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Notes from the Editor :
My thanks must go first to Daniel Pouzzner for the source of the
original text at his web-site -
t became ob!ious as was rea"ing the text# that it ha" been
scanne" using scan to text software# an" that the scan ha"
intro"uce" countless errors. $rrors were !arie" an" many: Pages
were misse"# figures showe" as letter %o&s' instea" of zeros %(&s'#
%l's )els* became %1's )ones*+ currency inclu"e" hyphens# ser!ing
no purpose# an" in finance# the ,-&s %.' )poun"* symbol ha"
been interprete" as an %/' etc# plus many others.
n "eci"ing to pro"uce a "ocument for wi"er consumption# felt
it woul" be remiss of me# if "i" not correct these. 0cts of
go!ernment were researche" to ensure correct "ates# names an"
titles were use". 1eferences in the bo"y of the text to earlier
works# /atin# prominent figures of the "ay# ol" terminology 2
currencies were gi!en footnotes# to assist rea"ers not familiar
with these terms. 3pelling was tailore" to our 0merican cousins
an" punctuation was also correcte" as nee"e".
4hese an" other amen"ments to make the text flow impro!ing
rea"ability# such as using italics an" bold to emphasize the many
spoken or 5uote" passages to highlight pieces recor"e" "irectly
from the recor"s was my "ecision.
6a!ing rectifie" these# it became ob!ious that the story "i"n&t en"
there# so it was "eci"e" to bring the story up-to-"ate# inclu"ing
the formation of the 7e"eral 1eser!e# e!ents lea"ing to the
"Credit Crunch", an" notable e!ents since# with a final look at a
possible future for the worl" economy.
n the final analysis# howe!er# all errors an" omissions are mine.
William Stirrup [Editor]
n this !olume the author en"ea!ours to gi!e an accurate history
of the present 9ational <ank 3ystem of currency# inclu"ing an
account of the first ,nite" 3tates <ank - both of which were
borrowe" from =reat <ritain by those statesmen who# like the
father of 3ir 1obert Peel# belie!e" that a national "ebt was the
source of prosperity.
t is belie!e" that the facts a""uce" in the following pages will be
pro"ucti!e of some goo"# in pointing out the immense e!ils
lurking in that system of banking# a system which has pro"uce"
panics at will# an" which is the acti!e abettor of the stock
gamblers# rail-roa" wreckers# an" those in"ustrial tyrants of
mo"ern times# the enormously o!er capitalize" an" oppressi!e
t is sought to point out the great "angers of "elegating purely
go!ernment powers to these gree"y monopolists# by which they
are enable" to organize a money trust# far more tyrannical than all
the other combinations now in existence+ an" by which they
absolutely "efy the authority that en"owe" them with corporate
4he issue between these banks an" the people will be >oine" in
the near future# an" the greatest struggle.

9e!er has this statement been more true ?$".@
The Coming Battle
Chapter Page
. :rigin of the Money Power in 0merica B
. :rigin of the Present 9ational <anking 3ystem CA
. 9ational <anks an" 3il!er DE
F. ;onspiracy of 9ew Gork an" /on"on <ankers an" <on"hol"ers
to 1emonetize 3il!er 1(E
F. $fforts to 1e-monetize 3il!er an" Preser!e the =reenback 1HD
F. 4he 9ational <anks Iage Iar ,pon the ;re"it of the ,nite"
3tates 8(A
F. 9ational <anks 3ecure a ;ontinuation of 4heir $xistence 8AJ
F. 4he 9ational <anking Money Power 3ecures ;omplete ;ontrol
of the 4reasury
K. Money Power of $nglan" ,nite" 3tates ;ombine to 0nnihilate
K. 9ational <anking Money Power <rings on the Panic of 1DEA A8H
K. 3pecial 3ession of ;ongress 1epeals the 3herman /aw AJC
K. 3enate Fotes for 1epeal ADH
K. $fforts of 0"ministration to force ;arlisle <ill through
KF. 9ational <anks an" the 0"ministration ;ombine to ssue <on"s
in 4ime of Peace
KF. ;ampaigns of 1DEJ CJH

KF. 4he 6un"re" Gears Iar CDE
KF. 4he Death of ;ashL HAA
KF 4he 1oa" to 1e!olution HCJ
KK 7ighting Gour :wn Personal <attle J1(
4ables JAD
0bout the $"itor/0uthor JAE
4o my wife# 0ngela#
Daughters 1achel# an" Megan#
an" 3on 0lan.
4he Price of /iberty is $ternal Figilance.
$xperience is /ife&s biggest school.
Iatch 2 /earn.
;60P4$1 .
:1=9 :7 46$ M:9$G P:I$1 9 0M$1;0

"Justice, full and ample justice, to every portion of the nited States,
should !e the rulin" principle of every freeman, and should "uide the de#
li!erations of every pu!lic !ody, $hether it !e state or national%"
- 0n"rew Mackson.
During the existence of the human race# from the earliest "awn of
ci!ilization to the close of the present century
# the power exerN
cise" o!er the in"ustry# property an" conscience of man by cunN
ning an" ambition has assume" many forms.
4he form of power which first appeare" to oppress an" plun"er
the race# was exemplifie" in those celebrate" con5uerors of anN
ti5uity# who tra!erse" the earth in their bloo"y careers# transformN
ing blooming fiel"s an" rich an" populous cities into "eserts#
o!erthrowing whole nations# sacrificing on the battlefiel"s# countN
less myria"s of their fellow men - merely to satisfy a species of
ma"ness "ignifie" by the name of ambition.
0nother an" a more "angerous form of misapplie" power resulte"
from the intellectual tyranny exercise" by that shrew" class# the
priest-hoo"# o!er the conscience an" religious beliefs of the great
mass of mankin".
7rom the "ays of the Pharaohs "own to this perio"# man# from his
instincti!e !eneration for a supreme being# has been so peculiarly
susceptible to the arts# wiles# an" cunning of priest-craft to such a
"egree as to excite uni!ersal surprise.
4he reference here was to the 1Eth century ?$".@
4hose gross superstitions# engrafte" on the inherent religious
nature of man# by that wary intellectual superiority# which
weighe" "own the noblest traits of the human min"+ which bre"
bitter religious animosities+ unhear" of extortions by the corrupt
an" infamous priestly aristocracies of !arious so-calle" religions#
were the well-mature" an" craftily-"e!ise" schemes for plun"er
by "esigning men.
t is almost inconcei!able that the ancient $gyptians# that a"mirN
able race# whose noble genius an" won"erful energy reare" those
stately temples# the magnificent cities# an" the stupen"ous pyramN
i"s along the !alley of the 9ile# shoul" worship the man-eating
croco"ile# the sa!age !ulture# the grinning ape an" the crawling
4his race is an example of that soul-"arkening superstition which
hung like a pall o!er the intellect of man.
4he countless wars which afflicte" $urope# 0sia# an" 0frica for
nearly eighteen centuries+ which "rowne" the finest aspirations of
humanity in bloo"+ which "esolate" the fairest parts of the earth+
which stemme" the ti"e towar" a higher an" a gran"er ci!ilizaN
tion# sprang from the base superstitions originate" by the graspN
ing priesthoo"# who li!e" in sloth an" luxury upon the labor of
the "elu"e" mass of mankin".
4he celebrate" Fattel
# in the twelfth chapter of that noble work#
4he /aw of 9ations# awar"s us a faint i"ea of the enormities
practice" upon the people of $urope by the clergy.
$mmerich "e Fattel O 4he /aw of 9ations - or the Principles of 9atural /aw
# in his 6istory of 7rance# shows that the ecclesiastics ha"
seize" upon the most !aluable an" fertile portion of the territory
of that country# an" that the oppression practice" by them upon
the 7rench people was one of the lea"ing causes of the great reN
4he thir" an" most insi"ious an" most "angerous form of power
that has yet appeare" to threaten the material well-being of the
race+ which now hol"s e!ery ci!ilize" an" semi-ci!ilize" people
in its merciless grasp+ which is appropriating to itself the pro"uctN
i!e energies of the worl"+ which is subor"inating the press# the
pulpit# an" the statesmen of the "ay to its ambitious en"s+ which
openly boasts of its nefarious metho"s in the courts# legislatures#
an" other parliamentary bo"ies of nations# is the mo"ern money
4hat there is a gigantic combination of the money "ealers# a
powerful international trust of usurers# asserting a superiority
abo!e all >uris"ictions# an" ha!ing for its ser!ants the so-calle"
statesmen an" potentates of !arious nations# who willingly reN
gister the "ecrees of this money power upon the statute-books of
the respecti!e states# is a fact that can be sustaine" by irrefutable
4his great international monetary trust now menaces the !ery life
of this nation# an" the people must "ethrone it an" subor"inate it
to their will# or 0merican liberty will !anish.
4he Declaration of n"epen"ence# which announce" the true prinN
ciples of go!ernment# was a memorable protest against the rapaN
cious money power compose" of the lan"e" aristocracy# the tra"N
ing# commercial# an" manufacturing interests of $nglan"# which#
6ippolyte 0"olphe 4aine )1D8D O 1DEA* was a 7rench historian an" critic.
by a long series of !icious an" unconstitutional acts of ParliaN
ment# sought to eat out the substance of the colonists.
4he war of the 1e!olution# which followe"# set its seal of appro!N
al upon the patriotic efforts of the colonists against oppression#
an" free"om was achie!e".
,pon the conclusion of that most righteous conflict# a more perN
fect union was forme" to establish >ustice# ensure "omestic tranN
5uility# pro!i"e for the common "efense# promote the general
welfare# an" secure the blessings of liberty for themsel!es an"
posterity by the a"option of the 7e"eral constitution.
=eneral Iashington was chosen the first Presi"ent by a unanimN
ous !ote.
7or his constitutional a"!isers he appointe" 4homas Mefferson for
3ecretary of 3tate+ 0lexan"er 6amilton for 3ecretary of the
4reasury+ Mames -nox for 3ecretary of Iar+ an" $"mun" 1anN
"olph for 0ttorney =eneral.
Mefferson# who was the most accomplishe" scholar in 0merica#
the profoun"est thinker upon the principles of =o!ernment of any
age# the frien" of humanity an" a staunch belie!er in the capacity
of the common people for self-go!ernment# was a representati!e
of that in"ustrial element which sustains society by its labors.
6amilton# who was an aristocrat by birth an" bree"ing# an" who
was connecte" by marriage with the wealthiest family of the
lan"e" aristocracy of 9ew Gork# was a strong representati!e of
the tra"ing# banking an" commercial element of 9ew Gork ;ity
an" 9ew $nglan"# which constitute" the 4ory element of the 1eN
4he presence of two statesmen of such wholly antagonistic !iews
an" temperaments in the cabinet of Iashington# naturally originN
ate" "i!isions of political sentiment# from which sprang two great
political parties.
:ne of the first measures which recei!e" the ai" an" sanction of
6amilton was the act of ;ongress a"opte" 7ebruary 8H# 1BE1,
chartering the <ank of the ,nite" 3tates.
Mefferson# whose penetrating min" percei!e" the !ast power for
mischief lo"ge" in an nstitution of that nature# in a powerful
communication to the Presi"ent# a"!ise" him to !eto the bill.
Iashington# howe!er# accepte" the !iews of 6amilton# his 3ecN
retary of the 4reasury# an" signe" the bill# an" it became a law.
<y the terms of the act incorporating the bank# its capital was
fixe" at ten millions of "ollars. 4he power to issue its circulating
notes as money ha!ing full legal ten"er 5uality for the payment of
taxes an" "eman"s "ue to the =o!ernment was conferre" upon it.
t was ma"e the "epositary of the re!enues of the =o!ernment#
an" therefore it became the fiscal agent of the 4reasury "epartN
ment. t was chartere" for the perio" of twenty years. 7or the exN
tensi!e powers an" exclusi!e pri!ileges bestowe" upon it by
;ongress# the bank pai" the ,nite" 3tates a small bonus.
4his bank# therefore# was a monopoly sustaine" by the cre"it an"
the re!enues of the ,nite" 3tates. t ha" the sole power of issuing
legal ten"er paper money# an" its actual capital was treble" in its
earning capacity by loaning its circulating notes at interest# an"
by ha!ing the control of the go!ernment re!enues.
4his was the first appearance of an :1=09P$D M:9$G
P:I$1 in the ,nite" 3tates.
4homas Mefferson# by !oice an" pen# in language of rare power
an" felicity# pointe" out the "angerous possibilities of the bank to
influence the politics an" business of the nation.
n a letter to Ma"ison in 1BEA# Mefferson state" that the bank party
consiste" of:
&% 'he fashiona!le circles of (hiladelphia, Ne$ )or*, +oston
and Charleston ,natural aristocrats-%
.% /erchants tradin" in +ritish capital%
0% (aper men%
0gainst the bank were:
&% /erchants tradin" on their o$n capital%
.% 1rish merchants%
0% 'radesmen, mechanics, farmers and every other possi!le
description of our citi2ens%
n 1Dll# ;ongress refuse" to re-charter the bank# an" as it ha" "urN
ing its brief career obtaine" the mastery o!er the entire business
of the country by its loans of circulating notes an" the public re!N
enues# an" ha" built up a system of cre"it in the commercial cenN
ters# to intimi"ate ;ongress an" the people# it ma"e a concerte"
contraction of the currency an" brought on the great panic of 1Dll.
,nite" 3tates 3enator <enton# in a speech in the senate "uring the
a"ministration of Mackson# thus graphically states the manner in
which the bank contributes to manufacture public sentiment in its
6e says: -
"3ll the machinery of alarm and distress $as in as full activity at
that time as at present, and $ith the same identical effects 4 to$n
meetin"s, memorials, resolutions, deputations to con"ress, alarmin"
speeches in con"ress%
"'he price of all property $as sho$n to !e depressed% 5emp sun* in
(hiladelphia from 6078 to 6.78 per ton9 flour sun* from 6ll%88 per
!arrel to 6:%:79 all real estate fell thirty per cent%9 five hundred
houses $ere suspended in their erection9 the rent of money rose to
one and a half per month
on the !est paper9 confidence destroyed9
manufactories stopped9 $or*men dismissed and the ruin of the
country confidently predicted%"
4he 3enator goes on to show that great public meetings were
hel"# inflammatory speeches ma"e# cannon fire"# great feasts gi!N
en - all engineere" by the bank. 4hat those members of ;ongress
who fa!ore" the bank# tra!ele" with public honors like con5uerN
ing generals returning from !ictorious battlefiel"s# salute" with
acclamations by the masses# escorte" by processions# an" that
those members fa!oring the bank were exhibite" throughout the
,nite" 3tates as though they were some superior beings from the
celestial regions.
n 1D18 occurre" the secon" war with $nglan"# an" the bank
threw its whole influence against the ,nite" 3tates "uring that
great struggle. $!i"ence is not wanting to sustain the charges
ma"e that the bank element of 9ew $nglan" planne" the separaN
tion of that section from the ,nion. During the continuance of
this war# the ,nite" 3tates issue" its treasury notes with full legal
ten"er power# an" they were gla"ly recei!e" by the people. 0lbert
for twel!e years 3ecretary of the 4reasury# an" one of
the ablest statesmen of the "ay# thus bears !aluable testimony to
the efficiency of go!ernment paper money in carrying the ,nite"
3tates through that war.
6e says: -
:ne assumes the author meant 1.HQ per month )circa 81Qp.a. compoun"e"*
0lbert =allatin )1BJ1 - 1DCE* 0ristocratic 3wiss national who emigrate" to 0merica
in 1BD(# was electe" to the 6ouse of 1epresentati!es an" 4reasury 3ecretary ser!ing
the Cth - Jth ;ongresses.
"'he paper money carried the nited States throu"h the most ardu#
ous and perilous sta"es of the $ar, and thou"h operatin" as a most
une;ual ta<, it cannot !e denied that it saved the country%"
n a letter to Mohn 4yler# May 8D# 1D1J# Mefferson says:-
"'he system of !an*in" $e have !oth e;ually and ever repro!ated,
1 contemplate it as a !lot left in all our constitutions $hich, if not
covered, $ill end in their destruction, $hich is already hit !y the
"am!lers in corruption, and is s$eepin" a$ay in its pro"ress the
fortunes and morals of our citi2ens%
=undin" 1 consider as limited ri"htfully to a redemption of the de!t
$ithin the lives of a majority of the "eneration contractin" it9 every
"eneration comin" e;ually !y the la$s of the Creator of the $orld
to the free possession of the earth
"5e made for their su!sistence unencum!ered !y their prede#
cessors% 3nd 1 sincerely !elieve $ith you that !an*in" institutions
are more dan"erous than standin" armies, and that the principle of
spendin" money to !e paid !y posterity under the name of fundin" is
!ut s$indlin" futurity on a lar"e scale%"
n a letter of March 8# 1D1H# written by Mefferson to the celebrate"
7rench author# 3ay#
he sai": -
"'he "overnment is no$ issuin" treasury notes for circulation, !ot#
tomed on solid funds and !earin" interest% 'he !an*in" confederacy
and the merchants !ound to them !y their de!ts $ill endeavor to
crush the credit of these notes9 !ut the country is ea"er for them as
somethin" they can trust to, and so soon as a convenient ;uantity of
them can "et into circulation the !an* notes die%"
1eprobate" - ;on"emne"# or 0ban"one" to eternal "amnation )as of =o"*
Mean-<aptiste 3ay )1BJB-1DA8* - 0 7rench Political $conomist/,ni!ersity /ecturer#
who !isite" $nglan" in 1D1C# to "etermine the reasons for its success# an" wrote a
book about it# amongst many others.
t has been state" that the bank# "uring the war of 1D18# exerte"
its whole influence against the ,nite" 3tates. t was a matter of
little concern to it that =reat <ritain ha" impresse" into her serN
!ice thousan"s of nati!e born citizens of this country# an" comN
pelle" them# against their will# to man <ritish guns.
Ihat care" the bank that hun"re"s of 0merican merchant !essels
were confiscate"# in a time of profoun" peace# by or"ers of the
$nglish go!ernment# an" that repeate" insults ha" been heape"
on this republic by the insolence of <ritish statesmenL
0lthough the bank was a creature of the legislati!e powers of
congress# an" ha" recei!e" !ast financial benefits from the counN
try# it sought to embarrass the go!ernment in its struggle against
=reat <ritain by arraying the moneye" class against the strugN
gling republic.
Money coul" not be obtaine" by means of loans to organize# arm#
an" e5uip the 0merican armies an" to construct !essels of war to
protect 0merican commerce.
n this emergency the counsel of Mefferson was re5ueste"# an" he
a"!ise" the issue of treasury notes by the go!ernment in lieu of
n a letter "ate" 3eptember ll# 1D1A# he thus state" his position:
"'he ;uestion $ill !e as*ed, and ou"ht to !e loo*ed at% What is to
!e the course, if loans cannot !e o!tained>" 'here is !ut one 4
"Cartha"o delenda est%"
+an* paper must !e suppressed, and the
circulatin" medium must !e restored to the nation to $hom it !e#
R;arthago "elen"a est" /atin for: - R;arthage must be "estroye"&
1t is the only fund on $hich they can rely for loans9 it is the only re#
source $hich can never fail them, and it is an a!undant one for
every necessary purpose%
'reasury !ills, !ottomed on ta<es, !earin" or not !earin" interest,
as may !e found necessary, thro$n into circulation $ill ta*e the
place of so much "old and silver, $hich last, $hen cro$ded, $ill
find an efflu< into other countries and thus *eep the ;uantum of me#
dium at its salutory level%
@et the !an*s continue, if they please, !ut let them discount for cash
alone or for treasury notes%"
4he soun" a"!ice couche" in this letter was hee"e" by the go!N
ernment# an" the country was carrie" safely through the secon"
war for in"epen"ence.
mme"iately after the close of the war# the bank put forth reN
newe" efforts to secure a new charter.
0t this >uncture# Iilliam ;obbett# the celebrate" $nglish writer
an" economist# transmitte" a letter to Mr. Dallas# 3ecretary of the
4reasury un"er Presi"ent Ma"ison# in which he strenuously urge"
him to oppose the pro>ect.
0s a warning against chartering a bank of issue# ;obbett pointe"
out the immense power of the <ank of $nglan" to ruin the tra"esN
men of that country# an" to "ictate the political sentiments of that
6e sai": -
Manuary 1A# 1D1J.
"'o /r% Secretary Aallas:
Sir: 1 have read $ith "reat care and uncommon interest your pro#
position to con"ress, under date of Bth Aecem!er, &C&7, for the es#
ta!lishment of a national !an*9 and as a part of the reasons $hich
you ur"e in support of that proposition appear to !e founded on the
e<perience of a similar institution in En"land, 1 cannot refrain from
endeavorin" to sho$ you $hat some of these effects really have
!een, and $hat is at present the situation of this country, o$in", in a
"reat measure, to the e<istence of a "reat !an*in" esta!lishment
closely connected $ith the "overnment%
1t is the evil of a national !an*, as e<perienced !y us, to $hich 1
particularly $ish to dra$ your attention% )ou profess, and 1 dare say
very sincerely, so to frame this esta!lishment in 3merica that it shall
!e independent of the Dovernment% 1t is ne<t to impossi!le, indeed,
that you, or any of the persons in $hose hands the Dovernment is,
should have a desire to ma*e a !an* $hat our !an* has lon" !een9
!ut $hile there is a possi!ility of its !ecomin", in any hands or at
any time, anythin" resem!lin" this !an*, it must !e a matter of seri#
ous dread to every friend of 3merica that such an esta!lishment is
li*ely to ta*e place%
Sir, it is as a !an* of discount that this esta!lishment e<ercises the
most pernicious influence% 'he directors, $ho are a chosen divan,
re"ulate these discounts, and in so doin" decide in some sort upon
the rise or fall, the ma*in" or the ruin, of all men in trade, and in#
deed of most other men, e<cept such as have no capital at all%E
"'he amount of these discounts at any "iven time is supposed to !e
a!out FB,888,888, as they are never for more than t$o months% 5ere
is a sum of thirty4si< millions lent every year to individuals% 'he
!ills for discounts are sent in9 the directors consent or not, $ithout
any reasons assi"ned%
No$, sir, consider the ma"nitude of the sum discounted% 1t is little
short of half a million dollars a day, Sundays e<cepted% 1t is per#
fectly $ell *no$n to you that in state of such thin"s almost every
man in trade is under the necessity of havin" a re"ular supply from
1f he !e e<cluded from his fair share here, he cannot trade $ith the
same advanta"e as other men trade% 1f he !e in the practice of dis#
countin", and if his discounts !e cut off, he cannot "o on9 he stops
payment and is fre;uently ruined forever, even $hile he possesses
property $hich, $ith the fair chances of time, $ould not only ena!le
him to pay his de!ts !ut to proceed in prosperity
1 !eseech you, then, sir, to loo* seriously at the e<tent of the dan"er#
ous po$er of these !an* directors% )ou must see that they hold in
their hands the pecuniary fate of a very lar"e part of the community,
and that they have it in their po$er, every day of their lives, to des#
troy the credit of many men, and to plun"e their families into shame
and misery%
1f 1 am as*ed for their motives to act li*e these, to pursue such parti#
ality, to ma*e themselves the instruments in committin" such detest#
a!le injustice and cruelty, need 1 point out to you that they have
!een and must !e constantly actuated !y the stron"est political pre#
'he fact is, ho$ever, that the +an* of En"land, !y means of its
po$er of "rantin" or $ithholdin" discounts, has !een, and is one of
the most potent instruments of political corruption, on the one hand,
and of political ven"eance on the other hand%"
n speaking of the great profits reape" by that bank# this writer
sai": -
"1 have "iven this rou"h statement that you may !e struc* $ith the
ma"nitude of the o!ject 1 present to you% Aiminish the amount as
much as you fairly can and even then you $ill d$ell upon the su!#
ject $ith a deli!eration you cannot prevent%
Gne fact $ill at least corro!orate $hat 1 have su""ested9 vi2%, that
the +an* of En"land had F.8,888,888, or nearly 6&88,888,888, sur#
plus in nineteen years, after payin" !onuses and dividin" : per cent,
per annum, $hich $as t$o fifths more than le"al interest% 1 $ill not
here allude to the nited States +an*, to $hich 1 may hereafter de#
vote an essay% "
4he array of facts set out by this writer# in which he exhibite" the
appalling power of this bank# "i" not "eter the 0merican statesN
men of that "ay from their attempt to fasten a like institution on
this country. n 1D1J# congress chartere" the ,nite" 3tates <ank
with a capital stock of thirty-fi!e million "ollars+ to it was "elegN
ate" the sole power of issuing notes recei!able by the ,nite"
3tates for taxes an" "eman"s "ue it+ an" "esigne" to ser!e as the
4reasury Department of the go!ernment by recei!ing an" "isN
bursing the public re!enues of the nation.
3ection 81 of the <ank 0ct was as follows: -
"'hat no other !an* shall !e esta!lished !y any future la$ of the
nited States, durin" the continuance of the corporation here!y cre#
ated, for $hich the faith of the nited States is here!y pled"ed%
(rovided, Con"ress may rene$ e<istin" charters for !an*s $ithin
the Aistrict of Colum!ia, not increasin" the capital thereof, and may
also esta!lish any other !an* or !an*s in said Aistrict, $ith capitals
not e<ceedin", in the $hole, si< millions of dollars, if they shall
deem it e<pedient%"
<y this section ;ongress surren"ere" its constitutional powers to
legislate upon a sub>ect within its exclusi!e >uris"iction for the
perio" of twenty years# 9ot satisfie" with a monopoly of the curN
rency an" banking of the country# the unlimite" gree" of the
wealthy stockhol"ers of this bank "eman"e" an" secure" from
;ongress# a ple"ge of the public faith that the essential powers of
the =o!ernment shoul" lie "ormant for twenty yearsS
n the early "ays of the republic# the accurse" spirit of special
pri!ileges ha" shorn the nation of its means of self-preser!ation.
7or the exclusi!e powers conferre" upon it# the go!ernment reN
cei!e" in return for this !aluable franchise a small annual bonus.
t will be ascertaine" from the enormous powers en>oye" by the
bank# that it obtaine" a monopoly of the circulating me"ium of
the country+ that# in a""ition to its capital stock of thirty-fi!e milN
lion "ollars which constitute" its primary loanable fun"# it woul"
earn interest upon the circulating notes issue" by it# as well as
usury upon the go!ernment re!enues when use" in "iscounts.
4herefore# by force of law# the interest earning capacity of its
capital was more than "ouble". t was a colossal moneye" monoN
4he bank rapi"ly obtaine" a practical control o!er the business of
the nation# an" it woul" tolerate no opposition. <y its metho"s of
conferring substantial fa!ors upon the influential >ournals of the
lea"ing commercial cities# an" by its loans to powerful members
of both branches of ;ongress# it was enable" to rally to its supN
port a coerce" an" manufacture" public sentiment - far-reaching
an" wi"e-sprea" as the limits of the ,nion.
4he financial power of the bank# un"er its able an" unscrupulous
management# ha" become so "ominant in its influence that it
"eeme" itself master of the go!ernment an" the people.
4his monopoly belie!e" in the 6amiltonian maxim that a "(u!lic
de!t is a pu!lic !lessin"," an"# "uring its career as the fiscal agent
of the =o!ernment# threw e!ery obstacle in the way of the payN
ment of the national "ebt. t may be in5uire" by some why the
bank shoul" oppose the payment of the "ebtL 4he reason is ob!iN
ous. 4he larger the "ebt# the more re!enues necessary to pay the
interest charge thereon# an"# therefore# the more profit to the bank
from the use of the increase" re!enues in making loans an" "isN
counts. 7rom 1D1J to 1D8D# it was the sole arbiter of the financial
affairs of the nation# both public an" pri!ate. ts power in politics
was immense# an" it swaye" elections at will.
4he most elo5uent 3enators an" 1epresentati!es were continually
soun"ing its praises in the halls of ;ongress as the most perfect
financial institution e!er "e!ise" by the wit of man. Delu"e" with
the i"ea that it was in!incible in its influence# an" that it was a
necessary part of the machinery of =o!ernment# it was confi"ent
that its charter woul" be renewe" before its expiration by limitaN
tion of law.
4he au"acity of the bank was "estine" to recei!e a check in its
career of uninterrupte" power an" success# an" its astonishing abN
uses of its franchise where to be mercilessly expose"# an" it was
"oome" to fall ne!er to rise again.
n the presi"ential election of 1D8D# 0n"rew Mackson# the hero of
9ew :rleans# was electe" chief magistrate by a great ma>ority#
an" the bank# its "efen"ers# an" retainers# were fate" to run
counter to a patriot an" statesman of in!incible will an" unflinchN
ing integrity. 0t the time of this election# an" prior thereto# the
public "ebt was being re"uce" rapi"ly# an" it woul" not be long
before the ,nite" 3tates woul" not owe a single "ollar.
0s has been state"# the ,nite" 3tates bank strongly oppose" the
payment of the "ebt for the aggran"izement of its own selfish
:n the Dth "ay of December# 1D8E# Presi"ent Mackson# in his first
annual message to ;ongress# announce" to that bo"y that he was
oppose" to the bank# an" that he woul" not fa!or a renewal of its
charter. n the year 1DA(# a large surplus of public re!enues acN
crue" to the ,nite" 3tates# an" accor"ing to law# the money was
"eposite" in the bank. 4his accumulation of re!enues ser!e" to
augment the power of the bank as it increase" its resources# an"#
therefore# its facility to make a""itional loans an" "iscounts in the
!arious commercial centers of the country.
Presi"ent Mackson "iscerne" the policy of the bank# an" in 1DA(
he a"!ocate" the passage of a law "istributing these surplus
re!enues among the states. 6e again oppose" the renewal of its
,nite" 3tates 3enator <enton# of Missouri# a man of great energy#
extensi!e learning# an" comman"ing ability# thoroughly un"erN
stoo" the means by which the bank ha" obtaine" its mastery o!er
the commerce an" in"ustry of the nation# an"# therefore# at that
session of congress# he presente" a resolution in the ,nite" 3tates
senate to the effect# that the charter of the bank ought not to be reN
newe". 4he resolution was lost by a !ote of twenty-three to
4he intro"uction of that resolution an" the narrow ma>ority by
which it faile" of passage# soun"e" a note of warning to the bank#
an" it gathere" all its energies for the struggle that sooner or later
was boun" to come.
4o arouse public sentiment in its behalf# it initiate" a policy of exN
pan"ing its loans until they reache" the !ast total of se!enty-one
million "ollars# which were so >u"iciously place" among lea"ing
merchants an" manufacturers# that# in the e!ent of their being
calle" in by the bank# a powerful pressure woul" be exerte" upon
the Presi"ent an" ;ongress by those who were borrowers of the
bank. :n the Cth of Muly# 1DA8# a bill to re-charter the bank# after
its passage by ;ongress# was sent to Presi"ent Mackson for apN
Many of the influential political frien"s of the Presi"ent# aware of
his intense hostility towar" the bank an" its metho"s# importune"
him to sign the bill+ large "elegations of lea"ing citizens from
e!ery tra"e center in the country implore" him to allow the measN
ure to become a law.
Merchants an" importers# who were hea!y borrowers from the
bank# troope" to Iashington to a"" their appeals to the petitions
alrea"y presente".
ts pai" hirelings# in the halls of congress an" elsewhere# preN
"icte" "rea"ful results to business interests# shoul" the Presi"ent
not rece"e from his opposition to the bill continuing the existence
of the bank for the perio" of twenty years longer.
4o a"" to the general clamor# the bank# through its officials#
a!owe" its purpose to precipitate a panic# an" to pull "own in ruN
ins the business of the country# shoul" its "eman"s not be conN
ceale". t compelle" its thousan"s of borrowers to sign "istress
petitions# which it cause" to be sent to the Presi"ent as the apparN
ently free expression of public sentiment.
4he magazine ha" long been prepare" by the bank# the train was
lai"# an" 9icholas <i""le# the presi"ent of this great financial inN
stitution# sat in his luxurious office# an" "eclare" himself rea"y
an" willing to apply the match that woul" start the most ruinous
financial explosion that ha" yet shook the foun"ations of the reN
public. Mr. <i""le ha" most able lieutenants in both branches of
congress "e!ote" to his interest.
Daniel Iebster# the elo5uent orator an" great lawyer+ 6enry
;lay# whose persuasi!e powers were unri!ale"+ an" ;alhoun# the
great lea"er of the 3outh# le" the banking interest in congress.
n a work entitle"# "3ndre$ Jac*son and the +an* of the nited
States," - Iilliam /. 1oyall
# thus speaks of the con"uct of these
three lea"ers: -
"1n addition to all its other sources of po$er the cause of the !an*
received invalua!le assistance from the coalition of these "reat men
Iilliam / 1oyall# wrote his booklet of A( pages# title": R 0n"rew Mackson# an" the
<ank of the ,nite" 3tatesR in 1DD(.
,We!ster, Clay, and Calhoun-% Each $as an aspirant for the presid#
ency, and upon the !an*Hs cause and paper money, each found a
common "round upon $hich all three could meet and oppose Jac*#
son, the "reat enemy of !oth these thin"s% 3ll the movements of the
!an* $ere !ut a repetition, $ith a chan"e of names and dates, of
$hat had ta*en place in &C&&%"
:n the other han"# the stalwart <enton was a stern opponent of
the bank# an" he was supporte" by an able array of statesmen of
the first rank.
Iebster# an" ;lay a"!ocate" a liberal construction of the ;onstiN
tution# an" were eternally soun"ing the praises of that instrument
as the noblest work of statesmanship# yet# while ascribing to it the
most ample powers an" authority# they strangely supporte" the
theory that the ,nite" 3tates <ank was absolutely necessary to
the financial a"ministration of the 7e"eral =o!ernment.
