspections

Rules

_

-

I

'

•

"

'

•

7
7

10

1

RE P0.111
OF THE

PROCEEDINGS

OF THE INSPECTION

COMUTTEE

OF

TRUSTEE 'SAVINGS BANKS
FOR THE

YEAR ENDED 20TH NOVEMBER 1907,
WITH

APPENDICES.

SIXTEENTH

•




ANNUAL

REPORT.

Trustee Savings Banks' Inspection Committee,
9. Serie Street, London, W.C.,
6th January 1908.

o
The CommiQsioners for the
Reduction of the National Debt.

MY LORDS AND GENTLEMEN,
WE have the honour to report to you, in pursua
nce of Sub•section 7
of Section 3 of the Savings

Banks Act, 1891, our proceedings for the year
ended 20th November 1907—the sixteenth whi
ch has elapsed since our
appointment under that Act.

THE COMMITTEE.
Our first proceedings during that year were
to re-appoint our Chairman, Re-appointSir Albert Ilollit, (our Vice-Chairman, Mr.
Thos. A. Welton, F.C.A., ment of
having been appointed in 1905 for the
term of four years), and also our Chairman,
Standing Sub-Committees of "Account
and Standand Insp
"Rules and Special Purposes," with their mem ectors' Reports" and of ing SubMr. I It-rper atiul Mr. Stutchbury, iii the ease of bership unchanged, viz.:— Committees.
the former ;Sub-Committee,
and Sir Edward Brabrook, Mr. Walters, and
Mr. Wood in the case of the
latter, with the Chairman and Vice.Chairman
as members of each ex-otliciis.
The services of a Special Sub-Committee, cons
and Mr. Walters, both ex-Presidents of the Law isting of Sir Albert Rollit Special SubSociety, were subsequently Committee.
required to deal with a matter which involved
questions relative to Special
Investments.
The period of four years for which Mr.
member expired on the 20th November last, andStutchbury was appointed a Member's
filled by the (;overnor of the Bank of England the vacancy thus caused was vacation of
app
Chief Accountant of the Bank of England, to ointing Mr. 11. 13. Orchard, office,
act as a member of the Committee for a period of four years front
that date. The retirement of
76.

A 2




Mr. Stutchburv, prompted by considerations of health, is a matter of great
regret to us. His wide experience of Banking. and Finance and his other
high and expert qualifications have been of the greatest possible value to
us during the past 13 years, and we trust that relief from official duties N%
conduce to the preservation of his health and the enjoyment of a ell-earned
leisure.
Appointment of his
successor.

The appointment of Mr. Orchard was acceptable as it renews an association with the office of Chief Accountant of the Bank of England, which
existed until Mr. Stutchbury retired from that position in 1903.
Vacation of
The completion of the past Smilers Bank year also terminated the period
office by three
of service of the three members of the Committee (Sir Albert Rollit,
members
representing Mr. Hepper, and Mr. Wood) who represent the Banks under Clause 4
the Banks
of the Statutory Scheme regulating oar appointment, constitution, and
and their re- proceedings, framed under Section 2 of the Savings
Banks Act, 1891. Each
appointment.
of the Banks (at present 22) haying the necessary qualification, viz.:—a
Balance of not less than 500,000/. on its General Account at the National
Debt Office on the 20th November 1906, made a fresh nomination, and,from
the list of the names of the gentlemen so nominated as eligible to serve,
the three remaining members and our new member unanimously selected
those of the three retiring members, who were in each case nominated by
a large majority of the Banks, and who have since duly accepted office.
Re-arrangeThese changes and re-appointments have involved some modifications
ment of
of the membership of our Standing Sub-Committees. Mr. Wood, who is
Standing
Chairman of the Edinburgh Savings Bank, now shares in the work of the
Sub-Committees.
Sub-Committee of "Accounts and Inspectors' Repoi.Ls," Mr. Orchard taking
Mr. Wood's place on the Sub-Committee of"Rules and Special Purposes."
Expenses.
)ur expenditure amounted during the past year to 4,361/. is. 9d., of
which particulars will be found on page 12, where the usual annual account
appears as Appendix A to this Report.

INSPECTION WORK.
Number of
inspections.

General

results of
inspections.

At the beginning of the year there were 224 Banks certified under
the Trustee Savings Banks Acts, 1863-1904, and all, including most of
their Branches, were inspected before the 20th November 1907. Supplementary visits were paid to 182 of them, the interval being made as long
as possible. Our Chairman also visited several Banks and officially conferred
with their Trustees and Managers on the subject of their duties and
management.
The Reports of our Inspectors upon the Banks are, in the great majority
of cases, satisfactory. Some informalities and infringements of rules have
been noticed in the case of a few Banks,arising partly from pressure of business,
and partly front undue reliance upon personal acquaintance with depositors
and upon local knowledge. ()wing to these causes, there is sometimes a
neglect to make suitable permanent records of facts, to obtain proper vouchers
for the sums repaid to depositors, to keep a complete register of depositors'
signatures, to make a note of the circumstances causing a change of Dame, to
protect the Bank by a proper explanatory record of the reason for issuing
a
duplicate pass-book, and the like. From these omissions, inconvenience and
even loss to the Banks may arise when the verbal testimony of
the parties is
no longer available, or when matters are complicated
differences and disputes. Necessary inquiries may be by family or other
rendered difficult and
even altogether frustrated, and the risk of
personation of depositors is
increased.
in oxeeptional cases where the rules
have not been carefully
and where the administration may have
observed
been somewhat inefficient, it,
has at
times been found difficult to prevail upon the
Trustees and Managers to take
the action necessary to put matters in better
order. They sometimes she'
It tendency to support an officer whose
acts or omissions are called in
In fact, it may 1e inferred general l.\ that
question.
negligence and inefficiency naturally




result from want of active control by the governing body, implying a
disposition to leave the affairs of the Bank too exclusively in the hands
of an official, who may in time come to regard his own interest, or
convenience, as a paramount consideration.
One indication of efficient management is, in our opinion, the possession Rules.
of comparatively modern rules, dating back not later than 1895, when we
first prepared a set of Draft Rules for the use of Savings Banks, which was
published in our Third Annual Report(H.C.P. 42, Session 1895). These Draft
Rules have been revised, as new Treasury Regulations were issued, and were
last published in our Fourteenth Annual Report (H.C.P. 57, Session 1906).
Since this subject was mentioned last year 10 Banks have completely revised
their rules, and others have done so partially. Revision of rules is in progress at 12 Banks, but 44 still .administer their affairs by means of rules
dated prior to 1891, when the first of the last three Savings Banks Acts
was passed, while the rules of 27 date back to 1863, when the Statute Law
relating to Savings Banks was codified, nothing having been done since then
to revise them as a whole, although in some cases a few partial amendments
may have been made on points of detail.
There is now little likelihood of serious errors in book-keeping (as Accounts.
distinguished from frauds or falsifications) escaping correction by. the
audit, or notice by the Inspectors. The books in use at many Banks are
not so complete as to admit of the accounts being kept and balanced by
double entry, hut the form in which the Annual Returns are rendered to
the National Debt Office serves as a mode of effecting a complete balancing
of the accounts and of bringing the figures of the year into one general
statement.
The accounts of the Banks for 1906, which formed the basis of
Inspection work for 1907, purported in every case to have been accurately
balanced without recourse to entries in a suspense account. In one instance
only did an error emerge in the course of the inspection. This was detected
by the Inspector in the castings of the interest credited to depositors, of
the balances due to them, and of those balances as extended for statistical
purposes into classes, according to size. A corrected Annual Return was
forwarded to your Department, and the Bank has since been reorganised,
the Secretary and Auditor having both resigned.
An error of 5s. in the balancing of the Accounts of one Bank in 1905,
which had formed the subject or repeated subsequent searches, was at length
cleared up by the officers of the Bank last year. The difference was due to
the posting of a deposit of 5s. to two separate deposit accounts, and as
such should have been noticed on the first re-checking of the postings. It
was traced by the comparison of the deposit account to which the item
had been improperly posted with the depositor's pass book, when produced
at the Bank (for the first time) two years after the mistake had been made.
At 10 Banks the postiirrs from Cash-Books to Ledgers have been found
by the Inspectors to he in arrear, and at 11 Banks the duplicate record of
every transaction, required as evidence of the application of the statutory
double check, has been reported to be occasionally faulty, entries of one
and the same transaction having been found in both Cash-Books at each Bank
in the same handwriting.
enKes the Auditors of the Banks are either qualified pr()fessid.un I A
Accountants, or persons otherwise competent ; but at 17 Banks attention was
drawn to insufficient work by the Auditor. From the smallness or the fees
which these Banks can afford to offer, there is sometimes a difficulty in getting
the hest men as Auditors. But, nevertheless, this is a most important matter,
to which the attention of the Trustees and Managers should always be given
in the public interest, and for their Own protection.
It is in our opinion an indispensable condition that the independence
awl
and efficiency of the audit should command the conlidence of the public,
should be free from any doubt arising from family relationship or otherNN
Accordingly, at an important Bank, the niaiiii.gem ent of whichh in all • ot her
essential particulars appears to be efficient, we drew the special tate n_t ion of
othecr in
the Trustees awl 'Managers to the fact of the .kuditor and the paid
A3

charge of the Ledgers being father and son. The Bank's Committee have
nevertheless maintained the arrangement to Nvitich exception was taken, and
have thus assumed full responsibility for the efficiency of the audit so
performed.
At eight Banks there was a change of Auditor last year owing to death
or resignation, hut at only one of them was the opportunity taken to substitute
as Auditor a professional Accountant for a person not in practice as such.
In the case of another Bank, in consequence of circumstances showing that
the audit rule in force was insufficient, it became necessary in the exercise of
our powers under Section 3 (5) of the Savings Banks Act, 1891, to draw an
audit rule requiring the Trustees and Managers to select an Auditor with
technical qualifications. The new rule was adopted by the Bank, and will
take effect in the present year.
Dorman( ui
unclaimed
ileposil
aCC01111 I

Expenditure.




The Ledgers of many Banks contain dormant or unclaimed deposit
accounts, the existence of which is largely due to the secrecy esteemed so
highly by depositors. This feeling we understand and respect, but we have
long advocated the adoption of a rule requiring such accounts to be
earmarked by transfer to a separate Ledger after a period of time,
(such as seven or ten years), during which no transactions have taken
place. In one case reported last year, payment of a sum deposited
in the name of a person in the year 1826 was not claimed by him
until last February, by which time it had accumulated to ten times the
amount of the original deposit, solely by the addition of compound interest,
no intermediate transactions of deposit or repayment having taken place.
Such deposits are almost at the mercy of any fraudulently-disposed officer,
with knowledge of the facts, especially if he has possession of the genuine
pass-book ; but the Actuaries have not infrequently resisted the adoption of
the practice suggested, alleging that it would involve unnecessary trouble,
and in some cases be impracticable. It seems to us, however, that any
trouble at the time or transfer, and when claims by the true owners require
transfers back again into the Ledgers containing the current accounts, is
compensated by the consideration that, pending re-claim, the isolation of
these accounts in the manner recommended tends to prevent improper
dealings and to expedite the posting up and balancing of the books.
The failure to exercise adequate supervision and control over such
accounts was the chief circumstance which facilitated defalcations by a
clerk last year, involving one Bank in a small loss, (over and above the
amount of the culprit's guarantee), and which necessitated an application for
an issue from the Separate Surplus Fund, which was sanctioned.
Several Banks take active steps to prevent dormant deposit accounts
from becoming lost sight of, or being tampered with, and although the
rule as to secrecy is possibly in some danger of infringement through such
action, the cases where these examples appear worthy of consideration and
perhaps of imitation by other Banks are noted on page 13 as Appendix B
to this Report.
The last A nnual Parliamentary Return relative to Trustee Savings
Banks (H.C.P. 270, Session 1907) shows that the aggreate expenditure of
the Banks for management (hiring the year ended 20th November 1906 was
almost the same as in the previous 12 months, being 1.1),834/. 4s. 3d.,
as against 149,5011. 28. 7d. in 1905, although salaries had risen .from
117,448/. is. 3d. in 190., to 118,6141. is. 8d. in 1906, an increase of
1,166/. 18s. 5d. The cost of management remained at the satisfactory
rate of 58. 6d. per 100!. of assets, the figure at which it ha now stood for
four years continuously. The cost per transaction decreased from 618
0-d.
to 6,0d., being a 'seduction of d. upon the corresponding figure for the
6
previous year, which was then the lowest since 1g93, when this information
was first; published.
Augmented salaries have been reported by our Inspectors during the
past
vcir at 24 Banks, for which there appeared to us to be good reasons, but
we




made objections in 29 cases, where increases in salaries, or special chanres,
incurred or contemplated, did not appear to us to be necessary, or where
diminished income, due to decreased business, required a reduction of
expenditure. In 21 of these cases the extra payments were discontinued
or refunded, or the general expenditure was reduced. In five cases the matter
is still the subject of correspondence, and in three cases we reported to
you, as afterwards appears.
Reductions in expenditure were also effected at 17 Banks in consequence
of deaths, or resignations of paid officers or of auditors, retiring allowances
being granted to three paid officers. In two cases the allowances were for
short terms only, so that the Trustees of the Banks might be free to renew
them or not. In the third case the allowance was granted subject to review,
and was to be contingently reducible by one-third. An application to charge
one of these allowances to the Separate Surplus Fund was not sanctioned.
The correlative of a high rate of expenditure for management is generally, Depositors'
if not universally, a low rate of interest to depositors, e.g., the recent interest.
reduction of the former at two Banks has enabled the latter to be raised
from 2/. 78. 6(1. to 2/. 10s. per cent. This is the maximum rate of interest
allowed by law, and is how given hy nearly all the Banks. Where a lower
rate is given, either the Banks are very small or are hampered by special
circumstances. In our opinion, failure to give the full rate reflects prima
facie upon the efficiency of the management, and we urge upon the Trustees
and Managers in such cases to spare no effort, and to lose no opportunity,
for reducing expenditure within such limits a, \di] enable them to raise
their rate of interest to 2/. 10s. per cent.
Applications for issues from the Separate Surplus Fund of sums
amounting to 905/. 16s. 3d. to meet special charges, mostly for acquiring
new buildings, or altering or repairing existing premises, were received from
seven Banks, and all were sanctioned. Since our last Report eight Banks
have removed to improved premises. Those of the Preston Savings Bank
were publicly opened by our Chairman on the 25th July last.

Premises.

Taking the Banks as a whole for the year ended 20th November
1906,—

Prutit-,

•
152 earned surplus profits, amounting' to
26 balanced their accounts of Profit and Loss exactly,
and
16 showed an excess of expenditure over income,
amounting to -

41,250

2,950

Thus leaving a net surplus of Income over
- £38,300
Expenditure of

The excess of expenditure over income was due in 13 cases out of
the 46 to special causes.
Thret.) intit.tters were rep4)rtc.oi to y4.11 111141(9. :.-tibo•tva 8 (2) nf th o Sayings
-Banks Act, 1891, the following Banks not haviier complied with requests
to remedy defaults, or to reduce exporoliture, within a specified time, viz. : -(1) Lambeth, whose expenditure for management is excessive, and
into whose Balance Sheet certain dormant deposit accounts and interest
thereon have not been introduced as liabilities, and which was accordingly
requested—
(a) To render an amended General Statement, with those accounts
and interests included as liabilities;
(b) To rescind a resolution increasing an officer's salary
A 4

Statmtnry

notices not
4' 4111 I)Iie(1
with.

8

(2) Poplar, which was called upon :—
(1) To remedy infringements of the rule requiring a Trus
tee or
Manager to be present during the houN of business and to he
a
party to transactions under Section 6(2) of the Trustee Savings
Bank Act, 1863;
(h) To reduce the salaries of the Secretaries, of whom there are
two.
(3) St. Pancras, which was requested to reduce the Secr
etary's salary
bv two instalments to the average salary p:iid at other Bank
s of similar size,
in order to provide for depreciation in the value of the Bank
's leasehold
premises and for interest in arrear upon dormant deposit acco
unts.
It \\ ill be observed that all three eases occurred in London Banks.
TRUSTEE SAVINGS BANKS IN 1906-1907.
The last Parliamentary Return shows that there were 224 Bank
s on
the 20th November 1906, of which 32 then made Special Investme
nts, and
two vere authorised to do so, but did not commence until later.

Number of
Banks.

No. of Depositors and
Amount of
Funds—
General
Departments.

Ditto—
Special
Investment
Departments.




The depositors numbered 1,759,228, and their deposits amounted
to
53,009,299/. cash, and 2,369,868/. Government stock. Compared
with the
corresponding figutes on the previous 20th November, these
show increases
of 28,897 in the number of depositors, of 285,863/. in the amount
of cash,
and of 51,620/. in the amount of Government stock held for depos
itors.
The invested funds on 20th November 1906 (including
504,675/.
Separate Surplus Fund moneys), amounted to 53,353,4491.,
besides which
there were uninvested balances of casti at the Banks, or in the
hand
Treasurers, amounting to 365,755/., and other assets (premise s of their
s, furniture,
&c.), estimated at 624,675/. Hence the amount of the total
assets
the Trustees was 54,343,8791., besides the Government stock already held by
to. The aggregate surplus of the Banks'assets over their liabilitie referred
therefore to 1,334,580/., subject to certain small outstanding s amounted
expenses and
other adjustments, not shown in the Return.':'

(inc Bank (Finsbury) applied durinir the year ended 20th
November 1907
for our recommendation, under Section 6 of the Savings Banks
Act, 1904, to
be allowed by you to make Special Investments. This recommen
dation was
given, and the Bank was subsequently authorised by you to
commence this
class of business, but has not yet made use of its powers.
The 32 Banks
making Special Investments on the 20th November 1906 had
on that date in
their Special Investment Departments (in addition to the
figures quoted
above) 51,116 accounts, with deposits amounting to 6,316,75
5/. cash and
110,707/. stock, the total assets held by the Trustees of the
respective Banks
on account of Special Investments being returned at 6 824 689
0 The two
/
Banks which began to make Special Investments after 7
20th November
1906 did so to the extent of 29,0001., and taking the
34 Banks as a
whole the business done again shows a substantial increase.
The question
of opeiling Special Investment Departments is under cons
ideration at other
Savings Banks possessing the qualifications necessary to
satisfy the requirements of the Act, viz., a daily opening and deposits with
the Government
of not less than 200,000/.
*

arc

5.)

r

be ascertained up to the date of the presentation of
this _Report, the following
for the 20th November 1907, viz.:—
General Departments. Special Investment
Departments.

No. of depositors

-

Amount of deposits (cash) Do.
(stoek)
Invested funds
Cash in hand
Amount of other assets

1,779400

56,450

52,152,000
2,481,000
52,481,(X)0

6,992,300
102,600

402,000
638,000

7,233,500
227,000
58,985

•




Earl v in 1907 the Trustees of the Banbury Savings Bank resolved
to Closed
bring its operations to a close, which was accordingly done after giving
a Banks..
month's notice to depositors. Their balances on the 20th November 1'906
amounted to 97,087/. cash and 6,667/. Government stock, and were raise
d
by subsequent deposits, interest, &c., to 99,619/. cash and 7,387/. stock. In
the process of closing, 77,572/. was paid to depositors in money and 22,04
7/.
transferred to other Savings Banks, the stock being disposed of as to
632/.
by sales, as to 3,6501. by transfers to other Savings Banks, and as to 3,100/.
bv transfers into the depositors own names in the books of the Bank
of
England. The assets realised a surplus of 1,270/. after meeting all liabilities
(including in those liabilities all the unclaimed 'deposits, amounting
to
3,016/. cash and 280/. stock), and defraying all charges, and that sum
was
duly paid over to the Separate Surplus Fund in your hands,from which 600/.
had previously been issued to meet claims of depositors pending the sale
of the Bank's premises.
The Trustees of the Holy well Savings Bank also decided to close it on
and after the 20th November last. The deposits amounted to 10,381/., of
which about 7.000/. was withdrawn in cash and about 3,000/. transferre
d
other Savings Banks, a small aniount remaining on the account of to
the
Separate Surplus Fund after discharging all liabilities and expenses.
The Trustees of another Bank proposed to close it in consequence of
the resignation Of the Actuary, but onr Secretary attended a meeting
at
which they unanimously agreed to continue it. The management
was
reorganised vith a Ile W staff of officers, and the Bank \Vas opened daily to
the public, instead of only once a week, with satisfactory results.
In anticipation of all ultimate amalgamation of the St. Clement Danes Amalgamaand Bloomsbury Savings Banks, limier Section 5 of the Savings Bank
tion of
1904, a working. arrangement was arrived at between the two Banks Act, Banks.
under
\vhich deposits amounting to 9,310/. cash and 1,504/. Government
stock
have been transferred to Bloomsbury during the past year with the assen
t of
the depositors individually, 1,22d/. being paid off in cash and
transferred to other Banks, which left about 5,000/. to be dealt with 555/.
on the
-)oth November 1967.
T.he opening of another new Bank in Scotland has again to be recor
ded, New Bank,
your sanction and approval under Section 2 of the Trustee Savings Bank
s
Act, 1863, haying been given on the 22nd October last. It is establishe
d at
Kilmarnock, and serves an important community, from
which the
movement ma.N extend to other populous centres in Ayrshire.
a cmtuty
which has hitherto been without any Trustee Savings Bank. The other
new Banks opened in Scotland in recent years are doing well, and the succe
ss
of that at Hamilton has induced its Trustees and Managers to clear
oft' the
expenses of its establishment by personal subscriptions.
Several Banks have established branches during the past year,
viz., New Branch
Bloomsbury Savings Rank at Shepherd's Bush, (the only
the
one started Banks.
in London in recent years), Nvhich was opened by our Chairman
v
last
January
Hull at Ilessle ; Manchester at Hightown (its 9th Bran
ch):
Reading at 377, Oxford Road, Beading ; Swansea at Pontardawe, unde
r
the auspices of Mr. Frank W. Gilbertson, a Trustee, ‘vlio defrayed all
the initial charges and will pay the working expenses for 12 months
;
Chester and Wrexham at Rhos, near Wrexham, from whic
h centre it will be
worked ; Hamilton at Burnbank : and Paisley at 45, Neilston
Road
Paisley. The Chester and Wre\liam Ni vimigs I;ank also opened a Branc ,
h
.V.encv at Holy well by arrangement v‘ ill! the Trustees of
the 11o1. \veil
\
Ni vim
Bank, in order that the town might continue to
ha\
Trustee
Suvim gs Uank facilities, Ho' v ithstanding the closi
ng of the latter Bank.
The Agency is open daily, and the balance due to
its depositors on the 20th
November last amounted to 3061/.1 of which
2962r. had been transferred
from the late Holy well Savings Bank.
It will thus be seen that while the number
of Banks open on 20th Number of
November 1907 shows a slight tel
reduction from 124 to 222, Banks open
(omitting Kilmarnock, Which did not commence
business until after that on 20th
4late), there has been, neverthele
November
ss, owing to the
Branch Banks, an extension of the Trustee savin s opening of nine new 1907.
, Bank system during the
past year.
76,

isetinv
,
SaN jug

The work of Penny Savings 1;:inks in connection with cltools iiI
uilierwise continues to be fostered and encouraged with excellent results.
and great praise is due to the Actuaries and other officers who devote much
of their own time gratuitously and in this practical manner to the inculcation
of habits of saying among young people.

Hour:, of
business.

A method of increasing Savings Bank facilities, which is as useful as and
less difficult than that Of establishing. Branches, and 1V111C11 is quite possible at
several Banks where the business is still conducted under great and needless
restrictions, is to abandon their intermittent Lours of business and open
the Banks daily. This has been done at four Banks since the 20th
November 1906, while two have opened for more than six hours a week,
which enables a quorum of two paid officers to act during the hours of
business under Section 6 (2) of the Trustee Savings Banks Act, 1863.
Valuable extensions of time have. been given at seven Banks without their
being as vet open daily. and recommendations to open daily have been made
by us in 12 other eases, where, in our opinion, this step should be taken. As
it is, instances are seen of paid officers, in receipt of remuneration ample to
secure whole time services, being employed and of costly premises being used
for comparatively few hours a week, instead of full time, resulting in
wasteful and inefficient conduct and management.

Number of
vacation:- of
office by
Trustee..




VACATION OF OFFICE BY TRUSTEES.
From the returns received from the Banks it appears that 63 Trustees
vacated. office on the 20th November 1907, through not attending meetings,
or taking part in the duties imposed upon Trustees and Managers by
Section 6 (2) of the Trustee Savings Banks Act, 1863, during the previous
12 months. Explanations were submitted to us in 19 cases, coming from
16 Ranks. Eleven of these were accepted, and the Trustees in question were.
therefore, enabled to be re-appointed without waiting for the completion of
the period of disqualification (12 months) mimed in the Act. In this
connection, a special reminder of the importance of Section 7 of the Savings
Banks Act, 1891, was sent by us on the 1st October last to the Banks
where the provisions of the Act appeared to have been overlooked.
GEN ER AL REMARKS.
The preliminary figures published on page 8 of this Report in anticipation of the usual Parliamentary Return prepared under .
sour direction
from the accounts rendered by the Banks for the year ended 20th November
1907, and now in process of examination, show that, even after creditinv
'
the N'ear s interest due on that date. there has been a falling off in the
amount of the funds of Trustee Savings Banks invested with the
Government at 2V. per cent., a rate which, after deducting management
expenses, admits of 2i/. per cent. interest at most being allowed to
depositors, which is the maximum rate permitted by Section .) of the
National Debt (Supplemental) Act, 1888. This decrease was only to be
expected in view of the high rates of interest obtainable elsewhere during
the year and still in force, but the transference of deposits into other
channels of investment is, after all, not more than 1-6 per cent.

Special Investment Departments have, however, been a support to
sevvral larul. Banks in a period of dear money, for they not ()illy retain the
deposits in the Bank in one or the other department, but also tend to
conserve the funds of the General Department in two ways, since, firstly,
a depositor need not go outside the Bank for more remunerative investments ; and, secondly, the opening of an account in the Special Iii vestment

Department, very often by time deposit of moneys received from some
speciAl source, such as a legacy, a sale of stock or chattels, compensation
for injuries, and the like, requires the depositor to have an account in the
other department to the extent of at least 50/., under Section 10 (0 of
the Savings Banks Act, 1891. This is usualliN construed as requiring hini
to retain 50/. in the one department, so long as any balance of special investments is due to hint in the other. Indeed, appreciation of these facilities is




11
attested by the fact that depositors have been known to transfer their
accounts from one Trustee Savings Bank to a neighbouring one, with the
sole object of making special investments.
The establishment of a Special Investment Department, however
'
imposes considerable obligations upon the management from which a Bank
investing only with the Government is free and in particular, care must
be taken to see that depreciation in the value of securities is adequately
provided for where it occurs, the liability to which is greatly minimised by
placing the money out on mortgages of rates repayable by 'local authorities
at par, which can usually be done with the reservation of power to the
lender to call in the money on short notice.
The past year has been unmarked by new Savings Bank leeislation,
in the form either of Acts of Parliament or Statutory Regulations framed
by the Treasury, hut, under your powers to make regulations relative to the
receipt of funds of certain societies by Savings Banks, under Section 32 of
the Trustee Savings Bank Act, 1863, a concession has been made as regards
the funds of Registered Trades Unions and their branches. Such funds
may now, in cases approved by you, be accepted for deposit up to 250/. a
year, and 1,000/. in all ; a change which will, in our opinion, confer a benefit
upon the Unions and the Banks.
We have again much pleasure in placing on record our high appreciation'
of the value of the services rendered by the Trustees and Managers of the
Banks to the community by the discharge of their honorary duties and
their devotion to the work of thrift throughout the Kingdom.
We have the honour to be,
My Lords and Gentlemen,
Your obedient Servants,
(Signed)

ALBERT KAYE 11,0141,1T•, CHAIRMAN.
THOMAS A. WELTON, VICE-CHAIRMAN.
EDWARD BRABROOK.
JOHN HEPPER.
II. B. ORCHARD.

W. MELMOTH WALTERS.
GEO. M. WOOD.

76.




A.

(Seepage 4.)

•

December 1906
January 1907
February 1907
March 1907
A pril 1907 May 1907 June 1907 July 1907 August 1907
September 1907
October 1907
November 1907

_
.
_
-

-

.

-

.
_

-

.
.
.
-

.

.

_
.

-

.

..
.
-

-

-

•

.
-

Advances by the National Debt Commissioners under
Section 4 (1) of the Savings Bank3 Act, 1891,
54 & 55 Viet. c. 21.:

Balance brought forward from last year -

RECEIPTS.

•••

250
150
300
500
250
500
400
450
350
350
200
650

MP

s. d.
•

—

1

1

4,350

105

£ s.

4,455

d.

ON

d.

TOTAL Expenditure -

15 5 3
8 19 1
11 3 9

f. s

•

Balance carried forward as an Advance in respect
of the Year ending 20th Nos ember 1908

Incidental Expenses :
Postage and Telegrams
Fuel and Light
Sundries -

Travelling Expenses and Subsistence Allowances
Rent Printing and Stationery Telephone -

Fees and Salaries:
Members of Committee
Secretary Clerk
Three Central Inspectors
Five Local Inspectors
Temporary Copyist Office Attendant

EXPENDITI"RE.

1

2

1

9

8 1

4,455

1

—

93 19 3

4,361

35

907 11 9
300
22 10 9
6 10

3,089

836 17
600—104 6 8
975
480
52 3 4
40 14 9

s. d.

STATEMENT of the Receipts and Expenditure of the TRUSTEE SAVINGS BANKS INSPECTION CONIMITTEE for the Year ended 20th November 1907.