<enton was a strict constructionist# an" asserte" that the general
=o!ernment was inherently 5ualifie" to transact its financial opN
erations without the ai" or assistance of any bank or system of
banks. 6e ably maintaine" the Meffersonian principles of =o!ernN
ment that bank paper shoul" be suppresse".
n a speech "eli!ere" in the ,nite" 3tates 3enate# <enton thus
truly "escribes the immense power of the bank o!er the =o!ernN
ment an" the people: -
"'he Dovernment itself ceases to !e independent, it ceases to !e
safe $hen the national currency is at the $ill of a company% 'he
Dovernment can underta*e no "reat enterprise, neither $ar nor
peace, $ithout the consent and co4operation of that company9 it
cannot count its revenues si< months ahead $ithout referrin" to the
action of that company 4 its friendship or its enmity, its concurrence
or opposition 4 to see ho$ far that company $ill permit money to !e
scarce or to !e plentiful9 ho$ %far it $ill let the money system "o on
re"ularly or thro$ it into disorder9 ho$ far it $ill suit the interest or
policy of that company to create a tempest or suffer a calm in the
money ocean% 'he people are not safe $hen such a company has
such a po$er%
'he temptation is too "reat, the opportunity too easy, to put up and
put do$n prices, to ma*e and !rea* fortunes9 to !rin" the $hole
community upon its *nees to the Neptunes
$ho preside over the
flu< and reflu< of paper%
3ll property is at their mercy, the price of real estate, of every "ro$#
in" crop, of every staple article in the mar*et, is at their command%
Stoc*s are their playthin"s 4 their "am!lin" theater, on $hich they
"am!le daily $ith as little secrecy and as little morality and far
more mischief to fortunes than common "am!lers carry on their op#
4his unanswerable argument# built on impregnable facts# coul"
not be met by all the elo5uence an" logic that coul" be mustere"
against it by the great 4rium!irate - ;lay# Iebster an" ;alhoun.
n a message to ;ongress# Presi"ent Mackson# in speaking of the
banking power# sai": -
"1n this point of the case the ;uestion is distinctly presented, $heth#
er the people of the nited States are to "overn throu"h representat#
ives chosen !y their un!iased suffra"es, or $hether the po$er and
money of a "reat corporation are to !e secretly e<erted to influence
their jud"ment and control their decisions%"
4hese pointe" shafts from the executi!e struck home# an" rankle"
in the breasts of those 3enators an" 1epresentati!es who supporN
te" the bank an" its policy.
Ihen the bank ascertaine" beyon" any "oubt that Presi"ent MackN
son was firmly oppose" to its further continuance# it began callN
ing in its loans rapi"ly# the !olume of currency was contracte"
greatly by the bank an" its branches+ merchants were mercilessly
9eptune - 1oman go" of water an" the seas# who repute"ly if angere" woul" likely
capsize the !essel an" co!er it by water# or other wise "estroy the mariner.
"ri!en to the wall# mills an" factories close" "own e!erywhere#
an" tens of thousan"s of skille" workmen were thrown out of emN
ployment# an" their families felt the pangs of hunger# notwithN
stan"ing there was abun"ance in the country.
$!ery "ay it tightene" its coils aroun" its helpless !ictims# while
Presi"ent <i""le sat in his office at the bank# an" laughe" at the
nee"less ruin he wrought among his fellow men. 6is course is
only parallele" by that of 9ero# who is sai" to ha!e fi""le" while
1ome was burning.
4he great >ournals of the lea"ing cities# subsi"ize" by loans - preN
sumably - teeme" with e"itorials "enouncing Presi"ent Mackson&s
opposition - an" "efen"ing the course of the bank.
Distress meetings at the same time an" at the same points were
hel"# fiery speeches were ma"e# an" strongly wor"e" resolutions
were a"opte"# re5uesting the Presi"ent to appen" his signature to
the bill renewing the charter of the bank.
4here was a singular i"entity in the e"itorials written# in the
speeches "eli!ere"# an" in the resolutions a"opte"# that ga!e
e!i"ence of a concerte" action. 4his similarity of sentiments an"
language in the >ournals# speeches# an" resolutions# e!ince" a
most remarkable talent# for combining the !arious means of influN
encing Presi"ent Mackson.
<ut the hero of 9ew :rleans was as immo!able as the 1ock of
=ibraltar. 0n"rew Mackson was in many respects the most reN
markable man in 0merican history. 0 sincere patriot of the purest
integrity# with a clearness of mental !ision that was unsurpasse"#
with a profoun" insight into the principles upon which our =o!N
ernment reste"# he plainly saw that the interests of the bank were
wholly at !ariance with that of 0merican liberty.
6e well knew that to transfer to a pri!ate corporation for its gain#
the issuance an" control of the currency of the country# an" to acN
cumulate in its !aults the national re!enues# woul" e!entuate in
buil"ing up a moneye" monopoly# ultimately controlling the
press# the business interests# an" the legislation of the nation.
4hat point was now reache".
6e was utterly oppose" to the =o!ernment ab"icating its highest
so!ereign function# - the issuance an" control of the currency# an"
"elegating it to in"i!i"uals or to corporations for their gain. 6e
was con!ersant with the traitorous con"uct of the bank "uring the
war of 1D18# an" he concurre" in the "eclaration of Mefferson that#
"+an*s of issue $ere more dan"erous to the li!erties of the people
than standin" armies%"
n speaking of the firmness "isplaye" by Presi"ent Mackson
against the arrogance of the bank# the "istinguishe" historian
<ancroft says: -
"When the period for addressin" Con"ress dre$ near, it $as still
ur"ed that to attac* the !an* $ould forfeit his popularity and secure
his future defeat%
'he (resident replied, H1t is not for myself that 1 care%H 1t $as ur"ed
that haste $as unnecessary, as the !an* had still si< une<pired years
of chartered e<istence% H1 may die,H he replied, H!efore another Con#
"ress comes to"ether, and 1 could not rest ;uietly in my "rave, if 1
failed to do $hat 1 hold so essential to the li!erty of my country%H "
<ancroft further says# that# upon one occasion when the bank
conflict ha" reache" its greatest height# the Presi"ent an" some of
his frien"s were stan"ing o!er the rocks of the 1ip 1aps
# lookN
1ip-1aps. 1ock or 3tone use" as a barrier against coastal erosion# though this may
also form naturally from rock on the shore-line.
ing out upon the ocean# when the sub>ect of chartering the bank
was brought forwar"# whereupon the Presi"ent remarke"#
"(rovidence may chan"e my determination9 !ut man no more can
do it than he can remove these Iip Iaps, $hich have resisted the
rollin" ocean from the !e"innin" of time%"
6istory fails to recor" a nobler sublimity of purpose than that "isN
playe" by Presi"ent Mackson "uring the war of the bank upon the
people. 9otwithstan"ing the immense pressure brought to bear
upon him# Presi"ent Mackson# on the 1(th "ay of Muly# 1DA8# reN
turne" the bill to the 3enate# whence it originate"# accompanie"
with his !eto message# which was a masterly exposition of his
!iews upon the true principles of free =o!ernment# an" it ranks in
importance with the Declaration of n"epen"ence.
4he first reason assigne" by the Presi"ent in his ob>ections
against the &renewal of the charter of the bank was# that it create"
a monopoly un"er the authority of the general =o!ernment# an"#
therefore# it increase" the !alue of its stock far abo!e its par
!alue# which operate" as a gift of many millions to its stock hol"N
ers. 4he Presi"ent lai" "own the fun"amental principle that a
monopoly shoul" only be grante" when it returne" a fair e5ui!alN
ent to the people.
6e showe" that while its capital stock was fixe" at T8D#(((#(((#
to confer this pri!ilege upon the bank woul" a"" the enormous
sum of T1B#(((#((( to the !alue of the stock# an" for this imN
mensely !aluable franchise the =o!ernment woul" recei!e the piN
tiful sum of T8((#((( per annum.
4he Presi"ent a"!ocate" the sale of the stock to the highest bi"N
"er# an" that the premium recei!e" there from by the =o!ernment
be pai" into the national 4reasury to lighten the bur"ens of taxaN
tion in lieu of its bestowal upon a few wealthy citizens.
6e state" that TD#(((#((( of the stock of the present bank was
hel" by foreigners# chiefly in $nglan"+ that this was the most "anN
gerous feature of the plan+ that a ma>ority of the shares of its
stock might fall into those alien han"s# an" that in the e!ent the
,nite" 3tates woul" be in!ol!e" in war with that nation# thus
hol"ing a large amount of the stock of this great bank monopoly#
its influence woul" be thrown against the ,nite" 3tates.
4he Presi"ent says: -
"3ll its operations $ithin $ould !e in aid of the hostile fleets and
armies $ithout% Controllin" our currency, receivin" our pu!lic
moneys, and holdin" thousands of our citi2ens in dependence, it
$ould !e more formida!le and dan"erous than the naval and milit#
ary po$er of the enemy%"
6e pro"uce" figures "emonstrating the sectional character of the
bank# that out of TAH#(((#((( of stock# TD#C(H#H(( were hel"
chiefly by =reat <ritain+ only T1C(#8(( were hel" by the nine
great western states+ TA#CHH#HED in the four southern states# an"
T1A#H88#((( in the eastern an" mi""le states.
4hat in 1DA1# the profits of the bank were TA#CHH#HED of this
amount the western states contribute" T1#JC(#(CD+ the four southN
ern states TAH8#H(B# an" the mi""le an" eastern states
t will be ascertaine" that un"er the operations of this banking
monopoly# the agricultural states of the Iest were paying hea!y
tribute to the $ast.
t was further pointe" out by the Presi"ent# that the principle of
taxation in!ol!e" in the bill was ra"ically wrong in this: that only
the stock coul" be taxe" where hel". 4herefore# while the nine
western states pai" T1#JC(#(CD in profits to the bank# only
T1C(#8(( of its stock was hel" there sub>ect to taxation+ that# in
the year 1DA1# the branch bank at Mobile earne" "i!i"en"s of
TEH#1C(# yet the state of 0labama coul" not tax the property of
the bank# because not a single share of its stock was owne" in its
4he foreign stock hol"ers coul" not be taxe" a single penny on
their hol"ings# as they were beyon" the taxing power of the
,nite" 3tates. 4he foreign stock hol"er woul" be "rawing large
"i!i"en"s from the 0merican people without bearing any of the
bur"ens of go!ernment. 4his woul" ten" to alien ownership of
this bank# non-contribution to the bur"ens of =o!ernment creatN
ing this !aluable pri!ilege# an" a continue" "rainage of specie to
foreign nations. 4he fourth section of the propose" law pro!i"e":
"'hat the !ills and notes of said corporation, althou"h the same !e,
on the faces thereof, made paya!le at one place only, shall, never#
theless, !e received !y the said corporation at the !an* or at any of
the offices thereof, if tendered in li;uidation or payment of any !al#
ance or !alances due to said corporation, or to such office of dis#
count and profit from any other incorporated !an*%"
4he right thus conferre" upon state banks to pay their "ebts to the
,nite" 3tates <ank# with the notes an" bills of any branch bank
thereof# woul" ten" to unify the whole banking interest of the naN
tion into a powerful combination# while at the same time# any inN
"i!i"ual who hel" currency issue" by a branch of the ,nite"
3tates <ank# situate" at any other place than his resi"ence# was
"epri!e" of that right# therefore# it woul" be compelle" to "isN
count the bills of the branch bank# or transmit them to PhilN
a"elphia to obtain the cash for them. 4hese were a few of the
reasons assigne" by the Presi"ent in his famous !eto message.
t is now conce"e" by the most eminent historians of 0merica#
that =eneral Mackson# in throttling the corrupt an" unscrupulous
money power of that "ay# sa!e" the nation.
:n the Dth of Manuary# 1D1H# =eneral Mackson ha" met the !eterN
ans of Iellington at 9ew :rleans# an" inflicte" upon them the
most "isastrous "efeat e!er suffere" by $nglan"# an" she" un"yN
ing renown upon 0merican arms. 6e sa!e" 0merica then# an" he
preser!e" its in"epen"ence in 1DA8.
<y act of ;ongress# Mune 8D# 1DAC# a change was ma"e in the
coinage laws of 0pril 8# 1DAC. 0t the act# the legal ratio of sil!er
to gol" was fixe" at fifteen to one# that is# fifteen poun"s of pure
sil!er were the legal e5ui!alent of one poun" of pure gol"# an"
this ratio was maintaine" until the passage of the act of Mune 8D#
1DAC. 7rance an" the other /atin 3tates maintaine" a legal ratio
of fifteen an" one half to one. ;onse5uently the ,nite" 3tates
o!er-!alue" sil!er when compare" with gol". 4he bullion "ealers#
e!er on the alert for a profit# sent the gol" abroa" an" sol" it at a
4o reme"y this# the act of Mune 8D# 1DAC# re"uce" the 5uantity of
gol" in the gol" eagle from 8CBU grains of pure gol" to 8A8
grains# or a re"uction in the ten "ollar gol" piece from 8B( grains
of stan"ar" gol" to 8HD grains. 0 correspon"ing re"uction was
ma"e in the half-eagle an" 5uarter-eagle. 0 fraction o!er six per
cent of gol" bullion was therefore "e"ucte" from the gol" coins.
4his ma"e the legal ratio of sil!er to gol" stan" at sixteen to one.
<y this act# sil!er was un"er!alue" an" gol" ma"e its appearance
in circulation# an" sil!er "isappeare" from the channels of tra"e.
4he ob>ect of the passage of this law was to superse"e the ,nite"
3tates <ank bills by the substitution of gol" coin as a circulating
me"ium. 4he people remembere" the great efforts of the bank to
monopolize the entire !olume of money in the country# an"
gla"ly recei!e" the two an" one half# fi!e an" ten "ollar gol"
pieces in preference to bank notes.
4his substitution of gol" coin for bank notes greatly "iminishe"
the profits of the bank# an" it imme"iately "eclare" war upon that
coin. ts subsi"ize" press# its minions an" "epen"ents "enounce"
this species of money in terms of ri"icule. 4he subser!ient tools
of the bank# when offere" gol" coin in the or"inary transactions
of business# woul" shu""er an" recoil at its appearance# an" "eN
man" ,nite" 3tates bank notes as the superior money.
n the meantime# howe!er# in 1DA8# a presi"ential election was
hel". 6enry ;lay was put forwar" as the can"i"ate of the Ihigs
an" of the bank power. 0n"rew Mackson was the can"i"ate of the
Democratic party# an" represente" the principles of Mefferson.
Mackson recei!e" two hun"re" nineteen electoral !otes to forty-
nine for ;lay. 4he prophecies of those Democrats that Mackson
ha" ruine" the party by his contest with the bank were refute" by
a "ecisi!e !ote of the people.
1$M:F0/ :7 46$ =:F$19M$94 D$P:343
4he next step taken by the Presi"ent to curtail the power of the
bank for mischief# was the remo!al of the go!ernment "eposits
amounting to many millions of "ollars.
0fter the bank so signally faile" to obtain a renewal of its exclusN
i!e banking pri!ileges# it "i" not alle!iate from its policy of inN
flicting "istress an" ruin upon the people.
7rom the 1st "ay of 0ugust# 1DAA# to the A(th of Mune# 1DAC# it
continue" its contraction of the currency by calling in its loans#
gi!ing as its reasons therefore# that the =o!ernment was harassN
ing it on e!ery han". t ha" ample time in which to arrange its afN
fairs without seriously crippling the business of the country an"
its excuse was not !ali".
0lthough many millions of public re!enues were un"er its sole
charge# constituting a loanable fun" for the benefit of the bank# its
hireling press teeme" with abuse against the a"ministration of
Presi"ent Mackson.
4he Presi"ent# in !iew of all the facts within his knowle"ge# enN
tertaine" the opinion that the bank was insol!ent# an" an unsafe
"epository for the public moneys. 6e ha" pre!iously communicN
ate" his belief to ;ongress as to the unsafe con"ition of the bank#
but such was its influence in that bo"y# that the 6ouse of 1epresN
entati!es# by a practically unanimous !ote# "eclare" its confi"N
ence in the institution.
n the lawful exercise of his powers# the Presi"ent or"ere" the
3ecretary of the 4reasury# through the fi!e go!ernment "irectors#
to in!estigate its financial con"ition. 4he "irectors ma"e a "eN
man" upon the bank for an inspection of its books# but they were
"enie" access to them. n the face of the obstacles thrown in their
way to ascertain its true con"ition# the "irectors ma"e an in!estigN
ation with astonishing results.
4o obtain a full# true# an" complete statement of the expen"itures
of the bank for political purposes# the official "irectors submitte"
a resolution to the full boar" of the bank# re5uesting the cashier to
furnish a statement to the boar"# as early as possible# showing
what amount was pai" out for certain purposes# the sums of
money pai" to each person# the 5uantity an" names of "ocuments
furnishe" by him# an" his charges for the "istribution of them.
3imilar statements were re5ueste" from the !arious branch ofN
fices of the bank. 4he resolution was !ote" "own by the boar" of
"irectors# an" a substitute was a"opte" expressing in explicit conN
fi"ence in the course of its presi"ent - 9icolas <i""le.
3ubse5uent e!ents ga!e satisfactory explanation why the officials
of the bank pursue" that course in refusing an inspection of the
books. ,pon a report of the go!ernment "irectors setting forth
these facts# the Presi"ent assume" the responsibility of remo!ing
the public moneys from the bank# an" "istribute" them among the
!arious state banks.
n this course he met "eci"e" opposition to this or"er in his cabN
inet. 4he 3ecretary of the 4reasury# Iilliam M. Duane# peremptorN
ily refuse" to obey the comman" of his chief# an" for this act of
insubor"ination he was summarily remo!e" from his office. 0tN
torney =eneral 4aney was appointe" to fill the !acancy occaN
sione" by Duane&s remo!al# an" the or"er was execute" to the letN
4he bol" stan" taken by the Presi"ent in the remo!al of the "eN
posits# stirre" up the wrath of the bank party in ;ongress# an"
6enry ;lay offere" a resolution in the ,nite" 3tates 3enate as
follows: -
"Iesolved, 'hat the (resident in the late e<ecutive proceedin" in re#
lation to the pu!lic revenue, has assumed upon himself authority
and po$er not conferred !y the constitution and la$s, !ut in dero"#
ation of !oth%"
4his resolution censuring Presi"ent Mackson was a"opte" by the
3enate on the 8Dth of March# 1DAC. 4he bank pointe" to this acN
tion of the senate as proof of its great power.
:n the 1Hth "ay of 0pril# 1DAC# Presi"ent Mackson transmitte" a
message to the 3enate# respectfully protesting against this implie"
impeachment of his official acts. 6is communication to that bo"y
was a magnificent exposition of constitutional law# an" he
se!erely arraigne" the senate for passing >u"gment upon him
without granting him an opportunity to be hear" in his "efense.
4hree years afterwar"# the resolution of ;lay was expunge" from
the >ournals of the senate. 4he Presi"ent was fate" to emerge triN
umphant from e!ery contest with the banking power.
4he bank still continue" its warfare upon the people. t a!owe"
its purpose to precipitate a wi"esprea" panic. t announce" its inN
tention to crush the business of the nation# unless the or"er of reN
mo!al was recalle"# an" the "eposits restore". 4he pressure
brought to bear by the bank was "irecte" at the chief commercial
an" in"ustrial centers. 4he ha!oc wrought by-it was as broa"# as
the range of its operations# an" its course was sustaine" by politiN
cians as one of self "efense.
Public men who were "eeply in"ebte" to it openly uphel" its conN
"uct. :ne of these purchasable "emagogues owe" the bank the
great sum of T1((#(((# an" his "efense of his owner was in "irect
proportion to his obligation to his master - the bank.
:ne loan of T1#1((#((( was ma"e by it to a broker in 9ew Gork
;ity# at which time it was stea"ily contracting the currency at
e!ery point where it was represente" by an office. 4he broker to
whom this immense loan was ma"e# accumulate" a fortune by
speculating with this money upon the misfortunes of others.
Distress meetings were hel" e!erywhere un"er the auspices of the
bank# resolutions were a"opte"# an" memorials were presente" to
the Presi"ent# re5uesting him to rescin" his or"er of remo!al# but
without a!ail.
4he presi"ents# !ice-presi"ents# an" !arious other officers of the
so-calle" "istress meetings were selecte" from those who ha"
supporte" Mackson for the presi"ency# which fact was always anN
nounce" to the people. 4he petitions# memorials# an" remonN
strances presente" to the Presi"ent but ser!e" to strengthen his
"etermination to crush the bank# an" the last fangs of the oppressN
ors were pulle" by the remo!al of these "eposits amounting to
t must be borne in min"# that "uring the a"ministration of MackN
son# a contro!ersy arose between the ,nite" 3tates an" 7rance
with reference to the "epre"ations committe" upon our merchant
marine by the latter nation "uring the Directory
. 0 treaty ha"
been conclu"e" by the a"ministration with the king"om of 7rance
on the Cth of Muly# 1DA1# by the pro!isions of which# the latter
power agree" to pay the ,nite" 3tates the sum of TH#(((#(((# as
in"emnity for such "epre"ations.
4he 7rench authorities faile" to pay the first installment thereof#
an" the 3ecretary of the 4reasury# un"er the "irection of the PresN
i"ent# "rew a bill of exchange upon 7rance for the amount.
4he bill was transmitte" to Paris through the ,nite" 3tates <ank
as the fiscal agent of the =o!ernment. 4he authorities of 7rance
refuse" to honor the bill# an" it was proteste"# whereupon the
bank seize" upon the =o!ernment fun"s in its possession to the
amount of T1B(#(C( which it claime" as "amages for the protestN
ation of the bill.
4his high han"e" proce"ure was clearly illegal on the part of the
bank# an" !iolati!e of the ;onstitution which pro!i"es that no
money shall be "rawn from the treasury# except through appropriN
ations ma"e by ;ongress.
4o force a suspension of specie payments by state banks of issue#
it "rew immense bills of exchange on Paris# where it ha" no
money# for the payment of them# then "rew !ast sums of specie
Directory - the =o!erning bo"y "uring the time of $mperor 9apolean <onaparte.
out of the banks of 9ew Gork ;ity# an" transmitte" it to Paris to
meet the bills so "rawn by it.
n speaking of the course of the bank# in attempting to force a
suspension of specie payments by the state banks of issue# Mr.
1oyall says: -
"1t $as certainly not too "ood to do so, and in the year &CJ&, just
!efore it finally e<pired, it is proved to have attempted to create a
"eneral suspension, !y forcin" the !an*s of the City of Ne$ )or* to
'he manner of this attempt $as after$ard related !y its cashier% 1t
consisted in sellin" !ills in unlimited ;uantities in (aris 4 at this
time in "reat demand 4 $here it had not a cent to meet them, and
dra$in" the coin $ith the proceeds of these sales out of the Ne$
)or* !an*s and shippin" it a!road to meet these !ills as they made
their appearance there% 'he !ills, ho$ever, "ot to (aris !efore the
coin, came !ac* protested, and the "reat !u!!le $as finally
4his act was committe" by the bank to embarrass the go!ernN
ment# to emphasize the panic then beginning to rage# an" to bankN
rupt the business interests of the nation.
n short# no trick# "e!ice# or artifice was too !illainous or traitorN
ous for the bank to in>ure the cre"it of the =o!ernment an" the
happiness of the people. 4he bank again faile" to obtain a charter
in 1DC1.
4he rottenness of the bank then became known# an" a complete
in!estigation into its management from 1DA( to 1DAJ# institute"
by the stockhol"ers# "e!elope" an astonishing "egree of !illainy#
corruption# an" rascality that was appalling# an" the results of
which more than sustaine" the charges brought against it by PresN
i"ent Mackson an" his supporters.
t was "isco!ere" that hun"re"s of thousan"s of "ollars were exN
pen"e" by Presi"ent <i""le in influencing elections# subsi"izing
the press# an" bribing members of ;ongress.
4he stockhol"ers# on the completion of this in!estigation# instiN
tute" a suit against Presi"ent <i""le in the ,nite" 3tates circuit
court at Phila"elphia# for the sum of T1#(1D#((( expen"e" by him
for which no !ouchers coul" be foun".
t was further "emonstrate" that# from 1DA( to 1DAJ# "uring the
struggle of the bank for a new lease of corporate life# loans# agN
gregating more than TA(#(((#(((# were ma"e by its presi"ent to
members of ;ongress# e"itors of newspapers# politicians of all
gra"es# >obbers an" brokers# mostly without security.
Perhaps all the facts connecte" with its management were ne!er
ma"e known# on the groun" of public policy# as the reputations of
many eminent men# not excepting presi"ential can"i"ates# woul"
ha!e been utterly ruine". n speaking of the contest between the
bank an" Presi"ent Mackson# Parton# the biographer# says: -
"1n these Jac*sonian contests, therefore, $e find nearly all the tal#
ent, near&y all the learnin", nearly all the ancient $ealth, nearly all
the !usiness activity, nearly all the !oo*4nourished intelli"ence,
nearly all the silver4for*ed civili2ation of the country, united in op#
position to Deneral Jac*son, $ho represented the countryHs un#
tutored instincts%"
Parton further says that Mackson was calle" a mur"erer# a traitor#
an ignoramus# a fool# a crook-back# a preten"er# an" !arious other
!ile names.
9icolas <i""le# who# to a !ery large extent# was responsible for
the gigantic conspiracies# bank-panic with their resultant ruin an"
misery# was "ri!en in "isgrace from his exalte" position# an" he
"ie" a shameful "eath almost unknown# unhonore"# an" unsung.
4he man before whom bowe" in fawning a"ulation great an"
wise statesmen# merchant princes# e"itors of powerful >ournals#
an" lea"ers of public opinion+ he# who# in the magnitu"e of his
financial plans an" un"ertakings# ri!ale" the money kings of
$urope+ he# who arraye" "ollars against the immutable principles
of >ustice an" the rights of man# li!e" to see his name become a
by-wor"# a hissing# an" a reproach.
4he career of the ,nite" 3tates <ank an" its presi"ent is an awful
monument of warning on the highway of time to come# an ob>ect
lesson to that colossal gree" of power# which# to tighten its grip
upon the people# scatters "istress an" ruin in its train# an" which#
from its ramparts of ill-gotten wealth obtaine" by monopoly an"
special pri!ileges# "efies the laws of man an" the laws of =o".
:n the other han"# the fame of Mackson shines more an" more
with the lapse of time.
4homas Mefferson# the foun"er of 0merican Democracy# an" the
frien" of the human race# is honore" as the great constructi!e
statesman of 0merica+ 0n"rew Mackson is re!ere" as that great
lea"er who regenerate" the politics of his country# an" rescue" a
people from financial sla!ery.
During his a"ministration# the public "ebt was wholly pai"# a
large surplus of public re!enues accumulate" to the cre"it of the
,nite" 3tates# the money power was "ethrone"# the 0merican naN
tion was honore" e!erywhere# an" he retire" from the presi"ency
ami" the plau"its of his countrymen.
n his farewell a""ress to the people# March A# 1DAB# he solemnly
warne" them against the money power# that special pri!ileges
must not be grante" to any class of citizens# an" that >ustice must
be the basis of public an" pri!ate con"uct.
n this noble "ocument# the Presi"ent a"monishes the people to
be on their guar" against the money power. 6e says: -
"+ut $hen the charter for the !an* of the nited States $as o!#
tained from Con"ress, it perfected the paper system, and "ave to its
advocates the position they have stru""led to o!tain from the com#
mencement of the =ederal Dovernment do$n to the present hour%
'he immense capital and peculiar privile"es !esto$ed upon it, en#
a!led it to e<ercise despotic s$ay over the other !an*s in every part
of the country% =rom its superior stren"th it could seriously injure, if
not destroy, the !usiness of any one of them that $ould incur its re#
sentment9 and it openly claimed for itself the po$er of re"ulatin"
the currency throu"hout the nited States%
1n other $ords, it asserted ,and undou!tedly possessed- the po$er
to ma*e money plenty or scarce, at its pleasure, at any time, and in
any ;uarter of the nion, !y controllin" the issues of other !an*s,
and in permittin" an e<pansion, or compellin" a "eneral contrac#
tion of the circulatin" medium accordin" to its o$n $ill%
"'he other !an*in" institutions $ere sensi!le of its stren"th, and
they soon !ecame "enerally its o!edient instruments, ready at all
times to e<ecute its mandates9 and $ith the other !an*s necessarily
$ent also that numerous class of persons in our commercial cities
$ho depend alto"ether on !an* credits for their solvency and means
of !usiness, and $ho are therefore o!li"ed, for their safety, to propi#
tiate the favor of the money po$er !y distin"uished 2eal and devo#
tion in its service%
'he result of the ill4advised le"islation $hich esta!lished this "reat
monopoly, $as to concentrate the $hole moneyed po$er of the ni#
on, $ith its !oundless means of corruption, and its numerous de#
pendents, under the direction and command of one ac*no$led"ed
head9 thus or"ani2in" this particular interest as one !ody, and se#
curin" to it unity of action throu"hout the nited States, and en#
a!lin" it to !rin" for$ard, upon any occasion, its entire and undi#
vided stren"th to support or defeat any measure of the "overnment%
1n the hands of this formida!le po$er, thus perfectly or"ani2ed, $as
also placed unlimited dominion over the amount of circulatin" me#
dium, "ivin" it the po$er to re"ulate the value of property, and the
fruits of la!or in every ;uarter of the nion9 and to !esto$ prosper#
ity, or !rin" ruin upon any city or section of the country as mi"ht
!est comport $ith its o$n interests or policy%
"We are not left to conjecture ho$ the moneyed po$er, thus or"an#
i2ed, and $ith such a $eapon in its hands, $ould !e li*ely to use it%
'he distress and alarm $hich pervaded and a"itated the $hole
country, $hen the +an* of the nited States $a"ed $ar upon the
people in order to compel them to su!mit to their demands, cannot
yet !e for"otten%
'he ruthless and unsparin" temper $ith $hich $hole cities and
communities $ere oppressed, individuals impoverished and ruined,
a scene of cheerful prosperity suddenly chan"ed into one of "loom
and despondency, ou"ht to !e indeli!ly impressed on the memory of
the people of the nited States% 1f such $as its po$er in a time of
peace, $hat $ould it not have !een in a season of $ar, $ith an en#
emy at your doors%
No nation !ut the freeman of the nited States could have come out
victorious from such contest9 yet, if you had not con;uered, the
Dovernment $ould have passed from the hands of the many to the
hands of the fe$9 and this or"ani2ed money po$er, from its secret
conclave, $ould have dictated the choice of your hi"hest officers,
and compelled you to ma*e peace or $ar, as !est suited their o$n
$ishes% 'he form of your Dovernment mi"ht for a time have re#
mained, !ut its livin" spirit $ould have departed from it%"
4he wise counsel coache" in these gol"en wor"s of Presi"ent
Mackson are now more applicable than when uttere" by him. n
the election of 1DAJ# Martin Fan <uren
succee"e" Mackson in
the presi"ency. 4he panic engineere" by the bank en!elope" the
people# an" the whole system of cre"it built up by it fell with a
Martin Fan <uren - )1BD8-1DJ8* $ighth Presi"ent of the ,.3. - 7irst 9ati!e born
Presi"ent# of Dutch ancestry - Presi"ent from 1DAB-1DC1.
n fact the bank ha" so shrew"ly manipulate" the !olume of
money# an" so absolute was its control o!er it# that society ha" reN
sol!e" itself into two classes# a cre"itor class# small in numbers#
but powerful in influence+ a "ebtor class# constituting a great maN
>ority of the people# but helpless in the grasp of the cre"itor class.
:ne was the master# the other the ser!ant.
During the a"ministration of Fan <uren# the n"epen"ent 4reasN
ury <ill became a law. 4hus the work begun by Mackson in crushN
ing the bank# was consummate" by the separation of the public
moneys from those of the banks - a most salutary reform.
;60P4$1 .
:1=9 :7 46$ P1$3$94 904:90/ <09-9= 3G34$M
"She is not dead, !ut holdin" her capital and stoc* holders to"ether
under a state charter, she has ta*en a position to $atch events and
also to profit !y them% 'he Ioyal 'i"er has "one into the jun"le9
and, crouchin" on his !elly, he a$aits the favora!le moment emer#
"in" from his covert and sprin"in" on the !ac* of the unsuspicious
- 4homas 6. <enton
"+an* paper must !e suppressed and the circulation restored to the
nation to $hom it !elon"s%
"'he po$er to issue money should !e ta*en from the !an*s and re#
stored to con"ress and the people%
"1 sincerely !elieve that !an*in" esta!lishments are more dan"erous
than standin" armies.
"1 am not amon" those $ho fear the people% 'hey and not the rich,
are our dependence for continued freedom% 3nd to preserve their in#
dependence, $e must not let our rulers load us $ith perpetual de!t%
"(ut do$n the !an*s and if this country could not !e carried
throu"h the lon"est $ar a"ainst her most po$erful enemy $ithout
ever *no$in" the $ant of a dollar, $ithout dependence upon the
traitorous class of her citi2ens, $ithout !earin" hard upon the re#
sources of the people or leadin" the pu!lic $ith an indefinite !urden
of de!t, 1 *no$ nothin" of my countrymen%"
- 4homas Mefferson.
n the prece"ing chapter# the career of the ,nite" 3tates <ank was
trace" from its origin to its "ownfall.
t was there shown that the ,nite" 3tates# by transferring its so!N
ereign power of issuing currency to accumulate as money among
the people# an" "elegating to a pri!ate corporation# ha"# in a periN
o" of less than fifty years# built up a monopoly that threatene" to
pull "own the pillars of the republic.
4hat the panics of 1D11# 1DAA# an" 1DAB-C1# with their conN
se5uent ruin of tens of thousan"s of in"ustries# with the atten"ant
circumstances of hunger# suffering# an" star!ation# were "esignN
e"ly pro"uce" by the bank to o!erawe ;ongress an" the Presi"N
4hat it secure" the powerful political influence of Iebster# ;lay#
an" ;alhoun on the floor of the ,nite" 3tates senate as the chamN
pions of its interests.
4hat the press of the country# to a !ery large extent# succumbe" to
its moneye" influence.
4hat it attempte" to crush the beneficent a"ministration of Presi"N
ent Mackson.
Ie now come to consi"er a system of national banking# comN
pare" with which# the ol" ,nite" 3tates <ank was a pigmy.
n 1DJ1# when the 3outhern states attempte" to with"raw from
the ,nion# the result was that great conflict known in history as
the ci!il war.
4hroughout its progress# the mass of the people were intently enN
gage" with the gigantic operations constantly carrie" on "uring
that perio"# an"# therefore# little attention was pai" by them to the
financial legislation# enacte" by ;ongress.
Ihen the 9orth an" the 3outh were marshaling their respecti!e
armies to "etermine the 5uestion of military supremacy# the
weight of foreign influence was thrown to the southern cause.
=reat <ritain# from her antipathy to the people of the ,nite"
3tates# early recognize" the ;onfe"eracy# an" her course was folN
lowe" by 7rance an" 3pain# but the latter powers "i" not resort to
the extreme measures of $nglan".
During the early perio" of the war# immense sums of money were
nee"e" by the 7e"eral =o!ernment to arm# e5uip# an" maintain
her numerous armies an" fleets necessary for the suppression of
the rebellion.
6ea!y taxes of !arious kin"s were le!ie" an" collecte" for the
payment of the extraor"inary expenses incurre" by the war# but
this was insufficient to meet the expen"itures. 1esort was ha" to
borrowing money on the cre"it of the ,nite" 3tates by the sale of
0t that time as at present# 9ew Gork ;ity was the financial center
of the country. 0ugust <elmont K ;o. were the 0merican agents
of the 1othschil"s# an" the former a"!ise" this great banking
house that there woul" be much risk in purchasing 0merican
4he 1othschil"s were locate" in the ;ity of /on"on# $nglan"#
with branch banks at Paris# 7rankfort# <erlin# an" Fienna.
7rom the year 1D((# up to the outbreak of the ci!il war# the
,nite" 3tates ha" ma"e astonishing progress as a commercial naN
tion# our commerce ha" rapi"ly grown to be the secon" largest in
the worl"# an" it promise"# ere long# to surpass that of =reat <riN
tain# who ha" long looke" with >ealous eye on the remarkable
growth of the 0merican merchant marine.
3he ha" for centuries pri"e" herself as the "/istress of the Seas,"
an" ha" long feare" that this republic woul" snatch its supremacy
from her# an" thus relegate her to a secon" rate power.
6ence# upon the outbreak of the war# the re>oicing in $nglan"
was immense# an" <ritish statesmen pre"icte" the success of the
;onfe"eracy. 9or was this all. $nglan" ai"e" the 3outh by
money# munitions of war# by the recognition of her belligerency#
an" by her moral support.
t was e!i"ent that no money coul" be secure" from $nglan" by
the ,nite" 3tates to maintain the supremacy of the ;onstitution#
for nations# like men# are go!erne" in their money transactions
largely by their likes an" "islikes.
n 1DJ1# the money in circulation in the ,nite" 3tates consiste"
of gol" an" sil!er coins# an" state bank currency. 0s the exN
penses of the =o!ernment in 1DJ1-J8 were many millions of "olN
lars in excess of its income# an" as but little money coul" be ha"
by the sale of its bon"s# recourse was ha" to issuing paper money.
<y the acts of Muly 1Bth# an" 0ugust Hth# 1DJ1# the 3ecretary of
the 4reasury was authorize" to issue "eman" notes to the amount
of fifty millions of "ollars# an" these notes were ma"e full legal
ten"er for all "ebts an" "eman"s# both public an" pri!ate.
4his was not the first time that the 7e"eral =o!ernment ha" isN
sue" its notes to circulate as money. t will be remembere" that
"uring the war of 1D18# the =o!ernment ha" resorte" to this
means# a prece"ent followe" by the a"ministrations of Fan <uren#
# an" <uchanan.
4hese notes so issue" at these !arious times were maintaine" at a
parity with gol" an" sil!er coin# an" were a fa!orite money of the
people. 6istory recor"s the fact that no less than twenty issues of
paper money were emitte" by the general =o!ernment prior to
the year 1DJ8+ that the people ne!er 5uestione" its !alue an" effiN
Mames - Polk: )1BEH-1DCE* $le!enth Presi"ent# ser!e" from March C# 1DCH to March
C# 1DCE# an" "ie" >ust A months later.
ciency as a me"ium of exchange. 4hese !arious issues of curN
rency were uniformly recei!able by the go!ernment in payment
of its taxes an" re!enues.
During the perilous times of the nation# when bankers an" finanN
ciers refuse" to loan money to it# the issue of full legal ten"er paN
per money ne!er faile" to come to the rescue# while cowar"ly
gol" fle" to the rear.
4herefore# the fifty millions of "eman" notes issue" un"er the auN
thority of the acts of Muly 1Bth an" 0ugust H# 1DJ1# ha!ing unlimN
ite" legal ten"er power for the payment of all "eman"s# ne!er "eN
preciate" a farthing
3ubse5uent to the passage of this act# a bill was intro"uce" in
;ongress pro!i"ing for the issue of non-interest bearing treasury
notes to the amount of T1H(#(((#((( with full legal ten"er power
for the payment of all "ebts an" "eman"s# public an" pri!ate.
mme"iately# from the lea"ing cities of the country# a hor"e of
bankers# or as 6on. 4ha""eus 3te!ens aptly terme" them#
"3 dele"ation of !an*ers and coin venders,"
hastene" to Iashington# organize" themsel!es# an" re5ueste" the
;ommittee on Iays an" Means of the 6ouse# an" the 7inance
;ommittee of the 3enate to meet with them at the office of the
3ecretary of the 4reasury.
4heir re5uest was complie" with on the 11th "ay of 7ebruary#
7arthing: - 0 5uarter of one ol" $nglish penny. ):ne EJ(th of a <ritish Poun"
3terling* ;ease" pro"uction in 1EHJ# an" remo!e" from circulation in 1EJ1.
:wing to some peculiar an" powerful influence# then an" there
exerte" by these organize" bankers on these committees# the legal
ten"er clause was mo"ifie" to rea" as follows: -
"'hat the amount of the t$o *inds of notes to"ether shall at no time
e<ceed the sum of 6&78,888,888, and such notes herein authori2ed
shall !e receiva!le in payment of ta<es, internal duties, e<cises,
de!ts, and demand of every *ind due to the nited States, e<cept du#
ties on imports, and of all claims and demands a"ainst the nited
States of every *ind $hatsoever, e<cept for interest upon !onds and
notes $hich shall !e paid in coin, and shall also !e la$ful money
and a le"al tender in the payment of all de!ts, pu!lic and private,
$ithin the nited States, e<cept duties on imports and interest as
4his propose" amen"ment was se!erely criticize" by Mr.
3te!ens# of Pennsyl!ania# an" by Mr. 3paul"ing# of 9ew Gork.
During the "ebate upon the bill as amen"e"# Mr. 3te!ens "eN
nounce" the "eman"s of the bankers an" sai": -
"3 dolefu& sound came up from the caverns of the !ullion !ro*ers
and the saloons of the associated !an*s% 'heir cashiers and a"ents
$ere soon on the "round, and persuaded the Senate $ith !ut little
deli!eration to man"le and destroy $hat it had cost the 5ouse
months to di"est, consider and pass%
"1nstead of !ein" a !eneficent and invi"oratin" measure, it is no$
positively mischievous% 1t has all the !ad ;ualities $hich, its en#
emies char"ed on the ori"inal !ill and none of its !enefits%
1t no$ creates money and !y its very terms declares it a depreciated
currency% 1t ma*es t$o classes of money 4 one for !an*s and
!ro*ers and another for the people%
1t discriminates !et$een the ri"hts of different classes of creditors9
allo$in" the rich capitalist to demand "old and compellin" the or#
dinary lender of money on individual security to receive notes $hich
the Dovernment had purposely discredited%"
Mr. 3te!ens further sai": -
"Who is this favored class> 'he !an*ers and !ro*ers and no!ody
else% +ut ho$ is this "old to !e raised> 'he duties and pu!lic lands
are to !e paid for in nited States notes, and they or !onds are to !e
put up at auction, to "et coin for these very !ro*ers, $ho $ould fur#
nish the coin to pay themselves !y "ettin" t$enty per cent, discount
on the notes thus !ou"ht%"
Ihile on his "eath be"# the =reat ;ommoner# as his frien"s lo!e"
to call him# recalle" the action of ;ongress in "emonetizing the
greenback at the instigation of the banks. n speaking of the
bankers he sai": -
"We $ere foolish to "rant them "old interest, and no$ they un!lush#
in"ly demand further advanta"es% 'he truth is $e can never satisfy
their appetite for money%"
4he amen"ment of Mr. 3te!ens to place officers an" sol"iers of
the army an" na!y# an" those who shoul" furnish them with proN
!isions upon the same stan"ing as the bankers an" brokers# was
"efeate" by a !ote of B8 to JB.
n "enouncing the amen"ment striking out the legal ten"er clause#
3enator Mohn 3herman spoke as follows+ -
"1f you stri*e out this le"al tender clause you do it $ith the *no$#
led"e that these notes $ill fall dead upon the money mar*ets of the
$orld9 that they $ill !e refused !y the !an*s9
that they $ill !e a dis"raced currency that $ill not pass from hand
to hand9 that they $ill have no le"al sanction9 that any man may de#
cline to receive them, and thus discredit the o!li"ations of the Dov#
1 as* a"ain if that is just to the men to $hom you have contracted to
pay de!ts> When you issue demand notes and announce your pur#
pose not to pay any more "old and silver coin, you tender to these
$ho have furnished provisions and services this paper money% What
can they do> 'hey can not pay their de!ts $ith it, they can not sup#
port their families $ith it, $ithout a depreciation%"
6e further sai" in this speech of 7ebruary 1A# 1DJ8# that
"1 much prefer the credit of the nited States, !ased as it is upon all
the productions and property of the nited States, to the issues of
any corporation, ho$ever "uarded and mana"ed%"
4his language of 3enator 3herman was that of un"oubte" patriotN
ism# an" it is strongly con"emnatory of his subse5uent public caN
reer# "uring which he became the acti!e ally of the national
Mr. -ellogg# of llinois# thus score" the gree" of these men. 6e
sai": -
"1 am pained to sit in my place in the 5ouse and hear mem!ers tal*
a!out Hthe sacredness of capital, that the interests of money must not
!e touched%
)es, sir, they $ill vote si< hundred thousand of the flo$er of the
3merican youth for the army to !e sacrificed $ithout a !lush, !ut
the "reat interests of capital, of currency, must not !e touched%"
n referring to the gran" struggle ma"e by Mr. 3te!ens for full
legal ten"er currency# Mu"ge -elley sai": -
"1 remem!er the "rand old Commoner $ith his hat in his hand and
his cane under his arm, $hen he returned to the 5ouse from the fi#
nal conference, sheddin" !itter tears over the result% H)es,H said he,
L$e have had to yieldH%
'he Senate $as stu!!orn% We did not yield until $e found that the
country must !e lost or the !an*s !e "ratified9 and $e have sou"ht
to save the country in spite of the cupidity of its $ealthiest citi2ens%"
4he bankers thus succee"e" in limiting the legal ten"er power of
the 4reasury note# or as it is commonly calle"# the greenback# an"
from this time on the bankers# brokers# an" speculators ha!e# with
few exceptions# "ictate" the financial legislation in the ,nite"
4his amen"ment# by which the "ebt paying power of the 4reasury
note was restricte" within such narrow limits# was a most "ishonN
est act on the part of the go!ernment.
t "rew "istinctions between the !arious kin"s of money issue"
by the ,nite" 3tates. t ma"e the bankers an" bon" hol"ers a
pri!ilege" class# an" it inflicte" a woun" upon the nation from
which it has not yet reco!ere".
t ma"e gol" an" sil!er coin the money of the pri!ilege" classes#
who compose" that traitorous element so >ustly "enounce" by
<y force of this amen"ment# coin went to a premium# thereby
greatly enhancing the wealth of the bankers an" bullion brokers.
Moreo!er# the principle in!ol!e" in that act greatly weakene" the
most powerful element of so!ereignty that can resi"e in a nation#
by placing the control of the !alue of money in the han"s of orN
ganize" gree"# in this case the gol" gamblers of Iall 3treet.
t lai" the foun"ation of a stupen"ous public "ebt# which the
hol"ers thereof woul" stri!e to perpetuate by e!ery means in their
power# an" it was the first step to fasten on the people the most
powerful an" merciless tyranny that e!er curse" a free people -
the centralize" money power known as the national banking sysN
4he bill# as amen"e"# became a law on Muly 11# 1DJ8# an"# from
that time# began the "epreciation of the greenback currency.
4he banking power# which ha" succee"e" in in"ucing ;ongress
an" the Presi"ent to cripple that currency# which e!entually sa!e"
the ,nion# afterwar" pointe" the finger of scorn at this money as
a "ebase" currency# an" they# therefore# implie"ly "amne" their
own nefarious con"uct by "enouncing it as "ra"4!a!y" money.
0s a result of this act as amen"e"# the merchant who pai" "uties
on merchan"ise importe" from abroa" was compelle" to pay the
taxes le!ie" thereon# in coin.
4o obtain that kin" of money he must procee" to the bullion
broker# an" pay him a large premium for the coin to make his
payment of the customs le!ie" on his merchan"ise.
4he bon" hol"er was pai" his interest on go!ernment bon"s in
gol"# which was afterwar" sol" by him to the importer# at a high
4his legislation was the result towar" which the bullion brokers
an" gol" gamblers of Iall 3treet bent all their energies to proN
cure# when they in"uce" the go!ernment to rob the greenback of
its full legal ten"er "ebt-paying power.
t was the consummation of the most "ishonest financial scheme
e!er perpetrate" upon a hea!ily taxe" an" patriotic people.
mme"iately following the !isit of these bankers to Iashington# a
circular was issue" by the /on"on bankers# an" "istribute" by
one 6azar"# who was their representati!e in this country at that
4he contents of this famous circular are as follows: -
"Slavery is li*ely to !e a!olished !y the $ar po$er and chattel
slavery destroyed% 'his 1 and my European friends are in favor of9
for slavery is !ut the o$nin" of la!or and carries $ith it the care of
the la!orer, $hile the European plan, led on !y En"land, is capital
control of la!or !y controllin" $a"es%
'his can !e done !y controllin" the money%
'he de!t that capitalists $ill see is to !e made out of the $ar, must
!e used as a measure to control the volume of money% 'o accomplish
this, the !onds must !e used as a !an*in" !asis% We are no$ $aitin"
for the Secretary of the 'reasury to ma*e his recommendation to
Con"ress% 1t $il& not do to allo$ the "reen!ac* ,as it is called- to
circulate as money any len"th of time, for $e cannot control it%"
4he existence of this remarkable circular has been strenuously
"enie" time an" again by the national banking money power.
9otwithstan"ing these "enials# the line of action in"icate" in that
circular has been consistently pursue" from that "ay to this.
4he a"!ice of sai" 6azar"# was at once acte" upon by the organN
ize" banks# an" they procee"e" to make known their "eman"s to
4herefore# a bill was spee"ily brought forwar" by 3enator 3herN
man in the ,nite" 3tates 3enate# pro!i"ing for the incorporation
an" organization of the present system of national banks as banks
of issue - a bill whose passage meant the creation of moneye" inN
stitutions# whose interests woul" be# or coul" be ma"e# antagonN
istic to the nation.
s it not excee"ingly strange# that 3enator 3herman# who# in his
able speech of 7ebruary 1A# 1DJ8# a"!ance" powerful arguments
in behalf of =o!ernment legal ten"er currency# or greenbacks# in
which he state" that he preferre" the cre"it of the ,nite" 3tates#
base"# as it was# upon all the pro"uctions an" property of the
people# to the issue of any corporation howe!er well guar"e" an"
manage"# woul" thus su""enly change his positionL
n less than a year from the time he so ably "efen"e" legal ten"er
greenback currency# he re!erse" his position# an" fathere" a finN
ancial measure which brought into being a "angerous ri!al to the
=o!ernment when it was engage" in a "eath struggle.
n substance# this act pro!i"e" for the incorporation of banking
companies# by which not less than fi!e persons coul"# un"er cerN
tain restrictions# organize a bank# by "epositing with the 3ecretN
ary of the 4reasury ,nite" 3tates bon"s to secure the circulation
of national bank notes as currency.
4he capitalists thus organizing themsel!es into a national bank
association# were re5uire" to enter into articles of association
which shoul" specify# in general terms# the ob>ect for which the
association was forme".
4hese articles were to be signe" by the persons uniting to form
the association# an" a copy of them was to be forwar"e" to the
;omptroller of the ;urrency to be file" an" preser!e" in his ofN
9o association coul" be organize" as a national bank with less
capital than one hun"re" thousan" "ollars+ except that banks with
a capital of not less than fifty thousan" "ollars coul"# with the apN
pro!al of the 3ecretary of the 4reasury# be organize" in any place
ha!ing a population not excee"ing six thousan" inhabitants.
,pon a "eposit of ,nite" 3tates bon"s# the banking associations
were entitle" to recei!e from the ;omptroller of the ;urrency#
circulating notes# of "ifferent "enominations# in blank# registere"
or countersigne"# e5ual in amount to ninety per centum of the
amount of the current market !alue of the bon"s so "eposite" by
the association with the ;omptroller# but in any case the circulatN
ing notes were not to excee" ninety per centum of the par !alue
of the sai" bon"s# if bearing interest at a rate of not less than fi!e
per cent per annum+ an" the amount of circulating notes to be furN
nishe" to each association shall be in proportion to its pai"-up
capital as follows# an" no more: -
1. 4o each association whose capital "oes not excee" fi!e
hun"re" thousan" "ollars# ninety per centum of such capN
8. 4o each association whose capital excee"s fi!e hun"re"
thousan"# but not excee" one million of "ollars# eighty per
centum of such capital.
A. 4o each association whose capital excee"s one million of
"ollars# but not excee" three millions of "ollars# se!N
enty-fi!e per centum of such capital.
C. 4o each association whose capital excee"s three millions
of "ollars# sixty per centum of such capital.
4he law further pro!i"e" that after any association recei!ing cirN
culating notes un"er this act# an" has cause" its promise to pay
such notes on "eman" to be signe" by the Presi"ent# or Fice-PresN
i"ent# an" cashier thereof in such manner as to make them obligN
atory promissory notes payable on "eman"# at its place of busiN
ness# such association may issue an" circulate the same as money.
0n" such notes shall be recei!e" at par in all parts of the ,nite"
3tates in payment of taxes# excises# public lan"s# an" all other
"ues to the ,nite" 3tates# except "uties on imports# an" also for
all salaries an" other "ebts an" "eman"s owing by the ,nite"
3tates to in"i!i"uals# corporations# an" associations within the
,nite" 3tates# except interest on the public "ebt# an" in re"empN
tion of the national currency.
4his act also pro!i"e" that# in lieu of all existing taxes# each assoN
ciation shoul" pay a "uty of one per cent per annum upon the a!N
erage amount of its notes in circulation# an" one-half of one per
cent per annum upon the a!erage amount of its "eposits# an" a
"uty of one-half of one per cent per annum on the a!erage
amount of its capital stock beyon" the amount in!este" in ,nite"
3tates bon"s.
7urthermore# these national banking associations were authorize"
to institute suits at law in the ,nite" 3tates courts as courts of oriN
ginal >uris"iction.
4his pro!ision ga!e the national banks an a"!antage o!er the orN
"inary citizen# an" place" these associations beyon" the >uris"icN
tion of the 3tate courts+ in other wor"s# these banks coul" select
whate!er court their interest "ictate".
t will at once be ascertaine"# from a stu"y of the national bankN
ing law# that the capital of the associations was nearly "ouble" by
act of ;ongress.
n the first place# bon"s# "eposite" by them to secure their circuN
lation "rew interest payable in gol"# at this time at a high premiN
um. 3econ"# the circulating notes issue" to them by the ,nite"
3tates# although promissory notes
payable on "eman" an" thereN
fore "ebts of the banks# were nominally money# an" were loane"
out at a high rate of interest to the customers of the national
4he ,nite" 3tates =o!ernment ga!e the wealthiest men of the
country# in the time of its greatest peril an" "istress# a gratuity
e5ual to ninety per centum of their banking capital.
4his scheme engineere" through ;ongress by the money power#
greatly ten"e" to centralize the currency in the large cities# an"#
therefore# ma"e it master of the pro"ucti!e energies of the 0merN
Promissory notes - $arliest form of <on"s: - essentially .:.,.&s sometimes bearing
ican people# as the !ast ma>ority of the bon"s were hel" in 9ew
Gork ;ity an" other centers of wealth an" population.
t ma"e the circulating notes of these banks a ri!al to the greenN
back currency# an" it woul" be to the interest of the national
bankers# by e!ery means in their power# to "ri!e out an" "estroy
the paper money issue" by the =o!ernment.
4his law place" it in the han"s of the money power to contract or
expan" the !olume of money at its pleasure# an" therefore# enN
hance or "epreciate the !alue of stocks# bon"s# an" all other
forms of property in the ,nite" 3tates.
4he far-reaching influence of this act of ;ongress# chartering naN
tional banks# becomes apparent# when the true principles an"
functions of =o!ernment are consi"ere" in all their relations to
the people. Pre-eminent among the !arious powers conferre"
upon# or assume" by a so!ereign state# are those of taxation# of
raising armies# an" of coining# issuing# an" controlling the
!olume of money.
4he first name" power# that of taxation# is only limite" by the neN
cessities of the 3tate# an" of the amount of property upon which it
0 citizen of a state may become the owner of a home through arN
"uous toil an" life-long rigi" economy# yet# the state# when in!okN
ing the power of le!ying an" collecting taxes# may sweep away
this property# not lea!ing a !estige for the man whose labor an"
pri!ations create" a shelter for himself an" family.
n a great case before the highest tribunal of the nation# Mustice
3amuel P# Miller sai" that:
"'he po$er of ta<ation is the po$er to destroy%"
9o man who is en"owe" with a mo"icum of intelligence woul"
a"!ocate a transfer of this immense power to a pri!ate corporaN
tion for its gain.
t woul" amount to the self-"estruction of a nation.
4he power of raising an" maintaining armies is inherent in a so!N
ereign state# an" is absolutely necessary for its self-"efense# an"
therefore its self-preser!ation.
4he strong arm of the =o!ernment can reach e!ery firesi"e in the
lan"# an" can "rag from thence the father# husban"# or son# tear
him away from the family circle# force him to "on the national
uniform# to bear arms# an" to lay "own his life for his country. 9o
citizen can resist the imperati!e call of his country when in!ol!e"
in war.
9o sane man woul" a"!ocate the "elegation of this high attribute
of so!ereignty to a corporation for its in"i!i"ual gain# as such
transfer of power woul" ine!itably result in frightful oppression.
4he power of coining# issuing# an" controlling the !olume of
money is a far more important function of go!ernment than the
foregoing. 0ll commerce# exchange# the existence of =o!ernN
ment# of ci!ilization itself# hinges upon this mighty function of
=o!ernment. 4he power of issuing an" controlling money exerN
cises an imperial sway o!er all pro"ucti!e in"ustry as uni!ersal
as the law of gra!itation upon all matter.
4he !alue of all property# whether of the present time# or of that
resulting from the earnings an" accumulations of all past generaN
tions# "epen"s upon the control of the !olume of money.
4he power of le!ying an" collecting taxes for the support of the
nation# of raising an" maintaining armies for its preser!ation# is
"epen"ent upon the control of the currency.
4he former is subor"inate to the last name" power# an" conN
se5uently in!ol!es the !ery life of the nation. Get# in time of the
greatest nee" of the nation# when e!erything most !aluable to
man was at stake# this necessary power of =o!ernment was "elN
egate" to the most traitorous an" rapacious system of corporaN
tions that e!er curse" the people.
<y this transfer of so!ereign power to the national banking sysN
tem# the 7e"eral =o!ernment "i!este" itself of that ne!er failing
resource which secure" the in"epen"ence of the colonies# an"
which successfully enable" the a"ministration of Mames Ma"ison
to chastise the o!erweening pri"e of =reat <ritain in 1D18.
4he alienation of this highest function of the nation to the nationN
al banking money power was a high crime against the welfare of
the country# an" it create" a powerful moneye" interest antagonN
istic to the ,nite" 3tates.
More than one hun"re" years ago# the illustrious Mefferson clearly
pointe" out the "angers of banks of issue. 4ime an" again# he exN
erte" his !oice# his pen# an" his influence# in warning the people
of the conse5uences that woul" ine!itably flow from such selfish
schemes as the transfer of national powers to corporations.
4he extreme "anger of a so!ereign power# in transferring its abN
solute right of coining an" issuing money in whole# or in part# to
a pri!ate in"i!i"ual# or corporation# has been clearly pointe" out
by the ablest thinkers of all ages. 3uch transfers of the powers of
a state ha!e uni!ersally resulte" in extortion an" oppression by
those to whom this pri!ilege is grante".
Fattel# the great authority on the law of nations# instances se!eral
6e places the right of coining money among the prerogati!es of
ma>esty# an" he relates that 3igismun"# -ing of Polan"# ha!ing
grante" this pri!ilege to his !assal# the Duke of Prussia# in the
year 1HCA# the $states of that country passe" a "ecree in which it
was asserte" that the king coul" not grant that pri!ilege# it being
inseparable from the crown.
4he -ings of 7rance grante" the pri!ileges of coining money to
lor"s an" bishops# an" these grantees# ha!ing use" that power as
an instrument of great oppression# these pri!ileges were cancelle"
by the crown on account of the great abuses practice" on its subN
4he history of $nglan" furnishes a notable example# for in 1B8A#
one Ioo"# an $nglishman# obtaine" a royal patent for the coinage
of copper half-pence. Ioo" at once procee"e" to floo" relan"
with this base coin# an" robbe" the "own-tro""en people of that
country out of thousan"s of poun"s sterling.
4his gross outrage upon that nation arouse" the in"ignation of
3wift# an" in his "ArapierHs @etters"
he attacke" the =o!ernN
ment with such bitter satire# that# in 1B8H# the patent to Ioo" was
Parliament# howe!er# grante" the scoun"relly Ioo" an annuity of
fifteen thousan" "ollars per annum for the perio" of twel!e years
as an in"emnityS 4he presumption is# that this great sum of
money was gi!en to Ioo" on the groun"s that he ha" surN
ren"ere" a "vested ri"ht%"
:ur =o!ernment# in the enactment of this national banking law#
ga!e away its greatest resource in time of peace or war+ !iz.# the
power to issue legal ten"er paper money# a resource that ha" time
an" again come to the rescue of the people while the capitalists
hel" aloof.
Monathan 3wift# a Dean of 3t. Patricks ;athe"ral in Dublin# wrote a series of
pamphlets# un"er the pen-name of: M < Drapier to arouse the rish against the coinage.
4he principal excuse offere" by those who procure" the passage
of this law was# that it woul" create a market for bon"s# an"
woul" ai" in the maintenance of the public cre"it+ that# for the
consi"eration of recei!ing these circulating notes to loan out at
interest as money# the bankers# who were the beneficiaries of this
law# woul" len" their assistance to the =o!ernment by ai"ing it to
maintain a high price for its obligations.
4he !ery reason a"!ance" by the originators of that system of
banking an" currency for its creation# became the strongest reasN
on why the =o!ernment cre"it sunk to its lowest point# because#
the national bankers# to obtain these bon"s as low as possible#
woul" combine to "epress the market !alue of the ,nite" 3tates
bon"s which forme" the basis of bank currency.
n fact# the market price of =o!ernment bon"s rapi"ly fell to the
lowest mark e!er known# after the passage of this act# an" the naN
tional banking money power conse5uently reape" a har!est
reaching into scores of millions.
4he same power "epreciate" the !alue of greenbacks for the
a!owe" purpose of increasing the premium on gol".
9ot satisfie" with the immense a"!antages thus obtaine" from the
=o!ernment# "uring the most critical perio" of the war# the
money power# on the 1Bth "ay of March# 1DJC# succee"e" in seN
curing the passage of a resolution through ;ongress# authorizing
the 3ecretary of the 4reasury to pay the interest upon bon"s# in
a"!ance# not excee"ing one year# either with or without rebate for
such prepayment# accor"ing to his "iscretion.
4he bon" hol"ers an" bankers were thus enable" to "raw their inN
terest in gol" one year in a"!ance# "ispose of it at a high premium
to the go!ernment an" to those who pai" "uties on importe" merN
n Muly# 1DJC# gol" rose to a premium of T8.DH# an" the bon"
hol"er# national banker# an" gol" gamblers fleece" the people out
of millions+ while the sol"ier# who was sacrificing his life for his
country# was pai" in greenbacks purposely "epreciate" by the
go!ernment for whose existence he fought.
During the 7orty-fifth ;ongress# 6on. Mames 1. Iea!er introN
"uce" the following resolution in the 6ouse of 1epresentati!es: -
"Iesolved, 'hat the Secretary of the 'reasury !e and is here!y dir#
ected to report to this house $hether he has at any time anticipated
the payment of interest on the pu!lic de!t9 if so, ho$ much has !een
paid in advance, and to $hom%"
4his resolution was referre" to the ;ommittee on Iays an"
Means# an" the chairman thereof sent the resolution to the 3ecretN
ary of the 4reasury# 3herman# with a re5uest to state when he
coul" report.
4he 3ecretary# in reply# state": -
"'hat there $as no pu!lic document that $ould "ive the information
re;uired% 'he department has !een in the ha!it for five years of pay#
in" the interest in advance $ithout char"in" anythin"%"
4his remarkable a"mission will attract attention for the reason#
that the hea" of the 4reasury Department "istinctly states that inN
terest ha" been pai" in a"!ance to the bon" hol"ers an" bankers
without any "e"uction for the use of the money# an" that there
was no public "ocument that woul" gi!e the information reN
4he ob!ious reason why there were no public "ocuments in the
treasury "epartment# containing a recor" of the interest on bon"s
pai" in a"!ance was this# that it woul" show a gigantic robbery of
the go!ernment by the banks an" bon" hol"ers# an" that it woul"
awaken the >ust wrath of the people at the subser!ience of conN
gress to the "eman"s of the gol" gambling money power.
n a speech "eli!ere" by 3enator 3herman in a"!ocacy of the naN
tional banking law# he sai": -
"We are a!out to choose !et$een a permanent system, desi"ned to
esta!lish a uniform national currency, !ased upon the pu!lic credit,
limited in amount, and "uarded !y all the restrictions $hich the e<#
perience of man has proved accessory and a system of paper money
$ithout limit as to amount, e<cept for the "ro$in" necessities of
n this "eclaration of the senator# he expressly a"mits that the cirN
culating notes of these banks were base" on the cre"it of the =o!N
4he truth is# that no safe system of bank currency has e!er yet
been "e!ise" by the wit of man# but that its cre"it is base" upon
that of the =o!ernment# an" the cre"it of a go!ernment rests upon
its taxing power# which is its means of self-preser!ation.
4o gi!e an excuse for his change of front from an a"!ocate of a
legal ten"er =o!ernment currency# to a champion of the national
banking system# the senator uses the following language: -
"1t is as*ed, $hy loo* at all to the interests of the !an*s9 $hy not
directly issue the notes of the Dovernment, and thus save the people
the interest on the de!t represented !y the circulation>
'he only ans$er to this ;uestion is that history teaches us that the
pu!lic faith of the nation alone is not sufficient to maintain a paper
currency% 'here must !e a com!ination !et$een the interests of indi#
viduals and the Dovernment%"
4his astonishing "eclaration of 3enator 3herman is pro!en absoN
lutely false by the pro!isions of his own act# the national banking
law# which makes ,nite" 3tates bon"s the sole security for naN
tional bank notes# an" compels the =o!ernment to act as a reN
"emption agency for the notes of insol!ent banks.
0s the next step to secure the perpetuation of this robbery of the
people# ;ongress# on the Ar" of March# 1DJA# authorize" the 3ecN
retary of the 4reasury to issue TE((#(((#((( in bon"s# "rawing
interest at six per cent.# an" re"eemable in not less than ten nor
more than forty years.
4hese bon"s coul" be purchase" by lawful money# thereby meanN
ing ,nite" 3tates notes an" treasury notes.
4here was a lapse of six "ays between the passage of the national
banking act an" the passage of this act authorizing sai" bon" isN
4here was yet one ri!al in the fiel" which the national banks "eN
sire" to crush# an" this was the state banks of issue# which# at this
time# ha" a circulation of T8AD#JBB#81D in state bank currency.
4o "estroy the state banks as banks of issue# an" to "ri!e out of
circulation that species of paper money# the national banking
money power pre!aile" upon congress to call into re5uisition the
taxing power of the nation to clear the fiel" of these competitors.
n compliance with their "eman"s# ;ongress enacte" the followN
ing law# !iz+ -
"'hat every national !an*in" association, state !an*, or state !an*#
in" association, shall pay a ta< of ten per centum on the amount of
notes of any person, or of any state !an* or state !an*in" associ#
ation used for circulation and paid !y them%" 4
4his great tax thus impose" by ;ongress upon the issues of state
bank currency was effectual in successfully accomplishing its
4he state banks# therefore# were "ri!en to the necessity of organN
izing themsel!es into national banks# an" this ten"e" to a further
consoli"ation of the money len"ing interests of the country.
During the early part of the year 1DJC# after the organize" banks
ha" secure" the passage of the law "epri!ing greenbacks of their
legal ten"er power# an" after the passage of the national banking
law# one Mames <uell# 3ecretary of the 9ew Gork bankers& comN
mittee# issue" the following circular to the bankers of the country
at large: -
"Aear Sir:
1t is advisa!le to do all in your po$er to sustain such daily and
prominent $ee*ly ne$spapers, especially the a"ricultural and reli#
"ious press, as $ill oppose the issuin" of "reen!ac* money, and
that you $ithold patrona"e and favor from all applicants $ho are
not $illin" to oppose the Dovernment issue of money%
@et the Dovernment issue the coin and the !an*s issue the paper
money of the country, for $e can !etter protect each other%
'o repeal the la$ creatin" national !an*s or to restore to circulation
the Dovernment issue of money $ill !e to provide the people $ith
money, and $ill therefore seriously affect your individual profit as
!an*er or lender%
See your mem!er of Con"ress at once and en"a"e him to support
our interest that $e may control le"islation%"
4he appearance of this infamous circular stirre" up the wrath of
the people# an" a wa!e of in"ignation swept o!er the lan". 4he
nefarious schemes of the money power were set out in this circuN
lar with startling "istinctness.
4he bankers of the country were urge" to combine their power+
the press of the country was to be corrupte"# an" legislation was
to be controlle"# to effect the purpose of transferring the control
of the money of the country to the "ictation of the money power.