APPENDIX




13
APPENDIX B.
STEPS taken by certain BANKS to prevent UNCLAIMED DEPOSIT ACCOUNTS
from being Lost Sight of, or Tampered with. (See page 6.)
1. An "Unclaimed Deposits" ledger is in use, which contains dormant
balances under 20s. and three accounts of over 200/. each. The accounts
of three depositors, who have been lost sight of and whose passbooks are at
the Bank, will be transferred to this ledger.
2. Dormant accounts are traced as far as possible.
3. Depositors who do not send their pass-books to the Bank for examina.
tion are circularised about every fourth year.
4. Certain dormant accounts are listed each year, and thus kept under
observation. Some years ago the late Actuary made exhaustive inquiries into
undisturbed accounts, and succeeded in tracing the owners of practically all
of them.
5. Certain accounts are carried to a "Dormant" ledger, but the last
transfer was in 1894.
6. Ledgers at the Head Office are examined periodically, and accounts
which have been inactive for 15 to 20 years are transferred to a separate
ledger, to which only the Actuary, Assistant Actuary, and Senior Clerk have
access.
7. There is a "Seven Years" ledger in use, which has not been added to,
however, since 1897, and it is open to any member of the staff.
8. Special precautions mare taken before making a repayment from a
pass-book not presented for seven consecutive years. The Actuary will
probably arrange to transfer old unclaimed accounts to a separate ledger.
9. Thirty very old accounts were segregated in 1894, and when any of
them are claimed the claims are passed by the Trustees and Managers before
payment.
10. When a new ledger supersedes an old one, accounts unclaimed for
(say) ten years are transferred to a dormant ledger. The question of
advertising for owners of unclaimed accounts has been under consideration,
but nothing has yet been done in this way.
11. A list of accounts undisturbed for 20 years and over was submitted
at a meeting of Trustees and Managers on the 20th June 1900,the particulars
being.inscribed on the Minutes of that date.
12. In 1902 a list of undisturbed accounts of 15 years standing and
upwards was published, with the understanding that about every five years
a fresh list would be prepared on the same lines.
13. Old unclaimed dormant accounts have been segregated into a
separate hook, but also remain in the ledgers in their numerical order.
1 I. Accounts brought forward from the older of the two ledgers in use
NH' kept distinct, in a separate section of tlie new ledger, dormant accounts
mulct. I/. being carried to folios reserved tor them at the end ()I the ledgers.
hily small accounts of"remains" are kept in a separate consolidated
le*rer. The Actuary states that a list of accounts unclaimed for upwards
or ten years was drawn up some years ago and advertised.
16. A Dormant ledger is in use, to 1vhich certain accounts were transferred some years ago by the late Actuary, and the present Actuary content.
plates fresh transfers of accounts to this led cm',
17. When a ledger is closed, accounts which have not been active for
ten years are transferred to a separate ledger.
IS. About every five years a list is made of accounts upon v
Ilia no
transaction has taken place for twenty years. The list
is hung up in the Bank




1'4
Hall. Two years ago a large number were advertised in the local newspapers.
Care is taken that the claimants are the right parties.
•
19. A list has been made of accounts inoperative for several years, and
the parties entitled to them are being traced.
20. Accounts with small balances, on which there have been no transactions for five or seven years, are transferred to a "Sundry Small Balances"
account at the end of each ledger, which accounts are transferred to a new
ledger. Lists of unclaimed accounts have been compiled from time to
time and owners traced, claims being received from the Colonies in some
cases.
21. If an account has not been operated upon for about twenty years a
notice is sent to the last-known address, and,if returned through the Dead Letter
Office, the account is transferred to a special ledger, and no payment is allowed
unless by minute of Committee of Management. Periodically those above (say)
15/. or 201., are advertised in local newspapers, but then are remarkably few
outstanding-, about 100, amounting to 7,000/. or so. Generally the estate of
the depositor (if deceased) is required to be administered, and, if necessary,
a reference is made to the Registrar of Friendly Societies, but all depends
,
upon circumstances. Durin! the )ear 1907, 38 claims, amounting to
1,581/., 19s. 9d. were admitted'''.
22. Small balances are carried to dormant accounts when ledgers are
transferred. Large amounts are advertised, and particulars, limited to names
and addresses, with the year in which the last transaction took place (going
back to 1837 in some cases), are printed in the Bank's Annual Reports.
23. When a ledger is transferred all accounts under 1/. having no transaction during the previous five years, are transferred to"Unclaimed Balances
Account." A list of unclaimed accounts is' exhibited in the Bank Office.
24, A separate "Unproduced Ledger" is kept, the accounts in which
amounted to 3,014/. 13s. 10d. on 20th November 1906. The last transfers to
this ledger were in 1885.
25. TJnclaimed accounts are transferred at the end of each year to the
"Septennial Ledger." Accounts in this ledger cannot be acted on without
the permission of the Committee of Claims and the General Committee.
26. When a ledger is full, accounts not operated on for seven years,
instead of being transferred to an "active" ledger are carried to the
"dormant"ledger.
27. When a ledger is closed, accounts which have not been operated upon
for eight years are listed, and their owners are requested to send in their
pass-books.

A. C. LAKE
28 North Front Street
Memphis, Tenn.

CURRENCY REFORM

THE PARAMOUNT ISSUE
The Only Way for the United
States of America
Ever to Attain Commercial
Supremacy in
the Markets of the World
and
on the High Seas.
(All Itightt: 1{cerryt.(1.1
Read carefully and pas
s along

telligent, thought fill ma ii.

to another in-

This Circular, price 25 cents, is
for brainy people—if
you get one gratis it is a com
pliment to you.

We Need Less Money, or Wh
y the Free Coinage
of Gold Should Immediately
Cease.
Alemphis, Tenn., January
s, 1909.
IIon. William Jennings Bry
an, Fairview, Lincoln,
Nebraska:
Dear Sir—Although you hav
e been the chief
advocate of an inflated
currency, I think you
must admit we now hay 4. pliongh,
and believ i ng
you have more influence in
forming public Opinion
than any one man in the rni
ted States, I ap.
peal to you to help iop t he fur
ther wa (Ting of
our monetary system.
Inflation would be all
right if it did not depreciate
purchasing power.
Add 1 i)or cent and you depr
eciate purchasing power 1 per cent. Dou
ble our per capita
circulation and yon double pric
es. Double prices
and you double the amount
of money required
for business, SO t
Will be US muc h hick
of
money as lwf( re for busiti).,, pur
:
poses. So what,
IS Ilte use? Double our cor
rency and you rob
the blunt 1 bondholder of
o!1'-lial 1, 1 he thrifty say-




logs bank depositors one-half and the poor wido\VA
and orphans of one-hall of their life insurance.
How many of these latter there are 1 do not
know, but there must be millions of them. I see
in the Philadelphia Saturday Evening Post of December 19, 1908, page 18, column 1, that there
are in the United States 8,588,000 savings bank
depositors, and that their deposits amount to
$3,690,000,000. This is $300,000,000 or $400,000,000 more than all the money in the 'United States.
Then there are the clerks W it 11 fixed salaries,
with their dependents numbering millions more,
who have been grievously W 14 Illged. For about ten
Years now all these people hatve been defrauded
of their interest, labor and capital by reason of
the purchasing pi1Wel' Of their money shrinking
up, caused by inflation. 1 14 MP V el', 11111, f VW of
them know it. How can WI' W11
$34.72 per
capita, and still increasing, hope to continue to
sell China with $2.00 am! Japan will) $4.1 5 per
capita, and (41111 pete \\ it 11 1)1 111'1' e011111 liPS Wit 11
It 5111111119' 111'1* Capita that 11 0111's, and consequently
lower wages (but higher purchasing. 110W(u), and
prices than OUTS, for the \\.orld's trade and the
ocean's shipping, the latter of which we lost y(1111',4
ago by our high wages and prices? Japan is
driving our few merchant N-VStiel 5 from the Pacific.
ller ships are big paying propositions, while ours
are losers. Last year We sold her $3,100,000 of
cereals and bought of her $15,000,000 of rice and
$9,0o0,000 of beans, things our OM n farmers
4
ought 11 111 iSe. iltis, Of C11111'5(., gi e! her more
pircha-ing power to huy, in cheaper markets
than ours, and to establish cotton factories and
other home industries. Many more factories can
be built tlwre than here with this money. Even
oil] peanut growers are asking (December 17,
1908) for a protect ive tariff of t \t I.) cents a pound.
How long Will it. be before 0111' (•01'11 and wheat
will need a tariff for protection against the miscalled "pauper" labor of the world? They, maybe. get, as many comforts with their lower high
purchasing power wages as do our working classes
with tlwir higher low purchasing power wages.
T see in the Memphis Commercial Appeal of De-




2

cember 26, 1908, page 14 and (.011111111
5, that our
reaper trust is going to establish
factories in
France and Germany. Query: How long
will
it be before our cotton factories will
be forced
to move to China, Japan and other
countries
where money is scarcer a 1111 C011sequently
worth
more than here, and the cost of living and
wages
is less? In Japan money is worth, I
think, about
ten times, and in China about t wenty times
as
Ii)11(11 as here. Mien all our trade is gone
what
LISt will 0111' -improvements" be? We will
ha\ e
killed the goose that laid the golden egg, and
the
income from our boom -improvements" won't
be
enough to keep thetn in usable repair. We
are
bottling onrselves up with our high prices,
caused
by inflated currency. The free, unlimite coinage
d
of silver at 16 to 1, regardless of any
other nation, could not possibly have done its any
more
ha Hu. It WOU Id ha 1'e immediat ely
demonet ized
gold and made 1110111'y 5(4 scarce that a
silver
dollar M mild have bougl:t as much as a gold
dollar had been buying, and one !mid dollar /night
have been is orth as much as two silver dollars,
so that the gold bugs would have been greatly
benefited, and the free silverit es injured by
free
Silver, except the silver mine owners. 1.(a)king
!awl:, it is plain to my mind that each
was
fighting tooth and nail to keep from getting
the
very t fling they each ardently it anted.
Neither
kIlew how to get it. I, today, WInild vote for
the
free coinage of onr own silver to remedy the
danger threatening us, because of the plethora
of
money (dollars made out of almo,t nothing)
. Inflation Will wonderfully stimulate our -prosperity"
temporarily. It will promote all kinds of wasteful
,
useless "improvements" and foolish extravaganees
and Over-speculation and over-pnaltation, stock
gambling and wildcat schemes generally, that are
bound to bring about a disastrons reaction. We
may for a while hail' a grand and glorious time
with our easy money, like the yonng spendthrift
just come int0 his patrimony. Tint payday is
coming, and if inflation is not stopped. I think
we will have a financial earthqnake sure enough,
beside whieh the brought-on-by-too-much-easy3

money panic of 1907, will be as nothing. The
amusing feature of the situation is that the common people have not caught on even yet, and
think that it is our wonderful, robbing Peter to
pay Paul "prosperity,' the trusts and the tariff,
that are causing high prices, and do not know it
is waterod currency. They say things are worth
more now. It never strikes them that things
are worth exactly the same, and that it is r.,ally
the money that is worth less.
Few even of the bondholders realize they are
being robbed. Every issue of "good" bonds is
quickly sold at a premium. There SeP111:4 to be
a mania sweeping over the country for issuing
and selling bonds. The big thieves appear to
think it is a good thing to get the money now
while our dollars are still worth 65 cents in purchasing power, as compared to the dollar of 1896,
and invest in "improvements" and pay the bonds
off twenty, thirty or forty years hence in dollars
that may not be worth 25 per cent of their preaent purchasing power. But as rascality often
overreaches itself, they may find there is some
factor in the calculation they overlooked. In 1896
the Bryanites were clamoring for higher prices
and more money to raise them. In 1908 they
wanted lower prices and less tariff to lower them.
In 1896 the Republicans told them there was
money enough, and that business was done mostly
with checks anyway, which is true. But now it, is
the Republicans that are deluging us with cheap
money. They have increased the circulation about
52 per emit. in 13 years, so that we have already
got about 65 cents in purchasing power dollars
as compared to 1896. Gold being the international
legal tender fiat money, has a fictitious value far
above its intrinsic worth. It is getting so plentiful and so cheap to get that its free coinage ought
to be stopped. This I say notwithstanding I have
four (4) gold mining claims, about 80 acres in
Arizona, that would be utterly worthless if it is
stopped; or, if the free coinage of gold is not
stopped, as fast as it is coined greenbacks and
national bank notes should be retired from circulation. Aloney is not wealth. It is simply




4

the counters with which we exchange wealth. We
ought to have a fixed per capita circulation, so
that when a man lends his money he can get
back exactly what he lends, plus legitimate interest. No more, no less. And when a man borrows, he can pay back the exact amount in purchasing power borrowed, not one cent more nor
less, except a fair interest. Put the per capita
circulation on a sliding scale, moving it up or
down, and you are robbing one class for the benefit of the other, which is unconstitutional. We
might, if our per capita circulation were not already too high, stand one-fourth to one-half per
cent, increase each year in our currency. But
the increase of about 81 4 per cent., about $3.00
,
per capita, last year, is just simply an outrage
on the lender. It wiped out his 6 per cent, interest and impaired his principal 21 2 per cent. And
/
then there is that iniquitous $500,000,000 Aldrich
emergency, elastic currency monstrosity bill. The
wrong is so flagrant it certainly can not go much
further. Even the dullest intellect will be forced
to see the point. According to Frank G. Carpenter, they are digging gold in South Africa at the
rate of four dollars ($4.00) per second, with 50
cents a day labor, and they propose to bring
electricity six hundred miles on an aluminum
cable from the Victoria Falls on the Zambesi
river, to install electric lights and power for
working the mines. He says also that the steamer
Saxon, on which he came from Capetown to England, had on board $5,000,000 of diamonds and
$25,000,000 of gold. If Great Britain has free
coinage she may swamp herself with an overproduction of money and consequent high prices
before we do, although her per capita (less than
$25, I think) circulation is at present far below
ours. However, it is presumable she will be too
smart for that, and will keep the mot of her
gold in bullion.
Onr newspapers are in the habit of boasting
of our increased prosperity, and to prove it cite
statistics showing our bank deposits and commerce increased as shown in dollars. This is not
a fair index to the increase in the volume of busi5

ness, for, as we have about 52 per vent more
money and 52 per cent higher prices, statistics
showing that we have 52 per cent more bank deposits and 52 per cent more business as expressed
in dollars, do not prove that the volume of business has increased. It merely proves that the
value of money has depreciated, so that it requires more money I ban we ought to have to
compete on equal terms with England and other
countries for the commerce and shipping. business
of the world.
To further expand our circulation is a clear
case of trying to make something out of nothing. It is as absurd as trying to raise ourselves
by pulling on our boot straps, or seeking to
invent perpetual motion. 1 might say more along
this line, but I doubt if a multiplication of
words could make my position any plainer or
stronger. If I am wrong, either in my premises
or argument, I would like to be set right.
Very respectfully,
A. C. LAKE,
A Confederate Veteran Who Voted for You.
P. S.—We cannot have quantity and quality
both. The much harped on so-called "crime of
1873" did not decrease the amount of money in
existence. Therefore it did not wrong the debtor
class. But the tremendous increase of money in
the last. thirteen years has greatly wronged the
classes above mentioned.
1 ne average per capita of money in the world
is about $10.00.
We now have the $1.00 per bushel wbeot yoor
adherents in 1896 said they wanted.
If we could make the people see, as I do, that
by discontinuing the free coinage of gold and
resuming the free coinage of our own silver at
16 to 1, the present value, i. e., purchasing power,
of our silver dollars would not be decreased, and
the value of our gold dollars would be, perhaps,
doubled, I think they would all vote for a resumption of the free coinage of our own silver.
Our thus demonetized gold would offset England's
bullion gold, and she has no silver to offset ours,
except, perhaps, sonic in Canada. So we would




6

beat all competition in the
world's markets for
manufactured goods, as vell as for
farm products.
‘Ve would need no protective
tariff then. We
would need no ship subsidy then.
We certainly
do need a prohibitive duty
on all foreign silver
and uneoined gold.
RANDOM BEFORE AND AFTE
R THOUGHTS.
In 1912 the Republicans ought
to stand for a
discontinuance of the free coina
1912 the Democrats ought to ge of gold. In
stand for a discontinuance of the free coinage of
gold and a resumption of the free coinage
of our own silver
at 16 to 1. As it takes 16
times as much silver
to make a silver dollar as
it does of gold to
make a gold dollar, I don't
think we could inflate our currency so rapidly
with our own silver
as with gold. Especially
as China and India
would become again as of yore,
the graveyards of
our surplus silver. These
count
dia, make it up into ornaments. ries, notably Infind we are getting too much But if we should
silver money we
could stop its free coinage. I
don't see how else
we can reduce our undesirabl
e burden of money
without working wreck and ruin
to millions of
people. As $oon as we threatened
to come to a silver standard foreign holde
rs
in gold bonds would rush them of not payable
over here and sell
them and withdraw this surplus
gold out of Hub
country. (If course, t here would
be
cataclysm, the effects of which might a I errible
be felt for
several years; but the ult inmate
result wonld be
beneficial as to counterbalance
the temporary
hardship. The market value now
of the silver in a
silver dollar is 30 to 40 cents.
I
gold in a gold dollar would sell don't think the
for that much if
its free coinage were stopped. It
is hard to make
some people understand that
there is not a dollar's worth of gold in a gold
dollar,
the government stamp on it with and that it is
the law behind
it that makes it a dollar. Assum
ing, for example,
that there may be only 5 cents
worth of gold in
a gold dollar and that the gover
nment stamp on
it with the law behind it adds
95 cents to its
value, making it one dollar, why
should not we,
7

the government, get this 95 cents
instead of giving it to us, the gold mine owners, as
heretofore?
This bunko game should have stopped
when our
per capita got to a parity with Engla
nd's $18.00.
In 1871 Germany exacted of France as war
indemnity 5,000,000,000 francs at 19.3 cents—$965
,000,000 gold. Of this amount 120,000,000
marks at
23.8 cents—$28,560,000—are supposed
to be in
the German war chest in the iJulius tower
in the
fortress of Spaudan, a western suburb of
Berlin.
The bulk of this $965,000,000 gold was used
in
paying off the cost of the war, etc. The
great
plethora of money resulted in wild speculation.
Mock companies for all sorts of enterprises sprun
g
up like mushrooms. '1 lie consequence was a great
financial crisis in 1873 which lasted till 1876.
I
read 25 or 30 years ago that Germany was injure
d
more by getting this money than France was
by
losing it. I think likely that it was in this way
that she, unfortunately for herself, got her per
capita of money up to $21.00, which is $3.00 above
England's $18.00. And that her prices and cost of
living have thereby been so increased as to seriously handicap her ever since in competing with
England for commercial supremacy in the markets
of the world and on the high seas. Life insurance
companies, savings banks and institutions with endowment funds invested in "good gilt-edge bonds,"
so called, should wire President Taft now and send
strong delegations soon vehemently protesting
against this senseless, suicidal inflation foolishness. The danger is imminent. Verbum sat
sapienti. A hint to the wise is valuable. The
currency fins been inflated 4 per cent per annum
for 13 years, making 52 per cent. And has depreciated in purchasing power 4 per cent per annum for 13 years, making 52 per cent. So that
the entire interest. on these "good, gilt-edge bonds"
has been wiped out during the last 13 years. Superficial people, especially in Wall street, have not
got. penetration enough to know that the value of
gold dollars can depreciate. They think they are
the fixed standard of value, whereas their value
fluctuates exactly in the same proportion or ratio
as their T1111111Wr is iii creased or decreased. These




8

people think it is an indication of prospe
rity
when prices go up, when really it is becau
se
money, by reason of in
is losing its purchasing power value, so that it takes more of
the
debased stuff to buy things that makes prices
go
up. We Americans have been reveling in a fool's
paradise, thinking that money is wealth a.nd that,
there is a dollar's worth of gold in a gold dollar
,
overlooking the fact that even our gold dollar
s
are only "chips" to do business with, and
that
the more "chips" there are the less they are
worth, and that the unlimited free coinage
of
gold, continued indefinitely, might ultimately
result in so weakening the purchasing power of
our
gold standard dollars that it might take $100
in
gold to buy an ordinary breakfast. Spain
owed
her rise to silver, her fall to too much silver
.
We may owe our downfall to too much gold
if
we don't watch out! Spain first lost her world
trade to the Hanseatic League; later, to Engla
nd.
Low-high purchasing power wages with low
cost
of living vs. high-low purchasing power
wages
with high cost of living did Spain and may do us,
i. e., United States. It is not China and Japan
that are the yellow peril so much as yellow gold
coin. Rascality often overreaches itself. Did
not
England overreach herself taking the Boers' gold
mines, and may they not prove her financial
and
commercial ruin if she is not careful? I see
in a
newspaper dated March 12, 1909, that the
production of these gold mines for tile last
twelve
months, as officially reported by the mine
owners, is $149,788.950.00, an increase of 9 1-2
per
cent, over previous twelve months. This is digging gold at the rate of about $4.75 per
second
for every second of 365 days of 24 hours
each.
Great Britain is certainly too shrewd to coin
all
of this "old junk" gold into money and put
it
into circulation. In fact, if she could only 1w
assured that we would be fools enough to coin
into money and put it into circulation here, it,
it
would be a master stroke of statecraft on her
part to make us a present of enough of
it to
raise our prices so high as to eliminate us
for a
long period of time from the world's markets
and
9

the high seas. Did not we
overreach ourselves
taking Panama from Colombia
if the bottom of
the canal should drop out and
it prove a failure?
Did not we overreach oursel
ves
pines, overlooking the Japane taking the Philipse factor in the calculation and ha d we not
better be generous and
give them their independence
and let Japan protect them? Japan, with her only
of money and consequent low $4.15 per capita
-high purchasing
power wages and low prices can
buy our cotton,
manufacture it into goods and sell
than we can. Memphis Commercial them cheaper
Appeal, April
22, 1909, page 1, column 3, says
they (the Philippines) are costing us $100,0
00.000 annually.
What lienetit are any of our Spanis
h possessions,
anyway? If all of the nations of
the earth had the
same per capita of money, there
would be a great
uniformity of prices throughout
there NV011111 be but little need for the world, aml
protective tariff.
Sly old 1other England, with
her only $18.00 per
capita of money, can afford
to
free trade, but we, with about have practically
twice that much
and still increasing, are forced to
continue to raise
our tariff walls. Little
Switzerland, with only
$17.00 per capita of money,
is thus enabled to
buy our cotton, manufacture it
ship about $10,000,000 worth of into goods and
them back to us
every year, in spite of our high
tariff wall. If it
were not for the fact that all our
laboring people
W1111111 suffer greatly
for the lack of work in the
meantime, it would be a good
thing if we could
have free trade and buy all of
our
abroad, so as to get rid of our glut of necessities
We might then have the full dinner gold money.
pail again,
for we could then produce
things at purchasable
prices for foreign nations, with less
we have. Recently I saw it stated money than
that the Salt
Lake Review had said: "(;old is
always stable.
An ounce of gold is worth the
same today as it
was ten years ago." This editor
maybe did really
believe 'ha t. he Ma id. He seemingly
aSSIIIIIVS I ha t
it is the gold in the gold
dollar that gives it
va
while I assume that gold per se is of
but
little value, and that the govern
ment stamp On
it, with the law behind it,
imparts the va




10

Anyway, they have both combined into one, lwcause of inflation, lost one-third of their purchasing power value in 13 years. This question as to
whether the gold or the stamp gives the value is
another form of the old enigma as to whether the
hen or the egg came first. The money mills ought
to stop till the population can overtake the oversupply of money. Cold mine owners will protest
that there is 90 cents worth of gold ill a gold
dollar and 10 per cent. alloy. Very well, gentlemen, we are delighted to hear you say so. Go
sell it for 90 cents. hi refusing to be injured any
further by you, we are glad to know we are not
injuring you. There is already plenty of gold
money in the world for all practical purposes for
many years to come, and we here in these United
States already have more than is good for us.
The government can, if we need it, make about
as good money for home use out of paper, making
it irredeemable legal tender fiat money. If a
limit were put to this paper money it would be infinitely more sane and sound than this unlimited
free coinage of gold insanity. This paper money
would not he a legal tender international fiat
money, and would not disturb our foreign
trade as does gold. llere below is an illustration of the higher prices for farm products flint the Bryn nit es clamored for in
1896. Recently we have been importing large
.
quantities of potatoes from (:reat Britain aml
:erma fl'.', and paying 25 cents per bushel tariff
on them. The reason we can do this is that Germany, having only abont 60 per cent, as mind)
money per capita as we have, her prices are about
60 per cent. of ours, and “reat Britain, having
only about one-half as much money per capita as
we, her prices are only about one-half ours, and
that is why she is mistress of the seas, and the
American flag on the ocean is a rarity. Recently
a representative of the Mitsuis was in our city.
Ile depreciated war between us and Japan. Of
course, the Mitsuis, the merchant princes of
Japan, do not want any war with us, their most
profitable customers, for as $1.00 will buy about
as much in .Japan as $10.00 will here, the cost of
11

production there is infinitesitnal as
compared to
here. They must make several
hundred per cent.
profit on every thing they sell
us. They are
shrewd enough to pile on all the
price the traffic
will bear, and I suspect they grade
their prices
to fit the per capita of money of
the difTerent
nations. They on the Pacific charge
full American freight rates when they can get
them. But
when they have to bid for freight
they always
get it, as their expenses, on account
of their low
per capita of money, are so small
that they can
down all competition. Japan, with
her low per
capita of money and consequent low
prices, is
apt to absorb all the trade of the Pacific
. With
her only $4.15 vs. our $34.72, we stand
no more
ehance in the battle with her for
commercial
supremacy than does an army with old,
obsolet
muzzle loaders against an army with up-to-d e
ate
automatic rapid-fire machine guns. "It is
to the
interest of every nation to have as low a
per
ita of money as possible." When I knew capless
than I do DOW, I thought the nations that
had
low per eapitas of money had them becaus
e they
WPre poor. But I know now
they have them because it is the best national policy. The financiers of these older nations must chuckle at
our
crass ignorance in inflating our currency. Years
ago, reading that a woman in China got only 5
cents a day for work, and thinking how little 5
rents would buy in this country, it seemed
awful.
130 since I know this 5 cents in China would buy
mueb as $1.00 here, I see she was getting fully
as much if not more than the majority of our
"sales ladies." A few days ago I read an article
by Frederic .T. Haskin on Oriental rugs, wherein
he said boys in India. get 5 cents a day making
these rugs. What nice profits these Syrian rug
peddlers must make, even if they buy the riers in
Turkey, where the per capita is $4.00, and the
boys must get about 10 cents a day for making
them. These two wages of India and China show
the correctness of my assertion that the per capita of money governs prices. For India and .China
both have the same per eapit as, $2.00. This low
per capita of money for India is the reason we are




12

now wrapping our cotton bales with comparatively rotten India jute instead of as formerly with
the much superior Kentucky and Missouri hemp
bagging. Our hemp industry has been ruined by
our high prices, and our cotton and every other
industry will be ruined if we don't stop inflating
our prices by inflating our currency. The negroes
in Africa are learning how to work and will make
the cotton, and the linen industry will be stimulated in Europe and wool growing in Australia
and elsewhere. And foodstuffs will be produced
more in other countries. The following are
the approximate per capitas of money of the different nations as given under Money in the Encyclopedia Americana, published in 1903 in Chicago and New York:
China
Cuba
Bulgaria
India
Servia

Japan
Turkey .
Roumania
Egypt
Finland
Mexico
Russia
Hayti
Austria-Ilungoy
Norway
Central Anierica

$ 2.00

INmmark
2.00 (,anada

$11.50
12.00
13.50
17.00

9.00 (;reeve
2.00 Switzerland
3.00 Cape Colony....
3.00 Great Britain....
4.00 Germany
4.00 Belgium
4.00 Spain
5.00 Port ugal
6.00 Australia ...
tiM0 Netherlands ....
7.50 S. A friea Repub..
8.00 U. S. $28, now...
9.00 South America...
10.00

Siam

18.00
18.00
21.00
22.50

21 00
23.50
25.00
25.00
28.00

35.00
31.00

34.00
10.50 France
38.00
11.00 Straits Set'inents 48.00
Average per capita of money in the world,
about $A.90.
Looking at this list, w e see that N11.‘loo a ad
Russia each have $6.00 per capita. Therefore,
their wages and cost of living ought to be about
one-sixth as much as ours. And are they not?
Have we not all heard of the 25 cents per day, socalled pauper labor of the peons and serfs? This
25 cents per da y is worth as much to I hem as
$1.50 to our eomm ,in laborprs, for other thin ig.s are
Italy
Sweden

13

likew ise in proportion. France, r think,h as heretofore prospered in spite of her high per capita of
money beeaume her people are 11111(.11 gi‘en to
,
hurvin their money.
hoarding, i. e., practicath
ltut even she has begun to have her troubles, for
'
workers
on April 10, 1009, I 1))'!)' ‘‘ as a but t
es
strike at .11erti because their ‘‘iii, had been rut
1
per cent. to compete with Japanese pearl hut ton..
I have recently been reading some very inCarteresting let t ers from Japan by Frank
pent er. \\*kit all his traveling and natural astute111111 ‘‘ hat,
ness. it 'CPO'S IIPVI'I Ill ha V*. oc(.111Te1
the per
he prieeS Of a (4)1110 r V ha VI'
capita of money of t hat e‘.11111 I . Farm laborers
cents a day ‘‘ithont board for
I
III Willa 11 „get
men and 10 cents t% omen, ‘‘iiil ing from sunrise
facIorie
III' says t here are Loot) IWW
sim-ct.
cotton factories are running night and
The
hcle.
‘
da. , making frout r..! per cent. to .)0 per cent. anivvs get :10 centi,
The Weil
1111:11 (I V 1414111k.
\‘ wrier) 1 cent s a nd t he children r) cents for
I
hours' 'Work The 111011 get good meals. consktillg of rice, fish and ve,uetables for !! 1-:2 (1408 eavh
The ship

per 41

building

.
making about 1 !
11 1141
dividends. 1 he ha s and
per rent . per minion
a 1111
. CVO
1:: pet
. 14 1
stock companies S per
f. p).4 i t or,
fla

i'r1 11

t he

1114,1

sa vi figs

. lilt

per

III')'

1111 1a
)

ki

till'

il

emaro111111ed '4('hlli-lliiIlIUIll.