4he associate" banks of 9ew Gork ;ity# in or"er to conciliate the
people who were strongly "enouncing the scheme set forth in the
circular of <uell# announce" that this "ocument was issue"
without their knowle"ge or authority.
6owe!er# Mr. <uell# whose name was appen"e" to this circular#
was rewar"e" by an election to the presi"ency of the mporters&
an" 4railers& 9ational bank# of 9ew Gork ;ity# a position which
has gi!en him much power an" prestige as one of the money
kings of Iall 3treet.
4he e!i"ence is positi!e that this circu1ar was issue" with the apN
pro!al# an" by the or"ers of the associate" banks of 9ew Gork
n the first place# the a"!ice ten"ere" to the !arious banks of the
country was in complete harmony with the intentions of the
money power# an" secon"ly# the national banks# from that "ay to
this# ha!e carrie" into execution the baleful plan outline" in that
"ocument# as the !arious acts of congress an" subse5uent history
abun"antly pro!e.
t was "uring the corrupt perio" of the war that immense grants of
public lan"s were ma"e to railway corporations that "onations of
,nite" 3tates bon"s# amounting to nearly one hun"re" million of
"ollars were ma"e to the Pacific railway companies# an" this was
"one "uring a time when the go!ernment was in nee" of fun"s to
suppress the rebellion.
t was "uring this perio" that ;ongress passe" the notorious forN
eign contract labor law# through the operation of which# the mills#
factories an" mines of the ,nite" 3tates were floo"e" with the
3la!s# 6uns# <ohemians# Poles# an" !arious other nationalities of
$urope# thereby laying the foun"ation for the countless race an"
labor riots# that ha!e "isgrace" an" curse" the manufacturing an"
mining states of the ,nion.
0fter the suppression of the state banks of issue# the next step of
the national bank was "irecte" towar" the "estruction of the
greenbacks an" ,nite" 3tates notes# an"# therefore# on the 18th of
0pril# 1DJJ# an act of ;ongress was "uly signe" by the Presi"ent
pro!i"ing for the with"rawal an" cancellation of the ,nite"
3tates notes an" treasury notes.
4his act pro!i"e" that# within six months after the passage thereN
of# the 3ecretary of the 4reasury was authorize" to retire from cirN
culation ,nite" 3tates notes to the amount of ten million "ollars#
an" for e!ery month thereafter a sum not to excee" four million
0t# the time of the passage of the act of 0pril 18# 1DJJ# 6on.
6ugh Mc;ulloch# a national banker# an" a bitter opponent of the
legal ten"er currency# was 3ecretary of the 4reasury. 6e ha" gone
so far in his opposition to the ,nite" 3tates notes an" treasury
notes as to "enounce them as "disreputa!le, dishonora!le
3ecretary Mc;ulloch imme"iately procee"e" to remorselessly
contract the !olume of legal ten"er notes# until TEC#(((#((( of
them were with"rawn from circulation by the issue of interest
bearing bon"s in exchange therefore.
:n the 8n" of March# 1DJB# an act was a"opte" by ;ongress
pro!i"ing for the re"emption an" retirement of the compoun" inN
terest notes# which# at this time were outstan"ing to the amount of
T1HE#(((#((( an" which circulate" as money.
4he metho" of re"emption was the substitution of temporary loan
certificates in lieu of these notes.
4he amount of such certificates was fixe" at TH(#(((#(((# an"
they bore interest at the rate of three per cent per annum# an" naN
tional banks were authorize" to count such certificates as part of
the 1eser!e 7un" pro!i"e" in the national banking law.
:n Muly 8H# 1DJD# the 3ecretary of the 4reasury was authorize" to
issue a""itional loan certificates to the amount of T8H#(((#(((.
4he acts of March 8# 1DJB# an" Muly 8H# 1DJD# ma"e a further
contraction of money to the amount of TBH#(((#(((.
t will be seen# therefore# that the scheme set forth in the circular
of Mames <uell was being carrie" out to the letter.
3tep by step# the national banking money power was gra"ually
succee"ing in "ri!ing the legal ten"er currency out of circulation#
in perpetuating the public "ebt by the issue of long time bon"s#
an" usurping the functions of go!ernment by the issue of bank
:n the 1Dth of March# 1DJE# a bill entitle"# "3n 3ct to Stren"then
the (u!lic Credit," was signe" by Presi"ent =rant.
4he pro!isions of the ;re"it 3trengthening 0ct "eclare" that the
public faith is solemnly ple"ge" to the payment of the interest
an" non-interest bearing obligations of the go!ernment in coin or
its e5ui!alent# except where the law authorizing the issue of such
obligations has expressly pro!i"e" that the same may be pai" in
lawfu1 money# or other currency than gol" an" sil!er.
7urthermore# the ,nite" 3tates solemnly ple"ge" its faith to make
pro!isions at the earliest practical perio" for the re"emption of
the ,nite" 3tates notes in coin.
4his so-calle" ;re"it 3trengthening 0ct# by force of its pro!iN
sions# ma"e e!ery "ollar of the bon"e" "ebt of the ,nite" 3tates
payable in gol" an" sil!er coin.
t was estimate" by the ablest public men of the "ay that this rasN
cally piece of legislation a""e" six hun"re" million "ollars to the
wealth of the national banks an" bon" hol"ers.
/et it be remembere" that this bon"e" "ebt was purchase"# to a
!ery large extent# with treasury notes purposely "epreciate" by
act of ;ongress# an" that a !ery large portion of these bon"s were
bought with greenbacks when the latter were worth but forty
cents on the "ollar in gol".
t shoul" further be borne in min"# that for more than three years
prior to the passage of this act# peace ha" been restore"# the 7e"N
eral authority was re-establishe" o!er the 3outh# sla!ery# the
cause of the war# was abolishe"# the treasury notes an" ,nite"
3tates notes were appreciating in !alue e!ery "ay since the estabN
lishment of peace# which# it was a"mitte"# were continually
a""ing wealth to the hol"ers of ,nite" 3tates bon"s# therefore#
those members of ;ongress who !ote" for that measure coul" not
e!en urge necessity - the last plea of tyrants - as an excuse for
!oting hun"re"s of millions of "ollars to the least patriotic of
0merican citizens.
:wing to the enormous re!enues collecte" by the 7e"eral =o!N
ernment# the public "ebt was being rapi"ly pai"# which excee"N
ingly alarme" the national banking money power# who "esire"
the perpetuation of the bon"e" "ebt of the ,nite" 3tates# for
without bon"s# there woul" be no national banks.
4herefore# the national banks sought by e!ery means in their
power to secure the perpetuation of the national "ebt# an" this
result coul" be obtaine" in two ways# first - by in hea!y re"uction
of the public re!enues+ secon" - by fun"ing the present "ebt into
long time bon"s.
During the war hea!y "uties were lai" upon importe" goo"s#
taxes were le!ie" on incomes# railway companies# insurance
companies# manufacturers# an" excises were collecte" on tobacco
an" spiritous li5uors.
4he manufacturing interests of the country were protecte" from
the competition of foreign goo"s# wares# an" merchan"ise by a
!ery high tariff# while at the same time they were enable"# un"er
the pro!isions of the foreign contract labor law of Muly C# 1DJC# to
import cheap labor by the wholesale from ;hina# =ermany# <elN
gium# taly# 1ussia# 0ustria# an" other foreign nations.
t was a matter of prime interest to the manufacturers to maintain
the present high rate of "uties on imports# an" at the same time
secure the remo!al of the taxes on incomes# manufactures# an"
!arious other forms of internal re!enue.
Moreo!er# the manufacturers "esire" the perpetuation of a huge
public "ebt which woul" necessitate the raising of large re!enues
to meet the interest charge" thereon.
7urthermore# it woul" be to the interest of the national banks an"
manufacturers that ;ongress shoul" make extra!agant appropriN
ations for the support of the =o!ernment.
4he subse5uent action of these two interests taken in connection
with the legislation procure" by them from congress# abun"antly
pro!e that the foregoing statements are true.
6on. Iilliam D. -elley# member of ;ongress from Pennsyl!ania#
was the outspoken a"!ocate of the manufacturing interests on the
floor of the house. n 1DJB# he offere" the following resolution+ -
"Iesolved, that the Committee on Ways and /eans !e instructed to
in;uire into the e<pediency of immediately repealin" the provisions
of the internal revenue la$, $here!y a ta< of five per cent is im#
posed on the mechanical and manufacturin" interests of the coun#
4he resolution was unanimously a"opte".
0t the same time# May ;ooke# the hea" of a great banking firm in
Phila"elphia# was the agent of the ,nite" 3tates 4reasury# an" as
such agent ha" negotiate" the sale of go!ernment bon"s in $ngN
lan" an" 0merica to the amount of se!eral hun"re" million "olN
lars# an" he# therefore# assume" the position of spokesman for the
national banking interests.
0s early as 1DJB# Mr. ;ooke "eclare" that the income tax shoul"
"+e scornfully a!andoned and that ri"ht speedily%"
6e lai" "own the following monstrous principle: -
"We lay do$n the proposition that our national de!t, made perman#
ent and ri"htfully mana"ed, $ill !e a national !lessin"%
"'he funded de!t of the nited States is the addition of
60,888,888,888 to the previously reali2ed $ealth of the nation% 1t is
three thousand millions added to the availa!le active capital%
'o pay this de!t $ould !e to e<tin"uish this capital and lose this
$ealth% 'o e<tin"uish this capital and lose this $ealth $ould !e an
inconceiva!ly "reat national misfortune%"
Ie can easily concei!e why May ;ooke# the allege" great financiN
er# shoul" gi!e utterance to such an absur" statement.
Mr. ;ooke is an intereste" witness in the support of the ri"iculous
maxim "'hat a pu!lic de!t is a pu!lic !lessin"%" 6e was realizing
millions in the way of commissions by negotiating the sale of
4o attract the support of the manufacturers# he says: -
"'he maintenance of our national de!t is protection% 'he destruc#
tion of it !y payment is !onda"e a"ain to the manufacturers of
n his appeal to the national banking money power# he says: -
"'hat is not a ha2ardous opinion $hich declares that in less than
t$enty years our national !an* circulation $ill !e 6&,888,888,888%
'he currency that si<ty4one millions of people, une;ualed in in#
dustry and untrammeled in enterprise, $ill re;uire, has "ot to have
the !asis of a national de!t%
'here is no other foundation for it to stand on that $ill impart to it
at once safety and nationality%"
t will be well to state here# that the man who ga!e utterance to
these !icious propositions was o!ertaken with calamity# an" the
gigantic failure of his banking house heral"e" the great panic of
4he national banks at once >oine" han"s with the manufacturing
interests# an" brought their combine" influence to bear upon conN
:n the first "ay of the session of ;ongress in 1DJB# 1epresentatN
i!e -elley# known as "(i" 1ron" -elley# intro"uce" the following
resolution in the 6ouse: -
"Iesolved, 'hat the $ar de!t of the country should !e e<tin"uished
!y the "eneration that contracted it, is not sustained !y sound prin#
ciples of national economy, and does not meet the approval of this
house% "
4his resolution was a"opte".
0s a result of the combine" influence of the national banking
money power an" the manufacturing interests# congress e!entuN
ally repeale" the tax on incomes# manufactures# railroa"s# insurN
ance companies# an" the tax on perfumes# bank checks# an" reN
"uce" the excise tax on whiskey an" tobacco.
n all# the total taxation remitte" by the general go!ernment# at
the behest of the sor"i" wealth of the country# amounte" to
T88B#(((#((( per annum.
3uch was the process by which ill-gotten accumulate" wealth esN
cape" taxation.
4he national banking money power was not yet satisfie"+ its
gree" was insatiate+
the more it recei!e" from the han"s of the go!ernment the more
ra!enous its "eman"s+ an" on the 1Cth of Muly# 1DB(# it procure"
the passage of the 7un"ing 0ct through a !enal an" corrupt conN
4his act was supplementary to the ;re"it 3trengthening 0ct of
March 1D# 1DJE# an" it went one step farther by pro!i"ing that the
H-8(yr bon"s shoul" be payable in coin.
t authorize" the 3ecretary of the 4reasury to issue bon"s to the
amount of T8((#(((#((( in "enominations of& fifty "ollars# or
some multiple of that sum# re"eemable in coin of the present
stan"ar" !alue# at the pleasure of the ,nite" 3tates# after ten years
from the "ate of their issue# an" bearing interest at the rate of fi!e
per cent per annum# payable semi-annually in coin+
also a sum not excee"ing TA((#(((#((( of like bon"s# the same in
all respects# but payable at the pleasure of the ,nite" 3tates# after
fifteen years from their issue# an" bearing interest at the rate of
four an" one-half per cent# per annum+
he was further authorize" to issue bon"s to the amount of
T1#(((#(((#(((# the same in all respects as the others# but payable
at the pleasure of the ,nite" 3tates after thirty years from the "ate
of their issue# an" bearing interest at the rate of four per cent per
Ie 5uote from a portion of the law as follows: -
"3ll of $hich said several classes of !onds and the interest thereon
shall !e e<empt from the payment of all ta<es or duties of the nited
States, as $ell as from ta<ation in any form !y or under state, muni#
cipal or local authority9 and the said !onds shall set forth and e<#
press upon their face the a!ove specified conditions, and shall, $ith
their coupons, !e made paya!le at the treasury of the nited
4he 3ecretary of the 4reasury was authorize". to sell these se!erN
al classes of bon"s# at not less than par# for coin# an" to re"eem
the H-8( bon"s# hitherto exempte" from payment in coin by the
;re"it 3trengthening 0ct+ or he was authorize" to exchange the
H-8( currency bon"s# at their face !alue for the coin bon"s
pro!i"e" for by the 7un"ing 0ct of Muly 1C# 1DB(.
4o exhibit the powerful influence exerte" upon that congress
which passe" the 7un"ing act of Muly 1C# 1DB(# we will refer to a
few facts that ha!e become history.
Ihen the 7un"ing bill was originally intro"uce"# section eight
pro!i"e" that on an" after the 1st "ay of :ctober# 1DB(# national
banks shoul" "eposit registere" bon"s of any "enomination not
less than one thousan" "ollars# issue" un"er the pro!isions of this
7un"ing act# an" no other# with the 4reasurer of the ,nite" 3tates
as security for notes issue" to national banking associations for
circulation un"er the act of Mune A# 1DJC.
4he banks were gi!en one year in which to take a"!antage of this
section to "eposit the new bon"s in lieu of the former# as security
for their circulating notes.
n case of failure to obey this act# their right to issue notes was
:n their failure to "eposit bon"s issue" un"er the act of Muly 1C#
1DB(# in lieu of the bon"s then on "eposit as security for their cirN
culation# the 4reasurer an" the ;omptroller of the ;urrency were
authorize" to call in an" "estroy their outstan"ing circulating
notes# an" to return the bon"s hel" as security therefore to the asN
sociation by whom they were "eposite".
4he bill containing this section originate" in the senate# an" after
it passe" that bo"y an" came up in the house for consi"eration#
the national bankers swarme" in the halls of ;ongress an" "eN
man"e" that this section be stricken out.
0t no one time "uring the history of the national banks "i" their
combine" power appear so formi"able.
4he house 5uaile" in the presence of these money kings# an" the
section was stricken out# an" the bill thus amen"e" was sent back
to the senate.
4he "eman"s an" metho"s of the banks in seeking the "efeat of
this section ha" become so insolent that e!en 3enator 3herman
6e sai" in reply to their imperious "eman"s: -
"/r% (resident, the three remainin" sections of this !ill apply to the
national !an*s%
'hat is much too "reat a theme for me to enter upon at this sta"e of
the de!ate9 !ut 1 $ill e<plain in a very fe$ $ords the H theory of
those sections%
'he national !an*s are mere creatures of la$% 'hey hold their e<ist#
ence at the pleasure of Con"ress%
We may, to4morro$, if it promotes the pu!lic interests, $ithdra$
their authority%
'he franchise has !een valua!le to them%
"We thin* it ri"ht they should aid us in fundin" the pu!lic de!t% 'hey
hold of our securities 60JB,888,888% Nearly all of these !ear si< per
cent interest in coin%
We $ill not deprive them of any of them9 $e $ill not ta*e from them
the property they enjoy9 $e $i&& not deny them even the payment of
si< per cent "old interest as lon" as they are the o$ners of these
+ut they hold the franchise of issuin" paper money "uaranteed !y
the nited States, and $hich constitutes the circulation of our coun#
try9 and $e say to t$enty per cent, annually upon the franchise%
+ut, sir, the vote of the 5ouse sho$s the po$er of the national
4he 3enate ga!e way to the banks# an" these monopolies comN
pelle" ;ongress to submit to# their will.
t woul" be presume" that 3enator 3herman# >u"ging from the
!igor of his speech against these monopolies on this occasion#
woul" subse5uently oppose their future "eman"s.
9ot so# howe!er. 6e became a more "e!ote" ser!ant than e!er in
furthering the ambition of the national banking money power to
monopolize the issue of paper money.
<y an amen"atory act of Manuary 8(# 1DB1# the secretary of the
4reasury was authorize" to increase the issue of fi!e per cent
bon"s# for which pro!ision was ma"e by the 7un"ing 0ct# from
T8((#(((#(((#to TH((#(((#(((# making a total interest charge
upon the T1#H((#(((#((( of bon"s so authorize" to be issue"# of
TJ8#H((#(((# per annum.
4he outrageous legislation embo"ie" in this 7un"ing 0ct beN
comes apparent to the rea"er.
n the first place# the H-8( bon"s# to the amount of TB88#8(H#H((#
purchase" with treasury notes# purposely "epreciate" by the =o!N
ernment at the "eman" of the gol" gamblers of Iall 3treet# were
ma"e re"eemable in coin.
4his resulte" in a gratuity of many millions of "ollars to the hol"N
ers of these bon"s# which was nothing more nor less than robbery
un"er form of law.
3econ"# it create" a !ast "ebt# making an annual charge upon the
in"ustries of the people of TJ#H((#((( all of which# both principal
an" interest# was exempt from taxation# national# state# county#
an" municipal# creating a special pri!ilege" class who coul" not
be compelle" to contribute a farthing towar" the expenses of that
=o!ernment which ga!e them protection.
9ot only were these bon" hol"ers expressly exempte" from taxes#
but these non-taxable bon"s opene" a wi"e "oor for extensi!e
frau"s upon the re!enues of state an" municipal authorities.
4he process by which states# cities# counties# town-ships# an"
school "istricts were swin"le" out of taxes an" re!enues was by
the shifting of the ownership# nominally at least# of these bon"s
aroun" the !arious banks an" capitalists who returne" them as
7or instance# banks an" capitalists# when the time came for them
to return their assessments of personal property# woul" report
large hol"ings of these nontaxable bon"s# which were obtaine"
for the occasion# an" since 1DB(# this resulte" in swin"ling the
!arious local go!ernments out of countless millions of "ollars in
4he same process by which non-taxable greenbacks were shifte"
from han" to han"# to a!oi" the payment of taxes "uring the periN
o" re5uire" by law for the return of assessment lists for taxation#
was a"opte" on a larger scale in the case of these non-taxable
t set a premium on per>ury.
0s these bon"s were hel" to a !ery large extent in the great cities
of the country where taxation is !ery high# in some cases
e5ualling four per cent on the "ollar# it will be seen that the actual
rate of interest on these bon"s range" from se!en to nine per cent#
4hus far the national banking money power succee"e" in in"uN
cing ;ongress to grant e!ery "eman" ma"e by it.
9ot satisfie" with the enormously !aluable pri!ileges bestowe"
upon it# this subtle power continue" to appear at the opening of
each session of the national legislature# an" make new appeals for
a""itional legislation in its interests.
$ach new "eman" of the national banks met with prompt compliN
ance from ;ongress# an" the "ecrees of this organize"# !oracious
money power were registere" upon the statute books of the nation
by the most corrupt legislati!e bo"y in the worl".
:n Manuary 8(# 1DB1# a bill was rushe" through ;ongress by
which the 3ecretary of the 4reasury was authorize"# in his "iscreN
tion# to pay the interest on the national "ebt e!ery three months.
9otwithstan"ing the fierce opposition "isplaye" by the national
banks against the ,nite" 3tates notes an" treasury notes# in spite
of the efforts of ;ongress to with"raw from circulation the war
money of the country by fun"ing this currency into interest-bearN
ing# nontaxable# long-time bon"s# this paper money "irectly isN
sue" by the ,nite" 3tates was so popular with the people that a
!ery large amount remaine" in the channels of tra"e.
4he people re!ere" the greenback an" ,nite" 3tates note# as that
money which came forwar" in time of "ea"liest peril+
which arme"# e5uippe" an" pai" more than two million patriots#
whose magnificent bra!ery won the greatest battles of mo"ern
times# an" whose heroism secure" the perpetuity of 0merican inN
stitutions+ while gol"# the money of kings# the loa"e" "ice of
stock gamblers# fle" at the first approach of "anger+
gol"# whose !alue appreciate" with e!ery "efeat of the ,nion
gol"# that !ulture which fattene" an" thri!e" upon the carnage of
the great ci!il war# laughe" the appeals of the nation to scorn.
n conse5uence of the further "eman"s of the national banks#
;ongress# on the 8(th of Mune# 1DBC# amen"e" the 9ational <ankN
ing 0ct# which permitte" these banks to with"raw the bon"s "eN
posite" by them to secure the circulation of bank notes# an" "eN
posit# in lien thereof as security# the non-interest-bearing notes isN
sue" by the =o!ernment.
Prior to the passage of this amen"ment# ,nite" 3tates bon"s ha"
risen to a premium in conse5uence of the !arious acts of ;onN
gress culminating in the ;re"it 3trengthening 0ct# an"# therefore#
this act was a"opte" by ;ongress to enable the banks to with"raw
the bon"s "eposite" by them# an" make a large profit by selling
them for the premium# many of which ha" been originally purN
chase" for less than sixty cents on the "ollar.
4he operation of the amen"ment effectually contracte" the 1ega1
ten"er currency of the country# for the substitution of ,nite"
3tates notes an" treasury notes in lieu of the bon"s# "iminishe"
the !olume of legal ten"er currency afloat to an extent e5ual to
the bon"s so with"rawn.
During this perio"# the national banking money power began to
a"!ance the argument that the character an"# !olume of money
shoul" be "etermine"# not by the legislati!e power of the nation#
but by what was calle" the "+usiness interests of the country%"
t sought to e"ucate the people to accept the "octrine# that it was
"angerous to permit congress "'o interfere $ith the dearest interests
of the country," an" that the solution of the money 5uestion must
be settle" by the national bankers# who assume" to hol" the key
to all monetary science.
Presi"ent =rant was won"erfully impresse" with this great "isN
co!ery of the bankers an"# in his message to congress# December
A# 1DBC# he ga!e utterance to this 3tatement: -
"'he e<perience and jud"ment of the people can !est decide ho$
much currency is re;uired for the transaction of the !usiness of the
country% 1t is unsafe to leave the settlement of this ;uestion to Con#
"ress, the Secretary of the 'reasury or the E<ecutive% "
4he Presi"ent# therefore# as far as lay in his power# tacitly surN
ren"ere" the constitutional power of ;ongress an" of the $xecutN
i!e to "eal with 5uestions of finance# an" conferre" it upon the
national banks.
4he people to whom reference is ma"e in this 5uotation from the
Presi"ent# were the national bankers# an" the chief executi!e was
willing to transfer the power of issuing an" controlling money to
that class of men# whose sole ambition was the extortion of the
highest rates of interest# an" who lo!e" to sha!e notes an" bon"s
when they purchase"# an" exact a premium when they sol".
:n the 8Cth of Manuary# 1DBH# after the congressional election of
1DBC# which returne" a great Democratic ma>ority in the 6ouse of
1epresentati!es# the specie resumption act became a law.
4he enactment of this measure carrie" into execution that part of
the ;re"it 3trengthening 0ct where the ,nite" 3tates solemnly
ple"ge" its faith to make pro!isions for the re"emption of the
,nite" 3tates notes in coin# which now legally meant gol".
:ne section of this law pro!i"e" for the substitution of fractional
sil!er coins for the fractional currency+ a subse5uent section abolN
ishe" the charge of one sixth of one per cent for con!erting gol"
bullion into coin# thereby pro!i"ing for the free coinage of gol" at
e!ery ,nite" 3tates mint.
4he most important section of the 1esumption 0ct is as follows: -
"'hat section 7:::, of the Ievised Statutes of the nited States, lim#
itin" the a""re"ate, amount of the circulatin" notes of the National
+an*in" 3ssociations, !e, and is here!y repealed, and each e<istin"
!an*in" association may increase its circulatin" notes in accord#
ance $ith the e<istin" la$, $ithout respect to said a""re"ate limit9
and ne$ !an*in" associations may !e or"ani2ed in accordance $ith
the e<istin" la$ $ithout respect to said a""re"ate limit9 and the pro#
visions of the la$ for the $ithdra$al and redistri!ution of national
!an* currency amon" the several states and territories are here!y
repealed9 and $henever and so often as circulatin" notes shall !e
issued to any such !an*in" association, so increasin" its capital or
circulatin" notes, or so ne$ly or"ani2ed as aforesaid, it shall !e the
duty of the Secretary of the 'reasury to redeem the le"al tender
nited States notes in e<cess of only 60,888,888 to the amount of
ei"hty per centum of the sum of national !an* notes so issued to any
such !an*in" association as aforesaid, and to continue such re#
demption as such circulatin" notes are issued until there shall !e
outstandin" the sum of 60,888,888 of such le"al tender nited
States notes, and no more%
3nd on and after the &st day of January, 3% A%, &C:?, the Secretary
of the 'reasury shall redeem in coin the nited States notes then
outstandin" on their presentation for redemption at the office of the
assistant treasurer of the nited States, in the city of Ne$ )or*, in
sums of not less than 678%
3nd to ena!le the Secretary of the 'reasury to prepare and provide
for the redemption in this act authori2ed or re;uired, he is author#
i2ed to use any surplus revenues from time to time in the treasury
not other$ise appropriated, and to issue, sell, and dispose of, at not
less than par in coin, either of the description of !onds of the nited
States descri!ed in the act of Con"ress approved July &J, &C:8, en#
titled: L3n 3ct to 3uthori2e the Ie4fundin" of the National Ae!t,H
$ith li*e privile"es and e<emption, to the e<tent necessary to carry
this act into effect, and to use the proceeds thereof for the purpose
0 critical examination of the 1esumption 0ct will "isclose the
sinister purpose of the organize" national banking money power
to carry into execution# to the letter# the instructions couche" in
the 6azar" circular.
:ne of the strange features of this act which assumes to restore
specie payments# is foun" in the express language of this statute.
Ihile ;ongress# by its solemn legislati!e "ecree# pro!i"e" for the
re"emption of ,nite" 3tates non-interest legal ten"er notes in
gol"# it "i" not re5uire the national banks to re"eem their circulatN
ing notes in anywise whatsoe!er.
:n the contrary# the so-calle" 1esumption 0ct pro!i"e" for the
substitution of national bank notes for the non-interest-bearing
legal ten"ers issue" by the go!ernment# although the national
banking law ma"e the ,nite" 3tates notes a fun" to re"eem naN
tional bank notes.
0gain: it was a contraction of non-interest-bearing legal ten"er
notes# an" expansion by the a""itional issue of national bank
notes# which were mere promissory notes of the banks# the latter
to be loane" by the bankers at a high rate of interest to the busiN
ness men of the country.
4hese circulating bank notes cost the bankers one cent on the "olN
lar# an" the =o!ernment was the re"eemer of this currency. t was
gol" re"emption of the greenbacks by the nation# an inflation of
paper money by the banks at a# cost to them of one cent on the
t was a shrew" scheme to "iscre"it the legal ten"er currency of
the country# that the national banking money power might inherit
that rich estate of issuing paper money.
9ext# it repeale" that part of the original 9ational <ank 0ct
which pro!i"e" for the "ue "istribution of the currency throughN
out the states an" territories# Iest# as well as $ast# 3outh# as well
as 9orth.
0n" it spee"ily resulte" in the absolute control of the !olume of
money by the opulent bankers of the 6ast# for the great capitalists
of 9ew Gork ;ity# <oston# <altimore# Phila"elphia# an" other
large eastern cities hel" ninety per cent. of the ,nite" 3tates
bon"s# without which there coul" be no national bank circulation.
4he "omicile of the bon" hol"er "etermine" the location of the
national bank# an" the location of the national bank fixe" the
point at which the currency of the country coul" only be obN
taine"# an" therefore# the pro"ucti!e energies of the Iest an"
3outh were at the mercy of the national banks.
4he two places fixe" by this act for the re"emption of legal
ten"er notes were in 9ew Gork ;ity - the arena# of gol" gamblers#
stock speculators# railroa" wreckers - an" 3an 7rancisco. 9o sum
less than fifty "ollars in ,nite" 3tates notes woul" be re"eeme".
4he reason of this limitation is !ery apparent. 4he banks of 9ew
Gork ;ity are the reser!e agents for the many thousan" banks
scattere" o!er the country# an"# therefore# hol" hun"re"s of milN
lions of "ollars in "eposits.
<y hoar"ing the legal ten"er notes recei!e" in the or"inary course
of business# the banks of 9ew Gork ;ity were enable" to accumuN
late many millions of ,nite" 3tates notes# an" present them for
re"emption at the sub-treasury+ but the plain citizen who coul"
not comman" fifty "ollars of these notes was barre" from the beN
nefits of the 1esumption 0ct.
4he ,nite" 3tates presente" the key of the 9ational 4reasury to
the national banks# with an implie" in!itation to help themsel!es
to e!ery thing in sight.
t was a =o!ernment of national banks# for the national banks#
an" by the national banks. Pro!ision was ma"e for the issue of
bon"s to obtain gol" to re"eem these legal ten"ers# an" this was a
part of the scheme to perpetuate the national "ebt# an" as MefferN
son sai":
"'o s$indle futurity on a lar"e scale%"
0t the time of the passage of the laws upon which comment is
ma"e# =eneral =rant was Presi"ent of the ,nite" 3tates.
4he career of Presi"ent =rant is one of the most uni5ue an" inN
structi!e in history. :f comparati!ely humble# but respectable
origin# he "i" not# prior to the ci!il war# gi!e any in"ications of
winning that worl"-wi"e fame which has become the heritage of
the 0merican people.
4hat fratrici"al strife was the ti"e that carrie" =eneral =rant from
obscurity to the highest pinnacle of renown. t was in the characN
ter of sol"ier that he gaine" an illustrious name.
n his character as a man# he ga!e abun"ant proof of many a"mirN
able traits# among which were magnanimity towar" the !anN
5uishe"# unimpeachable personal integrity# an" lasting tenacity in
his frien"ships# in which latter attribute he bore a striking resembN
lance to =eneral Mackson.
Get this "istinguishe" man of iron ner!e became as plastic as wax
in the han"s of those to whom he attache" himself# an" his conN
fi"ence in his truste" a"!isers was shockingly abuse" for the furN
therance of many selfish an" "ishonest schemes.
t is this latter fact that ga!e birth to those shameless abuses an"
scan"als which ha!e sullie" the pages of political history.
Many eminent public men are of the opinion that his a"ministraN
tion of ci!il affairs "i" not ten" to the enhancement of his fame.
0 summary of the war legislation# in so far as it relates to the finN
ances of the =o!ernment# exhibits these remarkable facts as to
the existence of a remorseless money power:
7irst# ;ongress at the "eman" of the bullion brokers an" gol"
gamblers of 9ew Gork ;ity an" <oston# ha" purposely "epreciN
ate" the currency issue" by the go!ernment by striking out its
legal ten"er 5ualities# by refusing to recei!e its own money in
payment of its taxes. t was high price" gol" for the bon" hol"er#
an" "epreciate" greenbacks for the patriotic sol"ier who offere"
up his life for his country.
3econ"# the passage of the national banking law# by which the
go!ernment "elegate" its highest so!ereign power - that of issuN
ing money - to pri!ate corporations for pri!ate gain# resulting in a
pri!ilege" class of capitalists# whose interests were wholly antagN
onistic to the welfare of the ,nite" 3tates# thereby making a perN
manent cre"itor an" "ebtor class# one the master# the other the
4hir"# an alliance# offensi!e an" "efensi!e# of the national bankN
ing money power an" the manufacturers# whose combine" inN
terests ha!e "ominate" the legislation of ;ongress# by which the
banks ha!e practically secure" a monopoly of the me"ium of exN
change# an" by which the manufacturers ha!e secure" a high proN
tecti!e tariff for their imme"iate benefit# an" at the same time
floo"e" their mills an" factories with cheap foreign labor.
7ourth# the passage of laws# the effect of which was to enormN
ously increase the untaxe" wealth of a pri!ilege" class# who exN
tort hea!y tribute from the pro"ucti!e energy of the 0merican
7ifth# 4he creation of a money power# foretol" by 0n"rew MackN
son# whose unlimite" gree" has appropriate" to its own use the
greatest portion of the wealth of the ,nite" 3tates.
3ixth# 0 mature" plan to perpetuate the public "ebt of the ,nite"
3tates for the purpose of hol"ing the people in sub>ection to the
money power.
3e!enth# 0n enormously extra!agant a"ministration of the 7e"erN
al =o!ernment# as a part of the plan to fix a permanent "ebt on
the nation.
$ighth# 3enator 3herman# "uring all this perio"# was the chairman
of the 7inance ;ommittee of the 3enate# an" he was the influenN
tial agent of the money power who shape" an" mol"e" that legisN
lation# upon which was reare" that imperial combination of
moneye" influence which# to a !ery large extent# rules the press#
the pulpit# the legislati!e bo"ies# an" the courts of the country.
n !iew of the !arious financial measures enacte" by ;ongress
from 1DJH# to the passage of the 1esumption 0ct of 1DBH# all of
which ten"e" to greatly appreciate stocks an" bon"s# an" to "iN
!est the =o!ernment of its un"oubte" power to issue full legal
ten"er ,nite" 3tates notes# or greenbacks# the following significN
ant extract from the most influential >ournal of =reat <ritain# the
/on"on 4imes# is hereby sub>oine".
n 1DJH the 4imes e"itorially state": -
"1f that mischievous financial policy $hich had its ori"in in the
North 3merican repu!lic durin" the late $ar in that country should
!ecome indurated do$n to a fi<ture, then that Dovernment $ill fur#
nish its money $ithout cost%
"1t $ill have all the money that is necessary to carry on its trade
and commerce%
"1t $ill !ecome prosperous !eyond precedent in the history of the
civili2ed nations of the $orld%
'he !rain and $ealth of all countries $ill "o to North 3merica%
'hat Dovernment must !e destroyed or it $ill destroy every mon#
archy on this "lo!e%"
904:90/ <09-3 09D 3/F$1

"'he hi"h4handed career of this institution imposes upon the consti#
tutional functionaries of this "overnment, duties of the "ravest and
most imperative character 4 duties $hich they can not avoid, and
from $hich 1 trust there $ill !e no inclination on the part of any of
them to shrin*%"
- 0n"rew Mackson.
4he success of the national banking money power in securing
control of ;ongress# an"# through that bo"y# an oppressi!e monoN
poly of the currency of the country# met the most sanguine exN
pectations of the men who hope" to rule the in"ustries of the
people with an iron han".
4he outlines of that great scheme of the national banks# which
aime" to throw the entire business of the country on a cre"it
basis# were now plainly apparent# an" it became patent that the
plan was to be consummate" by placing the entire !olume of curN
rency in the han"s of the bankers.
,n"er the workings of the national# bank system# all circulating
bank notes# before they woul" reach the han"s of the mass of the
people an" thus be thrown into the channels of tra"e# must first
pass through the toll gates erecte" o!er the counters of the
bankers# making them at once the len"ers of money# an" the great
ma>ority of our citizens# borrowers of that currency# gratuitously
bestowe" by the go!ernment upon the wealthiest moneye" corN
porations of the ,nite" 3tates.
0ll the in"ustries were compelle" to pay usury to the most traitorN
ous class of our citizens. 4he banks were enable" to lay the
foun"ations of that colossal structure of cre"it# which has plunge"
the people into an abyss of in"ebte"ness from whence they will
not emerge for generations.
,p to the time of the passage of the 1esumption 0ct# the banking
monopoly saw no "ifficulty stan"ing in its way to keep it from
being the master of all the property an" in"ustry.
Ihile corrupt congresses# notorious for the infamous scan"als
which besmirche" the reputations of some of the foremost men of
the 1epublican party# bartere" away the most precious rights of
the people# nature came to the rescue by affor"ing a great supply
of that most precious metal - sil!er.
4he bank monopoly at once caught the alarm# an" the plan was
mature" in /on"on an" Iall 3treet to assassinate the sil!er "olN
,n"er the free coinage of gol" an" sil!er# the national banks
coul" not control the !olume of money# an"# therefore# the posiN
tion taken by this monopoly was an essential part of that gigantic
conspiracy to "emonetize sil!er# an" thus maintain its grasp on
the property of the people+ furthermore# a fight must be wage"
against the stan"ar" sil!er "ollar as a part of the scheme to susN
tain the supremacy of 9ew Gork ;ity as the great money center
of the country.
Moreo!er# an a"e5uate supply of sil!er meant the free"om of the
agricultural "istricts of the Iest an" 3outh from the 7inancial
"omination of the cent per cent men of the $ast.
4he national bank autocrats saw# in the rich "eposits of sil!er in
the Iestern 3tates# the "anger that menace" their power# an" they
ma"e haste to strike "own the sil!er "ollar# which# in their fears#
woul" become the regenerator of the financial con"ition of the
3il!er "ollars meant cash# national bank notes meant cre"it# an"
therefore the bon"-hol"ers an" bankers of /on"on an" 9ew Gork
;ity "ecree" that sil!er must "ie.
0s a preliminary statement of the reason for the opposition of naN
tional banks to the coinage of sil!er# it must be born in min"# that
prior to the a"option of the 7e"eral ;onstitution# the ,nite"
colonies# un"er the 0rticles of ;onfe"eration# ha" no power to esN
tablish mints# an"# therefore# they ha" no national system of
4his want of uniform coinage an" currency laws was one of the
urgent reasons which le" to the assembling of the constitutional
con!ention that e!entually frame" the national charter.
4his bo"y of able an" learne" men# >ustly celebrate" for their
wis"om an" knowle"ge# pro!i"e" for a uniform system of money
for the people.
4hey knew that without a national system of coinage an" curN
rency# no people coul" become great in commerce an" in"ustry.
4he power of "etermining what shoul" constitute money# was
lo"ge" in the general go!ernment by that part of section eight# of
article one# of the constitution# which is as follows:
"Con"ress shall have po$er to coin money, re"ulate the value there#
of and of forei"n coin%"
4he con!ention which frame" this great instrument containe"
some of the ablest political economists an" financiers of that "ay#
among whom were <en>amin 7ranklin# 1obert Morris# the eminN
ent banker# Mames Ma"ison# 0lexan"er 6amilton# an" =o!ernor
4hese "istinguishe" men knew that the essential nature of money
was its function as a me"ium of exchange# an" they knew that
this function was impresse" by the so!ereign power of the nation.
6ence# the power to coin money an" to regulate its !alue# was "eN
cree" to fall within the sphere of the lawmaker# rather than left to
the ability of those who corner gol" an" sil!er to enhance their
4he absur" theory of our mo"ern statesmen that commerce# an"
not law# fixes the !alue of money has ne!er been recognize" as
soun" "octrine until the national banking monopoly "eman"e"
the power of issuing currency as a !este" right.
,pon the a"option of the ;onstitution# an" after the election an"
inauguration of =eneral Iashington to the presi"ency of the
,nite" 3tates# ;ongress# on the 8n" of 0pril# 1BE8# enacte" the
first coinage law un"er the new or"er of things.
4he system of coinage a"opte" by ;ongress# was base" on the
"ecimal plan which sprung from the imperial intellect of MefferN
son# to whom belongs the honor of in!enting an" establishing that
great reform.
4he ;oinage 0ct of 0pril 8n"# 1BE8# is as follows: -
R'hat the money of account of the nited States shall !e e<pressed
in dollars or units, dimes or tenths, cents or hundredths, mills or
thousandths, a dime !ein" the tenth part of a dollar, a cent the hun#
dredth part of a dollar, a mill the thousandth part of a dollar and
that all accounts in the pu!lic offices and all proceedin"s in the
courts of the nited States shall !e *ept and had in conformity to
this re"ulation%
"'hat a mint for the purpose of a national coina"e !e and the same
is esta!lished, to !e situated and carried on at the seat of the "ov#
ernment of the nited States for the time !ein"%
"'here shall !e, from time to time, struc* and coined at said mint,
coins of "old, silver, and copper, of the follo$in" denominations,
values and descriptions9 vi2%, Ea"les, each to !e of the value of ten
dollars, or units, and to contain .J:M "rains of pure, or .:8 "rains
of standard "old%
5alf ea"les, each to !e of the value of five dol#
lars, or units, and to contain &.0N "rains of pure, or &07 "rains of
standard "old%
Ouarter ea"les, each to !e of the value of t$o and one4half dollars,
and to contain B&P "rains of pure, or B:M "rains of standard "old%
Aollars or units, each to !e of the value of a Spanish milled dollar,
as the same is no$ current, and to contain 0:&Q "rains of pure, or
J&B "rains of standard silver% 5alf dollars, each to !e of half the
value of the dollar or unit, and to contain &C7R "rains of pure, or
.8C "rains of standard silver%
Ouarter dollars, each to !e of one4fourth the value of the dollar or
unit, and to contain ?.
S&B "rains of pure, or &8J "rains of standard
silver% Aimes, each to !e one4tenth of the value of a dollar or unit,
and to contain0:T "rains of pure, or J&N "rains of standard silver%
5alf dimes, each to !e of the value of one4t$entieth of a dollar or
unit, and to contain &C
S&8 "rains of pure, or .8
SB "rains of standard
silver% Cents, each to !e of the value of one hundredth part of a dol#
lar, and to contain && penny$ei"hts of copper% 5alf cents, each to !e
of the value of half a cent, and to contain 7M penny$ei"hts of cop#
4he ratio of the !alue of gol" to sil!er in all coins pro!i"e" for by
the act of 0pril 8# 1BE8# was fixe" at fifteen to one# that is to say#
the statute ma"e fifteen poun"s weight of pure sil!er e5ual in
!alue in all payments to one poun" weight of pure gol".
Pure gol" V 8Ccarat =ol"# an" 3tan"ar" gol" V 88 carat.
3ection 7ourteen of this act pro!i"e" for the free coinage of gol"
an" sil!er in the following language:
R'hat it shall !e la$ful for any person or persons to !rin" to the
said mint "old and si&ver !ullion, in order to then !ein" coined9 and
that the !ullion so !rou"ht shall !e there assayed and coined as
speedily as may after the receipt thereof, and that free of e<pense to
the person or persons !y $hom the same shall have !een !rou"ht%R
4he free coinage thus pro!i"e" for by the act of 0pril 8#
1BE8, place" gol" an" sil!er coinage "irectly in the han"s of the
people. 4he money thus coine" woul" not be compelle" to go
through the banks as interme"iaries before it reache" the channels
of tra"e.
4his coinage law was the >oint pro"uct of the stu"y an" research
of 6amilton an" Mefferson# an" it ma"e the sil!er "o1lar containN
ing AB1W grains of pure sil!er# the unit of account in the exN
change of commo"ities an" for the payment of "ebts.
t may be in5uire" why the 3panish mille" "ollar was taken as the
basis of the 0merican unit of account.
0t that time# 3pain was the great "ominating power in the westN
ern hemisphere# an" she exercise" >uris"iction o!er what is now
4exas# ;alifornia# 9ew Mexico# 9e!a"a# Mexico proper# the
;entral 0merican 3tates# the greater portion of 3outh 0merica
an" the Iest n"ies.
t was the mines of the 3panish colonies# from 1H(( to 1D((# that
poure" hun"re"s of millions of the precious metals into the lap of
$uropean commerce. 0 single mine of 3outh 0merica pro"uce"
sil!er to the amount of TJ((#(((#(((.
During the perio" that the 3panish colonies poure" forth their
streams of wealth# an" sa!e" the "ying in"ustries of $urope from
total extinction# the chi!alry of ;hristian $nglan" went forth in
their piratical craft in a time of peace# an" plun"ere" the 3panish
treasure ships of their rich cargoes.
<ritish historians yet gloat o!er the na!al prowess that robbe" an
unoffen"ing power in time of profoun" 5uiet. 4he reasons why
this young republic appropriate" the 3panish mille" "ollar as the
mo"el upon which to base its coinage laws were these+
7irst# a large number of 3panish coins were in circulation in this
country# an" these coins were of a !ery high stan"ar" of purity+
secon"# the people were familiar with the 3panish mille" "ollar#
an" its a"option as money sa!e" the expense of re-coinage+
thir"# the ,nite" 3tates maintaine" an extensi!e commerce with
the 3panish Iest n"ies# an" the a"option of a coin similar to the
3panish "ollar facilitate" tra"e won"erfully# an" ga!e the enterN
prise of this country the a"!antage o!er that of foreign nations#
whose system of coinage "i" not correspon" with that of 3pain
an" her colonies.
4o gi!e the rea"er a correct un"erstan"ing of the coinage laws of
the ,nite" 3tates from 1BE( to 1DBA# the following summary of
the !arious enactments of congress pro!i"ing for the mintage of
gol" an" sil!er coins will be necessary.
4he act of congress of March 8# 1BEE# fixe" the !alue of foreign
coins# an" ma"e them legal ten"er.
:n 0pril 1(# 1D(J# the gol" coins of =reat <ritain an" Portugal#
as well as those of 7rance an" 3pain# were ma"e legal ten"er for
the payment of all "ebts an" "eman"s within the ,nite" 3tates.
4he same act of congress ma"e the 3panish mille" "ollar an" the
crown of 7rance# which were sil!er coins# legal ten"er an" curN
rent in this country.
During the year 1D(H Presi"ent Mefferson suspen"e" the coinage
of the sil!er "ollar at the ,nite" 3tates mint.
4he reasons a""uce" by him in or"ering the cessation of the coinN
age of the "ollar were state" in a report ma"e by Mr. ngham#
3ecretary of the 4reasury un"er Presi"ent Mackson.
3ecretary ngham sai" that Presi"ent Mefferson ascertaine" that
the newly coine" sil!er "ollars# being of full weight# bright# an"
clean# were shippe" out of the country by speculators+ secon"# it
was a useless expense to coin these "ollars# when the law ma"e
the foreign sil!er coins full legal ten"er for the payment of all
"ebts# public an" pri!ate+ thir"# it was more "esirable to coin silN
!er bullion into half "ollars# 5uarter "ollars# "imes an" half "imes
to ser!e as change.
<y act of ;ongress# March H# 1D8A# the gol" coins of =reat <riN
tain# Portuga1# 7rance an" 3pain were recei!e" in payment by the
,nite" 3tates on account of sales of public lan"s.
<y act of Mune 8H# 1DAC# the following sil!er coins were ma"e of
legal !alue# an" passe" current as money within the ,nite" 3tates
for the payment of all "ebts an" "eman"s at the rate of one hunN
"re" cents to the "ollar+ !iz.# the "ollars of Mexico# Peru# ;hili#
an" ;entral 0merica+ this act fixe" the !alue of the <razilian "olN
lar# an" the sil!er fi!e-franc piece of 7rance an" it passe" current.
<y the same act# the gol" coins of =reat <ritain# Portugal# <razil#
2 7rance# 3pain# Mexico# an" ;olumbia were ma"e legal ten"er
for the payment of all "ebts an" "eman"s within the ,nite"
:n the 8Dth of Mune# 1DAC# the 5uantity of gol" in the eagle# or ten
"ollar piece# was re"uce" from 8CBU grains of pure gol" to 8A8
grains# the amount of stan"ar" gol" in that coin was re"uce" from
8B( grains to 8HD grains.
,n"er the act of 0pril H# 1BE8, the legal ratio of sil!er to gol"
was fifteen to one# which ratio un"er!alue" gol".
3ince 1D(A# 7rance an" the /atin countries a"opte" a legal ratio
of fifteen an" one half of sil!er to one of gol"# an" as a conN
se5uence# gol"# being un"er!alue" in the ,nite" 3tates# was withN
"rawn from circulation here# an" sol" abroa" at a profit by the
bullion brokers who were e!er on the alert for gain.
4he change ma"e the act of Mune# 1DAC# un"er!alue" sil!er# the
ratio of that metal to gol" being fixe" at fifteen an" ninety-eight
one-hun"re"ths to one# but the principal reason assigne" for the
o!er!aluation of gol" by the act of Mune 8D# 1DAC# was to pro!i"e
coins of large "enominations to take the place of the notes an"
bills issue" by the ,nite" 3tates <ank.
n other wor"s# Presi"ent Mackson fought the ,nite" 3tates <ank
with a gol" coinage as a legitimate weapon to con5uer that
money power.
t has become the settle" policy of those financiers who so urN
gently a"!ocate a single stan"ar" of gol"# to point to the act of
Mune 8D# 1DAC# as the establishment of that system. 4his has been
the gist of the numberless arguments of the gol" stan"ar" a"!ocN
ates# constantly reiterate" in the halls of congress an" elsewhere#
with a brazen "isregar" of truth that approaches "esperation. 4he
congressional legislation by which a !ery large !olume of gol"
coin was brought into circulation after 1DAC# Ias "irectly opN
pose" to that policy which secure" the "emonetization of sil!er in
t is an absolute falsehoo" to assert that the single stan"ar" of
gol" was a"opte" by this nation in 1DAC# for the plain reason that
the mints of the ,nite" 3tates remaine" open to the free an" unN
limite" coinage of both gol" an" sil!er# an" the law ma"e these
coins full legal ten"er for the payment of all "ebts an" "eman"s#
both public an" pri!ate.
4he sil!er "ollar still remaine" the unit of account.
<y the act of Manuary 1D# 1DAB# a slight change was ma"e in the
alloy in the gol" an" sil!er coins. 4he stan"ar" of purity was
fixe" at nine tenths of pure metal to one tenth of alloy.
<y this alteration in the purity of the coin# the stan"ar" was
raise"# an"# therefore# the weight of the sil!er "ollar an" fractionN
al sil!er coins was slightly re"uce".
4he material part of that act is as follows: -
"'he standard for !oth "old and silver coins of the nited States
shall hereafter !e such that of one thousand parts !y $ei"ht, nine
hundred shall !e of pure metal and one hundred of alloy, and the al#
loy of silver coins shall !e of copper, and the alloy of the "old coins
shall !e of copper and silver, provided that the silver does not e<#
ceed one half of the alloy%
"Gf the silver coins the dollar shall !e of the $ei"ht of J&.M "rains,
the half dollar of the $ei"ht of .8BQ "rains, the ;uarter dollar of
the $ei"ht of &80T "rains, the dime or tenth part of a dollar of the
$ei"ht of J&Q"rains, and the half clime or t$entieth part of a dollar
of the $ei"ht of .8R "rains%
"3nd that dollars, half dollars, ;uarter dollars, dimes and half
dimes shall !e le"al tender of payment accordin" to their nominal
value for any sums $hatever%
"Gf the "old coins, the $ei"ht of the ea"le shall !e .7C "rains, that
of the half ea"le ..? "rains, and of the ;uarter ea"le BJM "rains.
"3nd that for all sums $hatever, the ea"le shall !e a le"al tender of
payment for ten dollars, the half ea"le for five dollars, and the
;uarter ea"le for t$o and one4half dollars%"
4he alloy in the sil!er "ollar was re"uce" in 5uantity# while the
pure sil!er of AB1W grains# as originally fixe" by the act of 0pril
8n"# 1BE8# was retaine" in the stan"ar" "ollar# an" it remaine" the
unit of account an" was of unlimite" legal ten"er.
4his fact is borne out by the act of March Ar"# 1DCE# which
pro!i"e" for the coinage of "ouble eagles an" one "ollar gol"
Ie will 5uote the exact language of this statute# which is as folN
lows: -
R'here shall !e from time to time struc* and coined at the mint of
the nited States and !ranches thereof 4 conforma!ly in all respects
to la$, and conforma!ly in all respects to the standard for "old
coins no$ esta!lished !y la$ 4 coins of "old of the follo$in" de#
nominations and value9 vi2%, dou!le ea"les, each to !e of the value
of t$enty dollars or units, and "old dollars, each to !e of the value
of one dollar or unit%
"=or all sums $hatever the dou!le ea"le shall !e a le"al tender for
t$enty dollars, and the "old dollar shall !e a le"al tender for one
4his statute explicitly recognizes a unit# an" that unit of the exN
change !alue of money was the sil!er "ollar# the coinage of
which was pro!i"e" for by the act of 0pril 8n"# 1BE8.
4he !alue of these gol" pieces were respecti!ely fixe" by referN
ring them to a unit# an" up to this time the sole unit of account in
the ,nite" 3tates from which calculations were ma"e was the silN
!er "ollar. <y act of congress 7ebruary 81# 1DHA# a change was
ma"e by re"ucing the weight of the fractional sil!er coins.
4he language of this statute is as follows: -
"'hat the $ei"ht of the half dollar or piece of fifty cents shall !e &?.
"rains, and the ;uarter dollar, dime and half dime shall !e respect#
ively one4half, one4fifth and one4tenth of the $ei"ht of the half dol#
"'he silver coins issued in conformity $ith the a!ove section shall
!e le"al tenders in the payments of de!ts for all sums not e<ceedin"
five dollars%
"=rom time to time there shall !e struc* and coined at the mint of
the nited States and the !ranches thereof conforma!ly in all re#
spects to the standard of "old coins no$ esta!lished !y la$, a coin
of "old of the value of three dollars or units%"
4his act# which was the first legislation limiting the legal ten"er
5uality of sil!er coins# is pointe" to by the single gol" stan"ar"
a"!ocates as a "emonetization of sil!er.
n or"er that we may ascertain the intention of ;ongress in enactN
ing this law# it will be necessary to look at contemporaneous hisN
tory# the e!ils sought to be correcte"# an" the reme"y applie".
4he highest courts of the lan" ha!e a"opte" this principle as the
car"inal rule in the interpretation an" construction of statutory
law# an" it is a safe one for the or"inary n"i!i"ual.
0t the time of the passage of this act of ;ongress# the bullion in
the sil!er was more !aluable as a commo"ity than the bullion in
the gol" "ollar# conse5uently the sil!er "ollars were with"rawn
4he A principal rules of legal statute interpretation inclu"e: R4he Mischief ruleR. i.e.
Ihat mischief is attempte" to be reme"ie"L
from circulation an" sol" as bullion in the $uropean markets at a
4o reme"y this# ;ongress re"uce" the weight of the fractional silN
!er coins# an" limite" their legal ten"er "ebt-paying power# but
left the coinage of the sil!er "ollar free an" unlimite".
;ongress correctly foresaw that the owners of sil!er bullion# from
moti!es of self interest# woul" not coin their bullion into sil!er
"ollars# when they woul" be gainers by its coinage into light
weight fractional coins.
t woul" re5uire C18U grains of stan"ar" sil!er for a one "ollar
piece# or unit# but it woul" nee" only ADC grains for the coinage
of two half "ollar pieces.
4he limitation of legal ten"er power of the fractional sil!er coins
un"er the act of 1DHA# was embo"ie" in that law for the express
purpose of pre!enting their exportation to foreign countries.
0nother reason for the enactment of this statute arose from the
fact that the miners of ;alifornia an" 0ustralia were pouring hunN
"re"s of millions of "ollars of gol" into the arteries of commerce#
an" a number of lea"ing financial writers of 7rance an" =ermany
urge" their respecti!e countries to "emonetize gol"# for the exN
press purpose of increasing the !alue of bon"s an" annuities.
Michel ;he!alier# a member of the ;ouncil of 3tate of 9apoleon
. at this time# publishe" a work entitle"#
"'he (ro!a!le =all in the Ualue of Dold%"
n this !olume he strongly urges the "emonetization of gol"# gi!N
ing as his reason for this position that it was becoming too abun"N
ant# an" that its purchasing power ha" greatly fallen.
;he!alier says: -
"1f $e $ould particulari2e the persons $ho $ould !e more or less
deeply affected !y the fall in "old price, $e have only to select those
$hose income $ill not find itself au"mented naturally and !y a self4
adjustin" process, in e<act proportion to the fall, in "old%
'he national creditor is the characteristic type of this class of suf#
ferers% 3ll those persons $hose incomes, e<pressed in monetary
units, remain the same $ould !e injured !y the chan"e to the e<tent
of the half of their income, all other thin"s !ein" e;ual%
"3ll commodities e<ceptin" "old and every *ind of property e<cept#
in" that of $hich the income is, from the present, fi<ed, as is the
case $ith "overnment funds, ou"ht, from the moment that the mon#
etary crisis is terminated, to have attained in a "old currency
dou!le the price $hich they are at present $orth%
1t $i&& !e the same eventually $ith $a"es ,that is to say $a"es
$ould dou!le-, and $ith all personal services, $hether rendered in
the factory or on the farm, or from the li!eral professions%"
n summing up his arguments in fa!or of the "emonetization of
gol"# ;he!alier states the following conclusions: -
"'hus as a definite analysis, the properties of lands, houses, and
other real estate, manufacturers, merchants, and their au<iliaries of
every *ind9 pu!lic functionaries of all ran*s9 and also those $ho
follo$ the different learned professions, $ill all find themselves in
the end compensated in the ne$ state of thin"s $ith advanta"es
$hich they no$ enjoy, all other thin"s !ein" e;ual%
1t is another class of persons, the national creditor, $hom $e have
previously defined in a "eneral $ay $ho have to su!mit to a sacri#
fice in the proportion to the fall in the precious metal%"
n his plea for the bon" hol"ers# ;he!alier# unlike those 0merican
financiers who worship a single stan"ar"# "isplays one a"mirable
6e truthfully states the reasons why he urges the "estruction of
gol" as money. 6e says that the coinage of those large amounts of
gol" from the mines of ;alifornia an" 0ustralia will "ouble the
!olume of money# an" therefore "iminish its purchasing power
one-half# an" that the bon" hol"er woul" suffer loss.
7inally# ;he!alier sums up the effect of a change from falling
prices to rising prices# in which he sai": -
R1n time the chan"e $ill profit those $ho live !y present la!or9 it
$ill injure those $ho live on the fruits of past la!or, !e it their o$n
or that of their fathers% 1n this respect it $ill act in the direction $ith
the "reater part of those evolutions $hich are accomplished in vir#
tue of the "reat la$ of civili2ation to $hich ordinarily $e assi"n the
no!le name of (ro"ress%
"1t remains to add that in society as it is at present or"ani2ed, the
num!er is very small of those $hom it can truly !e said that they
live on the fruits of past la!or% Ieal property, rents, and the interest
of investment depend in such a de"ree on the present la!or of those
$ho pay them, that in an important sense those $ho receive them
live rather on the present la!or of others than upon past la!or%"
;he!alier positi!ely a"mits that a small !olume of money beneN
fits a !ery small number# an" those are the most un"eser!ing.
4he 0merican gol" stan"ar" a"!ocate is not so frank in his reasN
ons for a single stan"ar". $!ery national banker# an" single gol"
stan"ar" financier is in fa!or of that system of finance# because
the laboring man# the wi"ow# an" the orphan will be the sole beN
neficiaries of a contracte" !olume of moneyS
4he arguments of that class of political economists teem with figN
ures# showing that the working men# wi"ows# an" orphans are the
chief stock hol"ers in national banks# loan an" trust companies#
an" that they constitute the largest class of "epositors in sa!ings
banks# hence# the fear of this phi1anthropic )L* class of "isinterN
este" patriots# that the poor toiler# the frien"less wi"ow an"
orphan must be protecte" by a single stan"ar" of gol"S
=ermany an" some of the sma11er $uropean states actually "eN
monetize" gol" in 1DHB# an" a"opte" a sil!er stan"ar".
7rom the action of these states in thus attempting to cripple the
,nite" 3tates by "emonetizing gol"# an" going on a sil!er basis# a
great struggle arose in =ermany an" 0ustria to obtain sil!er.
4herefore# to pre!ent these countries from "rawing their supp1ies
of that metal from the ,nite" 3tates# ;ongress re"uce" the weight
an" limite" the legal ten"er power of the minor sil!er coins# an"
thus the !olume of sil!er in circulation here was protecte" from
exportation to the sil!er stan"ar" countries.
7urthermore# ;ongress now en"ea!ore" to supply the people with
a uniform system of gol" an" sil!er coinage# an"# in the execution
of that policy# enacte" the law of March Ar"# 1DHA# which
pro!i"e" that the 3ecretary of the 4reasury shoul" establish an asN
say office in the city of 9ew Gork# for the assaying an" casting of
gol" an" sil!er bullion an" foreign coin into bars# ingots# or "isks#
an" the assistant treasurer at 9ew Gork was ma"e the treasurer of
such assay office+ an" he was authorize"# upon the "eposit of
gol" or sil!er bullion or foreign coin# an" the ascertainment of its
net !alue#
"'o issue his certificate of the net value thereof paya!le in coins of
the same metal as that deposited%"
4he certificates so issue" by the assistant treasurer were ma"e reN
cei!able at any time within sixty "ays from the "ate thereof# in
the payment of all "ebts "ue to the ,nite" 3tates at the port of
9ew Gork for the full sum therein certifie".
4hus the foreign importer# in the payment of the "uties on goo"s#
wares# an" merchan"ise at the custom house# woul" take his forN
eign coin to the assay office# ha!e its fineness "etermine"# obtain
a certificate for the amount of its !alue# an" pay the "uties imN
pose" upon his goo"s with sai" certificate. 3uch foreign coins
were cast into bars an" transforme" into coins of the ,nite"
<y the act of 7ebruary 81# 1DHE# ;ongress fixe" the !alue of the
fractional parts of the 3panish Pillar Dollar
# an" the Mexican
Dollar as follows+ !iz.#
"'he fourth of a dollar, or piece of t$o reals at t$enty cents, the
ei"hth of a dollar, or piece of one real at ten cents, and the si<teenth
of a dollar, or half4real, at five cents%"
4hese coins at the !aluations thus fixe" by law were recei!able at
the 4reasury of the ,nite" 3tates# the post offices# an" lan" ofN
fice# as legal ten"er for the payment of "ebts an" "eman"s.
4he former acts of ;ongress# authorizing the circulation of forN
eign gol" an" sil!er coins# an" "eclaring the same a legal ten"er
for the payment of "ebts# were repeale".
4he reason for the repeal of former laws "eclaring foreign gol"
an" sil!er coins legal ten"er was base" on the following facts:
first# the ,nite" 3tates ha" become# with the "isco!ery of the rich
gol" mines of ;alifornia# the greatest pro"ucer of gol" in the
worl"# &an" it en"ea!ore" to supply the people with a !olume of
coins stampe" in 0merican mints+ secon"# nearly sixty years ha"
elapse" since the passage of the first coinage law# an" the capaN
city of the ,nite" 3tates mints being greatly increase"# ;ongress#
by sai" repeal# aime" at a re-coinage of the foreign gol" an" silN
4he pillar "ollar - i.e. colonial 3panish "ollar# was so-calle" because its ob!erse
)front/tails* si"e ha" two hemispheres of the worl" between the RPillars of 6erculesR#
an" was minte" from circa 1H(( in Mexico until the early 8(th ;entury.
!er coins into 0merican coins# an" by this means supply a homoN
geneous circulation of gol" an" sil!er.
3ix years ha" elapse" since the passage of the law of March A#
1DHA# authorizing the issuing of certificates for "eposits of forN
eign coin# an" the act of 7ebruary 81# 1DHE# was merely an accuN
mulati!e statute to that act for the transformation of foreign coin
into that of the ,nite" 3tates.
4he latter act "i" not take away the pri!ilege of the hol"er of forN
eign coin to recei!e certificates of "eposit at the assay office in
9ew Gork ;ity# an" the issuance of these certificates was of great
con!enience to the owner of bullion an" such coin. 7rom the act
of March A# 1DHA# "ates the origin of gol" an" sil!er certificates.
7rom 1DHE to 1DBA but few changes were ma"e in the coinage
laws# an" these were comparati!ely unimportant in their nature.
Prior to 1DJ(# the annual pro"uction of sil!er in the ,nite" 3tates
ne!er excee"e" the !alue of T1((#(((# on the other han"# the
amount of gol" pro"uce" in the mines of ;alifornia# from 1DCD to
the outbreak of the war# amounte" to hun"re"s of millions of "olN
4he greatest amount of gol" pro"uce" from 0merican mines in
any one year was in 1DHA# when it reache" the enormous sum of
TJH#(((#(((. 4he total pro"uct of gol" from the mines of the
,nite" 3tates# from 1DCD to 1DJ1 inclusi!e# reache" the gran"
total of TB((#(((#(((. n the year 1DHE# that great "eposit of silN
!er# the ;omstock /o"e# was "isco!ere" in 9e!a"a# an" from this
perio" the ,nite" 3tates is reckone" among the greatest pro"uN
cers of sil!er in the worl".
n 1DJ( the pro"uction of sil!er ha" risen to T1H(#(((# which# up
to this perio"# was the greatest amount pro"uce" in the ,nite"
3tates in any one year. n the same year the pro"uction of gol" in
;alifornia alone was TCH#(((#((( in !alue.
n 1DJA# the !alue of the pro"uct of sil!er ha" risen to
n 1DJB# sil!er to the amount of T1A#H((#((( was pro"uce" from
the mines of the west - chiefly in 9e!a"a. 4he pro"uction of
gol" for the same year was TH1#B8H#(((. 0t this perio"# the naN
tional "ebt ha" reache" the enormous sum of T8#B((#(((#(((# the
interest of which was payable in coin.
4he whole annual pro"uct of the gol" mines in the ,nite" 3tates
woul" scarcely be sufficient to pay one-half of the annual interest
charge upon the national "ebt hel" by the national banking
money power.
4herefore# the control of the gol" supply of the country was in the
firm grasp of the national banks an" bon" hol"ers. t is much
easier for the money power to manipulate the !olume of gol"
than that of sil!er# in as much as gol" contains a much greater
!alue in a proportionately smaller bulk than sil!er.
0gain# gol" bullion is con!erte" into coins of large "enominaN
tions# chiefly ten an" twenty "ollar gol" pieces+ while sil!er is
coine" into "ollars an" fractional parts thereof.
7rom the foregoing facts# gol" is the money of the wealthy# while
sil!er is the money of the laborer.
t is the small coins that most acti!ely circulate in the channels of
tra"e+ it is gol" that is hoar"e" by the miser an" the capitalist.
4he small coins that are in acti!e circulation ha!e always elu"e"
e!ery effort to hoar" them in large 5uantities.
4he rapi" increase in the pro"uction of sil!er in the ,nite" 3tates
meant the financial liberation of the people from the money
power of the $ast.
4he prospects for an enormous supply of sil!er from the western
mines threatene" the supremacy of 9ew Gork ;ity an" /on"on as
the money markets of the worl".
4he owner of sil!er coul" take his bullion to the mint# ha!e it
coine" into stan"ar" sil!er "ollars of full legal ten"er "ebt# paying
power# recei!e them after their mintage# an" transact business by
their means+ he was not un"er the necessity# when in nee" of
money# to make application to a national bank for a loan of its
circulating notes# whose sole cre"it reste" on the sol!ency of the
,nite" 3tates. 6e was not compelle" to pay toll to the national
banks for the use of their "ebts as money.
4he national banking money power coul" not control the sil!er
"ollar# as long as the law authorize" its free coinage# an" conN
se5uently# a gigantic conspiracy was forme" in /on"on an" 9ew
Gork ;ity to "emonetize sil!er.
4his great money power whose almost absolute control of the
currency was surely "ri!ing all business to a cre"it basis# "eliberN
ately planne" the "estruction of that precious metal whose !alue
has been far more stable than that of gol".
;60P4$1 F.
;:93P10;G :7 9$I G:1- 09D /:9D:9 <09-$13
09D <:9D 6:/D$13 4: D$M:9$4P$ 3/F$1.
"1 have !efore me the record of the proceedin"s of this 5ouse on the
passa"e of that measure, a record $hich no man can read $ithout
!ein" convinced that the measure and the method of its passa"e
throu"h this 5ouse $as a Lcolossal s$indle%H 1 assert that the meas#
ure never had the sanction of this 5ouse, and it does not possess the
moral force of la$%"
- Iilliam 3. 6olman.