oh

money as
if we orilv had as small a per capita of
\‘e could he JutNvould
li\V
o
.1 a0:1
11 1141 put
loatiitarians and !'"°'lit at the -.awe time,
the poor peopie
cotton •hirts on the hacks of all
‘vith our
or t he wrhl\\ it hoot sk inning 'en)
nit1 inn (11
.4. MI' 1
1‘
pr ices. A s it
out ra "eous
robbers, piling. hip money
. 4.
1.1 1. 11 V, vormoratit
S41.1
our
purchasing prayer), on
loses
(j.
\\ i.) of the 14'
hands as did the manful VAndos
;reedy
,
.
he V gf
11 hell
rael

t he

e•••

hrre41

1111(re

II

hey

needed

tor

heir

Standard
I amI old t hat t he
flied ja e Wahl .4.
i
l'az,
railroad trom
(01 Company is building a
2r:01c. 1'A 411Y
1:oli‘i41. to a solid mountain of low free coin t 1114
to
orv. Are \\ v
them and thereby
eoht mountain into money tor




further weaken the purchasing power of our
money, so as to make prices go sky high and
thereby rob all of our thrifty people of their savings, accumulated by years of toil and sweat and
self-denial? Also, there are said to be immense,
inexhaustible amounts of gold in Alaska. Why
not have the free coinage of aluminum and be
done with it? This aluminum money would not
HO disastrously affect our foreign commercial relations as does the free coinage of gold with the
present international agreement making gold a
legal tender fiat money. Tlw low per capita of
money in Cuba, with eonsequent low prices there,
is, I think, the reason they can raise sugar so
notch cheaper there than here. Then there is that
cheap Philippine sllgar coming in to ruin our own
cane and beet sugar industries. Joseph French
Johnson, professor of political economy at the
L niversity of Ne w York, who has published a
book, "Money and Curreney, says: "It took $:;,621.00 last year to pay for the necessaries of living that could be bought for $!!,7,00.00 in 1897.
Sixty-nine cents ten years ago had the buying
power of the dollar of today.- So he, tigUrilig on
1
figuring on the
the cost of coniniodities 111111
increase ill the currency, ha \ e reached the same
His estimate of Gia cents is for ten
clqichision.
.
vears, while my estimate of about 6.1 VelltS is for
lid each proves the correctness
t liirteen
of the other. Thus WI. 51.4. that iny assertion that
add one per cent. to the currency and you depreciate its purchasing power one per cent.; double the
currency and you cut its purchaqing power onehalf, is a condition and not a theory. And this
evil ought to be remedied at Once by stopping the
further free coinage of gold. For years past people I‘ho have been potting their hard-earned saying,. into life insurance policies, good gilt edge
t hembonds and
savings banks, have 1 hought
seh t'S It 1111051 11 5 511 fe as if they 111141 put their
faith on the Rock of Ages. ltilt they have been
building their houses on the shift itir sands. They
ha VI' been pia 111g their
wait ered
money into It
As I:1St HS he V 1)0111141 III at the
leaking barrel.
hot 10111.
I dated my
top it ION VIII) 0111 ut
15

14

open letter to the Hon. Wm. J. Bryan January 8,
because it was January 8, 1815, that we, mostly
Kentuckians and Tennesseans, whipped the British
at New Orleans. And my plan for currency reform is the way I think we can commercially whip
them and all nations. Since writing the foregoing
find, page 675 of the April, 1909, Nineteenth Century Magazine, an able article by Moreton Frewen,
an Englishman, entitled, "The New Era in
Economic history," which ought to be a Democratic eanupaign circular in 1912, unless the Republicans an, smart enough to beat them to it.
He says that owing to the demonetizing of silver
by the civilized countries the price of silver has
fallen so low that the 800,000,000 of people, about
one-half of the world, who use silver as their
money, are unable to buy the gold exchange with
which to buy English goods and that factories
are springing up in India that are not only supplying the Indian trade, but are shipping goods
to China, and he suggests that the Chinese open
door is more likely to swing outward than inward.
I think this is the reason they are now having
such hard times in England. I suspect also that
these factories are being 'promoted by English
capital, just as I suggested in my letter to Mr.
Bryan our factories would have to move to China,
Japan and other countries, where money is worth
more than here. It took me 60 years of life
experience and three years of special observation,
reflection and putting facts together, to gain the
knowledge to write the foregoing article. It is
entirely original with me, as I have never read
any works on political economy, but I think it is
good, common sense and essentially correct. It
is as plain, to my mind, as that two plus I WO
equal four.
A. C. LAKE,
No. 28 North Front Street, Memphis, Tenn.
The originator of the stop the free coinage of
gold idea.
The salary of (;en. Oyama, the 'Japanese corn
mander-in-chief, is only $3,000.00 a year, but when
we consider its purchasing power in Jaimn, that is
an immense sum.
Memphis, Tenn., luty 3, 1909.




16

THE CURRENCY QUESTION
Paper Read at Meeting of New Jer
an ers ss
tin
at Atlantic City, April 24, 190 by Robert D. Kent)
of Passaic,
April 24th, 1908
By way of introduction to my topic, I would say that the paper which I
will read was written three or four years ago, and while it has not been published copies of it have been sent to various persons who have been interested in the currency question. Among them were Mr. Jacob II. Schiff and Mr.
John Oaflin, as chairman of the Committee on Currency of the New York
Chamber of Commerce, and Congressman Burton, of Ohio, of the Committee of Banking and Currency, and to President Roosevelt. The idea of the incorporation of associations of banks, of which I will speak, is a prmninent feature of the measure recently Mtroduced by Congressman Vreeland. Whether
my paper started the thought on this line or not I cannot say, but it is not
improbable. Since writing the paper I have given considerable thought to
the Central Bank idea, and prefer that solution of the question, provided it
can be arranged that the bank will be kept clear of politics on the one hand
and from being dominated by Wall Street interests on the other. If we have
not been sufficiently educated on the question to at this time establish such
a bank, the plan I have outlined is, I am convinced, one that would be sufficient, safe and sound. In one or two places, I have added something to bear
on features of the question that are now receiving at
The writer during a general banking experience extending over thirty
years, both in large cities and in towns of moderate size, has paid considerable attention to the circulation of currency, and has noted the different action in legal tenders and National Bank notes, both when currency was in
good demand and when the supply was tm) almndant.
In the latter condition, National Bank notes were more carefully sorted
from the legal tenders and more actively paid out over bank counters, and
when redeemed and sent by the Treasury Department to the issuing Bank,
the latter would in two or three days have them paid out and so again put
ill circulation. Under these circumstances a bank Ill ighi 1 in a given time receive for redemption two or three times as mneli of its own currency as
when currency was scarcer, but to only a very limited extent would the
banks retire any portion of their circulation. hi other words, there ‘v a s, as
is well known, no elasticity.
In framing laws on the subject, due allowance shonld be made for the
ability of the country to absorb and keep floating all enormous amount of
currency that may not be the best grade (such best grade consisting of coin
and legal tender). This feature, as a rule, does not seem to receive the at-




I
tendon which its importance demands. For the purposes of this paper,
y as second grade; it consists of
will designate the less desirable currenc
National Bank notes, and fractional silver coin, and once for a period of a
few years in many parts of the country consisted also of trade dollars.
One way in which this second grade currency can be put in circulation
by millions of dollars every week is by the Banks in passing it out over their
counters in the shape of pay rolls. A mannfacturer with a large number of
employes will be under obligation to his bank for accommodation, or he will
be a director or stockholder in the bank. lie never objects to the kind of
currency given; in fact, seldom personally sees or thinks of it. The employes
do not object so long as it will be accepted for rent, food, clothing, etc.
Those so receiving it will not object if the banks will accept it on deposit,
as of course they will when it can almost at once be again paid over the
counter.
The bank tellers are continually sorting the currency received, and die
first grade is paid out only when the supply of second grade is exhausted;
the better quality being kept for reserve and Clearing I louse balances, such
as is used for this purpose only moving from one bank to another.
I do not think it is generally known to what an extent the less desirable
class of currency is forced out of the banks and into the hands of the public.
To illustrate I will cite the experience of one bank in a small manufacturing city. With a capital of $100,000, and a deposit line of $850,000, the weekly payments over its counter for pay roll, etc., will average over $75,000, or
a total for the year of nearly $4,000,000.
An able editorial in the New York Times entitled "Harvest Money," on
curJuly 23, 1903, gave an excellent account of the use and circulation of
s amount of currency so
rency in agricultural communities. The enormou
used will consist almost exclusively of second grade.
The wages paid by railroads and mining c(nnpanies also absorb and
keep in circulation an exceedingly large amount of such currency.
I have dwelt somewhat at length on this feature of the subject in order
to make the point that there is small inducement to bring about contraction
of the currency by the Banks when so many of them have such good facilities for working off that which is second grade, including, of course, the
comparatively small amount (if their own issue which may have been redeemed and returned to them.
Each Bank, while admitting- that the supply of currency is excessive,
will leave the others to attend to the retirement, and will keep its own expanded to the limit if theft; appcal n to be a margin of protit by so doing.
What is every bank's business becomes to a large extent no bank's business.
or
I do not see how contraction can be obtained except by inducement
convulsion applied to individual banks.
be
In my judgment there are three ways by which contraction can
brought about. First, by having an issue by the banks that is not secured.
early
The element of risk in holding this class of notes would lead to their
currency is that
presentation for redemption. The objection to this class of
from
it is only adapted to local uses, and a person needing to use it away
note of
points of issue would find an unwillingness to receive an unsecured
n bank.
a distant, and to the person to whom it was tendered, an unknow
of National Bank
After over forty years of experience with the security




look with favor upon an unsenotes, it is questionable if the country will
raction is by an issue of notes
cured issue. The second way of securing cont
could be put. This is,
h
which could be restricted in the uses to whic they
s, to the extent of not being
and has been, the case with National Bank note
a rule being accepted for Clearlegal tender or reserve for banks, and not as
not proved enough, howing I louse balances. These disadvantages have
ictions might be devised which
ever, to insure contraction. Some further restr
third method is to issue
wouid increase the tendency to contraction. The
tax. This last has many adan emergency or special currency with a graded
d to meet the needs of the
vocates, and is, in my judgment. the best suite
country.
that there is in the country,
Congressman Fowler estimates. I believe,
ns, reserve money of about
outside of the Treasury and Ranking Institutio
is correct this would largely be
1250 millions of dollars. If my contention
lied by asset currency, if such
e
collected in by the Banks and its plac supp
was good enough to carry in our
were issued in sufficient quantity and it
entirely safe to hold, would not, as
pockets \vithout risk. Asset currency, if
now are. A sponge will hold a
11r. Fowler state:, be redeemed as checks
wing any of it to escape. So the councertain quantity of water without allo
without decreasing its total volume
try will hold an immense sum of money
money in the hands of the people
by redemption. Replacing the Reserve
Reserve money to the Banks will
with asset currency and transferring the
nse inflation.
therefore be a method of causing imme
dinary
e of currency he of two kinds—or
I would suggest that the issu
is preferred, the latter to consist of
and emergency, or special, if that term
taxed at three per cent, and class "B"
two classes, A and B, class "A" to be
ness the ordinary kind only to be. in
at live per cent. In times of usual busi
e in the country class "A" would bc
circulation. When special demand aros
extraordinary demand class "B" would
put in cinmlation. In the event of an
latter and the bad effect on the credit
be resorted to. The high tax on the
not justify the issue would keep the
of the bank if general conditions did
pt on extraordinary occasion.-., and
banks from resorting to class "B" exce
nt at the earliest possible date. Such
when issued would cause its retireme
d the tax rate on classes "A" and
banks as might be disposed to disregar
effect on their depositors if they w,n114
"B" could not atiord to disregard the
ant
the general conditions did not warr
resort to the emergency issues when
it.
of securing the currency to %%16(11 I
The general outline of the plan
have alluded is as follow::
unite and form an association duly
I would have banks in one locality
of allowing the sevel al members of the
provided for by law for the purpose
agreed percentage of their capital upon
association to issue circulation to an
collateral of a specified kind as may
the deposit with the association of such
in percentage of value in excess of the
be satisfactory to it, and for a certa
r
on of laws to specify the characte
proposed circulation. General regulati
banks comprising
issue against it. The
of the security and the percentage of
antee the payment of the total issue
the association to proportionately guar
e
e population and consequently larg
of its members. In the States with larg
y as ten or fifteen associations, each
banking capital there might be as man
section of the State. In the sparsecomposed of the banks of one locality or




ly settled States there might be only one or two associations. No association should be formed by banks whose aggregate capital is less than, say,
$5,000,000. In addition to the security as already provided for, a percentage
of the tax paid the government or a special tax for the purpose should be
collected to provide a guarantee fund which might be built up until it was
five per cent, of the total issue of notes.
The security to holders of notes would be first the obligation of the
bank of issue; second, that of the assets pledged to the association; third,
the underwriting- by the association; and fourth, the possession of the guarantee fund by the government.
In an association of banks representing capital amounting- to at least
$5,000,000, a conservative spirit %you'd prevail as to the character of the
assets accepted to secure the circulation. Particularly so as a failure of the
security to suffice for the payment of the notes would make its members
liable to an assessment to make up the deficiency.
The plan outlined above, 1 believe. will provide a convenient, safe and
elastic currency which would at all times meet the varying demand.
This system of securing circulation is somewhat similar to that adopted
by the Clearing llouses in New York and other large cities when through
the pressure of financial disturbance the issue of Clearing House Certificates
has been resorted to; in fact, the issue of such certificates has been practically the issue of a secured emergency currency but without any provision
of law.
Please mite that Clearing- House Certificates have, in practice, always
been quickly retired when the necessity which called them forth is past.
This has been caused by the full interest (equivalent to a tax) which has
been charged on them, and also because of the discredit that would attend
their further use.
In submitting- this outline of a financial measure, it is not my place to
•
designate the exact kind of security to be required, but we have Bills Receivable, State and Municipal Bonds, and high grade Railroad Bonds to select from. The law should designate the class of securities, and possibly the
proportion of each kind that might be used.
Within the limits of lawful classification the different associations could
pass upon the particular securities that would be accepted by them. As each
association would be well posted on its own locality, wise and eonervative
selections could, and I have no doubt would, be made, as a failure in this
direction would make the several bank; in the association liable to
sessment to cover losses.
Note.—After reading the paper the President of a Philadelphia National
Bank made the criticism that it did not seem advisable that there should be
two classes of emergency or special issue, and that the one issue sin mid be
taxed high enough to cause it to be resorted to only %viten it was urventiv
demanded and retired %\,hen the emergency which caused its issue had
passed. This gives me occasion to say that each Fall there would probably
be a legitimate demand for from one to two hundred millions of dollars, extra currency to move the crops, and that three per cent. would seem to be
a reasonable rate of tax on such issue. It might, however, be wise to increase the rate to live per cent, in the event that it was not retired within
four months from date of issue.




Chicago, April 1, 1908.
At a meeting of the representatives of the National Banks doing business in the City of Chicago,
held this day, the following resolutions were unanimously adopted:
WHEREAS, The Aldrich Bill as it has passed the Senate contains provisions, adopted in the last hours of its consideration by that body, which are revolutionary in their effect upon national banks, and seriously curtail their ability to
extend accommodations to the business public, it appears to us not only proper for bankers to call attention to the facts,
but their duty to do so; and
WHEREAS, The Aldrich Bill changes the legal reserve requirements of the national banking act which have stood for
forty years, so that nearly $200,000,000 of lawful money, or about one-sixth of the lawful money holdings of the national
banks, must be withdrawn from loanable use and locked up in vaults or invested in certain specified bonds: therefore
BE IT RESOLVED: I. That the transfer of this money from the liquid reserves of the banks, where it is available
for loans, to an idle fund, which the banks are forbidden under any circumstances to encroach upon, will seriously
impair the working capital of the country. It is not merely a transfer of money from reserve cities to other localities,
but a definite withdrawal of money from use as a basis of bank credits. The total lawful money holdings of all the
national banks on December 3, 1907, according to the statements of that date to the Comptroller of the Currency, was
$1,045,795,019, on the basis of which the banks had outstanding loans of $4,585,337,094. lithe available cash in
their vaults at that time had been reduced as proposed by the Aldrich Bill, the banks would have been obliged to contract their loans by approximately $1,000,000,000. We submit that such a reduction in the loaning power of the
banks concerns the business community quite as much as it does the banks. It means restricted accommodations to
the business men, higher interest rates upon commercial loans, and a permanent burden upon the country in the form
of returns upon idle capital, the system of reserves in this country being already more costly than that of any other country.
II.
That the true method of dealing with commercial crises, which come once in ten or twenty years, and of
meeting all unusual demands upon the banks, is by providing means for readily increasing the supply of currency when it
is needed rather than by locking up continuously and permanently an unnecessary proportion of the country's banking capital.
III. That the substitution of bonds in the vaults of country banks for balances in the reserve and central reserve
cities will not promote safety. The ability to draw exchange on the principal cities of the country is an available
resource even in time of panic. It supplies the common means of payment between communities, and during the
recent panic as much difficulty was experienced in maintaining these balances as in maintaining cash reserves. On the
other hand, as there is no essential difference between them and other profit-earning bank investments, bonds cannot
be properly counted as a cash reserve. If the design is to use them in an emergency as a basis for circulating notes
under the Aldrich Bill, it cannot be done without impairing the legal reserves at a time when the banks can least afford
such impairment, for bank notes very properly are not counted in legal reserves. An investment in bonds is outside the
field of commercial banking and reduces the power of the banks to make commercial loans.
IV. That there is no objection to the prohibition of loans to bank officers, but there is serious objecticn to such prohibition against directors and companies in which directors are interested. The courts have repeatedly defined the word
"securities as used in Section 11 of the Aldrich Bill to include promissory notes and bills of exchange (25 Am. & Eng.
Ency. L., 180; Bank of Commerce vs. Hart, 37 Nebraska, 202; Jennings vs. Davis, 31 Conn., 139; Duncan vs.
Md. Say. Inst. 23 Maryland 299; Winward vs. Lincoln, 23 R. I. 476; Wagner vs. Scherer, 85 New York Supp., 894
and others) and this interpretation would practically prohibit a bank from doing business with any company of which any
of its directors were officers or directors. The effect would be to deprive the banks of the very men in each community who by ability, experience and knowledge of credits and business conditions are best qualified to serve in this advisory capacity. Bank directors are not salaried officers; they are principally engaged in other lines of business, and
they cannot afford to sacrifice the right to borrow money in order to serve on bank boards.
The banks will not be
strengthened by limiting the selection of their directors to men who have no active business connections. This section
should also be so amended as to permit a national bank to own stock in an allied corporation which owns the building in
which the bank is situated. It is desirable for a bank to have a permanent home, and in the large cities where the
erection of a creditable office building involves a heavy outlay, there should be no objection to allowing a part of the
capital to be supplied by others, or to allowing the bank to control such allied corporation.
V. That these restrictions will affect the institutions of the national banking system unfavorably in their competition
with state banks and trust companies. These rivals have already more latitude in the character of business they are allowed
to do, and in most of the states the requirements upon them as to reserves are less than those to which national
banks are now obliged to conform. Regulations, which make it impossible for national banks to do business at a profit
In competition with banks organized under state laws, will inevitably weaken the national system in membership and
prestige, an end which it may be presumed the National Congress does not intend.
VI. That as the Aldrich Bill is avowedly a measure for temporary use only, to bridge over until a comprehensive
and final system is determined upon, no changes in the existing system which will seriously disturb present conditions
should be included in its provisions. The regulations of the national banking system as to the reserves against deposits
have stood since the system was established, the business of the banks is adjusted to them, and the credits of the
country are adjusted to them. At the date of the last statement of the national banks, February 14, 1908, their net
surplus reserves amounted to $169.084.751. This margin, which is the basis for business recovery and expansion.




banks are now obliged to conform. Regulations, which make it impossible for national banks to do business at a profit
in competition with banks organized under state laws, will inevitably weaken the national system in membership and
prestige, an end which it may be presumed the National Congress does not intend.
VI. That as the Aldrich Bill is avowedly a measure for temporary use only, to bridge over until a comprehensive
and final system is determined upon, no changes in the existing system which will seriously disturb present conditions
should be included in its provisions. The regulations of the national banking system as to the reserves against deposits
have stood since the system was established, the business of the banks is adjusted to them, and the credits of the
country are adjusted to them. At the date of the last statement of the national banks, February 14, 1908, their net
surplus reserves amounted to $169,084,751. This margin, which is the basis for business recovery and expansion,
would be more than wiped out by the proposed legislation, and if the banks must prepare to do business under the
proposed regulations after January 1, 1909, there can be no expansion of loans meantime, even for crop-moving
purposes next fall, but further liquidation will be required and serious consequences may ensue. We respectfully urge
that a temporary measure should not contain harmful innovations, which, in a final treatment of the subject, may
prove to be unnecessary, and unless they can be eliminated it will be better to have no legislation until the whole subject can be referred to a commission for inquiry and report, which we believe would be the most practical disposition
of it.
RESOLVED FURTHER, That a copy of these resolutions be forwarded to the President of the United States, the Vice
President of the United States, the Speaker of the House of Representatives, and each member of the Senate and the
House of Representatives.
BANKERS NATIONAL BANK,
By J. C. Craft, Vice-President.

HAMILTON NATIONAL BANK,
By Charles B. Pike, President.

COil.MERCIAL NATIONAL BANK,
By George E. Roberts, President.

MONROE NATIONAL BANK,
By E. W. Harden, Vice-President.

CONTINENTAL NATIONAL BANK,
By George M. Reynolds, President.

NATIONAL BANK OF THE REPUBLIC,
By W. T. Fenton, Vice-President.

CORN EXCHANGE NATIONAL BANK,
By D. A. Moulton, Vice-President.

NATIONAL CITY BANK,
By David R. Forgan, President.

DROVERS DEPOSIT NATIONAL BANK,
By William A. Tilden, President.

LIVE STOCK EXCHANGE NATIONAL BANK,
By S. R. Flynn, President.

FIRST NATIONAL BANK,
By James B. Forgan, President.

NATIONAL PRODUCE BANK,
By R. N. Ballou, Cashier.

FIRST NATIONAL BANK OF ENGLEWOOD,
By J. J. Nichols, President.

OAKLAND NATIONAL BANK,
By H. C. Foster, President.

FORT DEARBORN NATIONAL BANK,
By L. A. Goddard, President.

PRAIRIE NATIONAL BANK,
By George Woo:land, President




COSTLESS CURRENCY
alone will insure a just division of product.
It solves the problem of distribution!
Nothing is more certain than that poverty among the industrious is the inevitable effect of our preposterous currency system.

i'IOSTLESS
k,,URRENCY.
.

A NEW MONEY SYSTEM

YOU HAVE READ
this argument which, if true, means so
much to you, to yours, and to us all.
If you are impressed with its logic, and
believe beneficial results would follow a
general discussion of the simple remedy
proposed, and are willing to aid in disseminating the new idea —
oir Send 25e to the Secretary of THE
LAND CURRENCY LEAGUE, 231 Kittredge Bldg., Denver, Colo., and you will
receive, post-paid, 10 copies of this argument for distribution among your thinking
friends.

Under Consideration By
The

NATIONAL CURRENCY
COMMISSION.

Issued By
THE LAND CURRENCY LEAGUE.

COSTLESS CURRENCY IS THE WAY OUT!
United Effort Will Bring It!
HELP SOW THE SEED!




Denver, Colorado.

To

Hon. Nelson W. Aldrich

With Cors3plats of
ea




/

1.7frA/C

OW'

"Put a shoulder to t e wheel."




This pamphlet contains the argument
addressed to the U. S. Monetary Commission* by the Land Currency League of the
city of Denver,elucidating a new, but feasible and scientific method of providing
national currency by a system that will automatically supply every legitimate demand for money.
The argument consists of an address and
three supplemental communications to the
Colorado members of the National Commission, Messrs. Teller and Bonynge, of
Denver.

*The Commission appointed by the 60th Congress
to discover the defects in our currency system consists of Senators Aldrich, Burrows, Daniels, Hale,
Knox, Money, Teller; Representatives Bonynge,
Burton, (0) Overstreet, Padgett, Pugo, Smith,
(Calif.) Vreeland, Weeks, and Sec'y Shelton of the
Senate Finance Committee.

ADDRESS
Delivered by James D. Holden, of the Land Currency League, to the Colorado Members of the Commission.
Gentlemen:
We are a delegation appointed by The Land
Curri,ncy League to present for your consideration what we believe to be a correct theory of
currency. Our purpose in seeking this audience
is to impress you with its importance, and to
convince you, if possible, that at last we have
the true solution of the currency problem.
Our conclusions are the result of an investigation of the subject, covering a period of many
years, prosecuted along a new line of research.
They prove conclusively that the knowledge of
the most enlightened legislators of the age concerning the science of money is of the most
superficial character.
This conclusion is in a manner justified by
the fact that after a national existence of upward of 116 years, we find ourselves embarrassed
by a fiscal system that is unequal to the task
of employing our full powers of production, of
equitably distributing the fruit of in
or of
preventing a frequent recurrence of disastrous
financial panics.
We cannot hope in a single interview to convince you of the validity of our theory. To elucidate it requires a great deal of argument on our
part and a great deal of reflection on the part
of those to whom it is presented, but with your
permission I will briefly outline the new philosophy and give the reasoning upon watch our most
remarkable claim is bas(41.
We claim that society needlessly pays interest for the use of a circulating medium; and that
the compulsory practice of compensatim.; the individual for the use of currency is avoidable.




2

Our contention is that owners of wealth should
not compel themselves to compensate the individual for the use of a legal-tender representative
of wealth; and that they would avoid the present interest charge could they obtain from the
state, on application, a legal-tender representative of the wealth they now pledge as security
to the usurer.
We claim that our every economic ill is due
to the fact that we unduly restrict the volume
of money.
Instead of supplying ourselves with a currency
volume equal to our requirements, we so restrict
the issue that a private substitute for money is
required to assist in effecting our exchanges.
Statistics show that fully 95 per cent of recorded
exchanges are made with a credit substitute.
All money provided by the state for commercial purposes is supplied to the recipients without interest, while the cost to society of the
credit substitute (which we are compelled to use
because of the money shortage) actually absorbs
the surplus earnings of industry.*
Our failure to apply the true remedy is largely
due to a common belief that the value of money,
like that of a commodity, is determined by the
economic law of supply and demand, and that
to materially increase the money volume is to
Impair the value of the money unit.
An unwarranted fear of a depreciated currency prohibits a sufficient volume of money, and
thus prevents a just division of product.
An exhaustive investigation satisfies its that
absolute money—paper or specie—does not, in
fact, fluctuate in value, but that it reflects and
represents the fluctuating value of the articles
for which it is exchanged. Hence were legaltender paper issued for currency purposes only
against individual wealth, the supply may equal
• See note A Appendix.
3

our commercial requirements without
fear of depreciation.
It is true that rising prices frequently
follow
a material increase in the volume of
the circulating medium, but this phenomenon
occurs only
when the volume is less than the
amount required to perfectly perform the money
a fact that has escaped the scrutiny of office—
the financial student.
The result, therefore, is not due to a
cheapening of the money unit, but to a natural
increase
in the value of certain commodities;
commodities
for which there is an increased demand;
demand
born of a new ability to purchase.
This view is sustained by the fact that
the
advance in price is not only confined to
articles
for which there is an increased demand,
but it is
temporary, for the secondary effect of a new
money issue is to so stimulate the production
of
articles whose value is enhanced that prices
will
become normal when the new demand is satisfied.
We claim that quality, not quantity, determines
the value of money.
Regardless, however, of what is known as the
"quantitative" theory of money, we claim that
the currency volume may safely be increased
to the extent we propose, because the measure
we suggest would simply substitute one form
of
circulating medium for another (cash for credit)
without augmenting the volume of that with which
our business is now transacted, and therefore
would not disturb prices.
The only persons who can now call new money
into existence to meet the demands of an expanding commerce, are owners of wealth in the
form of gold bullion and United States bonds.
All other wealth -owners are unwisely denied the
essential privilege of monetizing their wealth for
currency purposes by the certificate process. The
result is an enormous currency deficit of not




less than twelve billion dollars, as shown by the
last Report of the Comptroller of the Currency.
This report shows that our circulation now
consists of public money and bank-credit—about
one part money and five parts credit: public
money provided by the state at a nominal cost
to the recipient, and bank credit, provided by
financiers at burdensome rates of interest.
We propose to cure our financial ills by substituting cash for the credit constituent of our circulating medium. This can be done, we claim,
without departing from the present method of
supplying currency for commercial purposes.
We propose to extend the privilege of calling
new money into existence (which is now exercised exclusively by owners of gold bullion and
national bonds) to the owners of productive real
estate—our most stable form of wealth.
The underlying principle of the proposed system is that all forms of wealth are equally entitled to currency representation in the nation's
circulation on application of the owner.
We claim, however, that the interests of society will be as well served, and the system simplified, by confining the currency issue to owners
of stable, or permanent, forms of wealth.
To monetize LAND VALUES, we claim, will
destroy the existing currency monopoly, and the
indirect benefit to all will equal the direct benefit inuring to the currency recipient, because the
terms upon which legalized certificates will be
issued to land owners, on demand, will determine
the usurer's charge for the use of private funds,
and the credit substitute, should there be a demand therefor.
The new system assumes that the legal-tender
function alone sustains the value of money; that
commodity value has nothing whatever to do in
sustaining the money value of legal-tender currency; that money is a legislative device whose
value as an exchange medium necessarily equals
Its value for discharging contract obligations.
5

Evidence of the validity of this
principle is
found in the fact that gold coin
would not circulate at par for a moment were
it divested of
its debt-paying power, and that
our standard sil1.er coins circulate at par for the
reason alone
that they are invested by law with
the legaltender quality. It is obvious, theref
ore, that the
legal-tender attribute is the money
attrib
a nation's currency—whether paper, silver ute of
or gold.
Ours is not a proposition to "loan money
on
land." nor to "base" money on real
estate. It is
an automatic method of providing just
the amount
of currency required by a direct issue
to money
users, on demand, of a legal-tender repres
entative
of their wealth.