Prior to the "emonetization of sil!er in the ,nite" 3tates# $nglan"
an" Portugal were the only nations whose stan"ar" of monetary
!alue was base" on gol".
0fter the great 9apoleonic wars which con!ulse" $urope for so
many year&s# finally en"ing in the o!erthrow of the military
power of 7rance at Iaterloo in 1D1H# the national "ebt of $ngN
lan" reache" a colossal figure# excee"ing four billions of "ollars.
4his !ast "ebt was create" by the efforts of =reat <ritain in her
struggle to crush 9apoleon.
4he greater portion of this immense bur"en on the in"ustries of
the people of that country was purchase" at a !ery hea!y "iscount
by the bon" hol"ers.
0t this time $nglan" was the great na!al power of the worl"# an"
her merchant !essels entere" the ports of e!ery ci!ilize" an"
semi-ci!ilize" nation+ an" she ma"e goo" her boast that she was
"/istress of the Seas%"
n 1D1J# $nglan" a"opte" a single gol" stan"ar" as the basis of
her financial system.
3il!er was ma"e a legal ten"er to an amount not excee"ing forty
shillings for any one payment.
4his act of parliament was procure" through the influence of the
immensely wealthy bankers an" fun" hol"ers# with the sole aim
of enhancing the !alue of the !ast "ebt hel" by them# an" with the
a!owe" purpose of perpetuating its existence.
3ir Moreton 7rewen# an eminent writer an" financier of /on"on#
charges that this measure was instigate" by the capitalists of $ngN
lan"# an" that it was class legislation of the worst type.
4he financial system thus a"opte" by parliament "uring the minN
istry of /or" /i!erpool consiste" of gol" as the stan"ar" of !alue#
sil!er as subsi"iary coin use" in the small transactions of busiN
ness# an" notes issue" by the <ank of $nglan"# the latter being a
cre"it currency re"eemable in gol" by the bank.
n 1DCC# the charter of the <ank of $nglan" was amen"e" by act
of parliament# by which that corporation must pay for all gol"
bullion or mutilate" coins offere" at its counter# the sum of three
poun"s# se!enteen shillings# an" nine pence for each ounce of
gol" ten"ere" to it.
4his price was e5ui!alent to eighteen "ollars an" ninety-two
cents in money of the ,nite" 3tates.
4his act of parliament was the mature" result of the policy of 3ir
1obert Peel# at that time the Prime Minister of $nglan"# an" it
fixe" the price of gol" throughout the <ritish empire in e!ery part
of the worl"# an" it ga!e notice to the owners of gol" bullion
e!erywhere# that this great bank stoo" rea"y# at all times# to pay
the price fixe" by the law of its creation.
=ol" woul" ne!er go below that price# although there was no limN
itation in the law by which the bank was forbi""en to pay more
for that precious metal.
4he e!i"ent purpose of that policy fixing the minimum !alue of
gol" was the prohibition of speculation in it by bullion brokers.
0nother important ob>ect of the passage of this law was to make
/on"on the money market of the worl"# an" therefore the center
of exchange.
Moreo!er# at the time of the parliamentary act of 1DCC# the coN
lossal "ebt of $nglan" was payable in gol"# an" the fun"-hol"ing
class of =reat <ritain was instrumental in procuring the passage
of this act# fixing the minimum price of gol" by law with the
a!owe" intention of enhancing its purchasing power o!er all othN
er forms of property.
4he policy embo"ie" in the Peel 0ct is the basis of the financial
system of $nglan".
0fter the close of the ci!il war in 0merica# =reat <ritain ha" beN
come a large hol"er of ,nite" 3tates bon"s# railway stocks# an"
securities# an" other obligations of this country# to the amount of
many hun"re"s of millions of "ollars# the great ma>ority of which
were purchase" for a pittance.
4he great banking houses of 9ew Gork ;ity an" <oston are the
agents of the money len"ing classes of =reat <ritain# an" are the
mere echoes of /ombar" 3treet# /on"on.
3ince the "isco!ery of the enormously rich gol" mines of 0usN
tralia# which ri!ale" those of ;alifornia# she ranks as one of the
lea"ing pro"ucers of gol"# while the mines of the latter are gi!ing
in"ications of exhaustion.
4he pro"uction of sil!er in the <ritish $mpire was comparati!ely
small# while that of the ,nite" 3tates was rapi"ly increasing in
4he amount of $nglish capital in!este" in the national banking
system is unknown# but is un"oubte"ly !ery large# an" it was the
bankers of /on"on who suggeste" the scheme of the present naN
tional banking law# as shown by the circular issue" by Mames
6azar"# of which mention was ma"e in the secon" chapter of this
t must be borne in min" that# from 1DJ8 to 1DBA# ,nite" 3tates
3enator Mohn 3herman was the ;hairman of the 7inance ;ommitN
tee of the national 3enate# to which was referre"# an" which
frame" an" mol"e" the !arious financial measures place" upon
the statute books of the nation.
6e was the great pre"ominating power in the financial legislation
of ;ongress.
n 1DJB# the great nternational $xposition at Paris was hel"# to
which the nations of the worl" were in!ite" by the $mperor of
3ecretary of 3tate 3ewar"# on behalf of the ,nite" 3tates# appoinN
te" 3amuel <. 1uggles as the commissioner to represent this
country at that magnificent un"ertaking.
9apoleon # the $mperor of 7rance# on the Cth of Manuary# 1DJB#
exten"e" an in!itation to all the powers# inclu"ing the ,nite"
3tates# to hol" a conference in Paris# for the purpose of exten"ing
the principles of the /atin ,nion throughout the commercial
4his ,nion was originally forme" December 8A# 1DJH by an"
between 7rance# taly# =reece# <elgium# an" 3witzerlan"#
whereby these fi!e nations agree" to establish for themsel!es
>ointly a system of common coinage# weights# an" measures# as a
means for the promotion of commerce.
4he monetary system a"opte" by the /atin ,nion pro!i"e" for
the free coinage of both gol" an" sil!er at a ratio of fifteen an"
one-half to one.
t also ma"e pro!ision in its articles by which any other nation
coul" become a member of the con!ention.
0rticle 18 of the union was as follows+ !iz.#-
"3ny other nation can join the present convention !y acceptin" its
o!li"ations and adoptin" the monetary system of the union in re"ard
to "old and silver coins%"
4he in!itation of the 7rench $mperor was accepte" by the comN
mercial nations of $urope an" 0merica# an" Mr. 1uggles was apN
pointe" as the representati!e of the ,nite" 3tates.
3enator 3herman# who was the ;hairman of the ;ommittee on
7inance of the 3enate# on information of the receipt of the in!itaN
tion of the $mperor# !isite" /on"on in the spring of 1DJB# prior to
the con!ening of this monetary conference.
0fter consulting with the /on"on bankers an" capitalists# he
hastene" to Paris where the conference was to con!ene in the
near future# an" in reply to a note of 1uggles# sent a communicaN
tion to that gentleman in which he a"!ocate" the a"option of a
single gol" stan"ar".
4he material part of this remarkable letter to Mr. 1uggles is as
follows: -
R6otel Mar"in "es 4uileries#
May 1D# 1DJB.
"/y Aear Sir:
)our note of yesterday, in;uirin" $hether Con"ress $ould pro!a!ly,
in future coina"e, ma*e our "old dollar conform in value to the "old
74franc piece, has !een received% "'here has !een so little discus#
sion in Con"ress upon the su!ject that 1 cannot !ase my opinion
upon anythin" said or done there%
"'he su!ject has, ho$ever, e<cited the attention of several important
commercial !odies in the nited States, and the time is no$ so fa#
vora!le that 1 feel ;uite sure that Con"ress $ill adopt any practical
measure that $ill secure to the commercial $orld a uniform stand#
ard of value and e<chan"e%
"'he only ;uestion $ill !e ho$ this can !e accomplished%
"'he treaty of Aecem!er .0, &CB7, !et$een =rance, 1taly, +el"ium,
and S$it2erland, and the pro!a!le ac;uiescence in that treaty !y
(russia, has laid the foundation for such a standard%
"1f Dreat +ritain $ill replace the value of her soverei"n . pence,
and the nited States $ill reduce the value of her dollar somethin"
over 0 cents, $e then have a coina"e in the franc, dollar, and sover#
ei"n easily computed, and $hich $ill readily pass in all countries9
the dollar as 7 francs, and the soverei"n as .7 francs%
"'his $ill put an end to the loss and intricacies of e<chan"e and
"Gur "old dollar is certainly as "ood a unit of value as the franc,
and so the En"lish thin* of their pound sterlin"% 'hese coins are
no$ e<chan"ea!le only at a considera!le loss, and this e<chan"e is
a profit only to !ro*ers and !an*ers%
Surely each commercial nation should !e $illin" to yield a little to
secure a "old coin of e;ual value, $ei"ht, and diameter, from
$hatever mint it may have !een issued%
"3s the "old 74franc piece is no$ in use !y over B8,888,888 of
people of several different nationalities, and is of convenient form
and si2e, it may $ell !e adopted !y other nations as the common
standard of value9 leavin" to each nation to re"ulate the divisions of
this unit in silver coins or to*ens%
"1f this is done =rance $ill surely a!andon the impossi!le effort of
ma*in" t$o standards of value% Dold coins $ill ans$er all the pur#
poses of European commerce%
3 common "old standard $ill re"ulate silver coina"e, of $hich the
nited States $ill furnish the "reater part, especially for the
Chinese trade%"
t will be seen from the statements !olunteere" by Mr. 3herman
in his letter to Mr. 1uggles# that he was en"ea!oring to lea!e the
impression upon this conference# that the ,nite" 3tates was in faN
!or of a single stan"ar" of gol"+ an" that the effort of 7rance in
making two stan"ar"s of !alue was impossible+ an" that a comN
mon gol" stan"ar" woul" regulate sil!er coinage.
4he position assume" by 3enator 3herman ha" immense influN
ence# for at that time he hel" the most important position on the
lea"ing committee of the ,nite" 3tate 3enate.
6e spoke as one ha!ing authority# an" ga!e his moral influence to
that financial policy which has finally "estroye" one-half of the
money metals of the worl".
Ihile in $nglan" Mr. 3herman was e!i"ently ascertaining the
!iews of influential persons an" bo"ies upon this propose"
change of the coinage laws.
Ie 5uote further from his letter to Mr. 1uggles in which he says:
"1n En"land many persons of influence and different cham!ers are
earnestly in favor of the proposed chan"e in the coina"e% 'he
chan"e is so sli"ht $ith them that an enli"htened self4interest $ill
soon induce them to ma*e it, especially if $e ma*e the "reater
chan"e in our coina"e%"
4his letter is an important link in the chain of e!i"ence that ten"s
to pro!e a concerte" plan on the part of <ritish an" 0merican finN
anciers to effect a momentous change in the coinage laws of the
,nite" 3tates# a change that resulte" in the "emonetization of silN
3enator 3herman furnishe" the best of e!i"ence# that# "/any per#
sons of influence and different cham!ers" of a foreign country were
taking "eep interest in the coinage laws of a nation to which they
owe" no allegiance.
Mr. 3herman was a lea"ing member of the ,nite" 3tates 3enate#
an" it is "e"ucible from his writings that# after ascertaining the
!iews of these "influential persons and cham!ers" as to what system
of coinage woul" be satisfactory to them# he imme"iately proN
cee"e" to carry them into effect by intro"ucing a bill to that en".
4he phrase# "/any persons of influence and different cham!ers," unN
"oubte"ly signifies the bankers an" other fun" hol"ing classes of
=reat <ritain# who were intereste" in securing legislation that
woul" enhance the !alue of stocks an" bon"s.
4his letter of the 3enator to ;ommissioner 1uggles is a !oluntary
confession from Mr. 3herman# that he was in /on"on in conferN
ence with influential interests which were earnestly in fa!or of
the propose" change in the stan"ar" of money.
:n the A(th of May# 1DJB# Mr. 1uggles transmitte" a communicN
ation to 3ecretary of 3tate 3ewar"# in which he states that the letN
ter of 3enator 3herman urging the a"option of a single stan"ar"
of gol" was lai" before the nternational ;ommittee ha!ing the
5uestion of uniform coin un"er special examination.
n this communication# Mr. 1uggles informs the 3ecretary of
3tate of an inter!iew hel" with 9apoleon# with reference to the
coinage of gol" an" sil!er# in the course of which the 7rench emN
peror propoun"e" the following significant 5uestion:
"Can =rance do anythin" more in aid of the ivory>"
Ie here 5uote the reply of Mr. 1uggles to the 5uestion of the emN
peror in his own language+ !iz.#-
"'o $hich it $as replied, =rance can coin a piece of "old of t$enty4
five francs, to circulate side !y side on terms of a!solute e;uality
$ith the half ea"le of the nited States and the soverei"n, or pound
sterlin", of Dreat +ritain, $hen reduced, as they readily mi"ht !e,
precisely to the value of t$enty4five francs%
'he emperor then as*ed, LWill not a =rench coin of t$enty4five
francs impair the symmetry of the =rench decimal system>H 'o
$hich it $as ans$ered, LNo more than it is affected, if at all, !y the
e<istin" "old coin of five francs, that it $as only the silver coins of
=rance $hich $ere of even metric $ei"ht, $hile every one of its
"old coins, $ithout e<ception, represented une;ual fractions of the
"1t $as then stated to the Emperor that an eminent 3merican states#
man, /r% Sherman, Senator from Ghio, Chairman of the =inance
Committee of the Senate of the nited States, and recently in (aris,
had $ritten an important and interestin" letter, e<pressin" his opin#
ion that the "old dollar of the nited States ou"ht to !e and readily
mi"ht !e reduced !y Con"ress, in $ei"ht and value, to correspond
$ith the "old 74franc piece of =rance9 that the letter $as no$ !efore
the 1nternational Committee havin" the ;uestion of uniform coin un#
der special e<amination, to $hich letter, as !ein" one of the !est in#
terpretations of the vie$s of the 3merican people, the attention of
the pu!lic authorities of =rance $as respectfully invited%
"'he emperor then closed the audience !y repeatin" the assurances
of his "ratification that the important international measure in ;ues#
tion $as li*ely to receive active support from the nited States%
"'he letter of /r% Sherman, a!ove referred to, dated the &Cth of
/ay, &CB:, ori"inally $ritten in En"lish, $as presented in a =rench
translation a fe$ days after$ard to the 1nternational Committee in
full session, $here it $as received $ith unusual interest and ordered
!y the committee to !e printed in !oth lan"ua"es%
3 copy is here$ith transmitted for the information of the Aepart#
ment of State%"
,pon a fina1 !ote in the conference# the influence of $nglan" an"
Mohn 3herman succee"e" in "efeating the a"option of a bi-metalN
lic stan"ar"# an" a single stan"ar" of gol" was agree" upon by the
conference with but a single "issenting !ote.
6ence# it will be seen that Mohn 3herman an" 3amuel <. 1uggles
were the two eminent persons whose influence was exerte"
against the a"option of the sagacious policy of the $mperor of
7rance# which ha" for its ob>ect an international stan"ar" of both
gol" an" sil!er at a ratio of fifteen an" one-half to one.
t is e!i"ent that 3enator 3herman exerte" his great influence in
"efeating international bimetallism# the a"option of which woul"
ha!e resulte" in untol" benefits# not only to the ,nite" 3tates# but
to the worl" at large.
0s the first step for carrying into execution the scheme outline"
in his Paris letter# 3enator 3herman# "uring the secon" session of
the 7ortieth ;ongress# intro"uce" 3enate bill 81B# entitle"#
"3 !ill in relation to coina"e of "old and silver%"
4he material parts of this propose" measure are containe" in secN
tions one# two# an" three# which are as follows: -
"+e it enacted !y the Senate and 5ouse of Iepresentatives of the
nited States of 3merica in Con"ress assem!led, 'hat, $ith a vie$
to promote a uniform currency amon" the nations, the $ei"ht of the
"old coin of five dollars shall !e &.J
S.8 troy "rains, so that it shall
a"ree $ith a =rench coin of t$enty4five francs, and $ith the rate of
thirty4one hundred francs to the *ilo"ram9 and the other si2es or de#
nominations shall !e in due proportion of $ei"ht, and the fineness
shall !e nine4tenths or ?88 parts fine in &,888%
"Section .% 3nd !e it further enacted, 'hat, in order to conform the
silver coina"e to this rate and to the =rench valuation, the $ei"ht of
the half dollar shall !e &:? "rains, e;uivalent to &&B deci"rams9
and the lesser coins !e in due proportion, and the fineness shall !e
+ut the coina"e of silver pieces of one dollar, five cents, and three
cents shall !e discontinued%
"Section 0% 3nd !e it further enacted, 'hat the "old coins to !e is#
sued under this act shall !e a le"al tender in all payments to any
amount9 and the silver coins shall !e a le"al tender to an amount
not e<ceedin" ten dollars in any one payment%"
4he language of these sections expressly "emonetizes the stan"N
ar" sil!er "ollar of C18U grains as the unit of account by omitting
to pro!i"e for its coinage.
4he only sil!er coins that coul" be issue" from the mints of the
,nite" 3tates# shoul" this bill become a law# woul" be the half
"ollar# the 5uarter "ollar# an" ten cent piece# which woul" be legal
ten"er for the payment of "ebts to any amount not excee"ing ten
"ollars in any one payment+ while gol" coin woul" be unlimite"
legal ten"er to any amount.
4he bill was referre" to the 7inance ;ommittee# of which Mr.
3herman was ;hairman# an" on the Eth of Mune# 1DJD# he reporN
te" it back fa!orably# an" he a"!ocate" its passage in an elaborN
ately written argument. 6e thus spoke of the system of coinage
which the bill propose" to establish as follows: -
"'he second in;uiry of your committee $as $hether the plan pro#
posed !y the (aris conference $as the !est mode to accomplish the
end desired%
t proposes: -
1. 0 single stan"ar" exclusi!ely of gol".
8. ;oins of e5ual weight an" "iameter.
A. :f e5ual 5uality of fineness - nine-tenths fine.
C. 4he weight of the present H-franc gol" piece to be the unit.
H. 4he coins of each nation to bear the names an" emblems preN
pare" by each# but to be legal ten"ers public an" pri!ate in all.
"'he sin"le standard of "old is an 3merican idea, yielded reluct#
antly !y =rance and other countries, $here silver is the chief stand#
ard of value%
'he impossi!le attempt to maintain t$o standards of value has "iv#
en rise to nearly all the de!asement of coina"e of the last t$o cen#
'he relative mar*et value of silver and "old varied li*e other com#
modities, and this led first to the demoneti2ation of the more valu#
a!le metal, and second to the de!asement or diminution of the
;uantity of that metal in a "iven coin%"
4his was the first effort e!er attempte" to fasten a single gol"
stan"ar" upon the 0merican people# an" the "eclaration of 3enatN
or 3herman that#
"'he sin"le standard of "old is an 3merican idea," was mislea"ing# as
he well knew at the time when he use" this language in the report
4he sing1e gol" stan"ar" is of <ritish origin# as the parliamentary
acts of 1D1J an" 1DCC conclusi!ely pro!e beyon" any "oubt
Mr. 3herman also use" the following language in that report: -
"=rance, $hose standard is adopted, ma*es a ne$ coin similar to
our half ea"le% She yields to our demand for the sole standard of
"old, and durin" the $hole conference evinced the most earnest
$ish to secure the co4operation of the nited States in the "reat o!#
ject of unification of coina"e%"
4he report abo!e 5uote" is proof positi!e# that 3enator 3herman
an" Mr. 1uggles ha" place" the ,nite" 3tates in a false light beN
fore the Paris conference.
4he "istinguishe" 3enator a!ers that 7rance yiel"e" to
"Gur demand for the sole standard of "old"
- an astonishing piece of intelligence to his colleagues.
7or# be it remembere"# Mr. 1uggles was a mere appointee of the
Presi"ent# an" ;ongress ha" not# either by bill or resolution# auN
thorize" Mr. 1uggles to represent the ,nite" 3tates at any monetN
ary conference whate!er.
4he attitu"e of Mr. 1uggles on the propose" change of the coinN
age laws of the ,nite" 3tates was purely !oluntary# an"# in fact#
the !iews of this gentleman an" 3enator 3herman were "istinctly
repu"iate" by ;ongress at its earliest opportunity.
4he same committee# by 3enator Morgan# of 9ew Gork# submitN
te" a minority report against the passage of the bill.
Ie 5uote at length from this powerful "ocument: -
"1n June last, $hile the niversal E<position $as in pro"ress, an in#
ternational monetary conference $as held in (aris under the pres#
idency of the =rench /inister of =orei"n 3ffairs%
"Aele"ates from the several European nations $ere present%
"/r% Samuel +% Iu""les represented the nited States, and his re#
port on the su!ject has !een communicated to Con"ress throu"h the
Aepartment of State% =rom this it appears that a plan of monetary
unification $as there a"reed upon, the "eneral features of $hich
"&% 3 sin"le standard, e<clusively of "old%
".% Coins of e;ual $ei"ht and diameter%
"0% Gf e;ual ;uality, nine4tenths fine%
"J% 'he $ei"ht of the present 74franc "old piece to the unit, $ith its
multiples% 'he issue !y =rance of a ne$ coin of value and $ei"ht of
.7 francs $as recommended%
"7% 'he coins of each nation to continue to !ear the names and em#
!lems preferred !y each, !ut to !e le"al tenders, pu!lic and private,
in all%
"Senate !ill .&: is desi"ned to carry into effect this plan% 1ts pas#
sa"e $ould reduce the $ei"ht of our "old coin of 67, so as to a"ree
$ith a =rench coin of .7 francs%
"1t determines that other si2es and denominations shall !e in due
proportion of $ei"ht and fineness, and that forei"n "old coin, con#
formed to this !asis, shall !e a le"al tender so lon" as the standard
of $ei"ht and fineness are maintained%
"1t re;uires that the value of "old coin shall !e stated !oth in dollars
and francs, and also in +ritish terms, $henever Dreat +ritain shall
conform the pound sterlin" to the piece of 67%
"1t conforms our silver coina"e to the =rench valuation, and discon#
tinues the silver pieces of 6&%88, and 7, and 0 cents, and limits silver
as a le"al tender to payments of 6&8% 'he &st of January, &CB?, is
fi<ed as the period for the act to ta*e effect%
"'he reduction $hich this measure $ould effect in the present le"al
standard value of the "old coin of the nited States $ould !e at the
rate of three and a half dollars to the hundred, and the reduction in
the le"al value of our silver coina"e $ould !e still more consider#
"3 chan"e in our national coina"e so "rave as that proposed !y the
!ill should !e made only after the most mature deli!eration% 'he cir#
culatin" medium is a matter that directly concerns the affairs of
everyday life, affectin" not only the varied, intricate and multiform
interests of the people at home, to the minutest detail, !ut the rela#
tions of the nation $ith all other countries as $ell%
"'he nited States has a peculiar interest in such a ;uestion% 1t is a
principal producer of the precious metals, and its "eo"raphical pos#
ition, most favora!le in vie$ of impendin" commercial chan"es,
renders it $ise that $e should !e in no haste to fetter ourselves !y
any ne$ international re"ulation !ased on an order of thin"s !e#
lon"in" essentially to the past%"
7urther on in his report# the "istinguishe" 3enator# with rare
power of fact an" argument# exposes this new scheme of finance
propose" to be fastene" upon the 0merican people by the bill inN
tro"uce by 3herman.
6e shows that the 0merican continent pro"uce" four-fifths of the
sil!er of commerce+ that the mines of 9e!a"a ha!e taken high
rank+ an" that Mexico alone supplie" more than half of the
worl"&s gran" total.
6e points out that sil!er money is the key to the commerce of the
western hemisphere# an" of the tra"e of ;hina# Mapan# n"ia# an"
other :riental countries.
4he 3enator says: -
"'he 3merican continent, too, produces four4fifths of the silver of
commerce% 'he mines of Nevada have already ta*en hi"h ran*, and
/e<ico alone supplies more than half the $orldHs "rand total% Gur
relations $ith the silver4producin" people, "eo"raphically most fa#
vora!le, are other$ise intimate%
"/anifestly our !usiness intercourse $ith them can !e lar"ely in#
creased, a fact especially true of /e<ico, $hich, for $ell4*no$n
political reasons see*s the friendliest understandin"% 'his must not
!e overloo*ed%
"'hese t$o streams of the precious metals, poured into the current
of commerce in full volume, $ill produce pertur!ations mar*ed and
important% Gther countries $ill !e affected, !ut the nited States
$ill feel the effect first and more directly than any other%
"'he (acific rail$ay $ill open to us the trade of China, Japan, 1n#
dia, and other Griental countries, of $hose prepossessions $e must
not lose si"ht%
=or years silver, for reasons not fully understood, has !een the o!#
ject of unusual demand amon" these 3siatic nations, and no$ forms
the almost universal medium of circulation, a!sor!in" rapidly the
silver of coina"e%
'he erroneous proportion fi<ed !et$een silver and "old !y =rance,
and $hich $e are as*ed to copy, is denudin" that country of the
former metal% Gur o$n monetary system, thou"h less faulty, is not
suita!ly adjusted in this respect%
'he silver dollar, for instance, a favorite coin of the native 1ndian
and distant 3siatic, has $ell4ni"h disappeared from domestic circu#
lation, to reappear amon" the eastern peoples, $ith $hom $e more
than ever see* close intimacy%
"3s they prefer this piece $e do $ell to increase rather than discon#
tinue its coina"e, for $e must not deprive ourselves of the advant#
a"es $hich its a"ency $il& afford, and Lit $ould !e useless to send
dollars to 3sia inferior in $ei"ht and value to its $ell4*no$n Span#
ish and 3merican prototype%H "
Mr. 1uggles says that nearly all the sil!er coine" in the ,nite"
3tates prior to 1DHD has "isappeare". 0 reme"y is not to be foun"
in the a"option of a system that un"er!alues this metal# for that
commo"ity# like any other# shuns the market where not taken at
its full !alue to fin" the more fa!orable one.

t is a fa!orite metal# entering into all transactions of "aily life#
an" "eser!es proper recognition in the monetary system.
"1t is said that L'o promote the intercourse of nations $ith each oth#
er, uniformity in $ei"hts, coins, and measures of capacity is amon"
the most efficacious a"encies%H Gur $ei"hts, coins, and measures
no$ correspond much more nearly to the En"lish than to the =rench
Gur commerce $ith Dreat +ritain is nine times "reater than $ith
=rance, and if the former does not adopt the (aris system of coin#
a"e 4 and $e have no assurance that she $ill 4 the nited States
$ould certainly commit a serious error in passin" this !ill% No ar"u#
ment is needed to enforce this% 3nd $hat of the risin" communities>
3 properly adjusted coina"e $ould stimulate commerce $ith those
"reat parts of the continent lyin" south and south$est of us, $ith the
0n example of R=resham&s /awR after 3ir 4homas =resham )1H1E-BE* an $nglish
7inancier# who borrowe" the phrase R<a" money "ri!es out goo"R from ;opernicus -
though the phenomenon ha" alrea"y been note" by others.
West 1ndies and the countless millions of trans4(acific countries% We
stand mid$ay on the thorou"hfare of traffic !et$een these t$o
$idely4separated races% Gur rail$ays, canals, our natural hi"h$ays
and merchant marine may !e made to control their carryin" trade%
"+ut here, as every$here else, a $ell4adjusted coina"e !ecomes a
$and of po$er in the hand of enterprise% 'o*ens are not $antin" to
mar* the favor in $hich the nited States are held !y China% 'he
unusual honor recently conferred !y that "overnment upon a citi2en
of this country $as not done !ecause of his fitness as an am!assad#
or at lar"e, !ut $as a mar* as $ell of a friendly disposition to$ard
this country%
=uture harmony of intercourse is assured, too, !y their adoption as
a te<t!oo* in diplomatic correspondence of a leadin" 3merican au#
thority on international la$%
/uch mi"ht also !e said a!out the "ro$in" partiality of Japan to#
$ards this country, !ut it is enou"h that the recent openin" of cer#
tain ports indicates an enli"htened chan"e in the politics of these
t$o old empires, of $hich commerce, especially our o$n, is availin"
4his patriotic "ocument pillorie" the rascality of that scheme#
which woul" "estroy the immense mineral wealth of the western
hemisphere by the "estruction of sil!er money.
7urther on in the same report# 3enator Morgan exposes the falN
lacy of this so-calle" international system of coinage embo"ie" in
the 3herman bill. 4he genuine 0mericanism of his nature is finely
illustrate" by the conclu"ing language of that celebrate" report.
6e continues: -
"Gur coina"e is !elieved to !e the simplest of any in circulation,
and every $ay satisfactory for purposes of domestic commerce9 it
possesses special merits of every4day value, and should not, for
li"ht reasons, !e e<chan"ed $here the advanta"es sou"ht to !e
"ained are mainly theoretical, en"a"in" more properly the attention
of the philosopher than the practical man%
'he instincts of our people lead them to !elieve that $e are on the
eve of important !usiness chan"es, and $e may therefore safely
hold fast for the present to $hat e<perience has proven to !e "ood,
follo$in" only $here clear indications may lead, and a future of
"reat prosperity opens to our country%
"'he $ar "ave us self4assertion of character, and removed many im#
pediments to pro"ress9 it also proved our a!ility to ori"inate means
to ends% 1ts e<pensive lesson $ill !e measura!ly lost if it fails to im#
press upon us the fact that $e have a distinctive 3merican policy to
$or* out, one sufficiently free from the traditions of Europe to !e
suited to our peculiar situation and the "enius of our enterprisin"
"'he people of the nited States have !een ;uic* to avail them#
selves of their natural advanta"es% Not only the pu!lic lands and the
mines of precious metals, !ut our political institutions, have li*e$ise
po$erfully operated in our favor, and $ill continue to do so $ith in#
creasin" force%" - )3enate 1eport# ;om# 9o. llB# C(th ;ongress#
8n" 3ess.# Page 1A.*
Mu"ging from the language of the report >ust 5uote"# the great
3enator from the $mpire state was a firm belie!er in the power of
the 0merican people to legislate upon "omestic financial 5uesN
tions without the ai" or consent of foreign powers an" potentates.
Iere he ali!e at the present "ay# how his in"ignation woul" be
arouse" at the successi!e >ourneyings to $nglan" by 0merican
monetary commissioners# who ha!e humiliate" our national self-
respect by getting "own on their knees before the "Gld @ady of
'hread Needle Street," /on"on# an" begging for her assistance in
the solution of our financial problems.
4he report of 3enator Morgan was the "eath knell of the bill# an"
no attempt was ma"e to bring it up again while Mr. Morgan was a
member of the 3enate. 0fter the retirement of Mr. Morgan from
the ,nite" 3tates 3enate# March C# 1DJE# a re!ision of the mint
laws was un"ertaken.
Mr. <outwell# 3ecretary of the 4reasury# Mohn M. -nox# Deputy
;omptroller of the ;urrency# an" Mr. /in"erman# Director of the
mint# all of whom were "e!ote" a"herents of the nationa1 bankN
ing system# an" a single stan"ar" of gol"# frame" a bill containing
se!enty-one sections# the ob>ect of which was ostensibly a re!iN
sion of the mint laws of the ,nite" 3tates.
:n 0pril 8Hth# 1DB(# this bill# prepare" by the 4reasury cli5ue#
was transmitte" by 3ecretary <outwell to 3en. Mohn 3herman#
chairman of the 7inance ;ommittee# with a recommen"ation that
it be a"opte" by ;ongress.
9owhere in the report of 3ecretary <outwell# which accompanie"
this bill# was any mention ma"e of any change in the system of
coinage# but he calle" it#
"3 !ill revisin" the la$s relative to the mint, assay office, and coin#
a"e of the nited States%"
4his propose" measure# which purporte" to be a mere co"ificaN
tion of the mint laws# in reality pro!i"e" for the "emonetization
of the sil!er "ollar.
:n the 8Dth of 0pril# 1DB(# the bill was intro"uce" into the
,nite" 3tates 3enate by Mr. 3herman# an" was referre" to the
;ommittee on 7inance.
:n December 1Eth# 1DB(# it was reporte" back to the 3enate with
:n Manuary Eth#1DB1# the bill came up in the 3enate an" was "isN
cusse" in ;ommittee of the Ihole.
4hat the rea"er may un"erstan" the process by which legislation
can be surreptitiously pushe" through ;ongress# it must be borne
in min" that the !arious committees of the 3enate an" 6ouse of
1epresentati!es ha!e immense power to control the passage of
0 measure is intro"uce" into either branch of ;ongress# it is reN
ferre" to the appropriate committee which takes charge of the
bill# consi"ers it in all its phases# an" makes a report for or
against its passage.
4he report of the committee# in a ma>ority of cases# is the foun"aN
tion of the action of that branch where it was originally propose".
4herefore# it is the !arious committees of ;ongress which exert a
powerful influence upon the fate of bills# as such reports are genN
erally taken to be absolutely true by the members of that bo"y.
4he bill as amen"e" passe" the 3enate on the 1(th of Manuary#
1DB1 an" on the 1Ath of the same month it reache" the 6ouse an"
was or"ere" to be printe".
:n 7ebruary 8Hth# 1DB1# Mr. -elley# chairman of the ;ommittee
on ;oinage# reporte" the bill back with an amen"ment# in the
nature of a substitute# when it was again printe" an" re-commitN
te". 4he bill was ne!er hear" of at that session an" it ne!er was
"ebate" in the 6ouse for a single moment.
:n March Eth# 1DB1# Mr. -elley intro"uce" a bill in the 7orty-
secon" ;ongress# when it was or"ere" to be printe"# an" referre"
to the ;ommittee on ;oinage when appointe". :n Manuary Eth#
1DB8# the bill was reporte" by Mr. -elley# chairman of the ;oinN
age ;ommittee# with the recommen"ation that it pass.
n the report ma"e by Mr. -elley to the 6ouse# the general obN
>ects of the bill were pointe" out by him.
6e informe" the 6ouse that it ha" been prepare" in the 4reasury
Department for the purpose of co"ifying an" simplifying the mint
laws. 6e state" to the 6ouse that the most important change
ma"e by the bill was that creating a Director of the mint# with
hea"5uarters in the 4reasury Department# Mr. Maynar"# a memN
ber of the ;ommittee on ;oinage# ma"e the following statement
of the scope of the bill+ !iz.: -
"'his !ill is symmetrical in all its parts9 it is a mere revision of the
mint la$s, su""ested !y the Secretary of the 'reasury, and con#
curred in !y every man $ho sees the difficulty of mana"in" mints
and assay offices, scattered over this country as they are, $ithout
havin" a responsi!le head% 1ts sole function is to so codify the la$s,
and to appoint a responsi!le head under the Secretary of the 'reas#
:n the 1(th of Manuary# 1DB8# the 6ouse resume" consi"eration
of the bill# an" it was finally re-committe" to the ;ommittee on
;oinage# Ieights# an" Measures for a report. 4he committee reN
porte" the bill to the 6ouse on 0pril Eth# 1DB8.
Mr. 6ooper# of Massachusetts# who was in charge of the bill#
ma"e a lengthy explanation of its pro!isions# an" the only alluN
sion ma"e by him with reference to the sil!er "ollar is the followN
ing+ !iz.: -
"Section &B re4enacts the provisions of e<istin" la$s definin" the sil#
ver coins and their $ei"hts, respectively, e<cept in relation to the
silver dollar, $hich is reduced in $ei"ht from J&. U to 0CJ "rains9
thus ma*in" it a su!sidiary coin in harmony $ith the silver coins of
less "denomination, to secure its current circulation $ith them% 'he
silver dollar of J&.M "rains, !y reason of its !ullion and intrinsic
value !ein" "reater than its nominal value, lon" since ceased to !e
a coin of circulation, and is melted !y manufacturers of silver$are%
1t does not circulate no$ in commercial transactions $ith any coun#
try, and the convenience of those manufacturers in this respect can
!etter !e met !y supplyin" small stamped !ars of the same standard,
avoidin" the useless e<pense of coinin" the dollar for that purpose%
'he coina"e of the half dime is discontinued, for the reason that its
place is supplied !y the copper4nic*el 74cent piece, of $hich a lar"e
issue has !een made, and $hich, !y the provisions of the act author#
i2in" its issue, is redeema!le in nited States currency%"
- )3ee ;ong. =lobe# Part A# Page# 8#A(J 8n" 3ess.# C8n" ;onN
Mr. 6ooper correctly state" the weight an" fineness of the "ollar
containe" in the bill pen"ing# an" as it finally passe" the 6ouse#
but he "oes not state that it was a legal ten"er for only fi!e "olN
lars. 7rom the tenor of his remarks an" the character of his arguN
ment# it coul" ha!e been >ustly inferre" that the purpose of this
bill was to re"uce the weight of the sil!er "ollar so that it woul"
circulate on a parity with that of gol"# as at this time the !alue of
the sil!er "ollar excee"e" that of gol" by a fraction o!er three per
During the "ebate on the bill# 6on. ;larkson 9. Potter# member
of ;ongress from 9ew Gork# oppose" its passage in a speech of
great length. 4he speech of Mr. Potter excite" a !ery warm conN
tro!ersy# an" those who were urging the passage of the bill# seeN
ing the "etermine" an" aggressi!e opposition brought to bear
against it# professe"ly aban"one" it# an" brought in a substitute
which they asserte" was entirely free from the ob>ections brought
against the original measure.
:n the 8Bth of May# 1DB8# Mr. 6ooper obtaine" the floor an"
ma"e a statement as follows+ !iz.: -
"1 desire to call up the !ill ,5% I%, No% &,J.:- revisin" and amendin"
the la$s relative to mints, assay offices, and coina"e of the nited
1 do so for the purpose of offerin" an amendment to the !ill in the
nature of a su!stitute, one $hich has !een very carefully prepared,
and $hich 1 have su!mitted to the different, "entlemen in this 5ouse
$ho have ta*en a special interest in the !ill% 1 find that it meets $ith
universal appro!ation in the form in $hich 1 offer it% 1 move that the
rules !e suspended and that the su!stitute !e put on its passa"e%"
r. Broo!"# 1 as* the "entleman from /assachusetts [/r% 5oop#
er] to postpone his motion until his collea"ue on the committee, my
collea"ue from Ne$ )or* [/r% (otter] is in his seat%
r. $ooper% o& a""a'h("ett"# 1t is so late in the session that 1
must decline $aitin" any lon"er%
r. Broo!"# 1 $ould a"ain su""est to the "entleman that he
should $ait until my collea"ue comes in%
r. $ooper% o& a""a'h("ett"# 1 cannot do so%
r. $olman# 1 suppose that it is intended to have the !ill read !e#
fore it is, put on its passa"e%
The Spea!er# 'he Su!stitute $ill !e read%
r. $ooper% o& a""a'h("ett"# 1 hope not% 1t is a lon" !ill, and
those $ho are interested in it are perfectly familiar $ith its provi#
r. )err# 'he rules can not !e suspended so as to dispense $ith
the readin" of the !ill>
The Spea!er# 'hey can !e%
r. )err# 1 $ant the 5ouse to understand that it is attempted to
put throu"h this !i&l $ithout !ein" read%
The Spea!er# Aoes the "entleman from /assachusetts [/r%
5ooper] move that the readin" of the !ill !e dispensed $ith>
r. $ooper o& a""a'h("ett"# 1 $ill so frame my motion to sus#
pend the rules that it $ill dispense $ith the readin" of the !ill%
The Spea!er# 'he "entleman from /assachusetts moves that the
rules !e suspended and that the !ill pass, the readin" thereof !ein"
dispensed $ith%
r. *andall# Can not $e have a division of that motion>
The Spea!er# 3 motion to suspend the rules cannot !e divided%
r. *andall# 1 should li*e to have the !ill read, althou"h 1 am
$illin" that the rules shall !e suspended as to the passa"e of the
4he 5uestion was put on suspen"ing the rules an" passing the bill
without rea"ing+ an" )two-thir"s not !oting in fa!or thereof* the
rules were not suspen"e".
4he ;ongressional 1ecor" from which he ha!e 5uote" is proof
that it was a cunning mo!e on the part of Mr. 6ooper to push a
measure through the 6ouse "uring the closing hours of its sesN
sion# an" that he sought to "o this "uring the temporary absence
of those members who were aware of his plan# an" who were opN
pose" to the consummation of the scheme. 4his unscrupulous
tool of the money power "i" not e!en want this bill rea" so that
its contents woul" become known# as that woul" "efeat its pasN
n this "ilemma# Mr. 3peaker <laine came to the rescue of Mr.
6ooper# an" suggeste" to the latter that he mo!e the suspension
of the rules# so that the bill coul" be passe" without rea"ing.
4he suggestion of 3peaker <laine was promptly acte" on by Mr.
6ooper# but the motion to suspen" the rules an" pass the bill
without rea"ing faile" for want of a two-thir"s !ote.
Mr. 6ooper thereupon mo!e" that the substitute be rea"# that the
rules be suspen"e" an" the bill passe"# which action ha" been
prompte" by 3peaker <laine.
Ie gi!e the procee"ings of the 6ouse !erbatim+ !iz.+
r. $ooper% o& a""a'h("ett"# 1 no$ move that the rules !e
suspended, and the su!stitute for the !ill in relation to mints and
coina"e passed9 and 1 as* that the su!stitute !e read%
4he clerk began to rea" the substitute.
r. Broo!"# 1s that the ori"inal !ill>
The Spea!er# 'he motion of the "entleman from /assachusetts
[/r% 5ooper] applies to the su!stitute, and that on $hich the 5ouse
is called to act is !ein" read%
r. Broo!"# 3s there is to !e no de!ate, the only chance $e have
to *no$ $hat $e are doin" is to have !oth the !ill and the su!stitute
The Spea!er# 'he motion of the "entleman from /assachusetts
!ein" to suspend the rules and pass the su!stitute, it "ives no choice
!et$een the t$o !ills% 'he 5ouse must either pass the su!stitute or
r. Broo!"# 5o$ can $e choose !et$een the ori"inal !ill and the
su!stitute unless $e hear them !oth read>
The Spea!er# 'he "entleman can vote "aye" or "no" on this ;ues#
tion% Whether this su!stitute shall !e passed%
r. Broo!"# 1 am very much in the ha!it of votin" "no" $hen 1 do
not *no$ $hat is "oin" on%
r. $olman# +efore the ;uestion is ta*en up on suspendin" the
rules and passin" the, !ill, 1 hope the "entleman from /assachu#
setts $ill e<plain the leadin" chan"es made !y this !ill in the e<ist#
in" la$, especially in reference to the coina"e% 1t $ould seem that
all the small coina"e of the country is intended to !e re4coined%
r. $ooper% o& a""a'h("ett"# 'his !ill ma*es no chan"es in
the e<istin" la$ in that re"ard% 1t does not re;uire the re4coina"e of
the small coins%"
- );ong. =lobe# Part H# Page A#DDA# 8n" 3ess.# C8n" ;ongress.*
4he 5uestion being taken upon the motion of Mr. 6ooper# the
rules were suspen"e" by an aye an" nay !ote an" the bill passe".
4he scheme was force" through the 6ouse by the "ownright
falsehoo"s of 3amuel 6ooper# a banker of <oston# ai"e" by the
trickery an" the manipulation of parliamentary rules by Mr.
3peaker <laine.
4he facts in the case were# that the pro!isions of the original bill
aban"one" by Mr. 6ooper# an" those of the substitute afterwar"
passe"# were practically the same. 4he bill was now transmitte"
to the 3enate where it went into the han"s of the 7inance ;omN
mittee# which# on December 1Jth# 1DB8# reporte" the bill back
with amen"ments.
:n Manuary Bth# 1DBA# a""itional amen"ments were reporte"
which were or"ere" to be printe" with the bill. 3ection 1J of the
substitute passe" by the 6ouse was in the following language#
!iz.: -
"'hat the silver coins of the nited States shall !e a dollar, a half
dollar or 784cent piece, a ;uarter dollar or .74cent piece, and a
dime or &84cent piece9 and the frei"ht of the dollar shall !e 0CJ
"rains9 the half dollar, ;uarter dollar, and the dime shall !e, re#
spectively, one4half, one4;uarter and one4tenth of the $ei"ht of said
dollar, $hich coins shall !e a le"al tender, at their nominal value,
for any amount not e<ceedin" five dollars in any one payment%"
4his section of the substitute was i"entical with that of the originN
al bill which was with"rawn by Mr. 6ooper+ an" it will be seen
that sil!er was "emonetize" by its pro!isions# by which the free
an" unlimite" coinage thereof was taken away from that metal#
an" its legal ten"er "ebt paying power limite" to the insignificant
sum of fi!e "ollars for any one payment.
3ection 1H of the substitute passe" by the 6ouse was stricken out
by the 7inance ;ommittee of the 3enate in the way of amen"N
Ihen the 5uestion on the amen"ment striking out section 1H was
before the 3enate it was agree" to by that bo"y. 4he next amen"N
ment was to strike out the wor" se!enteen in the 1Bth section of
the substitute# an" this amen"ment ma"e section 1B of the substiN
tute# rea" 1J of the bill as amen"e" by the 3enate. 4he number of
each succee"ing section was change" accor"ingly.
4he se!eral sections of the substitute were taken up in their
change" numeral or"er until section 1E of the substitute as passe"
by the 6ouse was reache"# which# by the striking out of section
1H of sai" substitute# became section 1D of the amen"e" 3enate
bill. 4his latter section pro!i"e" for the inscription an" mottoes
to be impresse" upon the coins to be issue" un"er this bill. 0 "eN
bate arose upon this 5uestion# an" 3enator ;asserly# of ;alifornia#
calle" attention to the omission of the eagle upon the gol" "ollar#
three "ollar gol" piece# the sil!er "ollar# half "ollar an" 5uarter
"ollar. 3enator 3herman ga!e the following explanation+ !iz.:-
r. Sherman# "1f the Senator $ill allo$ me, he $ill see that the
precedin" section provides for coin $hich is e<actly interchan"ea!le
$ith the En"lish shillin" and the 74franc piece of =rance9 that is, a
74franc piece of =rance $ill !e the e<act e;uivalent of a dollar of
the nited States in our silver coina"e9 and in order to sho$ this
$herever our silver coin shall float4and $e are providin" that it
shall float all over the $orld4 $e propose to stamp upon it, instead
of our ea"le, $hich forei"ners may not understand, and $hich they
may not distin"uish from a !u22ard or some other !ird, the intrinsic
fineness and $ei"ht of the coin%" - );ong. =lobe# Part # Page
JB8# Ar" 3ess.# C8n" ;ongress# 1DB8-BA.*
4his public "eclaration of 3enator 3herman# in reply to the
5uestion of 3enator ;asserly# is one of the mysteries of this
6e ha" charge of this bill# an" the ;ongressional =lobe shows
that what afterwar" became section 1H of the bill as amen"e" by
the 3enate was ne!er rea" nor acte" upon by that bo"y.
4he 7rench H-franc piece# about which Mr. 3herman spoke in his
reply to 3enator ;asserly# was the e5ui!alent of a sil!er "ollar
containing ADC grains of sil!er# mentione" in section 1J of the
substitute# now section 1H of the amen"e" bill before the 3enate.
n 1DBC# upon the "isco!ery of the "emonetization of sil!er# sai"
section 1H of the amen"e" 3enate bill# which was now the lair#
was ascertaine" to rea" as follows: -
"'he silver coins of the nited States shall !e a trade dollar, a half
dollar, or 784cent piece, a ;uarter dollar, or .74cent piece, a dime,
or &84cent piece9 and the $ei"ht of the trade dollar shall !e J.8
"rains troy9 the $ei"ht of the half dollar shall !e &. "rams and one4
half of a "ram9 the ;uarter dollar and the dime shall !e, respect#
ively, one4half and one4fifth of the frei"ht of said half dollar9 and
said coins shall !e a le"al tender at their nominal value for any
amount not e<ceedin" five dollars in any one payment%"
4hat this section of the coinage law# pro!i"ing for the mintage of
a tra"e "ollar containing C8( grains of sil!er# was not in the bill
when the "ebate arose upon the inscriptions an" mottoes "esigne"
to be place" upon the coins pro!i"e" for by this act# is e!i"ent
from the answer ma"e by 3herman to the in5uiry of Mr. ;asserly+
for the reason that the "ebate arose o!er section 1D of the
amen"e" bill# while the pro!ision for the coinage of sil!er was
embrace" in the prece"ing section 1H of the amen"e" act. 3ai"
section 1H was formerly 1J of Mr. 6ooper&s substitute.
4he parliamentary proce"ure in the consi"eration of bills in both
6ouses of ;ongress is to rea" each section separately# take a !ote
upon its passage# an" thus act upon each section consecuti!ely.
4he bill so amen"e" went to the 6ouse of 1epresentati!es for its
concurrence in the 3enate amen"ments.
3peaker <laine appointe" Messrs. 6ooper an" 3toughton as the
;ommittee of ;onference on the part of the 6ouse+ 3enators
3herman# 3cott# an" <ayar"# three of the most ra"ical single gol"
stan"ar" men in ;ongress# were appointe" conferees on the part
of the 3enate.
4he ;onference ;ommittees met# an"# with the exception of a
few trifling amen"ments# agree" to the pro!isions of the bill as it
came from the 3enate. 4hey ma"e their reports to their respecti!e
6ouses# an" the bill became a law on the 18th of 7ebruary# 1DBA.
Ie now come to a singular act on the part of 3herman when the
bill came up for final passage in the 3enate.
During his career as chairman of the 7inance ;ommittee of the
3enate# we ha!e seen him in the city of /on"on# in 1DJB# next he
appears at Paris in the same year# an" throws his influence in beN
half of the single stan"ar" of gol"# then he intro"uces a bill in
;ongress in 1DJD for the "emonetization of sil!er.
0fterwar"# "uring the year 1DB(# he brings forwar" the bill
frame" by 3ecretary <outwell# of which mention has been ma"e
heretofore. 6e reports bill after bill for the a"option of a single
stan"ar" of gol"# an" now he !otes against the act of 7ebruary
18th# 1DBA# which was finally the fruition of his efforts.
4his incomprehensible action is the strangest episo"e in the long
public career of the =reat Demonetizer# an" many explanations
ha!e been !olunteere" for this apparently inconsistent con"uct.
n a speech in the ,nite" 3tates 3enate# Mr. 3herman attempte"
the following explanation of his course which le" to the "emonetN
ization of the sil!er "ollar# he says: -
"'he old silver dollar $as dropped out, in the revision, and $hy>
Simply !ecause it $as not in use% No la$ repealed the silver dollar9
it $as simply dropped out 4 there $as no such coin in use% 1t could
not circulate !ecause, in &C:. and &C:0, the silver dollar $as $orth
more than the "old dollar% 3s it had not !een coined for t$enty
years it $as dropped out from amon" the coins of the nited
Iith his consistent an" usual "isregar" of facts# 3enator 3herman
a!ers that no sil!er "ollars ha" been coine" for the perio" of
twenty years prior to the "emonetization act of 7ebruary 18th#
4his statement was ma"e in the face of the official report of the
"irector of the ,nite" 3tates mint for the year 1DBA# in which it is
shown that 1#llB#1AJ stan"ar" sil!er "ollars were coine" in the
calen"ar year of 1DB1# that 1#llD#J(( were coine" in the year
1DB8# an" in the one month an" twel!e "ays from Manuary 1st#
1DBA# to 7ebruary 18th# 1DBA# 8EJ#((( of stan"ar" sil!er "ollars
were coine".
4he excuse ten"ere" by Mr. 3herman for the passage of the act of
7ebruary 18th# 1DBA# is that the sil!er "ollar was worth more than
the gol" "ollar. 4he si1!er "ollar so "dropped out" containe"
C18U grains of sil!er. 9ow# if the reasons state" by Mr. 3herman
for the omission of the coinage of the sil!er "ollar by that act
were !ali" an" controlle" his action# why "i" the honorable 3enN
ator amen" that act in committee by increasing the number of
grains in the sil!er "ollar to C8(# thus making its bullion !alue
greater than before the passage of this actL
6is strange logic is as follows: 7irst# prior to its "emonetization#
the sil!er "ollar was more !aluable than that of gol"# hence it
woul" not circulate+ therefore# as a reme"y to increase its circulaN
tion# the !alue of the bullion in the sil!er "ollar must be ma"e
n other wor"s# the sil!er "ollar was worth three an" one-fourth
cents more than that of gol" an" the former was hoar"e" or sol"
abroa"+ therefore# to ob!iate this "ifficulty in the way of increasN
ing the circulation of that "ollar# the weight was increase" from
Cl8U to C8( grains# an" its o!er!aluation from three an" one-
fourth cents to fi!e cents. Iith such sophistry as the abo!e# Mr.
3herman sought to "elu"e the 0merican people.
4he manner in which the act of 7ebruary 18th# 1DBA# was slippe"
through both 6ouses of ;ongress has excite" en"less contro!erN
sies which rage e!en to this "ay.
3enator 3herman# in his speech of 0ugust A(th# 1DEA# ma"e a
labore" "efense of his con"uct "uring the passage of the bill "eN
monetizing sil!er. 6e asserts that the measure was fully an" thorN
oughly "ebate"# but the ;ongressional =lobe of that perio" conN
clusi!ely pro!es that such was not the fact.
:n the other han"# many 3enators an" 1epresentati!es of long
ser!ice in ;ongress# inclu"ing the sessions of 1DB(-B1-B8-BA#
renowne" for their ability an" integrity# ha!e "eclare" time an"
again that false statements were ma"e by those ha!ing charge of
the bill# that these statements were relie" on by the !arious memN
bers# an" that those who !ote" for the measure ne!er knew or
e!en suspecte" that sil!er woul" be "emonetize" by its passage.
4he public men making these statements bear such high reputaN
tion for truth an" integrity# that their testimony "oes not re5uire
the sanction of an oath to carry con!iction.
:ne excee"ingly strong circumstance that a""s great weight to
the charge of frau" in the passage of the act of 7ebruary 18th#
1DBA# lies in the fact that 3enators 9ye an" 3tewart# who represN
ente" the state of 9e!a"a - the greatest sil!er pro"ucing territory
in 0merica - !ote" in fa!or of the bill.
Iill any sane person suppose that these two 3enators woul"
knowingly !ote for a measure which woul" ruin the immensely
rich sil!er mines of that state that ha" honore" then by an election
to the ,nite" 3tates 3enators t is preposterous. 4he following
statements of lea"ing members of ;ongress furnish a solution to
this memorable contro!ersy. Mr. 6olman# in a speech "eli!ere"
in the 6ouse of 1epresentati!es Muly 1Ath# 1DBJ sai"# with referN
ence to the act of 7ebruary in# 1DBA: -
"1 have !efore me the record of the proceedin"s of this 5ouse on the
passa"e of that measure, a record $hich no man can read $ithout
!ein" convinced that the measure and the method of its passa"e
throu"h this 5ouse $as a Lcolossal s$indle%H 1 assert that the meas#
ure never had the sanction of this 5ouse, and it does not possess the
moral force of la$%"
- );ong. 1ecor"# Fol. F# Part J# 0ppen"ix# Page 1EA# 1st
3ess.# CCth ;ongress.*
4his is the statement of a man renowne" as the "Watchdo" of the
'reasury," an" whose !igilance "uring his long career in ;onN
gress has sa!e" the nation hun"re"s of millions of "ollars.
Mr. <irchar"# a republican member of ;ongress from llinois# in a
speech in the 6ouse on Muly 1Ath# 1DBJ# sai": -
"'he coina"e act of &C:0, unaccompanied !y any $ritten report
upon the su!ject from any committee, and un*no$n to the mem!ers
of Con"ress, $ho $ithout opposition allo$ed it to pass under the
!elief, if not assurance, that it made no alteration in the value of the
current coins, chan"ed the unit of value from silver to "old%"
- )3ame ;ong. 1ecor"# Page C#HJ(.*
Mr. ;annon# a republican member of ;ongress from the same
state# in a speech on Muly 1Ath# 1DBJ# sai": -
"'his le"islation $as had in the =orty4second Con"ress, =e!ruary
&., &C:0, lay a !ill to re"ulate the mints of the nited States, and
practically a!olish silver as money !y failin" to provide for the
coina"e of the silver dollar%
1t $as not discussed, as sho$n !y the Iecord, and neither mem!ers
of Con"ress nor the people understood the scope of the le"islation%"
- )3ame ;ong. 1ecor"# 0ppen"ix# Page 1EB.*
0gain on 0ugust Hth# 1DBJ# Mr. 6olman in speaking of that bill
sai": -
"'he ori"inal !ill $as simply a !ill to or"ani2e a +ureau of mines
and coina"e% 'he !ill $hich finally passed the 5ouse and $hich ul#
timately !ecame a la$ $as certainly not read in this 5ouse%"
:n the same "ay in the course of the same speech he sai": -
"1t $as never considered !efore the 5ouse as it $as passed% p to
the time the !ill came !efore this 5ouse for final passa"e the meas#
ure had sin"ly !een one to esta!lish a !ureau of mines9 1 !elieve 1
use the term correctly no$% 1t came from the Committee on Coina"e,
Wei"hts, and /easures%
'he su!stitute $hich finally !ecame a la$ $as never read, and is
su!ject to the char"e made a"ainst it !y the "entleman from /is#
souri [/r% +land], that it $as passed !y the 5ouse $ithout a *no$#
led"e of its provisions, especially upon that of coina"e%
"1 myself as*ed the ;uestion of /r% 5ooper, $ho stood near $here 1
am no$ standin", $hether it chan"ed the la$ in re"ard to coina"e%
3nd the ans$er of /r% 5ooper certainly left the impression upon the
$hole 5ouse that the su!ject of coina"e $as not affected !y that
- );ong. 1ecor"# Fol. F# part J# Page H#8AB# 1st 3ess.# CCth
Mr. <right# of 4ennessee# sai" of this law: -
"1t passed !y fraud in the 5ouse, never havin" !een printed in ad#
vance, !ein" a su!stitute for the printed !ill9 never havin" !een
read at the Cler*Hs des*, the readin" havin" !een dispensed $ith !y
an impression that the !ill made no material alteration in the coin#
a"e la$s9 it $as passed $ithout discussion, de!ate !ein" cut off !y
operation of the previous ;uestion% 1t $as passed to my certain in#
formation, under such circumstances that the fraud escaped the at#
tention of some of the most $atchful as $ell as the a!lest statesmen
in Con"ress at that time%%%%
3ye, sir, it $as a fraud that smells to heaven% 1t $as a fraud that $ill
stin* in the nose of posterity, and for $hich some persons must "ive
account in the day of retri!ution,"
- );ong. 1ecor"# Fol. F# Part 1# Page HDC# 8n" 3ess. CHth
3enator 0llison# on 7ebruary 1H# 1DBD# when 6ouse bill 1#(EA# to
authorize the free coinage of the stan"ar" sil!er "ollar# an" to reN
store its legal ten"er character was un"er consi"eration# state":
"+ut $hen the secret history of this !ill of &C:0 comes to !e told, it
$ill disclose the fact that the 5ouse of Iepresentatives intended to
coin !oth "old and silver, and intended to place !oth metals upon
the =rench relation instead of on our o$n, $hich $as the true sci#
entific position $ith reference to this su!ject in &C:0, !ut that the
!ill after$ard $as doctored, if 1 may use that term, and 1 use it in no
offensive sense of course 4"
Mr. 3argent interrupte" him an" aske" him what he meant by the
wor" "doctored%"
Mr. 0llison sai": -
"1 said 1 used the $ord in no offensive sense% 1t $as chan"ed after
discussion, and the dollar of J.8 "rains $as su!stituted for it%" -
);ong. 1ecor"# Fol. F# Part 8# Page 1#(HD# 8n" 3ess. CHth
=enera1 =arfiel"# in a speech ma"e at 3pringfiel"# :hio# "uring
the fall of 1DBB#sai": -
"(erhaps 1 ou"ht to !e ashamed to say so, !ut it is the truth to say
that, 1 at that time !ein" Chairman of the Committee on 3ppropri#
ations, and havin" my hands overfull durin" all that time $ith $or*,
1 never read the !ill%
1 too* it upon the faith of a preeminent democrat and a prominent
repu!lican, and 1 do not *no$ that 1 voted at all%
'here $as no call of the yeas and nays, and no!ody opposed that
!ill that 1 *no$ of% 1t $as put throu"h as do2ens of !ills are, as my
friend and 1 *no$, in Con"ress, on the faith of the report of the
chairman of the committee9 therefore 1 tell you, !ecause it is the
truth, that 1 have no *no$led"e a!out it%"
- );ong. 1ecor"# Fol. F# Part 1#Page EDE# 8n" 3ess.# CHth
3enator 6owe# in a speech "eli!ere" in the 3enate on 7ebruary H#
1DBD# sai": -
"/r% (resident, 1 do not re"ard the demoneti2ation of silver as an at#
tempt to $rench from the people more than they a"ree to pay% 'hat
is not the crime of $hich 1 accuse the act of &C:0% 1 char"e it $ith
"uilt compared $ith $hich the ro!!ery of t$o hundred millions is
venal%"- );ong. 1ecor"# Fol. F# Part 1# Page BHC# 8n" 3ess.#
CHth ;ongress*
3enator 4hurman# on the 1Hth of 7ebruary# 1DBD# in "ebate sai":-
"1 can not say $hat too* place in the 5ouse, !ut *no$ $hen the !ill
$as pendin" in the Senate $e thou"ht it $as simply a !ill to reform
the mint, re"ulate coina"e, and fi< up one thin" and another, and
there is not a sin"le man in the Senate, 1 thin*, unless a mem!er of
the committee from $hich the !ill came, $ho had the sli"htest idea
that it $as even a s;uint to$ard demoneti2ation%"
- );ong. 1ecor"# Fol. F# Part 8# Page 1#(JC 8n" 3ess.# CHth
Mr. -elley# a republican member of ;ongress from Pennsyl!ania#
in a speech "eli!ere" in the 6ouse in 1DBE# in speaking of the act
of 7ebruary 18th#1DBA# sai":-
"3ll 1 can say is that the Committee on Coina"e, Wei"hts, and
/easures, $ho reported the ori"inal !ill, $ere faithful and a!le,
and scanned its provisions closely9 that as their or"an 1 reported it9
that it contained provision for !oth the standard silver dollar and
the trade dollar%
Never havin" heard until a lon" time after its enactment into la$ of
the su!stitution in the Senate of the section $hich dropped the
standard dollar, 1 profess to *no$ nothin" of its history9 !ut 1 am
prepared to say that in all the le"islation of this country there is no
mystery e;ual to the demoneti2ation of the standard silver dollar of
the nited States% 1 have never found a man $ho could tell just ho$
it came a!out or $hy%"
- );ong. 1ecor"# Fol. K# Part 1# Page 1#8A1# 1st 3ess.# CJth
Presi"ent =rant was also ignorant of the "emonetization of silN
!er. $ight months after the passage of the bill# he wrote a letter to
Mr. ;ow"rey# from which the following extract is taken:-
"'he panic has !rou"ht "reen!ac*s a!out to a par $ith silver% 1
$onder that silver is not already comin" into the mar*et to supply
the deficiency in the circulatin" medium% When it does come, and 1
predict that it $ill soon, $e $ill have made a rapid stride to$ard
specie payments%
Currency $ill never "o !elo$ silver after that% 'he circulation of sil#
ver $ill have other !eneficial effects%
E<perience has proved that it ta*es a!out forty millions of fractional
currency to ma*e small chan"e necessary for the transaction of the
!usiness of the country% Silver $ill "radually ta*e the place of this
currency, and, further, $ill !ecome the standard of values $hich $ill
!e hoarded in a small $ay% 1 estimate that this $ill consume from
t$o to three hundred millions, in time, of this species of our circu#
latin" medium%
"1t $ill leave the paper currency free to perform the le"itimate func#
tions of trade and $ill tend to !rin" us !ac* $here $e must come at
last, to a specie !asis% 1 confess to a desire to see a limited hoardin"
of money% 1t insures a firm foundation in time of need% +ut 1 $ant to
see the hoardin" of somethin" that has a standard of value the
$orld over%
Silver has this, and if $e once "et !ac* to that our strides to$ard a
hi"her appreciation of our currency $ill !e rapid%
Gur mines are no$ producin" almost unlimited amounts of silver,
and it is !ecomin" a ;uestion, HWhat shall $e do $ith it>H
1 su""est here a solution that $ill ans$er for some years, and su"#
"est to you !an*ers $hether you may not imitate it: 'o put it in cir#
culation no$9 *eep it there until it is a<ed, and then $e $ill find oth#
er mar*ets%"
- )McPherson&s 6an" <ook of Politics for 1DBC# Pages 1AC-
t has been charge" time an" again# that $rnest 3ey"# the emisN
sary of the /on"on money power# was in this country at the time
of the "emonetization of sil!er# an" that he use" the !ast sum of
TH((#((( with which to corrupt ;ongress an" to secure its "eN
:n the A(th of 0ugust# 1DEA# 3enator 3herman# in a speech urN
ging the repeal of the purchasing clause of the 3herman /aw of
Muly 1Cth# 1DE(# took occasion to se!erely "enounce the charge as
utterly false. <ut as e!i"ence that some mysterious influence was
brought to bear upon certain members of ;ongress# we pro"uce
the following language taken from the report upon the bill which
"emonetize" sil!er.
4his report was written by Mr. 6ooper who was in charge of that
bill# an" who was so persistent in engineering its passage through
the 7orty-3econ" ;ongress. 4hat report contains the following
statement+ !iz: -
"'he !ill $as prepared t$o years a"o, and has !een su!mitted to
careful and deli!erate e<amination% 1t has the approval of nearly all
the mint e<perts of the country and the sanction of the Secretary of
the 'reasury% Ernest Seyd, of @ondon, a distin"uished $riter and
!ullionist, is no$ here, and has "iven "reat attention to the su!ject
of mints and coina"e, and after e<aminin" the first draft of the !ill
made various sensi!le su""estions, $hich the committee accepted
and em!odied in the !ill%
While the committee ta*e no credit to themselves for the ori"inal
preparation of this !ill, they have no hesitation in unanimously re#
commendin" its passa"e as necessary and e<pedient%"
6ere is a "irect a"mission that $rnest 3ey"# a citizen of $nglan"#
was in this country at the time that the first steps were taken in
the "rafting of that bill which aime" at the striking "own of the
time-honore" sil!er "ollar# an" the passage of which meant the
"estruction of the !aluable sil!er mines of the ,nite" 3tates# toN
gether with those of Mexico an" 3outh 0merica. Mr. 3ey" was
not here merely as a spectator# as the language of Mr. 6ooper
shows# for he says that this $nglishman#
"3fter e<aminin" the first draft of the !ill made various sensi!le
su""estions, $hich the committee accepted and em!odied in the
t will strike the a!erage 0merican citizen as singular that public
men of the prominence of 3amuel 6ooper an" Mohn 3herman#
members of the 9ational ;ongress# shoul" submit a great measN
ure of such importance as this bill to the inspection an" for the
correction of its pro!isions by an alien who owe" allegiance to
=reat <ritain.
t is a remarkable coinci"ence that foreign nations# especially
$nglan"# shoul" exert such influence in the preparation an" enN
actment of financial measures that came solely within the constiN
tutional powers of an 0merican ;ongress.
4hese striking coinci"ences of the constant meetings an" conN
sultations of 3enator 3herman with the financiers of =reat <riN
tain# from the time of his !isit to /on"on# in 1DJB# "own to the
passage of that infamous act "emonetizing sil!er# were not the
results of mere acci"ent.
t has been affirme"# time an" again# by the ablest 3enators an"
1epresentati!es of ;ongress# statesmen of unblemishe" honor#
that the "emonetization of sil!er in 1DBA was the preme"itate" act
of the combine" money power of $nglan" an" 0merica.
4his charge of a "eeply lai" an" successful conspiracy has been
openly an" fearlessly ma"e in the halls of ;ongress# an" has not
been met an" o!erthrown. 4he ;ongressional 1ecor"s# publishe"
by authority of ;ongress# affor"s ample >ustification for this
t is a historical fact that the financiers of =reat <ritain were
mainly influential in procuring that great change in the coinage
laws of this country# an" 3enator 3herman# who intro"uce" the
first bill pro!i"ing for the "emonetization of sil!er# an" who e!er
since 1DBA has exerte" his immense prestige an" influence
against e!ery measure pro!i"ing for its restoration# in whole or in
part# gi!es most conclusi!e e!i"ence that such was the case.