As our congressional representatives, and as
members of the recently appointed Monetary Commission, we ask you to thoroughly investigate
this new theory, and especially our claim that
real money does not fluctuate in value. To realize this momentous truth is to perceive that a
legal-tender representative of wealth may with
advantage and entire safety be issued, on application, to the owners of stable forms of wealth
at cost of issue.
We cannot but believe that the appointment
at this time of a Monetary Commission to whose
searching scrutiny this revelation in economics
can he submitted will prove of the greatest possible benefit to the human family.
Wt. have formulated a measure, of which we
will furnish you copies. embodying our recommemhitions which sets forth a plan for carrying
them into effect.
We trust that upon reflection you may see
way clear to commend this promising theory,
and the simple remedy we suggest, as worthy the
serious consideration of the Monetary Commis.
Sion.




4;

SUPPLEMENTAL COMMUNICATION NO 1.
(This paper was prepared for the purpose of refuting the
generally accepted 'quantitative" theory of money.)

Hon. Henry M. Teller,
Hon. Robert W. Bonynge,
Members U. S. Monetary Commission.
Gentlemen:
In the opinion of the members of The Land
Currency League, the chief obstacle in the way
of perfecting our money system is the belief that
the exchange value of a nation's circulating medium is regulated by its volume; and that to materially increase the money volume is to impair the value of the money unit.
Relief in this — the quantitative — theory of
money, in our judgment, is not only incompatible
with a correct understanding of the character of
money, but its blighting influence on the destiny
of the individual is incalculable, for the reason
that it prevents the mind from perceiving a momentous economic truth, namely:
That absolute money does not fluctuate in
value!*
The need of the hour, in our opinion, is an
argument that will expose the fallacy of this
accepted belief, and we beg leave to submit for
your consideration the reasoning which justifies
the conclusion that the quantitative theory of
money is false, misleading and pernicious.
In defining the theory, John Stuart Mill, in
his "Principles of Political Economy," says:
"If the whole money in circulation was double
d.
Prices would double. If it was increased one-fourth,
prices would increase one-fourth. • • • So that
the
value of money—all other things remaining the same—
varies inversely as its quantity; every increase
in
quantity lowering its value, and every diminution raising It in a nitin exactly equivalent."

David Ricardo, an eminent English authority,
says:
"The value of money in any country is determ
by the amount existing. That commodities would ined
rise
or fall in price in proportion to the increase or diminu
tion of money. I assume as a fact that is incontrovertible."

t)

Notwithstanding the high character of those
distinguished economists and the respect to which
their opinions are entitled, we assert that their
conclusions cannot be verified.*
The following is the reasoning upon which we
rely for a justification of our contention:
Because rising prices usually follow a material increase in the volume of money, economists
have erroneously concluded that the result is
due to a cheapening of the money unit. In other
words: that a rise in prices is the direct result
of an augmented money volume. In fact, however,
rising prices are due to increased demand, resulting from an increased ability of the recipients
of the new currency to gratify their wants.
In justification of this conclusion we point to
the fact that a rise in the price of all commodities
does not follow an increase in the money volume; that only those commodities increase in
value for which there is an increased demand:
that the mere existence of new money cannot
affect prices, because there can be no rise in the
price of any form of property until the new demand affects the available supply.
Were the quantitative theory true, the price
of all property would rise in response to a new
money issue, regardless of supply and demand,
for if "volume determines price," as the advocates
of this theory claim, the augmented money volume would advance the value of articles for
which there would be no unusual demand to the
ine extent that it would raise the price of articles the demand for which would exceed the supply. Surely something besides the unsupported
opinion of eminent economists is necessary to sustain so unreasonable a theory. The claim that
"prices are determined by the volume of money."
is inconsistent with the fact that they are determined by the economic law of supply and demand—a truth accepted by all economic students.
Another fact that discredits the quantitative
theory is that the advance in priees following a
*See Note II appendix.
8




fresh issue of money is not (as the theory assumes) permanent. It is temporary, for the reason that the secondary effect of a new money
issue is to stimulate and make possible the production of articles for which there s an active
demand, so liwt prices will become normal when
the new demand is satisfied. It will not be denied that price indicates vnlue,
therefore an increase in price means a real increase in value. As commodities are known to
Increase in value while the money volume remains stationary, it is clear that prices may advance, though the value of the money unit be
unaffected. Our contention is that any and every
change in prices is due to fluctuation in the
value of commodities—never to a change in the
value of full legal-tender currency—paper or
specie.
The significance of this conclusion—if valid
—is apparent. It reveals a truth of the greatest
moment, viz:
That the privilege of calling new money into
existence (whi('h is now exercised exclusively by
owners of gold bullion and national bonds) may
be extended to owners of other stable wealth
without fear of impairing the value of the money
unit. And that a wise change in the provisions
of our currency law will enable us to substitute
cash (provided by government at a nominal cost
to (lie money-user) for the credit substitute for
cash that is now provided by financiers at impoverishing rates of interest.
The following is the logic that sustains our
conclusion:
Whatever "value" may be, it is something that
Is expressed in "d(dhirs." The fluctuating value
of commodities and the debt-paying value of the
legal-tender symbol is thus expressed. As the
value of the debt-paying device—money---(expressed in dollars) is always the same (being
fixed by statute) it manifestly cannot be affected
by the economic law of supply and demand.
9

The following illustrations furnish additional
proof of the truth for which we are contending:
If wheat, for example, advances from 75 cents
to a dollar a bushel, the value of the money unit
is not affected, because it will still buy a dollar's
worth of wheat—the value of which, like that of
the debt-paying device, is expressed in arbitrary
units, called "dollars."
To elucidate this truth, let us suppose that
to-day wheat is worth a dollar a bushel, tobacco
a dollar a pound, and silk a dollar a yard, and
that to-morrow an advance in wheat raises its
price to $1.25 a bushel—the price of tobacco, silk
and other commodities remaining unchanged. Can
It be said that the money unit has lost any of
Its value so long as it will continue to buy a
pound of tobacco, a yard of silk, and the usual
amount of everything except wheat?—and when
It will still buy a dollar's worth of wheat.?
From this it is evident that it. will not do
to say that "prices advance," and at the same
time claim that "money cheapens," for if money
cheapens there is no real advance in price. The
foregoing illustration shows clearly that fluctuating prices are due, solely, to a change in the
value of commodities.
The common belief that money depreciates
in value arises from confounding the effect on
price of a failing credit currency with the effect
on demand of an increasing volume of money.
A convincing reason why the theory in question cannot .be defended is that its claims do not
harmonize with our monetary experience. For
example: In 1861 we had a currency circulation
of perhaps $5 per capita, while in 1865 it was
nearly $70. Prices barely doubled in that time,
while according to the quantitative theory they
should have increased fourteen fold. But the
doubling of prices may be accounted for by other
causes than the increase in money. War has
always caused prices to advance, though the
money volume remains unchanged, and for an
ohvious reason, viz: consumption is increased and
10




pro'luction curtailed as soon as armies are in
the field. Producers cease producing while continuing to consume, and the great law of supply
and demand operates to change prices, regardless of the money volume.
We invite your attention to the further fact
that during the currency contraction of October
last (1907), prices were but slightly affected.
Stocks depreciated in value, but general prices
remained firm, though an enormous contraction of
the circulation had taken place through the sudden withdrawal of credit by the banks. A general stagnation of business followed, though the
general level of prices was higher than it had
been for years. Shortly after a general denial
of credit by the banks, there was a great increase
In the tangible circulating medium, through the
Issue of millions of clearing-house certificates, yet
no advance in prices occurred. These facts prove
the incorrectness of the claim that the money
volume determines price.
Perhaps the most vulnerable part of this specious theory is its claim that "prices will continue
to rise as long as money continues to increase."
Because rising prices in the past have followed
an increase in the money volume, its advocates
asssurne that they will continue to do so. In
reaching this conclusion they lose sight of the
fact that it is only when the volume of the circulating medium is unequal to the needs of commerce that advancing prices accompany increasing money. The theory is based entirely on the
experience of the past—a period during which
society has never known a sufficient volume of
money. The obvious fact that a changing money
volume affects price only as it affects demand,
suggests that were demand beyond the influence
of a scant money supply, a change in the quantity
could not affect prices.
Reflection justifies the assertion that the only
manner in which the money volume may affect
price is in affecting demand. We claim that demand would not be affected were the money volume equal to the money needs. Were our full

11

powers of production
could not further inc engaged, additional money
rease production, and
our full powers of
were
consumption engaged,
a new
issue could not increa
se consumption.
Consequently as an augmen
ted volume could
neither production or
affect
ceivable that it could consumption, it is inconaffect prices.
This reasoning leads
to the following
sions, namely:
conclu1. That money is not
as is generally supposed. the "measure of value,"
2. That values are
without the aid of mon estimated and determined
ey.
That values are not
even expressed in
money, but in abstract
units of value, called
lars."
"dol4. That the unit of
value and the unit
money are not identica
of
l, but are distinct
com
cial factors—the mon
ey unit being concre merte, the
value unit,. ideal.
5. That the dollar,
in fact, is not a
material
thing, but a mere con
cept, like the figure
numbers.
1 in
6. That the word "da
refer to money, but, in llar" does not especially
its true sense, refers
the value of the legal
to
-tender symbol, just
refers to the value of
as it
commodities and
pro
7. That money, by
virtue of its debt perty.
-paying
power, is simply the
com
cles possessing utility mercial equivalent of artivalue equal to the
nation of the legal-tende
den
r coin or cf.rtificate omi.
While the value of
money is not affect
a change in the vol
ed by
ume, the price of
money is.
That is to say, the
interest rate varies
with a
material change in the
is less than the money supply when the volume
equal to our commercia needs. Were the volume
l requirements,
the payment of tribute
however,
for the use of
for facilitating exchanges
currency
would be unknown.
By "tribute" we mean
compensation for the
use of a circulating med
ium, as distinguishe
d from
compensation, or hire, for
the use of pro
The distinction is well
per
defiped, though not ty.
gen12




erally recognized. Compensation for
the use of
property is a legitimate charge—prope
rty being a
product of labor. But compensation
for the use
of a legalized representative of proper
ty (a product of legislation) is a charge that wea
lth-owners
literally compel themselves to pay,
by failing to
provide for the monetization of the
wealth they
now, as borrowers, pledge as securi
ty to the
money merchant.
According to the Land Currency Philos
ophy,
money in circulation is nothing more or
less than
"a legal-tender representative of wealth."
It circulates at par, and is the equivalent of
property.
because It is invested by law with arbitr
ary debtpaying power.
A money symbol, paper or specie, worth $5
for liquidating debt, has an exchange val
ue equal
to that of commodities worth $5 for other use
s.
Modern commerce is the barter of commod
ities
having a fluctuating value, determined by
sup
and demand. for legal-tender symbols hav ply
ing a
fixed value for discharging contract obliga
tions.
Poing "a legal-tender representative of wea
lth,"
money should be issued as such by the
state. It
shopld be issued to wealth-owners, on app
lication. as they may require it for commercia
l purposes.
It is the duty of the state to create money
for
the convenience of the individual, who, as a producer, is entitlei to a currency representati
ve
of the wealth he creates, for the conclusive rea
son that (as barter is impracticable in comple
x
society) a currency representative is els!ntial
to
a just distribution of the fruit of his industry.
Money being the available representative
of
Individual wealth, to the individual belong
s the
prerogativy of calling the representati
ve int
istence. His alone is the rifzht to determine o exwhen
his wealth shall be monetized for currency purposes. This is the present right of the gold own
er,
and of the national bond owner, and it should be
the right of the wealth owner.
13

The individual alone should
tion the currency representative place in cireelaof the wealth he
creates, or acquires, when his
needs require it.
No reasoning can justify the
state in disposing of
the currency representative
of the wealth of the
individual, except that acquired
by taxation.
Were all wealth owners granted
the right
to demand and receive a
curr
of their wealth, on applicatio ency representative
n, an impartial and
sufficient issue of money woul
d result—the b2nefits of which cannot be
estimated. Such a law
would, for the first time in the
history of civilization, make the life-blood of
commerce readily obtainable by the producer to
whom it is a necessity.
We claim that money comm
ands interest in
the market, not because it
is valuable, but because it is inaccessible to the
followers of useful
pursuits—who for specious reas
ons have, for centuries, unwisely confined the
issue of legal-tender
to the monetization of the preci
ous metals.
The inevitable effect of this
baneful law is
to force society to compensate
the individual for
the use of an artificial exchange
medium—a mere
Product of legislation.
The sum we obligate ourse
lves to pay financiers each year for the use
of this legislative
device is greater than the
surplus earnings of
our every industry. An
imperfect knowledge of
the nature of money, and a
gene
it can depreciate in value, resul ral belief that
ts
policy which so restricts the issue in a financial
of legal-tender
that it, and its credit equivalent
, commands "interest" in the market—INTER
EST, the legalized
tribute upon which the drones of
society lawfully
subsist.
That an interest-yielding curr
ency is the sole
cause of poverty among the indus
trious, and of
want in the midst of abundanc
e, is a fact that
has eluded the scrutiny of the
student of social
science.
Our claim that the volume of
money has nothing to do with its value, and
that, should trade
require it, the volume of mone
y may equal the
14




volume of wealth, without depreciating, is both
valid and demonstrable.
For example: Suppose every note or bond that
is now amply secured by mortgage, or trust deed,
on real estate were by law made a tender for
debt—would not the act enormously increase the
volume of money? And would the value of such
paper be impaired by making it a legal-tender?
Suppose that against every $5,000 worth of land
a bond for $1,000 was issued—would such bonds
depreciate in value as their number increased?
Certainly not—nor would the act of investing
them with debt-paying power impair their value.
Suppose all individual wealth—real and personal—were made a legal-tender for debt—why
would such an increase of money impair the value
of the money unit?
Suppose we were in the purely barter stage,
where commodities are exchanged for commodities, and money has not been invented—would not
values be adjusted solely according to supply and
demand? If so, upon what twist of logic can it
be claimed that if all personal and real propert.‘
should be monetized by the certificate process
Into a money representative, and this used in exchanges instead of the commodity itself, that
values would be affected or changed by the act?
How could values be affected when the money
thus created would be used only to facilitate exchanges, discharge debts, and conserve individual
wealth?
Finally. what additional evidence is required to
satisfy the discriminating mind that "legal-tender
representatives of wealth," of convenient denominations, may be made abundant or scarce—accessible or inaccessible--according to the wisdom
of legislators?
Very respectfully,
CHAS. M. BICE,
WEBSTER BALLINGER,
RICHARD WOLFE,
JAMES D. HOLDEN,

Denver, Colorado, October, 1908.
15

Committee.

SUPPLEMENTAL COMMUNICA
TION NO. 2.
Hon. Henry M. Teller,
Hon. Robert W. Bonynge,
Members of the 1, S. Monetary
Commission.
Gentlemen:
Having shown by irrefutabl
e argument that
absolute paper money (issu
ed for currency purposes against individual
wealth, and possessing
arbitrary debt-paying power)
cannot depreciate in
value, the folly of longer
continuing a financial
policy which deprives socie
ty of a sufficiency of
that which is essential
to the full employment
of its industrial powers,
becomes apparent.
And yet, the idea that it
is the duty of the
state to provide a circu
lating medium for which
"interest" cannot be exact
ed, and that a change
in the currency law woul
d give the wealth owner
bona fide money for the
asking, is so foreign to
traditional belief, to custom,
and to the teachings
of economists, that even
the most enlightened
hesitate to accept the
though it be—which eluci argument—conclusive
dates this vital truth—
this veritable revelation in
economics.
We feel confident, however,
that. in presenting
this new idea to a Natio
nal Commission, instituted
to ascertain the cause
of our financial ills, we
are submitting it to a
tribunal that will appreciate
the argument we offer in
its support, and recognize the merit of the
measure we suggest for providing a national currency
equal to our commercial needs.
The proposal to monetize
land values by the
certificate Process is simply
a proposal to make
a larger percentage of
our stable wealth available
for currency purposes,
without departing from the
established method of providing
currency for commercial uses.
It is only a feasible
plan for supplying the
enormous deficit in our
currency volume, which,
as shown by the last
Report of the Comptroller
16




of the Currency, n()w exceeds twelve billion dollars!
It is a practical plan to substitute cash (provided by government at a nominal cost to the
money user) for the credit substitute for cash
that is now provided by financiers at burdensome
rates of interest.
It is an automatic method of calling new money
into existence as it may be required by our expanding commerce.
WV The Federal Constitution confers upon Congress the power to create money! It is evident,
however, that the power conferred by the Constitution is not fully exercised so long as the producer must compensate the individual for the use
of this legislative device—a device that is indispensable in distributing the fruit of industry. Obviously the money supply should equal the money
needs—and nothing is more certain than that
INTEREST is the barometer which unerringly indicates the extent of the money shortage.
Beyond a doubt the legal-tender attribute is
that which enables money to perform its thre.
functions, viz: to conserve individual wealth; to
facilitate exchanges; and to pay debts; and while
a definite amount is required to perform two of
these functions (discharge debt and effect exchanges) the demand for money for conserving
the earnings of the industrious is practically unlimited. Thus its three uses will readily absorb
the limited volume of currency that may be called
into existence under the automatic plan of issue
we suggest.
Statistics show that the uninvested savings of
the American people at this time exceed fifteen
billion dollars, while the tangible circulation is
less than three billions. An additional currency
issue of twelve billions, therefore, could be used
for the purpose alone of conserving, in money,
the present savings of hank depositors—savings
17

now conserved in nothing more tangible than unsecured promises of the banks to pay their depositors, "on demand, twelve billions of money
that is not in existence.
Obviously, a law that will make the "legalized
representative" as accessible to land owners as
it now is to owners of government bonds,
will—
by making 50 per cent of the
nation's wealth eligible to monetization by the certificate proces
s—
provide a practical means of getting the required
currency into circulation. The volume proposed
will be limited, and yet, the required amount
may
be called into existence.
Query: Money being a mere legislative device
—what excuse is there for a money shortage? Why
pay tribute for its use?
I:(ing a legalized representative of wealth—
such wealth as the law may designate—the law
we, ourselves, inspire--why need there be dearth
a
of money so long as there is no dearth of wealth?
Were a currency representative made accessible to wealth owners, on application—is
it not
certain that they would escape the interest
charge?
And if interest could not be exacted for its use
—what motive would there be for calling a surplus
into existence?

Individual wealth when monetized for currency
purposes by the coinage process, or by the certificate process, is invariably monetized at an arbitrary valuation. Gold is, and silver was, thus monetized. In monetizing land values it is proposed
to make the assessed valuation of productive real
estate, for a given year, an arbitrary and permanent valuation of the same for currency purposes;
thus monetizing this most stable form of wealth at
a conservative valuation—not exceeding in any
Instance, 40 per cent of its market value.




The scientific character of the measure becomes apparent as the fact is realized that it will
automatically provide a sufficient public circulating medium, at a nominal cost to the money user,
by a method that will prevent an over-issue, and
avoid the necessity of monetizing other forms of
wealth.
That the new law will prove equally beneficial
to every citizen, and confer no especial advantage
upon the land owner, becomes clear to those who
perceive that the rate at which the government
will issue a sufficient volume of legal-tender paper
to land owners, on application, will regulate the
cost in the market of every form of circulating
medium that may be used—whether public or private.
It is a plan to give the commercial world a sufficient volume of money, through the mediation of
land owners, just as the present insufficient volnine is provided through the mediation of bullion
owners and bankers.
Our contention is, that had we a sufficient
volume of money, competition would insure equitable profits—because demand and supply alone
would determine price. And the wage system
would give the worker his full share of the joint
product—because then, money would seek labor,
whereas now, labor must seek money!
Very respectfully,
CHAS. M. BICE,
WEBSTER BALLINGER.
RICHARD WOLFE,
JAMES D. HOLDEN,

Committee
Denver, Colorado, November, 19as
19

SUPPLEMENTAL COMMUNICATION NO. 3.
Hon. Henry M. Teller,
Hon. Robert W. 1;onyilge,
Members of the U S. Monetary Commission.
Gentlemen:
A fundamental principle of The Land Curren
cy
philosophy is:
That fluctuating prices are due to a change
in the value of commodities—never to
a change
in the value of real money—paper or
specie.
Evidence of the truth of this conclusion. is
found in the fact that in modern commerce articles are virtually exchanged for products—through
the mediation of money: legal-tender curren
cy being that which reflects, and represents
in trade,
the value for which it is exchanged.
Commodities are converted into the legal-tender
representative at their relative value, compared
with that of other commodities—not as compared
with money. It is the relative worth of the commodity, therefore, estimated and expressed in
imaginary units of value (called "dollars") which
determines the number of legal-tender units it
will command in the market.
The debt-paying (1ev ice is the exchange equivalent of articles having utility value, because, aside
from its material, it has a legal value for popular
a
use equal to its face; a legal value which is unchangeable because fixed by legal decree.
The non-existence heretofore of the true mono
idea is attested:
First. By the universality of the interest-paying
custom—whereby society, without protest, needlessly compensates the usurer for the use of an
essential legislative device: an artificial device for
which "interest" is exacted only because the supply does not equal the demand.
Second. By the fact that heretofore every effort to increase the circulating mediu has been
m
in the way of providing
credit substitutes for
money, instead of increasing the issue of wife
20




legal-tender itself; a fact which shows that there
has been no general recognition of the economic
truth: that the legal-tender function is that alone
which insures the circulation at par of all money,
whether paper, silver or gold.
Third. By the prevailing belief that money
should have "stable purchasing power"; and that
its value should be "regulated" by limiting the
issue—a preposterous idea, because it is a patent
fnct that had money stable purchasing power
there would be no such thing as a change in
price, the very thing required to cause supply to
respond to demand.
Additional evidence of the phenomenal dearth
of fiscal knowledge, is the fact that all paper issues
in the past, with a single exception, *
have
been promises-to-pay-specie-on-demand. Even the
paper issues of the civil war period (declared to
be "money" by the United States Supreme Court)
were a credit currency invested with the legaltender quality. The promise of ultimate redemption in specie inscribed on these notes indicates
the existence of a belief that the legal-tender attribute alone would not insure their circulation at
par with coin.
*
The nearest approach to absolute paper money
of which we have a record, was the Land Currency,
Issued to land owners, in Franklin's time. by the Colony of Pennsylvania. This currency circulated at par
with specie for 40 years—from 1722 to 1762. The original
issue, in 1722, was a credit currency invested with full
legal-tender power; but. at Franklin's suggestion, the
issues subsequent to 1731 were not redeemable in coin,
hut were a pure paner money which perfectly performed all the functions of specie, because invested
by law with all its legal powers.—See Pennsylvania
Magazine of History and Biography for April, 1S85.

While the currency system we propose would
destroy the business of the usurer, it would benefit
the capitalist and the investor.
It would make dividends on stocks as safe as
interest on bonds—because it would exempt the
stockholder from the exactions of the bondholder.
It would create a field for investment in industrial enterprises which would make the investment
lucrative because of the increased ability of the
industrious millions to freely gratify their wants.
21

•

Relieved of the burden of compensating the
usurer for the use of a scant money supply; and
escaping the indirect tax which, as consumers, they
now contribute (daily) to the enormous fund from
which tribute is paid on billions of national, industrial and railway "bonds," the producers of the
nation would, at last, enjoy the full fruit of their
industry.
By giving themselves the same right to a legaltender representative of their stable wealth which
they now grant to the owners of gold bullion
and
certain bonds, the followers of useful pursuits,
by
simply amending a statute, would create for themselves an economical environment in which there
would be no artificial handicap to individual effort;
no artificial obstacle to the developmen
t of the
nation's boundless resources.
Money being an indispensable distributor of
product, it is clear that an insufficient issue must
result in imperfect distribution. Being a necessity.
an abnorm:11 industrial condition is the inevitable
concomitant of an inaccessible circulating medium.
As the present cost of an artificial medium I'm
facilitating exchanges exceeds the surplus earnings of the industrious, the relationship between
their poverty and a scant money supply is obvious.
In concluding, we beg leave to add that in our
opinion we have presented for your consideration
an argument which reveals an amazing truth,
namely:
That want in the midst of abundance, the unjust division of wealth, and the money troubles of
the industrious, are the necessary
effect of an
insufficient issue of legal-tender paper; and that
these evils will disappear when our public circulating medium shall equal our commercial needs.
Very respectfully,
CHAS. M. RICE,
WEBSTER BALLINGER,
RICHARD WOLFE,
JAMES D. HOI.DEN,

Denver, Colorado, December, P908.
22




Committee.

APPENDIX.
NOTE A.—"The surplus earnings of industry" are
indicated by the annual increase in national wealth,
whica (less the advance in real estate values) approximates two billion dollars. Our total indebtedness, public and private, is variously estimated at from 30 to 40
Assuming that it aggregates 35 billions
billions. *
an that the average interest rate thereon is 6 per cent
per annum, TWO BILLION ONE HUNDRED MILLIONS is the sum we obligate ourselves to pay financiers each year for the use of a circulating medium—
ONE HUNDRED MILLIONS more than the value of
the surplus product of our every industry.
* The following items anu figures indicate the present
Interest-bearing indebtedness of the people of the
United States, expressed in round numbers. The compilation is from official reports and estimates of experts:

National bonds
$ 925,000,000
234,000,000
State bonds
Municipal and Lounty bonds
2,140,000,000
7,821,000,000
Steam Railway bonds
1,455,000,000
Street Railway bonds
Industrial bonds
2,742,000,000
10,000,000,000
Real Esiate Mortgages
Chatte, Mortgages (a)
2.500,000,000
5,766,000,000
Bank Discounts
Unsecured Notes and Book Accounts (b)
1,417,000,000
Total

$35,000,000,000

(a) Estimated at 25 per rent of the known Real Estate Mortgage Debt. (b) A meagre estimate.
NOTE B.—A distinction, tiot generally recognized,
exists between the value of money and its "purchasing-power." Value is invariably expressed in itnagMary units (i. e., in dollars), while purchasing-power
can be expressed only in commodities. As the value
of a coin, or other debt-paying device (expressed in
(lollars) is always the same—always equal to its denomination—it cannot possibly fluctuate.

23

The fact that an insufficient volume of money frequentIN
compels a sacrifice of values to obtain it, is that which give
color to the claim that real money fluctuates in value, when in
fact every change of value is in the commodity.
Were it possible for legal money to vary in value, a change
in prices would indicate nothing, and the business world would
be at sea regarding values.
To realize that the so-called purchasing power of money
determined by the relative value of commodities (compared
with each other) is to perceive that it cannot be determined 1)
the volume of money, as claimed by adherents of the quantitative
theory.
The belief therefore, that an artificial symbol, created by so
ciety without cost, (and which has no independent value aside
from the delegated function which enables it to reflect and represent the values for which it is exchanged) is subject to ft,
same economic law that determines the exchange value of a product of labor, is a belief which, though well-nigh universal, can
not be sustained by logical reasoning.




e

etc

c).

24

ILLUSTRATION.
National bank notes are a "costless currency." They are issued by the State—
against individual wealth—without interest—for the convenience of society. They
pass current because of their power to pay debts and taxes.
Were money, in the form of legal-tender certificates, issued, on application, to
owners of productive real estate, the money supply would equal the money needs,
and the use of national bank notes, as well as the practice of paying usurers tribute
for the use of a scant money supply, would be avoided.
It is an interesting fact that it would be impossible to exact "interest" for the
use of an exchange medium from a truly enlightened people.
Our present mental development may be judged by the fact that we pay the individual interest for the use of legal tender PAPER (which we collectively create at
will, and without cost) as willingly as we pay rent for property, or hire for service.
It is a lamentable fact, that having the power to abolish interest for money—
by amending a statute—we lack the wit to exercise it—HENcE THE STRUGGLE roa
EXISTENCE!







REPORT OF THE FEDERAL LEGISLATIVE COMMITTEE
OF THE

BANKERS ASSOCIATION OF THE STATE OF ILLINOIS
Made at its Annual Meeting, held in Decatur, Illinois,
October 13th and 14th, 1909

PRESIDENT MCKINNEY: We come next to the reports of Standing Committees.
Mr. Parker, of the Federal Legislative Committee, I notice is in the house, and I would ask
him if he has any report to make from that committee at this time?
MR. E. J. PARKER: Mr. President and gentlemen of the Convention: The Committee on Federal Legislation was called into existence at a time when it was thought that
other state associations would also elect such committees, which would be standing committees.
However, we have not conferred with any state associations or received notice that they have
formed or have such standing committees in existence. Not knowing whether we would be
called upon for a report, I have no wr!tten manuscript; therefore I will make a verbal and
offhand report.
When currency legislation was under discussion during the last session of Congress,
your committee was asked by the members of the Currency Commission of the American
Bankers Association, to lend its aid in defeating certain bills; and I also received many letters
from acquaintances in the country at large. Many of these letters were referred to our committee, though we have had no formal meetings, the members being scattered over the state.
However, we have kept in touch with each other by correspondence. We strenuously
opposed the passage of the Fowler, Aldrich, and other bills, and later the Aldrich-Vreeland
bill, which is, as we knew it would be, inoperative. Only one Clearing House Association has
been formed under the provision of that bill and I believe it is in the District of Columbia.
The hint has been given to the country at large that the Congressional Currency
Commission may advocate a central bank. It is well to have it brought before the country
for consideration, agitation, if you please, and final adoption if the country so decides; it is
obvious there will be oposition to it. In the older countries of Europe, thickly settled with a
homogeneous population, and the conservatism which age brings to all communities and
nations, they have in operation large central banks, which serve their purpose well. Our
population is quite different and our vast country sparsely settled. We have invited men to
come from all parts of the world, they have come and emigration will continue. Instead of
being a monarchy, we are a republic and a democracy, pure and simple. I take it that it
would be difficult to establish a central bank in our country, with its heterogeneous population, strongly assertive as democracies usually are, opinionated many times, and our legislative bodies embracing among their members but few men possessing the wisdom of
political economists, and unfortunately economic questions such as the currency and the tariff
are not relegated to expert commissions. If the central bank should be advocated in the
coming Congress, it will resolve itself into political alignments, which will be unfortunate.
That was one of the weak points of the Aldrich-Vreeman bill, passed in haste to meet political emergencies rather than financial ones.




The bill is not practical as a financial measure.
The moment a legislator or a citizen of the country suggests a currency plan, he makes
himself a target, and his plan is immediately assailed. Hence, as a member of this committee,
I would not think of suggesting a plan. I will take up your time only for a few moments
in speaking rather interrogatively than affirmatively, certainly not dogmatically, on the
currency question.
Bankers are still living in New York City who co-operated with that sagacious banker,
Mr. Tappan, in establishing the New York Clearing House in that city. The clearing
houses of reserve centers (some of them imperial cities) comprising, as they do, National and
State banks, Trust Companies and private banking interests, represent a banking power
greater than many of the banks in Europe. Have they served a good purpose since they were
established? What would the banks of Chicago and San Francisco have done in the time of
their great conflagrations, if in order to avert a panic they had not availed themselves of the
united action of their clearing houses? At such a juncture could the Aldrich-Vreeland bill
have assisted them, distant as they are from Washington? In our own state the necessity
and power of clearing house organizations has been clearly demonstrated. I have felt since
the panics of 1873, 1884, and especially 1893 and 1907, that through clearing house issues
we might and could arrest the awful contraction of credits which always forces many solvent
institutions banking and other busidess enterprises, to the wall. At a time when credits should
be expanded, they are contracted under our present rigid currency system, and one banker after
another will filch money from his neighbor.
In the panic of 1907 Chicago went one step further than New York, not only issuing
clearing house certificates for the first time, but clearing house notes as well, secured by
assets of its members deposited with the clearing house. They steadied the situation in
Chicago and throughout the state. That principle can be applied in meeting the annual
crop situation in providing an emergency circulation to be used in the event of a panic.
Panics should be prevented in our country as they are in Europe; where there is never such a
severe and sudden contraction of credits. In the county above Quincy, an agricultural community, the principal of clearing house issues was illustrated. During the panic of 1907 the
bankers in that county (they have no clearing house there) met and decided to protect each
other, preparing their cashier's checks and had them in readiness for circulation if necessary.
Clearing houses should be increased and brought into existence, one or more in every
state and territory of our country.
In Europe the territory is smaller. Our country is a vast one and in times of panics,
banks cannot do business through Washington, certainly not readily, with a circulation
secured by government bonds.
The clearing houses are in advance of the general and state governments in the matter
of protecting depositors by independent examination of the condition of its members, whether
National or State banks, Trust Companies or private banks. The clearing houses of Chicago,
St. Joseph, Kansas City, I believe, and perhaps Omaha, make, without notice to their members, independent examinations if for any reason they think it best to do so. Under the laws
of Illinois, private banks are not subject to examination, but as stated before, if a private
banker is a member of the Chicago Clearing House and if for any reason the members of the

Or




Clearing House wish to examine that bank, they will do so and without notice. Therein,
gentlemen, lies, in the strict impartial examination of our banks, a security even beyond that
of the examinations under national bank statutes, and the state banking department. If we
want to meet the untenable proposition of guaranteed bank deposits we must develop and
carry out in our clearing house organizations, regulations which are stricter than those
required by the government or state administration and not have it understood that a young
state, namely Oklahoma, is the only state in the Union on the right track.
Let me recall how the clearing house of Chicago met the situation when suspicion \
rested upon the Walsh banks, the Chicago National and the affiiliated banks, the Trust
Company and the Savings Bank. It was Sunday afternoon when those virile strong bankers
of Chicago met and declared that on Monday morning it should be annouuced that those
institutions would be liquidated, and the associated banks through the clearing house would
pay every last dollar of their deposits. This action prevented a panic in Chicago.
What helped to bring on the panic of 1907? The knowledge that Heintze was trying
to corner the copper of the world, that Morse and others had secured control of a chain of
banks. It was then that such men as J. P. Morgan and others rose up like lions and asked
for the resignations of officials and directors, and the men who had disobeyed the laws of the
country in the administration of their banks. That created alarm, and within a few
days forty-two millions were taken from two banks, the Trust Company on Wall Street, and
the Knickerbocker on Fifth Avenue. The one hundred millions in gold brought from
England might have been but a drop in the bucket, if Morgan had not called the bankers
together and assessed them for certain amounts to steady the market and monetary conditions.
Now, Mr. Chairman, if the members of the convention want to he convinced or listen
to a few words about the cost to the country of our present rigid currency system and what
the government issues have cost, I can in a short time make some observations which I think
bear upon the necessity of a change, the possibility of clearing houses incorporated under
Federal Law and combining all the banking interests, meeting the wants of the country.
Shall I proceed for five minutes? (Cries of "go on".)
In yesterday's Tribune their correspondent "Raymond", in his letter, writes as follows:
"Now, according to the computations of the treasury department, if the greenbacks
January 1, 1879, had been funded into four per cent, thirty-year bonds and cancelled, the
total cost to the government for both principal and interest up to July 1, 1907, would have
been $741,897,340. They were not refunded, but it has been necessary to borrow money
from time to time and they have been redeemed in gold over and over again, at a ruinous
sacrifice, only to be reissued.
The result is, according to the treasury statement, that the cost of the greenbacks up
to July 1, 1907, has actually been $1,081,881,562. It will thus be seen that the difference
between the actual cost and the principal and interest if they had been converted into bonds,
amounts to the enormous sum of $339,984,222."
I venture to say that if Hugh McCullough, Lyman J. Gage, or Franklin MacVeagh
had been secretary of the treasury at the close of the civil war, in place of George S. Boutwell,
who was not a practical banker, they would have used the great surplus resulting from the
internal revenue tax, tax on income, stamp and other war taxes, in redeeming the demand




issues of the government, instead of buying bonds. Our debt was over three billions at the
time. It is now 48 years since the breaking out of the civil war, which brought into existence,
after a long deliberation on the part of Secretary Chase and other statesmen, the issue of
treasury notes after repealing the law permitting state bank issues.
The war was thus conducted on a depreciated paper basis rather than on a specie basis
as England has conducted its wars for over one hundred years. Our own statesmen well
knew that paper issues were a menace to stable financial conditions. They have been a
menace from that time to the present. The Congress of the United States failed to make
provision for the redemption of these issues and has not permitted their redemption to fall
below three hundred millions. Later on a gold reserve of one hundred and fifty millions was
carried in the Treasury against these issues. Congress limited the redemption of national
bank notes to only three million dollars per month. Recently this limit has been increased
to six million dollars per month. This has resulted in an inflation of the currency and great
speculations and the demand issues of the Government have never been paid but are still outstanding at an expense to the Government as well as the people. In the early '70s an inflation of the currency by a further issue of greenbacks was demanded by a large and strong
political party. An inflation bill passed Congress. General Grant vetoed this inflation
measure—the most important act of his civil administration. After Congress had passed a
bill for the resumption of specie payments in 1879, a bill was introduced later on, to repeal
the resumption act. Since then one large party in this country was fairly hypnotized with
the idea of silver issues.
We now have about one billion dollars of treasury notes, silver and silver certificates
kept at par, simply by credit of the Government, fiat money, silver, and silver certificates.
The demand obligations should be retired. Every dollar of currency issued should be issued
on a business transaction, and the sole and entire currency issue throughout our country
should be by banks or through clearing house associations, incorporated under a federal law.
Incorporate your voluntary clearing houses under a federal law and let them do by authority
of law what they now do by voluntary agreements. If the governm,mt will not give them
permission, we shall have to do as we have done in t he past, use clearing houses ouside of
the law in steadying the situation.
I have taken up enough of your time hut I have made observations so that when the
matter of currency legislation is under discussion you can decide whether currency shall he
issued solely by national banks and through clearing house associations incorporated under a
Federal Law, a central bank, or something else. I do not speak affirmatively, I speak suggestively, that if it is not to he a central bank, certainly we ought not to go on as we are at
present
Now, as a practical question, how long would it take you and me in our own localities
under the operation of the clearing house to judge the value of the assets which banks would
deposit in securing Clearing House circulation? Can you get a small number of men in
Washington to pass upon the value of bank assets which should be used in addition to
deposits of gold, to secure a circulation which should have provisions for enforced periodical
redemption?
I thank you for your attention.
NOTE-If Clearing Houses had the legal right to issue currency to meet the annual crop
movement, or to prevent a panic, or meet any emergency which might arrise at such time, it
would help to equalize rates of interest throughout the country and lessen speculative transactions on the Exchanges.

„

•
•

A Momentous Question:

SHALL

WE

MONETIZE

LAND VALUES?


http://fraser.stlouisfed.org/
Federal.4
Reserve Bank of St. Louis

tPrftrnInr,

4.4b,

A PLEA FOR RATIONAL MONEY.
The Continuous Prosperity League of The
U. S. Urges the Adoption of the Holden
Currency System, Namely: The
Monetization of Land Values.
To American Electors:
Reflection justifies the declaration that the failure of enlightened nations to provide themselves with a medium for exchanging
the products of labor without loss or hindrance; that is to say:
with a public circulating medium equal to the requirements of
business; is, beyond question, the most singular fact attending
the growth of the human understanding, or the development of
our civilization. Investigation discloses that the baneful effect
of an insufficient money upon the destiny of mankind is beyond
oomputation.
Throughout the civilized world money is, and ever has been,
an article of traffic, as though it were a commodity. For centuries the usurer has experienced no difficulty in exacting from the
followers of useful pursuits a form of tribute, called -interest,"
for the use of an available circulating medium.
Not only do the thoughtless millions literally impoverish
themselves by paying tribute for the use of eutifency, but
the
currency for which they pay tribute as individuals is the identical currency they collectively create at will, and issue gratis,
to
the financiers from whom they borrow it!
That society in the present stage of civilization continues to
pay interest for the use of an exchange medium, without
protest,
is conclusive evidence of an astounding fact, namely:
That the most enlightened members of the human family
,
almost without exception, are profoundly ignorant •kf the
true character of that important instrument of commer
ce
known as- Aft1N14.:Y.




To justify this significant assertion is not a
difficult task.
Indeed, it is justified by the fact that the industr
ial and professional classes not only pay "interest" for the use
of a legal-tender
circulating medium, but they pay this tribute
for the use of
legal-tender paper as willingly as for the use
of legal-tender
specie.
There is, therefore, no gainsaying the fact that
men are rare
who perceive the absurdity of the practice of
compensating the
individual for the tire of an exchange medium-th
e folly of which
is exposed by the following reasoning:
Money is not a natural, but an artificial commod
ity. It is
a legal-tender symbol: a paper or metalli
c device, created by
govet nmcnt, and issued gratis against individ
ual wealth for the
convenience of the recipient and for the benefit
of society to
whom it is a necessity.
All existing money was gratuitously issued.
Under our fiscal
system the money symbol is issued to the recipie
nt gratis against
bullion values. It is issued gratis against certain
bond values.
And it should, and it wl11 be issued gratis against
land values so
soon as a majority of American electors shall
intelligently demand
it
The money symEol being a necessity in our
daily business
transactions, financial difficulties among the
many, and AN
IINJUST DIVISION OF PRODUCT, unavoid
ably follow the
failure of government to provide this essential
in sufficient volume.
Query:-

What is a -sufficient" volume of money?

The sufficiency or insufficiency of a nation's
currency is evidenced by the presence or absence of an interes
t charge for its
use. A circulating medium commands -int
erest" in the market
for the single reason that the gratuitous
issue is less than the
amount required for business purposes.
That poverty among the industrious is due
to an insufficient
public currency is proven by the fact that we
pay yearly for the
use of a symbol for facilitating exchanges
many millions of dollars
in excess of the annual increase in nationa
l wealth as shown by
the census.

,
The interest we pay directly as borrowers is but ft fraction of
what we pay indirectly as consumers—interest kirrig an ingredient in the price of every article we eat and wear and use.
Thus the profits of industry now go to the interest-taker for the
use of an exchange medium—and why? Because the government's
issue of the money symbol is unwisely restricted by law to the
owners of two favored forms of wealth, namely, bullion and national bonds.

THE TRUTH IS:
We are not yet wise enough to know how to avoid the exactions of the usurer. With the acquisition of this knowledge,
poverty among the industrious will disappear. We are a nation
of perpetual tribute-payers, because—
We assume and believe that interest fer the
gitimate compensation for the use of capital!

use

of money is le-

This is an unwaranted assumption. A fatal error.
MONEY IS NOT CAPITAL. It is a symbol — the legalized
equivalent of capital:a fine but vital distinction: a vital distinction
because: if money is capital, then interest is justifiable, for capital is the product of labor. On the other hand, if money is but
an invention for paying debts, which also serves as a circulation
or exchange medium for that reason—because it will pay debts—
then interest is tribute, because money is a creation of law—made
plentiful or scarce at the pleasure of the government—a convenience which commands "interest" in the market because of its
inaccessibility and insufficiency.

WHAT WE NEED TO KNOW IS:
full legal-terder paper is real money. We need to
understand that wealth (any product of labor) may be monetized
by the certificate process as effectually as gold is monetized by
the coinage process. We need to perceive that a man's land may
be utilized for currency purposes as well as his gold, his silver, or
his bonds. We need to realize that there need be no dearth of
money where there is no dearth of wealth because money is
iminetized wealth.

That




it does
While the proposition to monetize land values is novel,
principle of our present currency system. It
not violate
wealth
merely extends the monetizing privilege to a form of
heretofore, has been denied the right, but which, because
which,
of its sufficiency, is better adapted to serve as a basis for the issue
of legal-tender paper than either bullion or U. S. bonds which
a
now exclusively enjoy the monetizing privilege. It is but
n of certain enduring economic truths, to-wit:further realizatio

ale

1. Money is an authorized symbol of property value—nothing
more.
of
2. A nation's money supply should equal the needs
business.
legal3. To ''coin," to "issue" and to "regulate" the issue of
currency is a sovereign power.
tender
a
Therefore, it is the paramount duty of Congress to provide
sufficiency of legal-tender currency which, under proper regulais to
tions, shall be as accessible to the users of money as it now
the lenders of money.
is
While a charge for the use of property is justifiable, there
the owners of property to pay the individno justice in requiring
to
ual for the temporary use of its symbol--a symbol essential
ble device created by society without
commerce: an indispensa
cost.
The monetization (if land values by the certificate process is a
just, safe, and feasible way to provide a sufficient national currency.
It is a method of issuing money which will gradually and
without disturbance eliminate the interest factorfrom commerce.
It will make 50 per cent of the nation's wealth available for
currency purposes instead of 3 per cent as provided by our
present policy, and thus free labor from the impoverishing exactions of the usurer.
It is not class legislation because the act—by providing an
adequate volume—will reduce the cost of currency to all citizenalike.
TI-ie monetization of land values will not disturb prices because the increase in the currency will not augment the actual
circulation which now consists of money and various credit
devices. It will simply substitute national currency for the expensive bank-credit expedient which comprises four-fifths of our
iwesent circulating medium. It will improve our facilities for
obtaining legal-tender in exchange for security without injury to
anyone.

Full legal-tender currency being at all times readily convertible into the various forms of wealth, it is evident than such a
currency—a convertible currency—need be redeemed in no other
manner than a nation redeems its coin, by honoring it; by receiving it in payment of debts, taxes, wages, etc.
The monetization of land values —by providing an adequate
volume of money—will check, if it will not altogether reverse, the
present tendency to abandon land culture for the employments
and diversions of the city. It will add new dignity and honor to
agricultural pursuits; stimulate, encourage and develop new
enterprises; greatly reduce our rapidly increasing dependent
class; render all forms of industry more profitable, permanent.
and attractive; restore purchasing-power to the many; and constitute a perpetual guaranty of the stability and permanence of
our free institutions.
Finally, the monetization of land values will rid us of an
interest-yielding bank-credit circulation; of A profit-bearing exchange medium: the stealthy despoiler of industry—the handicap of enterprise—the progenitor of debt—the unrecognized cause
of poverty.
Mature reflection justifies the conclusion that the act will
rid the world of USURY— "the thrall of civilization that keeps
nine of every ten men poor."
Realizing the blighting effect upon our fortunes of an
interest bearing exchange medium,we earnestly urge Congress to
so amend our monetizing law as to make national currency as accessible to the owner of productive real estate as it now is to the
owner of national bonds.
When we shall have thus provided ourselves with a le ga!tender currency equal to our needs, we will have avoided the
demands of the usurer, and justified Jefferson's confidence in
man's capacity for self-government.
THE CONTINUOUS PROSPERITY LEAGUE OF THE U. S.
CHAS. M. BICE, Pres't.
ALBERT TALMON MORGAN. Seey.
Isenver, Colo, January 1907.




"THE DISTURBING FACTOR IN HUMAN
AFFAIRS"
is the suggestive title of a 25c pamphlet
of which an American
economist, James D. Holden, of Denver, is the
author.
The modern student of money will take up
this book with
some misgivings, at first, suspecting that he
is being inveigled
into "the latest populistic screed" about
money. As he reads on,
however, he will find that Mr. Holden is not "a
fiat money monomaniac;" that he is not only an original writer,
but, also, that
his arguments for a radical change in our
monetary system are
conclusive on two points at least, viz: That men
are rare who can
afford to be without a knowledge of what it really
is that constitutes the disturbing factor in human affairs;
also that in an original and conclusive argument he demonstr
ates with invincible
logic that the cause of poverty among an
industrious producing
people is the ignorance of mankind generally
of money—its origin.
function, and utility as the commanding factor
in our complex
civilization.
But Mr. Holden does not stop here. On the
contrary he proceeds with an inexorable pertinacity to lay bare
the fact that ignorance is alone responsible for any lack of a circulati
ng medium
equal to the demands of but;ines, aod that
this igni wane..
a
,
common among the rich as among the poor.
Unlike all other writers upon this fascinating
subject, Mr.
Holden proposes a remedy that he is able to
defend, and does
defend with the same convincing power, and
demonstrates conclusively that the adoption of his remedy will
enable us to get rid
of interest for the use of money, and
thus rid ourselves of that
which keeps nine of every ten men p(x)r.

READER
If you favor the proposal to monetize land values—notify
/our congressman of the fact. Send him this leaflet. He is the
custodian of your political power. He draws a salary for serving
you. Do not wait for him to anticipate your wishes. Tell him
what you want.

If you are in doubt as to the wisdom of the proposal, secure a
copy of the Holden argument. Study it. Inform yourself as
to the merit and possibilities of this simple remedy for poverty.
You cannot afford to neglect this duty. The argument will enlighten you. It is a revelation. It anticipates and answers your
every objection. Its teachings favor your interests. Relief is
possible through individual action along the lines suggested.
It will come in no other way.

The result you crave will follow the dissemination of thin
wholesome idea!

Help disseminate it! Do your part! It will bring results.'
If you can afford it, reprint this document and distribute it
far and near among your relatives and friends! Do it now! It
will PAY! It is the way out!

The millions are poor because ignorant of the nature of
money!




(Reprinted from THE AM Eli 1(

N

Itrvirw or ItEvIEW, January, 19064.)
4,

CURRENCY REFORM: A CENTRAL BANK.
BY ROBERT EMMETT IRETON.
.\%sociatt. Editor, THE WALL STREET SU M MARY, New York.
ANKERS, business men, and legislators Fowler and American Bankers' plans advoall agree that our bond-secured cur- cate emergency credit currency. The Treat
rency system is defective, unscientific, and in- plan, a bond-secured emergency note syselastic, yet they are unable to unite on a sub- tem, and the Shaw proposal emergency cirstitute possessing the simple, primary essen- culation. These are the best-known and
tials of safety and elasticity. That we are most widely-advocated measures, and briefly
committed to-day to a currency system which epitomized are:
owes its inception to the necessity of finding
American Bankers' Plan: Providing for an
a market for Government bonds many years "emergency" credit currency by permitting any
ago, is due principally to the apparently ir- national bank, actually engaged for one year,
reconcilable conflict in banking opinion. This and with a surplus of 20 per cent. of its capital,
Congress has been quick to use as a foil to to issue additional notes without security equal
to 40 per cent. of its bond-secured
on,
defeat almost every request for remedial leg- subject to a tax of 2T/2 per cent. per circulation
annum
islation. It is a patent fact that bankers are the average amount outstanding; and a further
not in accord on this issue and that their amount, equal to 12TA per cent, of its capital,
views are strangely divergent. Indeed, in subject to a tax of 5 per cent., etc.
Central Bank: Providin for a central bank
many cases, they are confused and elemen- of issue, with capital of notgless than $93,000,000,
tary, and not a few bankers admit their in- to carry a large reserve of gold, and act as
custodian of the Government's metallic reserves,
ability to discuss the issue at all.
as

B

JOINT CURRENCY COMMISSION.

This tends to explain the fact that, practically, the first concrete effort of our bankers to amend our currency system dates only
from 1906, when a currency commission, consisting of appointees of the American Bankers' Association and of the New York Chamber of Commerce, met in Washington and
formulated a plan for presentation to Congress in December of that year. The measure failed to pass, but the incident marks the
beginning of unity and concurrence on this
issue among our financiers. At that, the plan
adopted did not represent the views of every
banker in this country, nor does it to-day;
but it carried with it the prestige of the only
representative organization of the nation's
bankers, and as such compelled the attention
of Congress. That body, with characteristic
resiliency, passed the Aldrich "relief" bill
and shelved the emergency currency plan of
the commission.
BEST-KNOWN RELIEF PLANS.

Other suggestions for monetary reform of
recent date are those of the New York
Chamber of Commerce, former Secretary of
the Treasury Leslie M. Shaw, United States
Treasurer Charles H. Treat, and Representative Charles N. Fowler. The Chamber of
Commerce favors a central bank, and, as an
alternative, a plan for asset currency. The




its agent in redeeming all kinds of money, as
its receiving and distributing agent, doing at its
branches the work now done at the Sub-Treasuries, and to deal exclusively with banks. The
plan provides for stock ownership of this bank
in part by other banks and in part by the Government, but vests its management exclusively
in the Government.
Chamber of Commerce: Providing for the issuance of additional notes equal to 35 per cent.
of its capital by any national bank whose bondsecured circulation equals 50 per cent, of its
capital stock, subject to a graduated tax of from
2 per cent. to 6 per cent., according to the
amount of additional notes taken out.
Treat: Providing for a bond-secured emergency note system, in contradistinction to a
credit currency system. Under this plan national banks would be empowered to issue 50
per cent, of their circulating notes on security
other than Government bonds, and the same
would be retired in four, six, and eight months
from September T of each year.
Fowler: Providing for a credit-currency system through permitting national banks to convert bank-book credits, or deposits subject to
check, into bank-note credits, or credit currency.
Shaw : Providing for "emergency" circulation by national banks up to 50 per cent, of their
capital without a deposit to secure its redemption, but subject to a tax of 5 per cent.
CRISIS INTENSIFIES REMEDIAL DEMAND.

Since the fall of 1906 the question of currency reform has been the leading subject
for discussion in bankers' conventions. In
the majority of cases when prominent financiers delivered public addresses throughout
the country the same issue was selected.
Magazines and newspapers in the same period

36

TM: AMERICAN REVIEW OF REVIEWS.

have given generous space to this vitally important issue, and even some Senators and
Representatives had been heard to concur in
the general demand for currency remedial
legislation. All this, however, is as nothing compared to the effect of last NONTMbees distressing.experiences. Bad banking
and a defective currency system were largely
responsible for our crisis, if not its precipitating causes; hence, to-day, from every section
of this country the demand is universal for
legislation that ‘vill reduce to a minimum
the dangers of the prevailing system and give
us instead an elastic and liquid currency.
President Roosevelt has urged upon Congress its duty in this respect, and has assured
us that we may expect a permanent and substantial measure of relief.
So we find the people and the press practically a unit on the question of currency
amendment, but not certain, by any means,
of the form of the appropriate remedy.
Bankers profess to be equally perplexed, and
it is entirely probable that Congressional relief, following the line of least resistance,
will come in the shape of another compromise
and satisfy none. Of the plans outlined, the
American Bankers', Fowler, and Chamber of
Commerce recommendations seek to preserve
our present bond-secured bank notes, and
would extend circulation through the medium of bank-credit currency in order to
provide the needed elasticity. Collateral
security for such note issues is not required
under any of these plans, but taxation is relied on to force their retirement when not
longer needed, and in case of a failure of a
national bank such note issues would be redeemed by the United States Trea,ur\-,
which would recoup itself, in turn, from the
redemption fund created by the tax imposed on such circulation, and from the assets
of the failed bank. The Shaw proposal
favor, emergency circulation unsecured but
heavily taxed, and the Treat plan (an
adaptation of an idea of former Secretary of
,
the Trea ury Chase) opposes credit or emergency currency, and would establish a bondsecured emergency note system. The ultraconservatives favor the Treat suggestion.
Diametrically opposite to all of these is
that of the central hank. Tentatively offered
by the Chamber of Commerce, in the fall of
1906, as a probable remedy for our currency
dilemma, it received but passing notice. Indeed, its own advocates had an alternative,
aforementioned, at hand when they proposel
it. Nevertheless, the increasing discussion of




our financial problem brought it to the attention of the public, particularly in the last
three months, and tram prominent bankers
and certain of our most influential newspapers unhesitatingly endorse it. Perhaps
some idea of its strength may be gathered
from the following demonstration.
RESULTS OF A CURRENCY POLL.

Within one month, the writer personally
conducted a currency poll of the presidents
and cashiers of leading banks throughout the
country, for a leading financial newspaper.
New York City was not included.. A ballot
was prepared containing an outline of the
plans aforementioned and mailed to several
hundred bankers, with the request that they
indicate their preference, assign their reasons and return to sender. The results were
most surprising and unexpected. Replies
were received from almost 400 voters in
thirty-three States. The Central Bank of
Issue plan led the poll, receiving 33 per cent.
of all the votes cast, and the plan of the
American Bankers was second, having been
favored by 29 per cent. of those balloting.
The Shaw, Treat, Chamber of Commerce,
and Fowler plans followed in the order
named, and, combined, did not equal the
vote of either of the dominant recommendations. In addition, it is worthy of mention
that fourteen voters rejected all plans and
sixteen submitted original solutions for this
perplexing. issue.
The voters were representative men. and
the vote as a whole may be assumed to be a
fair reflex of banking opinion on currency
reform. It was unquestionably the only vote
ever taken on all the current plans outlined,
and probably the heaviest ever recorded in
favor of a currency measure. It is asseverated
by those present and participating, that the
resolutions on currency reform passed in the
Atlantic City convention of the American
Bankers' Association last year were put to a
vote when there were not more than too
delegates present and voting. The poll referred to quadrupled that result and it can
be claimed, moreover, that never in a convention was the same opportunity for deliberation and individual expression of opinion given a hanker as in the privacy of his
office when con:iderini, the newspaper ballot
aforesaid. From the results of this poll two
facts are clear: The marvelous spread of
sentiment in favor of the central bank and
consequent recession of the American Bankers' plan, and the deeph rooted divergence

CURRENCY REFORM: A CENTRAL BANK.

37

of opinion among bankers. The fact that all the other banks, thus meeting every defourteen should reject all six plans, anti like- mand, extraordinary and otherwise.
wise that sixteen should submit new plans
CLEARING-HOUSE CERTIFICATES INADEshows the confusion and uncertainty, not to
QUITE
say empiricism, prevalent in the ranks of our
financial fraternity.
Clearing-house certificates are our only
recourse under present conditions, but howCENTRAL BANK'S ADVANTAGES.
ever serviceable to banks, as a means of 4Emergency currency based solely on a high fense in a currency famine, they lead to
interest rate is undesirable, and, at best, a chaos in business. Domestic exchange is
palliative. What we want is an issuance of halted. Collections and remittances cease.
properly protected bank-credit notes to insure Business men can neither make remittances
elasticity; rediscounting, facilities; control of nor avail themselves of their bank accounts,
the discount rate; and the prevention of soar- and are forced to suspend through no fault
ing interest rates. These, and more, a cen- of their own, but through the total insuffitral bank will furnish. Such an institution ciency of our financial machinery, which
would deal exclusively with banks, receive proves inadequate to the strain to which it
and disburse Government moneys, act as is subjected. What is the inevitable result?
Government agents in reducing paper money, Depression, blighting and lingering, which
issue currency, and rediscount for banks. It must continue to visit us so long as the
would serve as a buttress for the national Government takes no step to prevent panics,
banks and as a sanctuary in times of panic. but leaves to the bankers themselves the task
It would prevent the hoarding of Govern- of devising ways and means to arrest them
ment money in the Treasury vaults by act- as often as they occur. Were a central bank
ing, as its custodian, and it would terminate established the case would he different. Bankthe periodic appeals of the money market to credit notes of such an institution, responsive
the Treasury for relief. By dividing its to the demands of business, expanding and
stock among the national banks of the coun- contracting readily, would replace the certry in proportion to their capital its relation tificates aforementioned, insuring steadiness
to each would be uniform, and through the and safety to the merchant, the depositor,
constant changing of its paper its assets and the banker alike.
would be available always and its assistance
Every country in Europe has a central
to business constant. Moreover, it would bank, and the Bank of England, Bank of
eliminate the Sub-Treasury system, and pre- France, and Imperial Bank of Germany, or
vent inflation and contraction, liable to fol- Reichsbank, are pertinent illustrations of
low the Government's disbursements and worth and service. Japan copied our system
collections, by keeping the nation's money at thirty-five years ago, but later discarded it
for the central bank. We alone among
the disposal of trade and commerce.
We have no banking system to-day. Each highly civilized peopl.es have no such insti•
bank is an independent unit, playing a `.` lone tution, and to profound political prejudice,
hand " in the game of finance, and with that is absolutely without foundation, must
never a thought of its relation to the system responsibility therefor be ascribed. It is a
as a whole. This may lead to disaster. melancholy commentary on our character
When banks realize that suspicion is lurking and an admission of our inefficiency, that we
in the public mind, they become suspicious are unable to adopt for our financial ends a
of one another and hurriedly attempt to method so helpful to other countries. A hill
amass reserves. This was the case last No- for a central bank is now before Congress,
vember and led to gigantic hoarding by the having been introduced in the Senate by
banks, to the utter paralysis and confusion Senator liansbrough, and this may force the
of business and banking. Under a central issue. Certain it is,—as shown by the
hank this would not happen, for the latter, currency poll above referred to,—the trapossessing the right to issue credit bank ditional prejudice of the Jacksonian era
notes, could regulate its issuance automatic- against a central hank is disappearing with
ally and precisely through its relations with the years.




•

14antittoti & Tuttuittglittin
BANKERS

OBJECTIONS TO THE ALDRICH BILL
MY DEAR SIR:
I wish to call your attention to a few of the glaring defects in the
"Senate," or
"Aldrich Bill" that is now proposed as a panacea for panics.
FIRsT—It will discredit any National Bank putting out such notes or even
paying them out over
their counters.
SECOND—This bill will not expand and keep pace with the growth
and development of the
country.
THIRD It would give us at this time only $139,070,413.11 additional or
emergency circulation instead of $250,000,000.00, as its authors announce, tying up an additi
onal reserve with the 6,000
National Banks that can never issue these notes to the amount of $110,9
29,586.86, depriving them and
their customers of credits amounting to $554.647,934.30 and as the busine
ss and commercial wealth
of the country increases the amount of emergency circulation benefits will
decrease.
FouRTH —The time such notes shall be issued and the amount of issue
is too great a responsibility to be placed on any one man.
FIFTH The securities to be taken at 75 per cent. of their market value
as a basis for circulation,
and in case a bank should fail and the government not realize 75 per cent.
of the value of the securities, which being a certain class of designated securities bearing a
higher rate of interest would
command a greater premium and be subject to a greater shrinkage
in value during a panic. The
deficit would be a first lien upon the assets of the bank to the detriment
of its creditors.
SIXTH Under this bill a bank with a capital of $10,000,000.00, and a surplu
s of $10,000,000.00, may
be permitted to issue $20,000,000.00 of Aldrich notes and $10,000,000.
00 of bond secured notes by depositing the amount of its capital in United States Bonds at a premium of
4 per cent. or $400,000.00
and $26,666,666.60 of other securities or $27,066,666.66 taken from the
the assets of the bank. Would
this inspire public confidence in the bank issuing the 6 per cent. Aldrich
notes which under the most
favorable circumstances cannot be issued at a less cost than 8 per cent?
SEVENTH -Under Section 4 of this bill the tax received by the Unite
d States Treasury on the
i^ldriCh notes is not to be used as a guarantee fund to redeem these notes,
as many are led to believe,
but is for the redemption of United States and other notes.
EIGHTH—Under Section 9 of this bill it may be so construed that bond
secured notes may be retired before the other notes if for any reason the Comptroller of
Currency or Secretary of the
Treasury might deem it advisable. This should not be permitted.
NINTH There is danger of inflation through carelessness of redemption
of the Aldrich notes by
the payment into the treasury of lawful money by the banks wishing to
retire these notes and this
money deposited with some depository bank pending the return of these
notes. Such money should
be kept in the United states Treasury.
TENTH The country banks have been criticised for hoarding cash
and yet under Section 8 of
this bill they are required to increase their legal reserve on hand from
two-fifths to two-thirds of
of 15 per cent of their deposits, thus locking $110,929,586.86 additional
money.
ELEVENTH — The security for the Aldrich notes is United States bonds
and certificates, railroad
bonds (not street railway) paying 1 per cent. on entire capital for five
years past, City or County
bonds of communities 15 years in existence that have not defaulted for ten
years in the payment of
principal or interest, with a population of 20,000 as per last census.
Banks cannot be expected to carry U. S. bonds, if this measure becom
es a law, as they will not
do it now. Had they done so we would have more circulation than this
bill provides for.
I have no means of knowing, but dare say that there are not a half dozen
railroads in the U. S.
whose bonds could be accepted under this measure.




[2]
There are but 232 cities in the United States with a population, according to the last census, of
20,000 inhabitants or over, and how many of that may have defaulted in payment of either principal
or interest during the past ten years we have no means of knowing. Under this measure there are
13 states and territories that do not have a city of 20,000 in them, and the following is the number
of such cities in each state:
2
North Carolina
5
3
Kentucky
Alabama
Ohio
15
1
Louisiana
1
Arkansas.
Oregon
1
3
5
Maine
California
20
Pennsylvania
1
Maryland
3
Colorado
4
28
Rhode Island
7
Massachusetts
Connecticut
2
South Carolina
9
Michigan
1
Delaware
4
Tennessee
4
Minnesota
1
Dist. Columbia
7
Texas
5
Missouri
1
Florida
1
Utah
1
Montana
4
Georgia
6
Virginia
3
New Hampshire
12
Illinois
3
Washington
3
Nebraska
8
Indiana
1
West Virginia
15
New Jersey
10
Iowa
8
Wisconsin
20
New York
4
Kansas
232
After carefully considering this how many members of congress are there who have not a city •
in their district that could furnish such bonds, and why this discrimination against the smaller cities?
Why is this measure so drawn that only a limited few railroad securities are acceptable, and why are
the securities confined to such a limited list?
The securities required are such as are not carried by scarcely a bank of the country class, or
those required to carry a 15 per cent. reserve, and if this bill should become a law, instead of
being of any benefit tl them it would be a positive detriment as compared with the present
law, and instead of preventing a panic, when its provisions are understood, it would more likely
cause one, and leave the country banks entirely at the mercy of their customers with an additional
handicap in the way of a reserve and a surer chance for federal imprisonment for violation of the
National Banking Act.
If the members of congress have the interest of their constituents at heart, and their future, they
will vote NO on this measure, as its passage would be worse than no legislation.
Yours truly,
JOHN L. HAMILTON.




THE NATIONAL CITIZENS' LEAGUE
For the Promotion of a
Sound Banking System.
701THE EDITOR:
The accompannying news matter is sent you for publication not
.earlier than Monday, October 16.
THE NATIONAL CITIZENS' LEAGUE.




Straus Says People
Must Reform Banks
New York Merchant Believes Congress, Not Bankers, Should
Do Work.
TAKES ISSUE WITH J. J. HILL.
NATIONAL RESERVE ASSOCIATION, HE SAYS, MUST BE
KEPT OUT OF HANDS
OF
POLITICIANS
AND
WALL
STREET.
New York, Oct. 15.—"Mr. Hill of the
Great Northern Railway admits that we
have a panic-breeding banking system, but
he asserts that the Congress of the United
States has not the intelligence to work out
the reform that the business men of the
country are demanding. This, it seems to
me, is an astounding statement. I believe
the great majority of the people of this
country are ready to leave this vitally important, non-partisan work of reform with
Congress, confident that it will be performed for the good of all the people."
Isidor Straus, the big New York merchant, treasurer of the New York State
branch of the National Citizens' League,
thus answered James J. Hill's Springfield,
Ill., speech:
"A sound banking and currency system
is one of the foundations of national prosperity," continued Mr. Straus. "Mr. Hill
says we have an unsound system. But he
thinks it should be made sound by the
bankers, and not by the people through
their Representatives in Congress. If we
wait for the bankers to give us a modern
banking and currency system, we will have
another panic as disastrous as that of four
years ago this month.
"The millions of men who work in the
productive industries of this country,
whether as merchants, manufacturers,
farmers or wage-earners—the men who
have suffered from our panic-breeding
banking system—are going to demand that
this reform be effected by them and in
their interest, rather than by the bankers,
as Mr. Hill would have it.
"It is a problem that touches too closely
the welfare of every citizen to be left to
a few thousand bankers for settlement.
The fight for sound money was fought and
won by the people; so must be the fight
for sound credit. And I believe the bankers of the country are ready to take counsel
with business men."
Mr. Straus said he was glad to see a
man of Mr. Hill's great business ability
criticize the proposed plans for a co-operative banking association. Only by a frank
discussion, he said, could the reform he
effected for the best interests of the country. He agreed with some of Mr. Hill's
criticisms.
"Mr. Hill says a National Reserve Association would be a tine thing for the counL-fint froe from nolitics
•... :s

IPS




as Mr. Hill would have it.
"It is a problem that touches too closely
the welfare of every citizen to be left to
a few thousand bankers for settlement.
The fight for sound money was fought and
won by the people; so must be the fight
for sound credit. And I believe the bankers of the country are ready to take counsel
with business men."
Mr. Straus said he was glad to see a
man of Mr. Hill's great business ability
criticize the proposed plans for a co-operative banking association. Only by a frank
discussion, he said, could the reform be
effected for the best interests of the country. He agreed with some of Mr. Hill's
criticisms.
"Mr. Hill says a National Reserve Association would be a tine thing for the country if it could be kept free from politics
and ambitious financiers," he said. "I agree
with him but I believe that we will have
little difficulty in keeping dangerous influences out of such an association. The business men of the country, banded together
in the National Citizens' League, are going
to make a strenuous tight against any banking reform plan that does not eliminate
political and Wall Street control of the
credit machinery of the country. We all
know now that our present system encourages ambitious politicians and financiers to seek command of the credit
machinery. If we are going to prevent the
rise of a money trust in the United States,
we must reform our banking system."
Mr. Straus said we were far behind other
great commercial nations in banking and
currency.
"This is now the only country in the
world where they have money panics," he
said. "Do you know that the same conditions in this country as existed in Germany
in the past few weeks would have caused
a panic? A war scare swept over Europe.
French capital suddenly withdrew from
Germany. The Bank of Germany rapidly
increased its loans by $24o,000,000, and lost
at the same time $6o,000,000 cash. It met
the emergency by increasing its note issue
by $2oo,000,000. In the last week of September the Bank's available resources suffered the enormous loss of $200,000,000.
Here, in times of peace, we have panics resulting from a much less violent strain on
our banks. But Germany has had no panic
because she has a sound banking system.
"The United States ought to be the
credit center of the world. Instead, we
are years behind Europe, struggling along
with an archaic banking system."

THE . 7 1tIRENCY QUEsTioN.
Is the problem of a sound, honest, ever-stable currency
as
complex as "linztnciers "(!! I would make it appear? No, emphaticWhen "balance of trade"(so called) and other irrelevant
ally No
matters ad nau sea in which would-be financiers, either ignorantly
or wickedly, inject into the discussion of the Currency Question are
eliminated by the art of cancellation (wisely and honestly applied
as can be so quickly done with the inherit:thee problem lielow plain
people will understand t he highly imliort ant subject. readily and
t horoughly.
The subjoined simple suggestions present the true basis of a
sound, honest currency, a currency as nearly perfect as anything of
human devising can well be and as far superior to that which we now
have as direct sunlight is superior to the reflected light of the immn :
1st. National Governments
(ON LY and singly)have power to coin
money. Neither individuals nor corporations can co-operate in the
discharge of this highly import ant function not even in the slightest
degree. The act of coining under the laws, makes money a legal
tender within the National domain. Such money may be received
and paid out in other countries, of course, but its acceptance in cancellation of debt cannot be enforced by the Government which coined
it, not even so far as one hundred feet outside of its own domain. This
has always been t he case. It is not desirable to have it otherwise.
2nd. Money coined by a Government cannot be tittered (without
fraud) for any purpose whatsoever, other than in payment of obligations incurred by itself.
3rd. So long as Government finds it necessary to levy taxes it
can never justly lend money (or its credit in any form) to any individual I a- private corporation whatsoever. It can, however, justly
disburse money. largely. for genuine public improvements. throughout the realm.
4th. In practice, paper has been found thoroughly-well adapted
for use in coining money. The volume of such money, when uttered
in abundance, may find automatic (hence, perfect adjustment in
exact accordance with t he "Currency Needs of Commerce." through
free interchangeability at holder's option (preferably) in sums of one
thousand dollars and multiples I hereof with bonds of the Government such bonds bearin Lr an equitable rate of interest, say, 3 or
cents per day on each 11,000.
Unless t he volume of currency is made automatically adjustable.
as suggest ed to meet the requirements of business every day, the adjust men t thereof cannot lx suit able for a civilized people. The diet um s,
of any (self-appointed, or otherwise appointed) thousand or ten
thousand men of the United States regarding the volume of currency actually outstanding and t he per capita currency needs of
the other 84,990,001) deserve NO consideration.
I Tnt il each one of t he $4,490.000 is permit t ed to decide whet her to
hold currency or a bond of the li,,vernment in lieu of currency at his
pleasure, currency levislat ion will remain inexcusably fault y and
positively unworthy of a civilized people.

HOW MUCH DID THE DISSOLUTE SON INHERIT?
A certain man had four sons and three charming(Ling hters. While this man was not so rich as Andrew
Carnegie, he was very wealthy. One of the son.
was dissolute and reckless. In many ways this son



brought disgrace upon the family. Finally the father,
becoming exceedingly angry, disowned the dissolute
son. In his will the father bequeathed to his son an
amount equal(in dollars)to the product of the following
figures when duly multiplied :-16 x 7 x ,'„ x 1. x
x .01 x
x
x
x
1.25 x 8 x 2 x .0625 x 100 x
inheritance. The inheritance — ?
.125 x 1 = The

ABSURD?
Yes, the foregoing as a mere statement of a simple
fact is absurd - -very absurd in form and detail. It is almost as absurd by way of circumlocution as the twaddle
some men utter regarding the Currency Question. And
yet, a valuable hint lies underneath it which a mathematical solution should bring to the surface. Children
12 to 15 years of age, who have wrestled, successfully,
with problems involving the multiplication of fractions,
can readily dispose of the absurdities by the art of cancellation and thus accurately determine the amount of
the bequest—after a very few moments consideration.
i A 0.

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N. Y. MERCANTILE JOURNAL. JULY 3.

«v .7. 1 2 .

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1110111.)41)a)11 '41144.1.1S .101 p00,4

V=
.4.e,

TO/THE

TOR:

ide, publi ed in THE V4JL ST FT SU MARY7i\
In he following
rationl f confi4nye
firadual r
al suggesti4looking to thei,
s believ t be a pra
Should yci use any portion of it, or c ment ohe id 'M
les is ma
busin
E ALL
giver-in
ctions% to 4e marke copy of your. 'papuitt sent t
SU
1<
Voztc,,•-,
0 one \§treet,
Y,- 4

Publish Bank Investments
In commenting on the necessity for reform
in certain matters closely related to speculation
in our issue of yesterday, we emphasized the
urgency of exacting from State and National
banks full reports of the securities in which
they invest to the end that the people might
be advised of their transactions and be furnished with the same information that at present is only open to the bank examiners in the
case of State and National banks. We pointed
out that in this State savings banks and
fiduciary institutions were obligated to furnish
such information to the State Superintendent
of Banking, and we recommended the extension
of that rule to State and National banks, in
the interest of the institutions and their depositors as well as in the interests of the public at
large.
We believe that the extension of such a policy to the banks in question would be of the
greatest service to such institutions and would
accomplish more in regard to a restoration of
confidence and public reassurance than ally of
the projected reforms that have come under
our notice. One of these aims to secure a
Governmental guarantee of National bank deposits, and this suggestion has been amended
to include State guarantees for deposited funds
in State banks. Obviously these proposals are
not tenable. Aside from the undesirability of
making our National and State governments
rartners in our banking undertakings. the element of paternalism involved therein is decidedly opposed to the spirit of our American institutions. Indeed, as a corrective or disciplinary measure for those entrusted with a
bank's management the guarantee proposal is
entirely inadequate.
This is the root of the matter. If a bank's,
like an individual's, investments are sound, its
successful operation is measurably assured. If
on the other hand, its holdings are speculative
in character, and uncertain in value, its service
to the community is greatly impaired and its
stability weakened. We know full well from
the revelations of last October in this city the
los.ies incurred through ill-advised investment
by certain of our banks—investment which, in
part.cular cases, was absolutely indefensible.
If anything could emphasize the pecessity for
a reform such as we are endeavoring- to point
out, the experiences of the recent panic should
do so potentially. Bankers from the very nature of the trust reposed in them should be
As a
held to the strictest accountability.




class, they are men of scruple and honor, but
likc every other line of human endeavor banking is not without its sordid side, its weaklings,
its speculators.
While left to themselves to deal with a bank's
investment funds the latter invariably exercise
poor judgment, and not Infrequently yield to
So, we find in the
downright temptation.
bank's strong box when the crash comes and
the nOtice of suspension is tacked on the front
door, worthless paper and wildcat securities,
where there should have been income yielding
certificates. In many cases we find the -paper"
of the bank president or securities of properties controlled by himself or his "friends." This
is particularly true of "one-man" banks and
bank "chains." For illustration: Devlin and
Walsh in the West; Hipple in Philadelphia
and lleinze and Morse in this city. To what
txtent the conditions of our present system
may have attributed to the downfall of these
men, as well as to the institutions wrecked by
them, and the consequent financial losses to
thousands of trusting depositors, must be problematical ; but, certain it is, such cupidity and
weakness would be measurably restrained
under the policy of publicity within recommended.
Banks that have nothing to hide could have
no reason to oppose a regulation for the publication of their investments, and those, perchance, who may have cause to do so through
mismanagement, or speculation, or abuse of
trust, would be stripped bare and shown to the
public in their true light. Is it better to know
a bank's holdings before or after a panic? To
our readers we will leave this question. and on
their answer stake the justification for our
recommendation. Publicity is the purifier of
business, the regulator of civic and political
institutions. It's the people's reliable, neverfailing weapon and it should be given a larger
part in governing their banks.
All the banks of the country are tributaries
of Wall Street—the centre of investment.
They, or the majority of them, gather up the
idle funds throughout the country and send
them to Wall Street for investment, whence
they make their way into the channels of business and enterprise. Between the Street and
the banks is there an indissoluble connection,
and by parity of reasoning, between the banks
themselves. Is it not time to take some decisive step toward! real, toward constructive,
toward reformative reform in regard to banks?
Talk is cheap and crusades against speculation
are periodic and harmless. They are ephemeral. What we want is something lasting and
substantial. A law embodying the SummARy's
suggestions would serve such a want and go
far to allay public distrust and suspicion. Publicity is not the chief weapon of government:
it is government today.

4




•

The Reserve
Association
of America
(CHARTED)

COMPLIMENTS OF
•

THE FINANCIER
NEW YORN




•

•

Chart Showing the Organization of the Reserve Association of America, Proposed by
Senator Aldrich and Submitted to the National Monetary Commission

BOARD OF
DIRECTORS
RESERVE
ASSOCIATION

CHARTER
50YEARS

RESERVE ASSOCIATION
OF

EXECUTIVE COMMITTEE AND OMER
COMMITTEES
BOARD OE
SUPERVISION

TERM

AM ERICA
EXECUTIVE
OFFICERS
RESERVE
AS

CAPITAL.

$ 300,000,000
,
:_- UBSCPIPTION 2001,
BANKS CAPITAI.
10
t50) TO eE PAID IN

TERM

1

EXPENSES &TAO

STOCKHOLDERS

HEAD OFFICE
WASHINGTON

SURPLU sj—
US GOVT.

Li
Li
>co

THE COUNTRY SHALL BE DEV1DED INTO 15 DISTRICTS AND ALL THE
LOCAL ASSOCIATIONS SHALL BE GROUPED INTO ID DIVISIONS

Li

Q_
LOCAL ASO
ICIAT Or.

A BRANCH IOF I -1E
RESERVE 453OCIATION

NOT.155. HAN ID OANkS
I

I

SHIALI_BELOCATED
IN EACH DISTRICT

CO

LOCAL ASSOCIATION
1BOARD OF DIRECTORS

TERM

1

BRANCH BOAR—
D1

OF DIRECTORS i
TERM

I

Pi-epared for The Financier by Henry Dinise, Second Vice-Pres., Greenwich Bank,
New York
coryitiowr, 1911. BY THE FINANcIElt PIT BI,IsHING Co.. NEW Vt IN IN




CHART OF THE RESERVE ASSOCIATION
HE accompanying chart showing the organization of
the Reserve Association of America has been prepared for The Financier by Henry Dimse, second
vice-president of the Greenwich Bank of New York. It
shows most graphically just how the plan would work
out in detail and will undoubtedly be of great value in
enabling the average banker to follow the current discussion on the subject. The following matter is explanatory
of the chart:

T

1.—It is proposed to charter the Reserve Association of
America, which will be the principal fiscal agent of the
Government of the United States.
2.—The head office of the association shall be in Washington, D. C.
3.—The length of its charter shall be fifty years.
4.—The authorized capital of the reserve association shall
,be approximately $300,000,000.
5.—Only National banks of the classes herein:t nor provided for may subscribe to the capital stock of the reserve
association. A National bank having a minimum capital
of at least $25,000 may subscribe to an amount of capital
stock of the reserve association equal to 20 per cent. of the
stock of the subscribing 'National bank, and not less, and
each of such subscribing banks shall become a member
of a local association, as .hereinafter provided for. Fifty
per cent. of the subscription to the capital stock of the
reserve association shall be called in cash; the balance of
the subscriptions wili remain a liability of the stockholders,
subject to call.
.
Shares of the capital stock of the reserve association will
not be transferable, and under no circumstances may they
be owned by any corporation other than the subscribing
National bank, nor by any individual, nor may they be owned
by any National bank in any other amount than in the
proportion here provided. In the case of a National bank
Increasing its capital after it once becomes a subscriber
to the stock of the reserve association, the National bank
shall thereupon subscribe for an additional amount of the
capital stock of the reserve association equal to 20 per
cent. Df the National bank's increase of capital, paying
therefor its then book value, but only one-half of this additional subscription will be called in cash, as hereinbefore
provided. In the event of a National bank, 'which is a
holder of the capital stock of the reserve association decreasing its capital, it shall surrender a proportionate
amount of its holdings of the capital stock of the reserve
association; or if a National 'bank goes into liquidation, it
shall surrender all of its holdings of the capital stock of the
reserve association. The capital of the reserve association so surrendered shall be canceled, and the National
bank thus surrendering stock in the reserve association
shall receive in payment therefor a sum equal to the then
book value, as shown on the balance sheet of the reserve
association, of the stock so surrendered.
6.—The board of the reserve association shall consist of
forty-five directors, and it shall be composed in the following manner:
First.--Six ex-officio members—namely, the governor of
the reserve association, who shall be chairman of the
board; two deputy governors of the reserve association,
the Secretary of the Treasury, the Secretary of Commerce
and labor, and the Comptroller of the Currency.
Second.—Fifteen directors to be elected, one of the board
of directors of each branch of the reserve association. They
shall be elected ..,y ballot, each member of the branch
board having one vote.
Third.—Twelve directors, who shall be elected by voting
representatives, one representing- the banks embraced in

each district. Each voting representative shall cast a number of votes equal to the number of shares in the reserve
association held by all the banks in the district which he
represents.
Fourth.—The board as thus constituted shall select twelve
additional members, who shall fairly represent the industrial, commercial, agricultural, and other interests of the
country, and who shall not be officers of banks. Directors
of banks shall not be considered as officers.
7.—At the first meeting of the board all the members
of the board, except the ex-officio members, shall be classified into three classes, and the terms of office of these
three classes shall be, respectively, one, two, and three
years. Thereafter members of the board shall be elected
for a term of three years.
8.—The directors of the reserve association shall annually elect an executive committee and such other committees as the by-laws of the reserve association may provide. The executive committee shall consist of nine members, of which the governor of the reserve association
shall be ex-officio chairman and the two deputies and the
Comptroller of the Currency ex officio members.
The executive committee shall have all the authority
which is vested in the board of directors, except such as
may be specifically delegated by the board to other committees or to the executive officers.
9.—There shall be a board of supervision, elected by
the board of directors from among its number, of which
the Secretary of the Treasury shall be ex-officio chairman.
10.—The executive officers of the reserve associafron
shall consist of a governor, two deputy governors, a secretary, and such subordinate officers as may be provided
by the by-laws. The governor and deputy governors shall
be selected by the President of the United States from a
list submitted by the board of directors.
In the absence of the governor or his inability to act,
the deputy who is senior in point of service shall act as
governor.
11.—The governor shall be subject to removal by the
President of the United States for cause. The term of office of the deputies shall be seven years, but the two deputies first appointed shall be for terms of four years and
seven years, respectively.
13. -All subscribing banks shall be formed into associations of National banks, to be designated as local associations. Every local association shall be composed of not
less than ten banks, and the combined capital and surplus
of the members of each local association shall aggregate
not less than $5,000,000.
The territory included in the local associations shall be
so apportioned that every National bank will be located
within the boundaries of some local association. Every
subscribing National bank shall become a member of the
local association of the territory in which it is situated.
13 A.—The number of the directors may be determined
by the by-laws of the local associations. Three-fifths of
that number shall be elected by ballot cast by the representatives of the banks that are members of the local association, each bank having one representative, and each
representative one vote, without reference to the size of
the bank. Two-fifths of the whole number of directors of
the local association shall be elected by these same representatives of the several banks that are members of the
association, but in voting for these additional directors
each representative shall be entitled to as many votes as
the bank which he represents holds shares in the reserve
association. At such elections there shall be no proxies.
The authorized representatives, of a bank, as herein pro-

1
4!




vided, must be either the president, vice-president, or
cashier of the bank he represents.
13 B.—Each local association shall elect annually a
board of directors.
14.—The country shall be divided into fifteen districts.
All the local associations shall be grouped into fifteen
divisions, to be called districts.
15.—A branch of the reserve association shall be located
in each district.
15 A.—Each of the fifteen branches of the reserve association shall have a board of directors, and these directors
shall be elected in the following manner:
The board of directors of each local association shall
elect by ballot one member of the board of directors of
the branch of the reserve association. In this manner
there will thus ,be elected as many directors of the branch
of the reserve association as there may be local associations in the'diStrict in which that branch of the reserve
association is located. In addition to that number there
shall be elected a number of directors equal to two-thirds
of the number of local associations in the district where
the branch is located. Such additional directors shall be
elected in the following 'manner:
There shall be chosen by the banks composing each
local association a voting representative or proxy holder.
In choosing such voting representative each bank shall
be entitled to as many votes as it holds shares in the
The voting representatives of the
reserve association.
several local associations which form a district shall then
meet at the office of the branch and elect an additional
number of directors of the branch equal to two-thirds of
the number elected directly by the local association.; that
is, equal to two-thirds of the number of local associations
composing the district. Each voting representative at such
election ,shall have a number of votes equal to the number
of shares in the reserve association held by all the banks
composing the local association which he represents.
The first business of the board of the branch as thus
constituted shall be to add to its numbers by the election
of an additimml number of directors equal to one-third
the number of local associations situated in the district.
Such additional directors shall fairly represent the industrial, commercial, agricultural, and other interests of
the district and shall not be officers of banks. Directors
of banks shall not be considered as officers.
The manager of the branch shall be ex-officio a member

of the board of directors of the branch and shall be chairman of the board.
The board of directors of a branch of the reserve association will thus be composed of:
First. A group of directors equal in number to the number of local a.sdociations composing the district, and this
group shall be elected by the directors of the local association, each director having one vote.
Secoud. A group of directors equal to two-thirds of the
foregoing group and elected by stock representation.
Third. A group of directors equal in number to one-third
of the first group, representing the industrial, commercial,
agricultural, and other interests of the district, and elected
by the votes of the first two groups, each director thus
voting having one vote.
Fourth. The manager of the branch shall be ex-officio
a member of the board of directors of the branch and
shall be chairman of the board.
15 B —All the 'members of the board of directors of the
'branch, except the ex-officio member, shall at the first
meeting of the .board be classified into three classes, and
the terms of office of these three classes shall be, respectively, one, two, and three years. Thereafter members
of the board shall be elected for a term of three years.
16.—Each branch shall have a manager and a deputy
manager. They shall ,be appointed by the association, with
the approval of the executive committee.
16. A—The powers and duties of the manager and deputy
manager and of the various committees of the branches
shall be prescribed by the by-laws of the reserve a,ssociation
17.—The earnings of the reserve association shall be distributed in the following manner:
After the payment of all expenses and taxes the stockholders shall receive 4 per cent. Further earnings shall
be divided, one-half to go to the surplus of the reserve association until that surplus shall amount to 20 per cent.
of the paid-in capital; one-fourth to go TO the Government
of the United States, and one-fourth to the stockholders;
but when the stockholders' dividends shall reach 5 per
cent, they shall receive no additional distribution. After
the stockholders receive 5 per cent. the earnings shall be
divided, one-half to be added to the surplus of the reserve
association and one-half to go to the Government. After
the stockholders receive 5 per cent. per annum and the
surplus of the reserve association amounts to 20 per cent.
of the paid-in capital, all excess earnings shall go to the
Government. The minimum dividends to the stockholders
shall be cumulative.

Confede rate

•uuai 'sltidulaw

policy on iiiy'lit' iii substa
10110WS,
"About, a year ago you and I were in correspondence about, the depreciation in the purchasing power of our money because of the inflation of our currency. You wrote me at. that
time that you could not see it as I did. I wrote
you to watch and tbink, which if you have done
you now see it as I do. One-third of the purchasing power of that big wad of 'good gilt edge bonds' you have that belongs to the poor
widows and orphans has been lost during the
last 13 years by reason of the inflation of our
currency. Why don't, you insurance men confer
together and stop the further debasement by
expansion of our currency? Are you a lot of
blind bats, or don't you care a copper, just so
long as you can wear fine linen and fare sumptuously- every day?" Although I am still flying
the "Rebel" flag, I am now in open rebellion
only against the further debasement by expansion of our currency. I know that the war ended nearly 50 years ago, and that about, every
one who .had anything to do with it is dead and
all the rest of us will be dead soon. On May
9, 1864, when I was only 15 years, 2 months,
18 days old, I voluntarily enlisted into the
Confederate army, and I am proud of it. I
thought then I was right and know now I was
right then, but, I am satisfied with the result
it those few meddlesome ones of the Yankees
will only let•us "requiescat in pace" and let us
manage our own home affairs, to suit ourselves.
Very respectfully,
A. C. LAKE,
28 North Front St.,
Memphis, Tenn.
Veterans Reunion

June 8-o-io-i909




SUPPLEMENT TO

CURRENCY REFORM
THE PARAMOUNT
ISSUE.

THE REMEDY.
Memphis, Tenn., March 12th, 1910.
)e r Sir:—Fin Moseet Aleresorftit- 443414t—rrrn
CompljtrieWary one of my pamhlets, "Currency
Reform the Paramount Issue," which if you
read carefully I think you will find interesting,
perhaps instructive. After reading I would like
you to wri:e me any facts that may come into
your mind that can help me in writing my later
amplified edition of this article.
With an expanding currency the automobile
classes are jubilant, being profited at, the expense of the s,reet car masses, "onto whose
brows the crown of thorns it tightly pressed
down" by rising prices. I am no Socialist. It
is to the interest of every nation to have a
smaller per capita of money than any other nation. Let the gold miners quit their harmful
occupation of digging gold and go back to tlw
farms and raise foodstuffs, which is something
worth while. Gold intrinsically is not worth
so much as iron. Its free coinage into money
is what makes gold valuable. Redundant currency is the sole true lap root cause of high

priees. The high protective tariff and all other
causes are only the natural outgrowths therefrom. That high prices are in every way
undesirable is clearly shown in my pamphlet of
28 pages (single copies 10 cents).
The remedy for high prices is to stop watering our currency with national bank bills
and
free coined gold money. Our mints ought
to
take as toll at least one-half of all the gold or
gold and silver brought to them for coinage
into money. The seigniorage should be used,
First: In paying off the government bonds, by
means of which the national banks water our
currency ‘Aith their bank notes. Secondly: In
paying off the about $346,681,016 of outstanding
legal tender greenback flat money. Thirdly:
In creating a gold reserve emergency currency.
such as the Bank of France, Bank of England
and, I think, Bank of Germany, have. In this
way we might in time become again, as in 1833,
a nation without debt and have cash gold
money in bank. A consummation greatly to
be desired. I am met with the objection that
other nations will continue to free coin gold.
This reminds me of the old hackneyed catchword, "Prohibition won't Prohibit." Let other
nations continue to free coin gold if they have
no better sense. They cannot thereby put us
into any worse fix than we are already in, and
they may ruin themselves. I believe wheit we
stop free coining gold all the rest of the world
will voluntarily do likewise. There will not
have to be any international agreement. They
will fall all over themselves trying to see who
can stop first. I have seen it stated that the
gold money in existence at the time of Napoleon I was only $500,040,000. If this is trne
the $15,000,000 we paid him for the Louisiana
purchase was not such a bagatelle after all.
It was perhaps as hard for us to pay that
amount at that time as it wonld he for us 10
pay $1,000,000,000 now. I have also seen it




staled that the production of goid within "the
last ni
t currency! Good Lord, deliver us! This
nancial heresy must have originated among
the stock gamblers of Wall st. The AldrichVreeland $500,000,00u Equergszncy monei is
set curren
n I was studying in Ger69-1871, during which time occurred
.,
the Franco-Prussian Nvar, I kept my money in
a savings bank in Leipsic, bearing 21 2 per cent.
/
interest. I could not check this money out, but
whenever I needed money had to go in person
to the bank with my pass-book and have the
amount withdrawn entered therein.
I suppose some such system is in vogue in
France, and that the checking habit is not so
prevalent there as here. During 1909 we sold
China all told only $27,000,000. Some years
ago, when cotton was worth less than half its
present price, 15 cents for middling, we sold
$50,000,003 of manufactured cotton goods alone.
At:our present prices I think likely it would be
cheaper to wear silk than cotton in China it'
they had to buy of us. But they raise 70 per
cent• of the cotton they consume. A great part
of China is cultivated like a garden. The lani
practically belongs to the government, and if
a Chinaman does not cultivate his land Properly it is taken away front hint. We have
learned much from the Chinese and could learn
more if we were not so self-satisfied. If we
could quietly lose the Philippines without losing
our prestige it would be a profitable loss. Perhaps, however, if we could lose our disgus'ing
self-conceit at. the same time it would be still
more profitable to lose our prestige. If we
coithi only exchange all our Spanish possessions for Canada we would be well rid of our
white man's burden and maintaining a large
navy to protect our worthless (to us) outlying
Possessions. I recently wrote an officer ot
an insurance company that has a life insurance




(Copyright, 1910, by A. C. Lake, No. 28 North
Front Street, Memphis, Tenn.)

CURRENCY REFORM
THE PARAMOUNT
ISSUE

Confederate

'utiai. 'siticlulaw

Veterans Reunion

June 8-9-10-190o

The Only Way for the United States of America
Ever to Attain Commercial Supremacy in
the Markets of the World and on
the High Seas.

Third Edition.

All Rights Reserved.

1141 Hi., along to n114111101 I IIIZI.:1(1 careful
1114,1011 till 111111. This circular, prici.
per I 1iii.itiil, f Iii iwr limifired, is 14)1 brainy
it is a (i )111 11 iment,
4)114 gi
pciplf.:it ,‘ .)11
I 4) ()u.
el I

•




We Need Less Money, or Why the Free Coinage
of Gold Should Immediately Cease.
Nleniphis, Tenn., Jan. S, 1909.
lion. William Jennings Bryan,
Fairview, Lincoln, Nebraska:
Dear Sir—Although you have been the chief
advocate of an inflated currency, I think you
must admit, we now have enough, and believing
you have more influence in forming public opinion than any one man in the United States, I
appeal to you to help stop the further watering
of our monetary system. Inflation would be all
right 1F it did not depreciate purchasing power.
Add 1 per cent to our per capita of money and
you decrease its purchasing. power 1 per cent.
Double our per capita circulation and you double
prices. Double prices and you double the amount
of money required for business, so there will be
as much lack of money as before for business
purposes; an endless chain. So what is the use?
Double our currency and you rob the bloated
lamdholder of one-half, the thrifty savings bank
depositors of one-half, and the poor widows and
orphans of one-half of their life insurance. II ow
many of these latter there are 1 do not know,
but there must be millions of them. I see in t he
Philadelphia Saturday Evening Post of December
19, 1908, page 18, column 1, that, there are in
the United States 8,588,000 savings bank depositors, and that their deposits amount to $3,090,000,000. This is $300,000,000 or $400,000,000 more
than all the money in the United States. Then
there are the old war veterans and clerks with
fixed salaries with their dependents numbering
millions more, who have been grievously wronged.
Fl)r about thirteen years now all of these people
have been defrauded of their pensions, interest,
labor and capital by reason of the purchasing
power of their money shrinking up, caused by
inflation. liowever, but few of them know it.
I low can WI with $3-1.98 per capita and still increasimz (about
per vent per annum in gold and

more rapidly in pai)er 4In a gold basis) hope to
worth
to sell China with $2.00 (in silver,
40 cents on the dollar in gold) and Japan with
$1.15 per capita and c4)tnpete with other colintries
with a smaller per capita than ours and consequently with lower wages (but higher pUrChasing
Power) and prices than ours, for the world's trade
and the ocean's shipping, the latter of which we
lost years ago because of our high wages and
prices? Japan is driving our few merchant vessels from the Pacific. Iler ships are big paying
propositions, while ours are losers. Last year
we sold her $3,100,000 of cereals and bought of
her $15,000,000 of rice and $9,000,000 of soy
beans, things our own farmers ought to raise.
This, of course, gives her more purchasing power
In buy in cheaper markets than ours and to establish cotton factories and other home industries.
Many more factories can be built there than here
for this immey. Even our peanut growers are
asking (De(ember 17, 1908) for a protective tariff
of 2 cent s a pound. Bow long will it be before
our corn and wheat will need a tariff for protection against the misealled "pauper" labor of the
world? They maybe get as many comforts with
their low high purchasing power wages as do our
WI rking classes with their high low purchasing
power wages. 1 see in the Memphis Commercial
Appeal of December 26, 1908, page 14, column 5,
that fair reaper trust is going to establish factories in France and Germany. Query: How long
will it he before our cotton fact IF IPM will be
forced to move to China, Japan and other countries, where money is swarm. and consequently
worth more than here and the cost of living and
wages are therefore less? The American Tobacco
Trust already has factories in China and Japan.
In Japan money is worth, I think, about ten times
and in China about I went y I lines as much as here.
When all our trade is gone what use will our
We will have killed the
" be ?
r"Vellleill s
111 1)
goose that laid the golden egg- and the incomes
from our boom "improvements" ‘von't be enough
to keep them in usable repair. We are bottling




4

ourselves up with high prices caused by ini1ated
currency. The unlimited free coinage of sik en
at 16 to 1, regardless of any other nation, could
not possibly have done us any more harm. It
would have immediately demonetized gold and
made money so scarce that a silver dollar would
have bought as nmeh as a gold dollar had been
buying and one gold dollar might have been worth
as much as two silver dollars. So that the gold
owners would have been greatly benefited and the
free silverites injured by free silver, except the
silver mine owners, of whom I am one. Looking
back it is plain to my mind that each party was
fighting tooth and nail to keep from getting the
very thing they each ardently wanted. Neither
knew how to get what they wanted. 1 today
would vote for the free coinage of our own silver
al, 16 to 1 to remedy the danger threatening us
because of the plethora of money (dollars made
out of almost nothing). inflation 'i1l wonderfully stimulate our "prosperity" temporarily. It
will promote all kinds of wasteful, useless "improvements" and foolish extravagances and overspeculation and overproduction, stock gambling
and wildcat schemes generally that are hound to
bring about a disastrous reaction. We may for
a while have a grand and glorious time with
4)111. easy money, like the young spendthrift just
come into his patrimony. But settlement day is
coming. and if inflation is not stopped T think
we '1%111 have a financial earthquake sure enough
1),)dde which the brought-on-by-too-much-easymoney panic of 1907 will be as nothing. The
amnsing feature of the situation is that the common people have not caught on even yet, and
think it is our wonderful robbing Peter to pay
Pa iii "prosperity," the trusts, the tariff, underprodnetion and our more luxurious scale of living
that are causing high prices, and do not know that
it is watered currency. They are drunk on "prosperity" and say things; are worth more now. It
never strikes them that things are worth just
exactly the same and that it is really the money
that is worth less. Few even of the bondholders;
5

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prices before we do, all hough her per capita circulation is at present far below ours. nom ever,
it is presumable she will be too smart for that,
and will keep the most of her gold in bullion. Our
newspapers are ill the habit of boasting
of our
increased prosperity and to prove it cite statis
tics
showing our bank deposits and commerce increased
as shown in dollars. This is not a fair index to
the increase in the volume of business. For as we
have about 52 per cent more money and 32 per
cent higher prices, statistics showing that we
have 52 per cent more bank depiisit s and 52 per
cent, more business as expressed in dollars,
do
not prove that the volume of business has increased. It merely proves that the value of mone‘
.
has depreciated so that it requires more money
to do business than we ought to have
to compete on equal terms with England and other
countries for the commerce and shipping 1usine,-0.
of the world. We eannot have quantity and
(Want Y 1)01 h. When we gain in quantity we
exactly the same proportion in iinality, and
ire
versa. The much harped on so-called "crime
01
1s73" did not decrease the amonnt, of money in
existence. Therefore it did not wrong flue debto
r
class, as falsely claimed. lint the tremendous
increase in nalla'y in the last, thirteen years has
greatly wriniged I he classes above mentioned. The
average per capita of money in the
world is ab.mt
$10. We now have the $1.00-per-bushel m heat
your adherents in 1896 said they wante
d.
could make the people see, as I do, that If we
by discontinuing the free coinage of giild and resuming
the free coinage of our own silver at 16 to
1, the
present
purchasing power of our p11VCT (1011a l's would lint ha' de(TVaged and
vain
,
of our gidd dollars mould be perhaps the
doubled. I
think they mould all vote for a resnm ion of
the
pt
free coinage of Our own silver.
(Mr t bus demonetized gold would orket England's bullion
gold, and
she has no silver 'to offset ours, excep perha
t,
ps.
some in Canada. So we would bea t all emnpe
t it ion
in the Vorluhs market for nmnufactur
ed go ids as
well as Ii it' tarm prfiducts. We would ne441




protective tariff then. We would noed no
ship
subsidy then. We certainly do need a prohi
bitive
duty on all foreign silver and uncoined gold.
To
furt her expand our circulation is a clear case
of
Irving to make something out of nothing. It
is
as absurd as t vying to raise imrselves by pulfing
on our boot straps or seeking to invent perpe
tual
motion. I might say more along this line, but
I
doubt if a multiplication of words could make
my position any plainer or stronger. If
I am
wrong either in my premises or argument, I
would
like to be set right.
Very respectfully,
A. C. LAKE,
A Confederate Veteran Who Voted for You.
RANDOM THOUGHTS.
In 1912 the 1Z(ipu1lica115 (night to stand for a
discinit inuance of the free coinage (4 gidd. In
1912
I he Democrats might to stand for a discontinnanee
of the free coinage of gold and the resumption
of the free coinage of our own silver, at 16 to 1.
As it takes sixteen times am much silver (371.
25
grains) to make it silver dollar as it does
of gold
(23.22 grains) to make a gold dollar, I don't
think
we coil Ii hillat V our currency so rapidly
with our
own silver as wit h gold. Especially as China and
India, with their 700,000,00o population,
would
become again, as of yore, the graveyards
of our
suridus silver. These eount vies, notably
India,
:40,000,000 population, make it into
ornaments.
But if we should find we are
silver mon ey, we could stop its getting too much
free coinage. By
coining to a silver standard I I bink our
circulating
medium would la, cut in Iwo by demonet izing
gold
by driving it to a premium. I don't see
how else
we can reduce ow. undesirable
burden of money
with(fill WOrking wreck and ruin to
millions of
our people. As soon as we threatened
to come
to a silver st a tabard foreign holders of
our not payable-in-gold bomb* and stocks would rush
t hem
over here and sell them and wit Infra
w this surplus gold out of t he country. Of
course, t hero
would ensue a terrible financial catac
lysm, the
`fl
.C1't
if Wh Hi might
be felt for several years,
9

but the ultimate result would be so beneficial as
to counterlatlance the temporary hardships. A
few years in the life of a nation is but a . short
time. (no. financial condition has g()t into such
bad shape t bat I think heroic measures are in
order to restore it to normal. The niarket value
now of the silver in a silver dollar, 371.!25 grains,
is about .10 cents. I don't think the gold, 2::.2!!,
grains, in a gold dollar would sell for that much
on its own merits. It is hard to make some otherwise intelligent people understand that there is
not a 414411;41.'5 worth of gold in it gold dollar, and
that it is the government stamp on it with the
law behind it that makes it a dollar. Assuming,
for example, that there may be only 5 cents'
worth of gold in a gold dollar and that the government stamp on it wit ii the law behind it adds
05 cents to its value, making it, one dollar, why
should Mit we, the government, get this 05 cents
instead of giving it to us, the gold mine owners,
a.s heret()fore ? This bunco game should have
stopped when our per capita got to a parity with
England's, $15.00. Ill 1871 (44.many exacted of
France as war indemnity 5,000,000,000 francs at
10.:: cent s—$065,000,000 gold. Of this amount
120,000,000 marks at 23.8 cent s—$28,560,000—are
supposed to 1)4. in the German war ('best in the
Julius tower in the fortress of Spa whin, a western
sulairl) of Berlin. The bulk if this $065,000,000
gold was used in paying off the cost of the war
and establishing the gold standard of currency
for Germany. The great plethora of money resulted in wild speculation. Stock companies for
all sorts of enterprises sprung up like mushrooms.
The eonselinence was a great financial crisis in
1873, whHi lasted till 1 S76. I read 25 or 30
years ago tliat I 4.1.111111‘. was injured more by
getting I his money than France was by losing it.
I id Ilk llkilyI lint it was in this way that she,
onfortunately for herself, got her per capita of
op to $21.00, which is $3.00 above England's $18.00. And t hat her prices and cost of
living have 11iereby been so increased as to seriously handica p her ever since in compet log with




10

England for commercial supremacy in the markets of the world and on the high seas, which is
the chief cause of the present somewhat strained
relations between these two countries. Life insurance companies, savings banks and educational
and other institutions, with endowment funds
invested in "good gilt-edge bonds," so called,
should wire President Taft now and send strong
delegations soon vehemently protesting against
this senseless suicidal inflation foolishness. The
danger is imminent. Verbum sat sapienti—a word
to the wise is valuable. The currency has been
inflated 4 per cent per annum for thirteen years,
making 52 per cent, and has depreciated in purchasing power 4 per cent per annum for thirteen
years, makincr 52 per cent. So that the entire
interest on these "good, gilt-edge bonds" has been
wiped out during the last thirteen years. Besides the market price of bonds has declined so
that really the entire interest on 4% per cent
bonds has been about wiped out. For $1.50 cash
now is not worth as much as $1.00 cash was
worth thirteen years ago. Whereas, stocks have
not only paid good dividends, but their market
price has advanced about in the same ratio as the
currency bins been watered. Superficial people,
especially in Wall street, have not got penetration
enough to know that the value of gold dollars
ea n depreciate. They think they are the fixed
standard of value, w 'wrens, their %able fluctuates
exasetjy in the same proportion or ratio as their
number is increasi.d 4)1. decreased. These people
hink it is an indication of prosperity when prices
go up. When really it is because money, by
reason of inflation, is losing its purchasing power
value so that it takes more of the debased stuff
ha iv things, that makes prices go up. Tt is the
money piing down. We Americans have been
reveling in a fool's paradise, thinking that money
is wean hi and t hat there is a dollar's
worth of
gold in a gold dollar, overlooking the fact that
even our gold dollars are only "chips" to do luisiness with and that, the more "chips" I here are
1 he less they are worth, and that the imlimited
11

1111111inftwaps*,,,,.

free coinage of gold continued indefinitely might
I ltimately result in so weakening the purchasing
power of our gold standard dollars that it, might
take $100 in gold to buy an ordinary breakfast.
Spa in ()
!`,"d her rise to silver. Iler fall to too
Innen sliver. We may ilwe on r downfall to ill()
much gold if we don't watch out! Spain first lost
her world trade to the Ilanseatic League, later to
England. Low high purchasing power wages with
14)\‘. cost of living versus high low purchasing
power wages with high cost of living did Spain
and may do us, I. e., the United States. It is not
China and Japan that are the yellow peril s"
much as yellow gold coin. Rascality ()Hen overreaehes itself. Did not England overreach la.rsell
taking the Boers' gold mines and may they ii
1""11eial and commercial ruin if she i1
Pr?"'
no, careim? I see in a, newspaper dated Nlarch
12, 1909, flint the production of these gold mines
for the last twelve months, as officially rep"11."1
by the mine o‘vners, is $149,788,950, an increa-e
O f 94„:„ per een i over previous twelve months. I h I
is digging goid at I he rate of :tbout $4.7: Per
3
ond for every second of 365 days of 24 imur.4
each. Clrea t Britain is (Pri a ink' too slirlbWd I di
coil) all of this "old junk" gold into money and
put it into circulation. In fact, if she could only
be assured that we would be fools enough
coin it, hitt) motley and add it to our eirenlat
here it, \\milli be a master stroke of stater?
on her part to make us a present of en014.4 1
0 to raise our prices so high as to elitniant ,
for a long period of time from the w orld',4
Let s and t he high seas. Did not we overt..;..
ourselves taking Panama from 0)101106a ii
hot I out of, t he canal or the bond market sk
drop out, \\ hich it should onless interest Fill)'' as to cover loss in the Inirel"
4(I
I"'wer 4)1 1114) 111011VV, find it prlIVI' :1 fa i hire
not WV 01VITV:11'11 ourselves taking, I he 14111111 11
.
overlook in! I III' Japanese factor in the ealeni.'
,
and had we not het I er he generous and goc
their independence and let Japan protect :IP.
'Omit them? Japan, with her only $ 1.17 1"
'




12

ita of money and consequent low high purchasing
power wages and low prices, can buy our cotton,
manufacture it into got Os and sell to them cheaper
than we can. The Memphis Commercial Appeal,
April 22, 1909, page 1, column 3, says the Philippines are costing us $100,000,000 annually. So
it is ourselves being exploited. What benefit are
any of our Spanish possessions, anyway? Cuba's
last little revolution cost us over $6,000,000,
which, I think, we will lase. We did Spain a
big favor when we relieved her of them. If all
the nations of the earth had the same per capita
of money there would be a great uniformity of
prices throughout the world and there would
be but little need for protective tariffs. Sly old
Mother England, with her only $18.00 per capita
of money, can a fiord to have practically free
trade, but we, with about twice that much and
still rapidly increasing, are forced to continue to
raise higher our tariff walls. Little Switzerlaml,
wit hi only $17.00 per capita of money, is Ih its
enabled to buy our cotton, manufacture it int o
goodr and ship about $10,000,000 worth of them
back to us every ye;ff, in spite of our 7)2 per cent
high tariff wall. This is more cotton goods than
we sell China's 400,000,000 population. We sell
India almost, nothing. Having only about one-half
as much money per capita as we have make.;
SN‘itzerland's gold money worth abttut twice as
notch there as our gold money is worth here,
dollar for dollar, 23,22 grains. If it were not for
I he fact Hint 0111' laboring pc((ph. would suffer
greatly for the lack of work in the meantime, it
\\ mild be a good thing if we could have free
rade and buy all of our necessities abroad, so as
10 get rid of our glut of gold money. We could
I hen have the full dinner pail. For we eould produce things at purchasable prices for fiweign
i011s with less money than we have. Thev would
I hen have the purehasing power money and we
would have the eommodit to, 1(1 sell them cheaper
than they could make them. ()nr financial edit ors
seem alarmed when gold is shipped a way from
I his count ry. I ani always delight ed II) see it
13

• ‘uut 04 out put lu
10!i1 i
•Salutioa slit) u! 0(3 'Iwo.) 1,1 11.,%‘
•uopuol u! aaluo
aq luq3 puu st:1$ ppm tq
•satuoia
aputu Iwo.) 1! mut!! mot( !up( palwu
jo 3Ins aalu u uo putt an •uopturt ‘paaiti 011)0011
-puaiuu, tuoaj
u put I oilu 2uo1 '40N
Tunoj puu laamiiszittutpi x!s
tiaa!plosPU
Xaqj putt aaatu ;imam:Aim
sVum!qt; og
pull
JIB saalad 3LU 113 aaaq .1a.11q tumoa
tiv
•.10JA.1 13ut.:ti luoqu
si s! *tom Xup 'V
salmi amam.) aoj puutritia u!
uotuttioa
JO 0211A1. 0211.10A11 awl pap aulzuVutu tisHilua ttu
11! puaa J S111133311 •U13030 0111 110 X11.11(.1 If St 2Ito
uulaaulv awl puu S13043 awl Jo stia.tog!tu s! aqs
•
s! ;mu puv 13.1110 JO J11111-0110) 3noqu Sitio
oat! saa!ad Jag ‘anuq 3.11 u undua aad Sauotu
qatuu su jEuq-auo luoqu Situ) riu!Auti ulumafi quaa!)
puu 'salt° Jo luaa .13(1 09 inoqu .quo Dan saa!att
aaq 'omit4 am su ut!dua .tatl S(motu qamu U luaa
aad 09 gnoqu Sitio klu!Aut( 'A'uuttilati) pup s! s!tu
•tuatii uo 'Haul latism1
U113 0,1t gulp uosuaa
lad swaa vz U!& Lid puu .11uttliat) puu ta!umail
rim!) 1110.1J S8011330d JO 1301111111Mb anti 110!1.1001111!
uaaq 0A131 Wit XLIJIOIJ :96si U aoj paJoitutia
.
samuuSag am lug slanpoad wilt, au; saapti aatiriN
...m.
‘‘
3143 jo uormaysnii! U11 s! molati
.101)1In
alp .103J11 5.1130S .10J pity :titi!anio su
lunoasq• 1: 03 a pittom pip mold 003 J.! .‘'otiotit
s11
aadvd ain 10,4 *IAOU soap( Pt
1I!1(
‘lulod laodxa 01(3 puoSaq wimp(' iqo'n aluAala jou
;1
!!! 0,4 30lut saa!ad
1!!Sttu I! qauotu aadud
1011 moil Jamul ou ao,q •pla sac:op su apitai 11:71!0
.
-.toj ano qams!p gou pinom puu ploti s! su A 0110111
31111 .131)1131 it.rai I It0or11111.131111 1111 Oq 11 )11 1)1110M
S3t1010 .13(111(1 spILL •.'1!111!s1t! 1)102 JO 9213m03 301J
pamm11111
Imo punos puu Owls 010111 S101(1I
-11111 aq iquom 31 /fallout a3d11t1 s!t! 110 vul 3.1011
mum 1! n •lapual W20T ivuoputualuI nu 9 m
ldaaxa s! Sono!!! pvd liu yogi: s! Tula •Souout
klupitntt
qui; aaptial 11.a1 anytuaapaaa!
JO 3110 1111 aadud Jo gno asn atuot! aoj Sauotu 1)001-1
su 3110(f13 '3i pail!i am j! 'a)[um 11113 luauttlaaw;i
•aadso.t‘T
illm Bmtuou aoj Sumatuos
lot!
:AX *A0.1,1-0A11 1111115 lJP ti 1311111
HIM aqm 011

t



311111 011 'M1(111011 .10J 211!11101110s 102 01 po4
4011
161 11
*.iii(!i!I (utiti101) 'mu .1•01101u .1 5(1a o.r1 .1
.
.511,1 01110).)
III)
pitiliM
5h1111 11111i1 II 110
(f
SdU0111 .10(110 mu 01144010(1M 211( 1111.141 1)1111
1)(1110.12
0111 Jo) 4110
.10,11!s 1)1111 1402 0111 M1(10.10115 11150(5
Jo 1)11035114 's110111111 .101110 0111
.
110 X0110111 .1110

a.na imu 1.10m 0

ut 3(10.)X0 4s11110X 00 I
-HS

,trionti pinto .)M
11( 1 101155 0.10.‘t
(

Jo (mom A111i"1.

iI1U(II '40

f11.1t.JIlJJ
.10 .10A

0011p; II ion j! Ham Sao.%
su Auj 1)0011 Si (11114)

1)11103 am Tip! 4

0.10111 0.11111

X1)110.1113 kid 1111S

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•noS au.;
uloo aaa; 01 astijaa
put: ,u 1110.1j Ono a13144 0qu4 tum suo!luu .1011(0
3531(3

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3M

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.

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3.111
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uloa aaaj
aq
suouttu aatoo Tutu pun

'Soul! Jo pl.).) aad 01. puu auilop moll 13 111 11102 JO
1(3.10At ,111U0.) 06 111 0.10113 3111(4 350301d WM 5.10UMO

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uo!luindod aq3 mutt dos 03 3qiino slum Saturn!
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uati 0143 aaillailm 03 su
uttirl!tia pf0 31I3
ituoj a01430uu aidoad Jaws 1131m
s! anitu aql 1.4)41 diuuls a1(1 ao pia 01(3 aaglaqm
0( su uousaill) 111141 •sauaS 110031!q3
aurnA
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Satil `SumAuy •atilun 0113 spudtul guql m pup(
-aq Atiq alp timm 3! uo diuuls quatuuaanoB alp s!
3! Tutu pm: antun aulll 3nq jo s! as lad ploil pito
alunssu I 01111M ‘3111Ilit
saApS' luto atqlop
u it! pio',1 atil s! 3! lino satunssu SOu!tuaas all
•p(ItS 4)11 3011A1 0A0110q. S11130.1 114I OCISI1U1 aompa 9q,T,
„•oklu sauaS 1101 SUM 3! SU X111)03 'Ll)*()Z$ '0111135
0143 113.10,1t 111 P10 jo aauno uv
•alquis skumiu
pioo„ :prus pug maptau aNuri 31us aql pup paluls
3! MIIS J Sfluaaan •salua!pu!
apual Jo sso!
aoj pa111.1111u tur
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1)0111.1 'qv! 0.1u
lsmau s! apral jo 03U13
-11101 .l
Iuli sal1t,m)111 3! mu ltioaxa Sumu .1111!0.11
4i

•

I

•

as it was good English goods and vell
made. A short time since a repn.sentative of the
Alit suis was in our city. lie deprecated war beween us and Japan. Of course the Mitsuis, the
merchant princes of Jaimn, do not want, any war
with us, their most profitable CUSt0111VI'S. For as
$ 1.00
Vill buy about as much in .Japan as $11)
here, the cost of pr(Hluction there is infinitesimal
as compared to lien.. They must make several
hundred per cent profit on everything they sell
us. They are shrewd enough to pile on aJI the
price the traffic will bear, and I suspect they
grade their prices to fit the per caidt as of money
of the different nations. Our own trusts virtually do this when they sell to to
markets
cheaper than they do here at home. We have to
rev ise oar
,h,"•,,"•ard. w hile Japan has a
w ide, margi n
rev ise her prices u p ward
when selling gold standard nations. The Japanese
on 1114' Pacific charge 11111 American freight rates
when they can gel them. lint when they have to
bid for freight they always get it, as their expl'1lSeS 011 l0.0111111 Of 1 IlVir low per capita of money
;MI SO SIMI II that they can down all competition.
.1:1111111 WW1 her 1‘1‘1* 1ST ell pit a of
money and e0)11se(01(.111 low prices is apt to absorb all the trade
of the Pacific. Watch her grow! l'nless she
should become too bellicose Or too competitive
and alienate England and other nations so that
they may combine against her and clip her wings
by taking her navy from her and not allow her
to build another one. With her only $4.15
capita of money against our $34.11S and still 1".1
increasing about 2 per
per annum in gold and
2 per cent per annum in paper, we stand no more
chance in the battle with her for commercial supremacy than does an army with old, obsolete
muzzle-loaders against an army with up-to-date,
automat ie, rapid-tire, smokeless powder machine
guns. China and India, too, because of their
small volume of money, are on the eve of great
commercial pnlsperity, especially when we consider thcir money is in silver worth only about 40
cents on the dollar in gold, which makes their

go dil per capita only about 80 vents. This forces
them to supply their OW11 W11111S, for they have
not got the money to buy from foreign nations.
Thus they are compelled to patronize their home
industries. They will increase. We may decrease.
It is to the interest of every nation to have as
small a per capita of money as possible. wi,"
knew less than I know now, I thought nations that
had low per capitas of money had them because
they were poor. For I thought money above all
I hings else was wealth. And I did not know that
the volume of money of a nation decreased its
purchasing power and that it gold dollar is a
unit of changeable value. But I know now these
nations have little money because it is the best
national judicy. The financiers of those older nations must chuckle at our gross ignorance in inflating our currency. Years ago, reading that, a
woman in China got only 5 cents a day for work
and thinking only how little 5 cents would buy
in this country, it seemed 11 \\ltd. B111 5111cc
know 5 cents ill silver (ab)ut 2 ceiits in gold) will
buy as ninvli in China as $1.00 here, I see she was
getting fully as much relatively, if not more,
than the majority of our own "salesladies.- Men
laborers in China get 10 cents silver a day, equal
I o about, 4 cents in gold. The coolies at, the great,
steel works at llankow, on the Yangt se-Kiang, get
1 cent an hour for 12 h(mrs, making 12 cents a
day in silver, equal to about 5 cents a day in gold.
There is plenty of iron and coal in China, and they
are turtling out iron rails as good as anybody
makes, 111111 W1411141 soon be shipping them to us
but for our prohibitive tariff. The mines have
not hendofore been worked in China because of
their superstitious fear to dig up the evil spirits,
but they an. getting over this foolishness now. A
few days ago 1 read an article by Frederic .1. IIaskin on Ilrio.ntal rugs, wherein he said boys in
India get 7) cents (2 cents in gold) a day making
these rugs. What nice profits these Oriental rug
dealers must make even if they buy the rugs in
Turkey, where the per capita of money is $400
and the boys must get about 10 cents a day for

in

17

111111S $.,07




in

w•hich

I 4)

I

I

making them. These Iwo wages of India
and
China show the correctness of my assertion
that
I he per capita of money governs prices. For
India and China Inith have the same per capita,
$2.00 in silver, worth, say, 40 cents on the dollar
in gold, making 80 cents per capita in gold.
This
low per ea pit a of money for I ndia is the reason
we are TIOW Wrapping our cot ton hales \\It h
com!milli ively rot t en I ndia jut e i nstead Of as
formerly with the much superior Kentucky and
Missouri
hemp. Our hemp industry has been ruined by
our high prices and our cotton and every
ot her
industry will be ruined if we don't stop inflating
our prices by inflat ing our currency. The
neToes
in Africa are learning how to work and
will make
I he cotton and t he linen indust ry will be
stimulated in Europe a rid wool growing in Australia
,
Argentine and elsewhere. And foodstuffs will be
produced more in other connt ties. The following
are the approximate per capit as of money
of the
different nations, as given under Money
in the
Encyclopedia A merica na, published in 1903,
in
Chicago and New York:
China
$2.00 I h•nina rk
$11.50

Cuba
Bulgaria

India
Servia ...........
Japan
Turkey
.
Roumania
Egypt
Finland
Mexi,,,
Russia
ilayti
•
Austria -Itinerary

2.00 1'atimla
2.00 1;recce

12.00
13.50

0 00 Swit zerla rid
17.00
3.00 Cape Col,my . .. 18.00
3.00 Great Brit in i n ... . 18.00
4.00 Ciermany

21.00

4.00
4.00
5.00
6.00
6.00

Belgium
Spa in . . .........
Port uga I
Ansi ra lin . . ... . .
Netherlands .....

7.50
8.00
9 00

S. African Rep.. . 28.00
U. S. $2s, now . . 35.00
South America.. 3 1.00

3..5 ,
220)
23.50

25.00
25.00

Norway
Cent ra I A1114.6(11 1(1.00 Siam
14 00
Italy
10.50 France
18 00
Sweden
11.00 Straits Set t!emit s 48.00
Average per capita of money in
the world,
about $8.90,




18

Looking at the foregoing list, we see that
Mexico and Russia each have $6.00 per capita.
Therefore their wages and cost of living ought to
be about one-sixth as much as ours. And are
they not? Have we not all heard of the 25-centsper-day so-called "pauper" labor of the peons and
serfs? This 25 cents per day is worth as much
to them as $1.50 to our common laborers. For
other things are likewise in proportion. Egypt,
per capita $4.00, good farm labor 10 cents a day.
Labor so cheap they cannot afford to buy our
high-priced labor saving machines, manufactured
with high priced labor. France, I think, has heretofore. prospered in spite of her high per capita
of money because her people are much given to
hoarding, i. e., practically burying their money,
and do not use checks on banks nearly so extensively as we do. Besides, the Bank of France
carries a large gold reserve; dead capital. It is
also \\mill eonsidering that France may have
earned her money by thrift from other nations
and did not manufacture it out of paper and
cheap gold as we are doing. But even she is beginnin! 1,, have her troubles, for on April 10,
,
1909, there was a button-makers' strike at Meru
because their wages had been cut 30 per cent
10 compete with Japanese pearl buttons. It could
hardly be an accident that Cireat Britain and
Cape Colony have the same per eapit a, $18.00.
There must have heel some good, well thought,
out reason for it. I have recently been readinf.,*
some very interesting letters from Japan by Frank
0. Carpenter. With all his traveling and natifral
astuteness, it seems never to have occurred to
him what relation the prices of a country have
to the per enpita of money of that country. Farm
laborers in Japan now get 16 cents a day without
hoard for 11101 and 10 cents for women, working
front sunrise to sunset. Ile says prices there
have advaneed greatly N‘ithin 1 he last few years.
This is (wit e natural, f,,r lii pan has copiously W8('red her currency during these years, with large
borrowings in n» foreign nations. Mr. Carpenter
says there are 1,000 new factories then.. The
19

..t

cotton factories are running night and day, making from 12 per (Pia to 50 per cent annual dividibads. The men operat ives get 30 cents, I he wittnVII 21 cents and the ehildren 6 cents for ten hours'
work. The men get good meals, consisting of
rice, fish and vegetables, for 21,4 cents each-7/
12
cents per diem. The shipbuilding yards aml navigation companies are making about 12 per cent,
per annum dividends. The banks and stock companies 8 per cent to 12 per cent, and more. The
savings banks pay the depositors 4.8 per eent
interest compounded semi-annually. Oh! if we
only had as small a per capita of money as Japan.
how We would prosper. \\•,, „mod
he h umatu_
tarians and profit at the sante time, and put cotttut shirts on t.he hacks of all the poor peoples of
the world without skinning 'em alive with our
outrageous prices—higher than those of any
ot
oat ion
wc would have such
the world,
high power money that, we could profitably raise
cotton at minus 5 cents a pound, corn at, milois
25 CPO S a bushel and wheat, at minus .10 cents
Imshel, and horses, mules, meat, land, wages and
everyt hing else would be in proportion. As it is,
We are a. nal 1(111 of selfish, greedy
cormorant, robbers, piling up money that spoils
loses
purchasing power) on our hands, as did the
manna (Exo(lus xvi) of the Israelites in the Wilderness, when they got greedy and gathered more
I han I hey needed for their immediate wants. I
am I old I hat, t he Standard I
Cmapa n V is
ing a railroad from La Paz, Bolivia, old blindto a
solid mountain of gold of low grade, easily
worked, free milling gold ore. Maybe a steam
sh“vv1 (
'Yaniding Pr°1)°siti°11. Ar" w'
enmmodatingly free coin this gold mountain to"
for them
and thereby further weaken the purchasing power
of our money, so :IS
nin ke prices go sky high
aunt I herl'hy l'Oh mull
of Olir I hrift v
people of
their cash savings, aecumulated by years of toil
and sweat and self-denial? If there were anything
whatever to be gained by so doing there might !IV
excuse for doing so. Ilur
government might.
to gut at least ort-lialf for mining it into money.




20

r

There are said to be over $15,000,000,000 on (!eposit in the banks and trust companies of the
United States. MI of this money in thirteen
years has lost ainmt one-third of its purchasing
power, because of inflation, making about $5,000,000,000 lost. This is a loss of about one and a
half billions of dollars more than all the money
in the United States. Then there is the one-third
loss on untold billions of bonds, mortgages, notes
and life insurance policies. So I think it is safe
to say that our people have lost in thirteen years
several times over the total amount of money
there is in these United States. dust think of
it! Lsn't it awful? Then there are the authorized several hundred millions of Po no ma bonds
which when sold are to be used as a basis for
still further watering the currency with national
bank notes. This basing the currency on a. debt
is queer financing anyway. There should be no
1111/11! in an Is sold OH whiCh currency can be issued.
Devember 1, 1909, there is already outstanding
.
$707,433,547 of this national bank currency and
$316,681,016 of legal tender greenback fiat mopey,
which is better money than the national bank
notes, which ore not legal tender liat money.
Besides, gold can be withdrawn from the treasury
wit It these greenbacks: also the national banks
hold them as their legal reserve, fol. which nat ional bank notes cannot, be used. Also there are
said to be immense, inexhaustible amounts of gold
in Alaska, so that, Alaska is an injury instead of
ourselves
a benefit to Its. We have been it
on the back for years over cheating 1Zussia by
lmying Alaska from her for $7,200,000. If we
had left Alaska to Russia she with her low eapit a
of money and low prices could have caught the
salmon and seals cheaper for its and mined the
clad, copper, etc., and sold it to its a great, deal
cheaper than we con ourselves. Besides, it looks
like the trusts might rob us of everything in
Alaska, anyway. Also, we could have bought the
Philippine timber cheaper under Spanish rule
there than we can under our own rule, for we
have put up prices there too. Why not have the
21

free coinage of aluminum and he
done with it?
This aluminum money would go at a
discount
under gold and consequently
would not so disastrously affect ii r foreign
commercial relations
as does the free coinage of gold
and the issuance
of paper money on a gold basis,
with the present
international agreement making 23.22
in gold
dollars the international legal tender
fiat money.
It would make no difference in
our dealings with
foreign nations how high prices
Ii une in this aluminum money might go here at
.
prices would be governed entirely The height of
by the amount
of this aluminum money put
into circulation by
the government. And free
printed paper money
would be just as worthless and
make and more convenient to a little cheaper to
carry. The low
per capita of money in Cuba,
with consequent low
prices there, is, f think, the
reason they can raise
sugar there so much cheape
r than we can here.
Then there is that cheap no-duty
Philippine saga r
a nd tobacco coming in to
niin our cane and beet
sugar industries and tobacco
he very little money there, raisers. There must
for the native Filipino
school teachers under
American stipervision get
an average of only $9 a
month stipend. Joseph
French Johnson, professor of
the University of New York political economy at
City, who has published a book, "Money and
Currency," says: "It
took $3,623 last year to
pay for the necessaries
of living that could be
bought. for $2,500 in 1897.
Sixty-nine cents ten years ago
power of the dollar of today." had the buying
So he, figuring
on the cost of commodities
and
,
increase of the currency, have I figurin! on the
reached the same
ciin('lusion. His estimate of
years, while my estimate of 69 cents is for ten
65 cents is for thirteen years. And each
proves the correctness of
the other. Thus we see
that inv assertion that
add 1 per cent to the curren
its purchasing power 1 per cy and you depreciate
cent, double the currency and you cut its
purchasing power one-half,
is a condition and not a
ught to be remedied at on theory. And the evil
by stopping the free
coinage of gldd
by ,
:tnpping. the issuance of




1.)
i•••
,

any more national bank notes or legal tender
greenback fiat money or Aldrich-Vreeland money,
or any other kind of money. We need less money
in order to have better money. It seems that
'Messrs. Aldrich and Vreeland want a central bank
with power to expand or contract the currency.
This would be a very dangerous machine if it
should happen to fall into the hands of unprincipled predatory men, which it is very likely to
do. They could elevate or depress prices at will
by put I ing the currency on a sliding. scale, which,
I think, is unconstitutional, working it up and
down, pump like, and suction all the money out
of the people of the United States. There is
enough of that kind of thing going on already,
a nd we don't want any more machinery to help
it along. And if congress does pass any such law
I hope President Taft will veto it, as did "Old
iliekory" Andrew Jackson veto in 1832 the
United States Bank. All the currency reform
e need is to stop watering it so copiously. Anil
tho United States treasury is a good enough central bank. For years past people who have been
putting their hard-earned savings into life insurance policies, "good, gilt-edge bonds" and savings banks have thought themselves almost as
safe as if they had put their faith in the Rock
of Ages. But they have been building their
houses on the shifting sands. They have been
put Iing their watered money into leaking barrels.
As they poured in at the top it has run out at
the bottom. Our government ought to charge
as loll for coining into money, say, 50 per cent
of all the gold (or gold and silver) received at the
mint. In this way a fund might be created with
hich to redeem about $751,000,000 of outstanding 2 per cent bonds on which are based a
circulation of about $650,000,000 (on a like
amount of bonds) of national bank notes and
also redeem the $346,681.016 of legal tender
greenback flat money for the redemption of which
$150,000,000 gold is required by law to always
be held in reserve at Washington, D. C., so that
we could become again as in 1$35, a TIM l()T1 with0
'
•••. •.

out debt.
14,1N-Postmaster-(blitbral Meyer, now
ref ary of the
sec..
navy, has a very
good plan, approved
of hy President Ta
It, I think,
is to estill)Hsu postal savings
banks allowing 2 per
Cent interest and use the
deposit, in retiring t hose
$7:i1,000,000 01 pest iferons 2
pet' rent bonds by means
of which I lie
is NV11 t.011111 t !trough
t he
national banks w•it h
their notes. It is quite a
common occurrence to
hear the miners out
\Vest
boast that the gold
and silver they dig
out of the
mines is good, clean,
honest money; that it
jures im Ina%
inenriches t he W1/11t1
and benefits
everybody.
In I heir profound
ignora tap of the
first principles of
sound finance they are
perfectly
honest in I heir mist
al:en belief. They t
16111: t here
is a dollar's worth
of githl in a gold didlar.
do not know that it
They
is t he go\ ernment
stamp NVit 11
111' Ill IV I/1'1111141 it
1 hat makes I he
gold valuable.
The.v do not I; la t‘‘ I lint
\\ hen I lie go ld
currenc y
doubled that although
we ha\p Iw ice as
many
gold dollars ‘ve ha
‘e not onesintzle,
solitary dollar more of purena,i ng
.
an,i hat milUt
lions of potpie a
re injured by the
shrinlagi. iii
I he purchasing pm\
er lit I heir nimit.y
etihe
I,. increased.
Some time since I
read
Ilia! tea"dil in 4
e.‘lon at Hl cents a
pound. i"reiiil i,
I. Ilaskin
s in the
t'onotteretal Appeal
of ltd.\
I, Hite), page
0. column 0, the
1 111.1 I.
children
lo 1 cents
da ‘. t he skillful %V
.
.•
4111(91
; cents and he
men to cents for
picking tea,
mud 161
!'le;1 I wail\ "14 4I t'
(row Siuithern India Ilet'11
..I I hi's.' AllIn t1 1\
‘‘n*.e. anti an'il
III Hit
opIII ,lit
'
nione. 1 14 1 .1 111 11 11 .
‘
Lind :11141 I.. Iii1j
and bily
Illil
liii poor rcht i% es
back
ih"1"
.
"
II
cam out their intent I4 ,ii I.. 1.1 lit 11
1 hi l, is just like
the En, '1'1`11 11 11 11111W1 III
U I,, ..Int' It/
our country.
nudge I*t 1 Ile, 1 11.1
I
1 I he 141 ea
pit a of money in
te.‘lott
••• :.00. ;mil III •
•;ititheett India 11 1/011t
1 .01), and 1 lint
.
hind
114.1c Is ‘er‘
at nom
cheap looked
(it'it point
Iti their consular
reports
.itt
II Ilkto
toice:ti commies
are contimmlly
out met cha
ills t ha I t he
reason t hey cantiot it,et the
trade to the
dttferent countries is




that they will not study the wants and the peculiarities of the people and cater to them and
pack their goods to suit, them, etc. Now, I do
not think this is the principal; true reason we
do not get the trade. I think. the true, fundamental reason is that our prices are too high,
caused by inflated currency. I think our consuls
are either ignorant of this or that they have not
got the backbone to come right out and say so.
I dated my letter addressed to the Hon. Win. J.
Bryan January 8, 1909, because it was written
about that, date and because it was January 8,
S 1 :i, that we, mostly Kentuckians and Tennesseans, whipped the British at New Orleans. 0,000
Americans whipped 1 2,000 Brit kb in twentylive minutes, killing and wtmnding• about 2,500
and losing only 8 killed and 1 3 wounded. Our
old backwoods hunters knew
how to shoot,
st raight.
They did not have modern rapid-lire
gulls and as it was quite a task to load and
prime their old flint, locks they took good a liii
before tiring. The British were brave, well seasoned soldiers, but, their officers hliiiidere:I. This
bat lit' was fought, 1.") days after the 11'1'111y of
peace was signed at, “hent, December 21, 1 sl I.
There were no fast steamships nor wireless telegraphs to bring news in those days. This battle
was about the only one On land during the war
1.512 hy which we saved our face). And my
plan for currency reform is the only way we eau
111111 1111 44110'
eiwilliereially whip GrVat Brit am
1111I 14111.4. Since writing the foregoing 1 find page
67.1 of the April, 1909, Nineteenth Century and
After Magazine an aide artiele by Moreton Frewen, an Englishman, entitled "The New Era in
Economic History," which ought to be a Democrat h. eampaign circular in 1912, unless the Republicans art. smart, enough to beat them to it.
Ile says that owing to the demonetizing of silver
by the civilized countries the price of silver has
fallen so low that the S00,000,000 of people, about
one•half of the world, who 11Se silver as their
money, are unable to buy the gold exehange with
which to buy English goods, and that factories
25

are springing up in India. that are not only supplying the Indian trade, but, are also shipping,
goods to China, and I hat, fact ones are also starting up in China, and he suggests that the Chinese
open door is more likely to swing outward than
inward. I think this is the reason they are now
having such hard times in England. Commander
N,Vm. Booth of the Salvation Army reports November 17, 1909, hundreds of thousands out of
work and their families starving in London and
millions suffering for lack of employment throughout Clreat Britain. I suspect also that these
factories are being promoted by English capital,
just as I suggested in my letter to Mr. Bryan, our
factories would have to move to China, Japan and
other countries where money is scarcer and necessarily worth more than here and wages and living cheaper and the cost of prodnel ion a great
ka I less than here.
The $2.00 per capita of China
and India must be in silver, equivalent, say, to 40
cents on the dollar in gold, which would make the
per 'a pit as Si) cents in gold. As if in confirmation of Nlr. Frewen's prediction that the Chinese
open door would swing outward, I see in the Pittsburg Chronicle Telegraph of September 24, 1909,
.
page 6, column 2, an editorial, "China as a, Purveyor," saying: "On July :30 last the British
provision trade experienced a severe shock from
the arrival at London of a Chinese steamship
laden with provisions consisting of wild fowl,
Sit ipe, pheasants, deer, hares, hogs, chickens, dottiest It. ducks, geese and eggs, this being the
first cargo of the kind received from the Celestial
empire, which were offered at very low figures
and found a, ready market,. That China's surplus
of hiod supplies is vast, prices low, etc." Frail k
G. Carpenter says there is an industrial school at
Tientsin that pays the boys 10 cents a day,
which
is enough to pay for their hoard and clothes, and
that there are boarding schools in Peking with
I nit ion and board at $3.00 a month. This 10 cents
ilfl y or $3.00 a uun)nfh must be in
silver and
aineunts to only about I cents a day, or $1.20
a
month in geld standard money. thold miners'




26
•

wages in Korea is 25 cents a day. Here about
$3.00 am! tip for eight le at us' work. 'rite tot a I
production of gold from 1199 to 1907, inclusive,
-116 yea us, was about $12,500,000,000, nearly all
of which is still in existence. 'rile production
the world in 1896 was ablett, $202,251,600, in
i
1907 $404,000,000, in 190S $434,000,000,
and inereasing every year
1909 $450,000,000
and raising prices throughout the world. Another
way in which these 2 per cent government bonds
with which the currency is watered might be retired would be to offer the holders of them in
/
exchange gold bonds bearing 3 per cent, 31 2 per
or 4 per cent interest on which no currency
cent
could be issued. When I say cheap money I mean
money of low purchasing power. The newspapers
by cheap money men n money at a low rate of
interest. Our prices are so high that our imports
are increasing, exports decreasing, which, of
course, increases the governmeni. revenue, but at
the expense of the country. lug gold 811(1 it will
leave us. Stop digging it and it will come back
and stay with Its, a nil be wort more to its. I
don't like the idea of ship stil,idy, butt realizing
that we have just, got to do something to get
auxiliaries for our navy, I would suggest I hat, our
giwernment own out right a merchant niarine,
manned entirely by white Americans, so as to
make the service honorable, to be used ihiring
wit rs as naval a 11 X iliaries. Our Southern congressmen might be induced to vole for such
ny,
bill. I thi id; the -navies of Bussia , Cerma
aboard. Not
.hipan have no It
France and
many years ago the American Oeeanic line plying,
between San Francisco and Australia, pitying sailout of business by
ors S-10 per inimth,
vessels paying sailors only
Japanese and other
$8 per month. Soldiers in China get, 12 cents
silver a day, which is about, 5 cents in gold. Men
reeling silk from the comens 10 cents to 12 cents
in silver working from daylight to dark. What
good can the (Minese ern door do us? All this
I waddle about it is a silly farce, so far as our
selling them is concerned. Our robber prices boy27

eott us.. The sahiry of Gen.
Ova
the coramander-in-chief of the Japanese army,
is only
$::,000 a year, hut Mien we consider its purchas
ing power in Japan, that is an immens
e 811111.
The trusts may think it to their
interest to inflate the currency so as to have
such high prices
as to necessitate high tariff
to keep out foreign
goods. Senator Aldrich is for high
tariff. The
Ahirich-Vreeland $500,000,000
emerge ley (•firrency
bill is an inflation measure,
On the tobacco plantations in Java !nen get 10
to 16 cents a day,
women 0 to 12 cents, children 4
to 6 cents, working from 7 a. in. to 5 p. in.
'There are more hogs in China
I see in Oetober, 1009, Consular than in Europe.
that pork sells in China at .1 'Reports, page 117,
at 31 2 cents a dozen and quail cents a pouffil, eggs
/
at 2 cents each. It
these prices are in silver, which
I think they are,
40 per cent of these amount
s would be the prices
in our gold standard money.
On December 10,
1909, tTnited States Comptr
olh.r of the Currency
Lawrence 0. Murray reports
"!25,000,000 people
have bank deposits,
amounting to $14,425,523,M')." Add to this the money
not in the banks
and we have perhaps
considerably over $15,0(n),000,000, about one-third of
which has been lost in
I hirteen years because
of inflation. Tie reports
savings bank deposits at
$5, 8,735,379
67
()
1.1,
891,696 people. Total number of deP sil"
banks iii
the ("rated States,
about 25,000, of which about
7,000 are national
banks.
stantly blaming the trusts Newspapers are conand the tariff' for high
pr ices. This is ()illy
.
half a truth, which, however,
misleads the unthinking
multitude. Our inflated
eur.
rency is the first root,
cause of high prices,
which makes a high
proteetive tariff absolutely
necessary to shut out foreign
competition. Tariff
added 10 our already
high inflated currency prices
is only the second
ary
tarifl, of course, gives cause of high prices. The
the trusts a chance to roll
us from behind I he
high tariff wall. However, it
here were Ho /11'111.
at all I think there would be
wI rldwide trusts.
l'ossildv by systematic methods and the elimina
tion of waste our trusts make




28

big profits and still sell us cheaper than we could
otherwise buy. We buy of South America ahout
three times as much as we sell there, and of the
Philippines we buy about t \vice as much as we
sell them. As long as our high inflated currency
prices bar us front the Latin-American markets
we may confidently depend upon Great Britain
to liack us up in the Monroe doctrine. For she
has nothing whatever to fear from our competition there, but she has everything to fear from
(;erranny and other countries. I think if we should
undersell her there we will have ti) abandon our
Monroe doctrine. They are getting our gold via
Latin-America and are satisfied. I see in the
Literary Digest of Deeember 25, 1909, page 1195,
that priees for commodities on Deeember 1, 1909,
were 00 per cent higher than on .1111y 1, 1s90,
when they reached their lowest point. It took the
00 years of life, experience, travel and reading and
three years of special observation, reflection and
witting facts together to gain the knowledge to
write the foregoing article. It is entirely original
with me, a plain old fogy bookkeeper, for I have
never read any works oil polit ical economy, but 1
111111k it is 21(11d, common sense, sound, logical, essentially correct and incontrovertible. It, is as
(dear to my mind as that two phis two equal boor,
A. C. LAKE,
28 North Front St., Memphis, Tenui.
originator of the charge 50 per cent toll for coinage idea. It will curtail the overprodnetion
of gold and 11(.11) pay the government's expenses.
Inflated currency is the sole first cause of our
high prices, and inflation oueht, to stop .at once.
Q. E. I).
Last year Japan sold us almost one and a half
times as much as she did to the whole of Europe. She bought of Europe nearly two and II
11111'11 111111'S 11S 111111'11 as she did of us. Our sales
to her were mostly raw cotton and petroleum.
Europe's sales to her were manufactured goods.
Nlemphis, Tenn., 'January 5, 1909.
reviscd to January s, 1910.
29

[Pus.621

17

For expenses of inquiries and investigations ordered by the Senate,
including compensation to stenographers to committees at such rate
as may be fixed by the Committee to Audit and Control the Contingent Expenses of the Senate, but not exceeding one dollar
twenty-five cents per printed page, twenty-five thousand dollars. and
For additional amount for purchase of an automobile, including
driving, maintenance, and care of the same, for use of the VicePresident, one thousand dollars.
For purchase of furniture, two thousand five hundred dollars.
To pay George H. Boyd for compiling customs tariffs, two hundred
and fifty dollars.
HOUSE OF REPRESENTATIVES.

Contingent expenses, namely: For wrapping paper, pasteboard
paste, twine, newspaper wrappers, and other necessary materials ,
folding, for the use of Members of the House, and for use in for
the
Clerk's office and the House folding room (not including envelopes,
writing paper, and other paper and materials to be printed and
nished by the Public Printer, upon requisitions from the Clerk offurHouse, under the provisions of the Act approved January twelfthe
th,
eighteen hundred and ninety-five, for the public printing and
binding), three thousand dollars.
For folding speeches, to continue available during the fiscal
year
nineteen hundred and eleven, five thousand dollars.
GOVERNMENT PRINTING OFFICE.

The allotment for printing and binding for Congress authorized
in
the sundry civil appropriation Act for the fiscal year nineteen hundred
and ten is hereby increased to one million eight hundred and
seven
nine thousand one hundred and ninety dollars, such increase nottyto
involve any increase in the total appropriation under "Gov
ernment
Printing Office" in said Act for the fiscal year nineteen hundred
ten. And the amount authorized to be expended for machinery and
of the appropriation for printing and binding during the fiscal out,
year
( hundred and ten is hereby increased from fifty
ni eteen
thousand
liars to seventy-five thousand dolfars.
The allotment for printing and binding for Congress is hereby made
available for the printing, under provisions of existing law and
the
rules of the Senate and I louse of Representatives relating to publi
c
printing, as public documents of such of the publications of
the
National Monetary Commission as the Commission may desig
And the Superintendent of Documents is hereby authorized to nate.
order
reprinted, from time to time, such public documents of the Natio
nal
\ Monetary Commission as may be required for sale.
\,
JUDGMENTS, UNITED STATES COURTS.
For payment of the final judgments and decrees, including
suit, which have been rendered under the provisions of thecosts of
larch third, eighteen hundred and eighty-seven, entitled "An Act of
Act to
provide for the bringing of suits against the Government of the Unite
d




Pub. No. 62-2

18

[PUB. 62.]

States," certified to Congress at its present session by the AttorneyGeneral in House Document Numbered Five hundred and thirty-five,
and which have not been appealed, namely:
Under the War Department, two thousand eight hundred and
thirty-six dollars and fourteen cents;
Under the Navy Department, four thousand and fourteen dollars
and eighty-five cents;
Under the Department of Commerce and Labor, three thousand
two hundred and fifty-seven dollars and fifteen cents;
Under the Department of Justice, two hundred and twenty-five
dollars and forty cents;
In all, ten thousand three hundred and thirty-three dollars and
fifty-four cents, together with such additional sum as may be necessary to pay interest on the respective judgments at the rate of four
per centum per annum from the date thereof until the time this
appropriation is made: Provided, That none of the judgments herein
provided for shall be paid until the right of appeal shall have expired.
JUDGMENTS IN INDIAN DEPREDATION CLAIMS.
For payment of judgments rendered by the Court of Claims in
Indian depredation cases, certified to Congress in Senate Document
Numbered Three hundred and twenty, at its present session, twentysix thousand four hundred and thirty-seven dollars; said judgments
to be paid after the deductions required to be made under the provisions of section six of the Act approved March third, eighteen hundred and ninety-one, entitled,"An Act to provide for the adjustment
and payment of claims arising from Indian depredations," shall have
been ascertained and duly certified by t he Secretary of the Interior to
the Secretary of the Treasury, which certification shall be made as
soon as practicable after the passage of this Act, and such deductions
shall be made according to the discretion of the Secretary of the
Interior, having due regard to the educational and other necessary
requirements of the tribe or tribes affected; and the amounts paid
be reimbursed to the United States at such times and in such
proportions as the Secretary of the Interior may decide to be for the
interests of the Indian service: Provided, That no one of said judgments provided in this paragraph shall be paid until the AttorneyGeneral shall have certified to the Secretary of the Treasury that there
exists no grounds sufficient, in his opinion, to support a motion for a
new trial or an appeal of said cause.
J tJDGM ENTs,COURT OF CLAIMS.
For the payment, of the judgments rendered by the Court of Claims,
reported to Congress at its present session in I louse Document
Numbered Four hundred and thirty-seven, and Senate Document
Numbered Three hundred and thirty-seven, namely:
Under Treasury Department, one hundred and forty-four dollar,
and forty-five cents;
Under War Department, twenty-six thousand nine hundred and
eighty dollars and seventy-four cents;
Under Navy Department, two thousand two hundred and thirtynine dollars and two cents;





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