4o support this statement# we 5uote from his speech "eli!ere" beN
fore the ;hamber of ;ommerce# of 9ew Gork ;ity# March Jth#
1DBJ# in which he ma"e an elaborate argument against the resoluN
tion of that bo"y in fa!or of repealing the 1esumption 0ct of
1DBH. n the course of his remarks# a"!erse to that course of the
;hamber of ;ommerce# he sai": -
"Gur coina"e act came into operation on the &st of 3pril, &C:0, and
constituted the "old one dollar piece the sole unit of value, $hile it
restricted the &e"al tender of the ne$ trade dollar and the half dol#
lar and su!divisions to an amount not e<ceedin" five dollars in one
'hus the dou!le standard previously e<istin" divas finally a!ol#
ished, and the nited States as usual $as influenced !y Dreat +ri#
tain in ma*in" "old coin the only standard%
'his suits En"land, !ut does not snit us%
1 thin* $ith our lar"e silver producin" capacity $e should return to
the dou!le standard, at least in part, and this $ill constitute one of
the means !y $hich $e $ill !e ena!led to resume specie payments%"
- );ong. =lobe# Fol. F# Part 8# Page 1#CD1# 1st 3ess.# CCth
s this not a plain a"mission by the chairman of the 7inance ;omN
mittee of the ,nite" 3tates 3enate# that =reat <ritain ha" wiel"e"
a great influence in procuring the "emonetization of sil!er in
n connection with this "eliberate public a"mission of 3enator
3herman# let it be borne in min" that 3amuel 6ooper state" on
the floor of the 6ouse of 1epresentati!es# that a citizen of $ngN
lan" assiste" in framing the bill which "emonetize" sil!er. 4his
speech of 3enator 3herman was clothe" with official authority#
an" he "istinctly state" that#
"'he dou!le standard previously e<istin" $as finally a!olished, and
the nited States as usual $as influenced !y Dreat +ritain in ma*#
in" "old coin the only standard% 'his suits En"land, !ut does not
suit us%"
n his elaborate a""ress to the lea"ing commercial bo"y of 0merN
ica# Mr. 3herman a!ers that <ritish influence was successful in
securing legislation from an 0merican ;ongress fa!orable to that
country# an" that
"'his suits En"land !ut does not suit us%"
4his is e5ui!alent to a charge of treason against ;ongress an" the
Presi"ent# an" implies corruption+ for what 0merican law-maker#
howe!er base# woul" !oluntarily prostitute his power to the influN
ence of a foreign stateL
6e makes an implie" charge against the patriotism of that party
of which he is a lea"er# for it hel" the presi"ency an" a great maN
>ority of both 6ouses of the 7e"eral legislature at the time the act
which "emonetize" sil!er was place" upon the statute books.
0n" nowhere "uring the "ebates upon that measure "oes he "eN
nounce those whom he alleges !ote" a bill through ;ongress to
"suit En"land9" nowhere ha" he censure" those who were influN
ence" by =reat <ritain. 4he 5uery naturally presents itself - Di"
=reat <ritain influence 3herman to present the bill of Mune Eth#
1DJD# which sought to "emonetize sil!erL Ias that to suit $ngN
Mr. 3herman knew whereof he spoke. t will be remembere" that
the first bill intro"uce" in ;ongress to "emonetize sil!er was that
of the Eth of Mune# 1DJD# an" it came fresh from the han"s of Mr.
7urthermore in his report a"!ocating the passage of this bill# Mr.
3herman state" that "'he sin"le standard of "old is an 3merican
n his a""ress to the ;hamber of ;ommerce he asserts that the
,nite" 3tates was influence" by =reat <ritain in a"opting the
single stan"ar" of gol". 9o li!ing man can reconcile the utterly
inconsistent statements of this allege" statesman. t was "uring
this perio"# beginning with the year 1DJ8 "own to the year 1DBA#
that so many gigantic scan"als smirche" the legislati!e recor" of
During the time co!ere" by these years# the 7e"eral legislature
ga!e away more than 8((#(((#((( acres of the public "omain to
great railway corporations# in a""ition to a gratuity of ,nite"
3tates bon"s to the amount of TJH#(((#(((+ the ;re"it Mobilier
rascality resulte" from an exposure of the corruption of many "isN
tinguishe" members of ;ongress who sol" their !otes outright+
the great whiskey ring was all-powerful# an"# in collusion with
the treasury officials an" re!enue officers# swin"le" the go!ernN
ment out of untol" millions+ the Presi"ent# it is true# or"ere" 3ecN
retary <ristol "'o let no "uilty man escape," an" then he nullifie" all
prosecutions of the scoun"rels by the exercise of his par"oning
power+ <oss 3hepher" reigne" supreme at Iashington+ the
"Salary Dra!" an" "+ac* (ay" schemes of plun"er were brazenly
pushe" through ;ongress# while the 7ree"man&s <ureau robbe"
the negro of his sa!ings.
t woul" re5uire pages to briefly summarize the history of the
congressional an" "epartmental scan"als rife at the national capitN
4he Iashington correspon"ent of that lea"ing republican >ournal#
the ;hicago 4ribune# of the "ate of 7ebruary 81st# 1DBA# thus "eN
scribe" the corruption pre!alent at Iashington.
6e says:
"'ur*ish corruption under the pashas and !eys, or Iussian official
rottenness, could scarcely !e $orse than it is here%"
4he public conscience was so arouse" by these exposures an"
proofs of the boun"less official corruption an" "ebauchery# that#
in the congressional elections of 1DBC the republican party met
with an o!erwhelming "efeat# an" the "emocracy carrie" the
6ouse of 1epresentati!es by a great ma>ority.
mme"iately after the "emonetization of sil!er by the ,nite"
3tates# 9orway# 3we"en# an" Denmark close" their mints to silN
;re"it Mobilier - was a 7rench 7inance 6ouse in!ol!e" in the financing of railways
an" mining interests in the ,.3. an" elsewhere.
!er an" a"opte" the gol" stan"ar". 4he /atin ,nion# howe!er#
still continue" the unlimite" coinage of sil!er for a brief perio".
:n 3eptember Jth# 1DBA# the 7rench go!ernment limite" the
amount of sil!er to be accepte" at the mints for coinage.
4o affor" the rea"er an explanation of the closing of the mints to
sil!er by 7rance# we refer to the great 7ranco-Prussian war of
1DB(-B1# brought on by the folly of $mperor 9apoleon# who# to
restore his waning influence o!er the 7rench nation# "eclare" war
against Prussia# Muly 1Hth# 1DB(.
n the brief perio" of two hun"re" an" ten "ays# the armies of
7rance were "estroye"+ her territory was o!er-run by the !ictoriN
ous =ermans# an" the nation lay prostrate un"er the heel of her
bitterest enemy - Prince <ismarck
n the treaty of peace negotiate" by 4hiers
on behalf of 7rance#
an" <ismarck# on the part of =ermany# the latter succee"e" in imN
posing the most enormous bur"ens upon the 7rench people.
4he treaty of peace as finally agree" upon by 7rance an" =erN
many pro!i"e" that the former shoul" pay the latter the immense
sum of H#(((#(((#((( francs )T1#(((#(((#(((*# in gol" as an inN
"emnity for the expense of the war# payable in three installments#
the last of which woul" fall "ue March 1st# 1DBH.
n the meantime the 7rench authorities were to support a =erman
army of occupation until the money was pai". 9ot satisfie" with
the exaction of this enormous in"emnity# <ismarck compelle" the
7rench to ce"e to the =erman empire the two splen"i" pro!inces
of 0lsace an" /orraine. t is sai" that the !enerable an" patriotic
4hiers she" bitter tears when he signe" this treaty# an" that <isN
marck smile" in "erision at the humiliation of the 7renchman.
0"olphe 4hiers - )1BEB-1DBB* <riefly Presi"ent of 7rance "uring the perio" 1DB1-BA.
,p to the time of this treaty the =erman empire was on a sil!er
basis# but# upon the payment of this enormous war in"emnity#
<ismarck# in the execution of his policy to cripple 7rance as
much as lay in his power# procure" the passage of a law through
the =erman parliament which pro!i"e" for the "emonetization of
4his measure became a law Muly Eth# 1DBA# an" it establishe" a
national gol" stan"ar" throughout =ermany# an" it further
pro!i"e" that the aggregate issue of sil!er coin shoul" not# until
further or"ers# excee" ten marks )T8.H(*# for each inhabitant of
the empire# an" that the sil!er in excess of this amount shoul" be
with"rawn from circulation an" sol".
4he e!i"ent ob>ect of this measure was the enhancement of the
!a1ue of the !ast war in"emnity recei!e" from 7rance# an"# by
throwing a large amount of non-legal ten"er sil!er on the market#
to force "own its price# which# in effect# woul" "epreciate the silN
!er coinage of 7rance an" the other members of the /atin union#
whose mints still remaine" open to the free an" unlimite" coinage
of sil!er at a ratio of fifteen an" one-half to one.
4he shrew" statesmen of 7rance at once penetrate" the scheme of
the wily <ismarck to "ebase the 7rench coinage# an"# therefore#
on the Jth of 3eptember# 1DBA# the 7rench go!ernment in a treasN
ury or"er limite" the amount of sil!er to be accepte" by the
n 7ebruary# 1DBC# the /atin union states >ointly close" their
mints to the free coinage of sil!er# agreeing# howe!er# to coin on
go!ernment account such 5uantities as were fixe" upon from time
to time. 3uch were the reasons that mo!e" 7rance to suspen" the
unlimite" coinage of sil!er.
During the years of 1DJD# 1DJE# 1DB(# 1DB1# 1DB8# an" 1DBA# the
pro"uction of sil!er in the ,nite" 3tates rapi"ly increase"# while
that of gol" largely "iminishe". n the last name" year the proN
"uction of sil!er reache" the great sum of TAH#BH(#(((# to the use
of which as money was "estroye" by the act of 7ebruary 18#
3hortly after the "emonetization of sil!er in the ,nite" 3tates# a
"istinguishe" political economist of $urope urge" this country to
rea"opt the bi-metallic law# an" he forcibly state" that it woul"#
"Not only save the $orld at lar"e from an a!yss, and prevent the
accomplishment of a stupid "eneral crime, $hose authors humanity
$ould some day learn to curse, !ut that she $ould advance her o$n
material interests more than may !e supposed possi!le, and that she
may perchance ta*e the lead in the intelli"ent and prudent or"ani2a#
tion of firm monetary systems%"
4he "estructi!e effects of the "emonetizing act of 1DBA upon the
!alue of property was so great# that 6on. 0lexan"er 3tephens#
one of the ablest an" most conser!ati!e of 0merican statesmen#
"eclare" that it was more "isastrous to the 0merican people than
the total cost an" "estruction of that bloo"y an" protracte" war
between the 9orth an" the 3outh.
6e sai": -
"3 careful calculator told me the other day that shrin*a"e of values
in this country after the fatal act $as more than the $hole e<pense
of our $ar% 'hat fatality $as $orse than $ar%
'here is no remedy for us no$ e<cept in re4esta!lishin" the value of
silver and its free coina"e% We $ant 6?88,888,888 in circulation, at
least% We have no$ only fourteen dollars Hper capitaH
in circula#
tion, includin" all the hoarded "old and silver%
Per ;apita:- 0 latin phrase meaning RPer hea" of populationR# use" most
pre"ominately in terms of economic output.
We $ant at least t$enty4five dollars Hper capitaH, or as much as $e
had !efore the crash of &C:0% (eople fear the silver flood9 1 $ould
let it come from all the $orld until $e have a thousand millions in
4he enormity of this crime# as state" by Mr. 3tephens# can only
be a"e5uately gauge" when it is borne in min" that the cost of the
war of the 1ebellion up to the time that he ma"e that statement
aggregate" TD#(((#(((#(((.
4he process by which the !alue of bon"s an" of public "ebts was
increase" by legislation# both here an" in $urope# an" the !alue
of other property was correspon"ingly "epreciate"# as measure"
by the exchange power of money# was shown by a paper rea" beN
fore the 3ociety of 0rts of /on"on# by M. <arr 1obertson# the
!alue of which was so highly recognize" by the ,nite" 3tates
go!ernment# that it was publishe" on page AHC of the coinage
laws of the ,nite" 3tates.
Mr. 1obertson says: -
"While it $ould ta*e too much space to enter into details re"ardin"
the practical effects of this appreciation of "old, it $ill suffice to
"ive some indication of the enormous injury it has inflicted, if it is
stated that the transfer of $ealth from the landed and propertied
classes and from the mercantile, manufacturin", and producin"
classes "enerally in the nited Vin"dom to the holders of securities,
mort"a"es, annuities, etc%, can not !e less than F.,888,888,888, due
solely to the appreciation of "old%
"1t is already a ;uestion ho$ much further the holders of securities
are to receive the assistance of a continually contractin" currency to
ena!le them to "o on a!sor!in" further and further the $ealth of the
producin" classes%
"1f no other relief can !e o!tained, it may !e necessary to fi< a com#
modity standard instead of a money standard for lon"4dated pay#
ments, as has !een recommended !y the principal economists of the
last hundred years%
"Such a colossal unearned increment as has accrued to the holders
of securities valued in "old durin" the last t$enty years in Europe
and the nited States, amountin" to not less than from
F:,888,888,888 to F?,888,888,888, is entirely unparalleled in the
history of the $orld, and all other pu!lic ;uestions sin* into utter
insi"nificance compared $ith it%"
4hink of itS 4he "emonetization of sil!er by the ,nite" 3tates an"
$urope so enhance" the exchange !alue of gol" o!er other forms
of property that it a""e" T1(#(((#(((#((( to the wealth of the
cre"itor classes of $nglan"+ an" from TAH#(((#(((#((( to
TCH#(((#(((#((( to the accumulations of the cre"itor classes of
$urope an" the ,nite" 3tates.
n speaking of the effects of the "emonetization of sil!er# initiate"
in $nglan" by /or" /i!erpool in 1D1H# later followe" by the
,nite" 3tates an" =ermany# an" in "escribing the artificial inN
crease of the !alue of money o!er all other species of property#
an" in pointing out the class who are the sole beneficiaries of that
infamous system# 3ir Moreton 7rewen well sai": -
"1t may, indeed, !e affirmed $ithout fear of contradiction, the le"is#
lation arran"ed in the interest of a certain class, first !y @ord @iver#
pool in this country, and a"ain !y Sir Io!ert (eel at the insti"ation
of /r% Jones @loyd and other $ealthy !an*ers, $hich $as supple#
mented recently !y simultaneous anti4silver le"islation in +erlin and
Washin"ton at the instance of the "reat financial houses% 'his le"is#
lation has a!out dou!led the !urden of all national de!ts !y an arti#
ficial enhancement of the value of money%
"'he fall of all prices induced !y this cause has !een on such a
scale that $hile in t$enty years the national de!t of the nited
States ;uoted in dollars has !een reduced !y nearly t$o4thirds, yet
the value of the remainin" one4third, measured in $heat, in !ar
iron, or !ales of cotton, is considera!ly "reater, is a "reater demand
on the la!or and industry of the nation than $as the $hole de!t at
the time it $as contracted%
"'he a""ravation of the !urdens of ta<ation induced !y this so4
called "appreciation of "old," $hich is no natural appreciation, !ut
has !een !rou"ht a!out !y class le"islation to increase the value of
"old $hich is in fe$ hands, re;uires !ut to !e e<plained to an en#
franchised democracy, $hich $ill *no$ ho$ to protect itself a"ainst
further attempts to contract the currency and force do$n prices to
the confusion of every e<istin" contract%
"Gf all classes of middle4men, !an*ers have !een !y far the most
successful in interceptin" and appropriatin" an undue share of pro#
duced $ealth% While the modern system of !an*in" and credit may
!e said to !e even yet in its infancy, that portion of the assets of the
community $hich is to4day in the stron" !o<es of the !an*ers,
$ould, if declared, !e an astoundin" revelation of the recent profits
of this particular !usiness9 and not only has the !usiness itself !e#
come a most profita!le monopoly, !ut its interests in a very fe$
hands are diametrically opposed to the interests of the majority%
+y &e"islation intended to contract the currency and force do$n all
prices, includin" $a"es, the price paid for la!or, the money o$ner
has !een a!le to increase the purchase po$er of his soverei"n or
dollar !y the direct diminution of the price of every *ind of property
measured in money%"
;60P4$1 F.
$77:143 4: 1$M:9$4P$ 3/F$1 09D P1$3$1F$ 46$
"3ccordin" to my vie$ers of the su!ject, the conspiracy $hich
seems to have !een formed here and in Europe, to destroy !y le"is#
lation and other$ise, from three4sevenths to one4half, of the metallic
money of the $orld, is the most "i"antic crime of this or any other
- Mohn =. ;arlisle# in 1DBD.
"1t is the mono4metallists $ho are the authors of the depreciation
$hich they point to as a proof of the un$orthiness of the metal they
cry do$n% 'hey resem!le the people $ho, havin" tied the le"s of a
horse, call out for him to !e *illed !ecause he does not "allop%"
- 6enri ;ernushi.
n the prece"ing chapter# the writer faithfully en"ea!ore" to gi!e
a true history of the legislation culmination in the act of 7ebruary
18# 1DBA# which struck "own the stan"ar" sil!er "ollar as the unit
of account.
3tep by step# the money power successfully attaine" its great en"
in the halls of ;ongress# an"# with the "ownfall of sil!er# nothing
apparently stoo" in its way for the complete control of the curN
rency of the nation# an" conse5uently an oppressi!e mastery o!er
all other property.
4he financial legislation# up to this perio"# was "ictate" by the
national banks an" their firm allies# the money len"ers of /onN
;ongress merely registere" the "eman"s of this money power
upon the statute books as the law of the lan".
3ince 0pril 1# 1DBA# we ha!e ascertaine" that a single stan"ar" of
gol" was fastene" upon the nation by the combine" influence of
$nglan" an" her ally - the national banking system.
4he passage of the so-calle" specie resumption act of 1DBH
plante" this country upon a gol" stan"ar"# an" practically ga!e
the banks a monopoly of the currency.
4his was the policy planne" an" mature" by the money power to
place the !ast business interests of the nation upon a bank cre"it
basis as the sole metho" of carrying on all tra"e an" commerce.
4he way was apparently clear to substitute a national bank cre"it
currency in lieu of legal ten"er sil!er an" greenbacks# force al1
business to be tributary to the banks# an" to perpetuate a huge naN
tional "ebt.
4his system of finance was the exact counterpart of that of $ngN
lan" - in fact# it was borrowe" from that country.
4hat the scheme of finance embo"ie" in the national banking act
was importe" from $nglan" by Mohn 3herman - the author of the
original bill pro!i"ing for its creation - is in"isputable.
n one of his reports as 3ecretary of the 4reasury# Mr. 3herman
refers to this fact an" says:
"+oth En"land and the nited States have settled upon a !an* cur#
rency secured !y "overnment !onds%"
4his language of Mr. 3herman# in thus speaking of $nglan" an"
the ,nite" 3tates# signifies a unity of purpose to fasten on this
country the <ritish system.
4o illustrate the immense power of the <ank of $nglan" o!er the
people of =reat <ritain# we 5uote from a report ma"e by the
;hamber of ;ommerce of the ;ity of Manchester# $nglan"# in
1DHE# which says: -
"3lthou"h it scarcely comes $ithin the scope of their present o!ject,
the !oard $ill add a reflection upon the su!ject of the undue priv#
ile"es assumed !y the +an* of En"land%
'hat such a po$er over the property and even over the lives of the
people of this country can !e allo$ed to e<ist is one of the phenom#
ena of our civili2ation%
'hat their directors, t$enty4si< in num!er, can in secret session,
$ithout the consent of their constituents, decide the value of all
property, is to !e re"arded as one of the "reatest crimes a"ainst
modern civili2ation%"
n the face of this in"ictment against the <ank of $nglan"# Mr.
3herman appropriate" its plan as the mo"el of his scheme - the
9ational <anking 0ct of 7ebruary 8H# 1DJA.
0fter the "emonetization of sil!er in 1DBA# the most "isastrous
panic e!er known in history up to that time# swept o!er this counN
try# tens of thousan"s of failures occurre"# entailing losses of hunN
"re"s of millions of "ollars of capital.
4he extent of the loss wrought by that great crash cannot be "eN
scribe" by the language of man. 1esource must be ha" to figures
to con!ey an a"e5uate i"ea of the magnitu"e of the "isaster flowN
ing from this wi"e sprea" ruin an" wreckage of !alues.
n 1DBA# the number of failures was H#1DA# with liabilities of
T88D#H((#(((+ n 1DBC# the failures were H#DA(# an" the liabilities#
T1HH#8AE#(((+ in 1DBH the failures were B#BC(# an" liabilities of
T8(1#(((#(((+ in 1DBJ# the number of failures was E#(E8 with a
loss of T1E1#(((#(((+ in 1DBB# the failures were D#DB8 an" liabilN
ities were T1E(#JJE#(((+ in 1DBD# the failures reache" 1(#CBD
with the !ast aggregate of T8AC#ADA#((( in liabilities - a total of
failures numbering CH#1EH# with liabilities of T1#ll(#E(J#((( - exN
cee"ing the enormous war in"emnity pai" by 7rance to =erN
$xclusi!e of this immense loss to business# the amount of sufferN
ing borne by the people will ne!er be known to the historian.
6un"re"s of thousan"s of skille" an" unskille" workmen were
thrown out of employment# although the crops were abun"ant#
an" the number of consumers was larger than e!er before known.
4hen# for the first time in the history of the ,nite" 3tates# apN
peare" that phenomenon - the 0merican tramp - whose appearN
ance an" permanency# as an establishe" institution in ci!il sociN
ety# is a problem that must be sol!e" some time in the near future.
4hen occurre" an uni!ersal re"uction of wages in all the lea"ing
in"ustries throughout the ,nite" 3tates# an" in many eases skille"
workmen recei!e" a wage of less than one "ollar per "ay. 6unN
"re"s of thousan"s of 0merican citizens# the flower of the in"usN
trial class# struck against these star!ation wages# an" these strikes
sprea" all o!er the ,nite" 3tates# resulting in tumults# riots# an"
bloo"she"# assuming the proportions of a ci!il war.
4he ,nite" 3tates troops were calle" out to put "own the working
men at the point of the bayonet# an" their >ust grie!ances were
5uenche" by the regular army.
t was "uring this perio" that a celebrate" "i!ine# in a sermon "eN
li!ere" from his pulpit# sai": -
"1s not a dollar a day enou"h to !uy !read> Water costs nothin"W
3nd a man $ho cannot live on !read is not fit to live% 3 family may
live, lau"h, love, and !e happy, that eats !read in the mornin" $ith
4he "ata abo!e is containe" in tabular format# an" correctly summe" in the epilogue
as 4able 8.
"ood $ater, and "ood $ater and !read at noon, and $ater and
!read at ni"ht%"
4his humane "iscourse was uttere" by a minister of the gospel
who recei!e" the princely salary of T8H#((( per annum. May
=oul"# the great railroa" wrecker# sai":
"We shall shortly find ourselves livin" under a monarchy% 1 $ould
"ive a million dollars to see Drant in the $hite house%"
4he 9ew Gork 4imes# a republican >ournal# sai": -
"'here seems to !e !ut one remedy, and it must come 4 a chan"e of
o$nership of the soil and the creation of a class of land4o$ners on
the one hand and of tenant farmers on the other 4 somethin" similar
to $hat lon" e<isted in the older countries of Europe%"
6on. M. ;. <urrows# a republican member of ;ongress from
Michigan# ga!e utterance to the following language in a speech
"eli!ere" by him on the 5uestion of finance: -
"'o4day, the !est that could happen to the financial interests and the
!usiness interests $ould !e for Con"ress to pass a la$, at its very
ne<t session, to punish $ith death any mem!er of Con"ress that
$ould ma*e a speech on finance for the ne<t t$enty years% What $e
$ant is to !e let alone, and $e are on the hi"h road to prosperity%"
1e!. Moseph ;ook# of <oston# a "i!ine an" public lecturer# use"
this remarkable language in a speech "eli!ere" by him: -
"'he stron"est of this "eneration $ants a dictator%
1 say come on $ith your schemes of confiscation and forced loans,
and "raded income ta<es, and irredeema!le currency, under univer#
sal suffra"e, and if you are sufficiently fran* in proclaimin" the doc#
trines of your rin"leaders, then, under military necessity, and even
here in the nited States, $e must "et rid of universal suffra"e, and
$e shall%
Iather than allo$ these thin"s $e $ill have one of the fiercest of
civil $ars%"
4he 9e!a"a ;hronicle# the organ of the millionaire 3enator 3harN
on# e"itorially sai": -
"We need a stron"er "overnment% 'he health of the country demands
it% Without capital and capitalists our "overnment $ould not !e
$orth a fi"% 'he capital of the country demands protection9 its
ri"hts are as sacred as the ri"hts of the paupers $ho are continually
of the encroachments of capital and a"ainst centrali2ation%
We have tried Drant, and $e *no$ him to !e a man for the place
a!ove all others% 5e has nerve% 3s (resident he $ould !e command#
er4in4chief of the army and navy, and $hen the communistic tramps
of the country raise mo!s to tear up railroad trac*s, and to sac* cit#
ies on the sham cry of L!read or !lood,H he $ould not hesitate to
turn loose upon them canister and "rape% 'he health of the country
has to !ear the !urden of "overnment and it should contro& it%
'he people are !ecomin" educated up to this theory rapidly, and the
sooner the theory is reco"ni2ed in the constitution and la$s, the !et#
ter it $ill !e for the people%
Without !lood, and rivers of it, there $ill !e no political chan"e of
administration% 'he moneyed interests, for self4preservation, must
sustain the repu!lican party%
'he railroads, the !an*s, and the manufacturers, the heavy import#
ers, and all classes of !usiness in $hich millions are invested, $ill
sustain the supremacy of the repu!lican party%
"'o avert fearful !loodshed, a stron" central "overnment should !e
esta!lished as soon as possi!le%"
Prating - 1esearch re!eals this as the wor" use" by the 3enator - ts usage
accor"ing to my ancient Ia!erley "ictionary# means RprattlingR# Rtalking or
i"ly chattingR.
4hese are but a few of the many expressions of the sentiments enN
tertaine" by a corrupt an" subsi"ize" press# clerical hypocrites#
an" gigantic kna!es.
,nite" 3tates 3enator 3haron was one of the most notorious corN
ruptionists an" libertines that e!er "isgrace" the name of man.
3tatesmen an" financiers of the stamp of =oul" an" 3haron are liN
bels on the human race# an" their influence was a stan"ing menN
ace against the liberties of the people. 4his panic hung o!er the
people like a pall for se!en long years.
4he extent of the suffering throughout the "uration of this panic
is elo5uently expresse" by ;olonel ngersoll# who sai": -
"No man can ima"ine, all the lan"ua"es of the $orld can not e<#
press $hat the people of the nited States suffered from &C:0 to
&C:?% /en $ho considered themselves millionaires found that they
$ere !e""ars9 men livin" in palaces, supposin" they had enou"h to
"ive sunshine to the $inter of their a"e, supposin" that they had
enou"h to have all they loved in affluence and comfort, suddenly
found that they $ere mendicants
$ith !onds, stoc*s, mort"a"es, all
turned to ashes in their hands% 'he chimneys "re$ cold, the fires in
furnaces $ent out, the poor families $ere turned adrift, and the
hi"h$ays of the nited States $ere cro$ded $ith tramps%"
:f course the wise men of that "ay# in their conceit# "isco!ere" a
reason for the panic of 1DBA.
n their learne" "issertations on the origin of this financial breakN
"own# they asserte" that o!er pro"uction was the mo!ing cause
that so fearfully multiplie" failures# threw workmen out of emN
ployment# an" ma"e hun"re"s of thousan"s of men# women# an"
chil"ren feel the pangs of hunger an" star!ation.
Men"icants - :l"4erm from /atin# referring to begging or relying on the charity of
others to sur!i!e.
4he reasoning of these financial wiseacres took the form of the
following syllogism: Panics# want an" star!ation are results of the
pro"uction of large 5uantities of wheat# corn# an" other goo"s. 0t
that "ate the 0merican people pro"uce" immense crops of farm
pro"ucts+ therefore# these immense crops were the cause of panN
ics# bankruptcies# loss of employment# hunger# an" star!ation.
3uch was the theory gra!ely announce" by so-calle" learne" proN
fessors of political economy. 4his "octrine was taken up an"
echoe" in the halls of ;ongress by allege" statesmen# reiterate" in
the press# an" forme" the bur"en of the stump speeches of
"esigning politicians who sought political preferment.
4his absur"# sophistical argument ha" some weight with the unN
thinking. :r"inarily# instances of such suffering that were pre!alN
ent "uring the panic of 1DBA# usually procee"e" from failures of
t is a historical fact that all great panics that ha" occurre" in the
,nite" 3tates up to this time# were "uring perio"s when nature
exerte" herself to the utmost to make bounteous pro!ision for the
wants of man.
4he scarcity of money# the want an" suffering became so great
that# in 1DBJ# the ;hamber of ;ommerce of 9ew Gork ;ity a"opN
te" a resolution urging the imme"iate repeal of the specie 1eN
sumption 0ct of Manuary 8C# 1DBH. t was on this occasion that
Mohn 3herman met with this bo"y# an" ga!e utterance to the stateN
ment 5uote" in the prece"ing chapter that#
"'he nited States as usual $as influenced !y Dreat +ritain in ma*#
in" "old coin the standard%
'his suits En"land !ut it does not suit us%"
:ne great cause of the panic originating in 1DBA# was the natural
result of that financial policy# which ha" persiste" in a long conN
tinue" contraction of the currency# a policy initiate" by 6on.
6ugh Mc;ulloch# who ha" been appointe" 3ecretary of the
4reasury in 1DJH.
,pon his appointment as the hea" of the 4reasury Department# he
at once took measures# in pursuance of the !arious acts of ;onN
gress# to fun" the currency of the nation into interest-bearing
bon"s# an" to create a permanent public "ebt.
,n"er the act of 0pril 18# 1DJJ# the 3ecretary of the 4reasury was
authorize" to exchange interest-bearing bon"s for the notes circuN
lating as money# whether sai" notes were interest-bearing or othN
3ecretary Mc;ulloch# a national banker by profession# procee"e"
to carry out this policy of a merciless contraction of the currency
to the full extent of his power.
0t the time he began this policy of fun"ing the currency into long
time interest-bearing bon"s# the entire !olume of the !arious
notes performing the functions of money amounte" to the sum of
T1#EDA#(((#(((# exclusi!e of gol" an" sil!er coin.
4his !olume of currency consiste" of greenbacks# temporary loan
certificates# one an" two-year treasury notes# certificates of inN
"ebte"ness# postal currency# compoun" interest treasury notes#
fractional currency# B-A( notes of 0ugust an" 3eptember# 1DJC# B-
A( notes of 1DJC-JH# state bank circulation# an" national bank
4he two classes of B-A( treasury notes alone amounte" to
t has been "enie" that these treasury notes circulate" as money#
but =eneral /ogan an" numerous other public men of that "ay#
"eclare" that these notes forme" a !ery material part of the
!olume of currency.
Iith this large !olume of circulation the national banking money
power saw that it was impossible to obtain control of the currency
of the nation.
Money being plentiful# business was transacte" on a cash basis#
an"# therefore# the people were not compelle" to borrow the cirN
culating notes of the national banks at a high rate of interest# an"
thus be place" in the power of these banks.
4hese con"itions were so apparent# that# in his report as 3ecretary
of the 4reasury for the year 1DJH# Mr. Mc;ulloch sai":
"'he country as a $hole, not$ithstandin" the rava"es of $ar and
the drau"ht upon la!or, is !y its "reatly developed resources, far in
advance of $hat it $as in &C7:% 'he people are no$ comparatively
free from de!t%"
6ence it was the policy of the national banking money power# by
this fun"ing of the rea"y cash of the country into bon"s# an" subN
stituting the national bank circulation for the currency issue" by
the go!ernment# to control the business of the nation# an" ultiN
mately the !otes of the people who were obligate" to the banks as
4he national banks "esire" that all business shoul" be "one upon
cre"it+ that this cre"it shoul" be gi!en to them by the go!ernment
in the form of national bank notes# the latter form of currency to
be loane" by the banks to the business interest of the country.
3ecretary Mc;ulloch carrie" out this policy so energetically# an"
contracte" the !olume of legal ten"er currency so rapi"ly# that
strong protests went up from the people# an" on the Ar" of 7ebruN
ary# 1DJD# ;ongress forba"e the further "estruction of the legal
ten"ers# which ha" been re"uce" to TACJ#(((#(((. 4he total conN
traction of all forms of notes circulating as money# reache" the
enormous sum of T1#(((#(((#(((# "uring the a"ministration of
Mr. Mc;ulloch. Ie inclu"e in these last figures# all go!ernment
obligations utilize" as money by the people# whether legal ten"er
or otherwise.
n a speech "eli!ere" in the 3enate in 1DBC# =eneral /ogan state"
that the contraction of the !olume of money up to that time was
more than one billion "ollars
t was this mur"erous policy of contraction# initiate" by 3ecretary
Mc;ulloch an" followe" by his successors# that e!entually le" to
the panic of 1DBA# from which "ates a uni!ersal stagnation of
business lasting se!en long years.
During this panic# the "emocracy was successful in the elections
of 1DBC an" for the first time since 1DJ(# the /ower 6ouse was
controlle" by the party of Mefferson an" Mackson. t was then asN
certaine" that sil!er ha" been "emonetize" by the act of 7ebruary
18# 1DBA# an" the 6ouse at once en"ea!ore" to enact measures to
un"o the wrong.
During the 7orty-fourth ;ongress# which came into existence
March C#1DBH# an" continue" in power until the Cth of March#
1DBB# the Presi"ent was republican. n the 3enate there were CJ
republicans# 8E "emocrats# an" one !acancy. 4he 6ouse of 1epN
resentati!es was compose" of 1DJ "emocrats an" 1(B republicN
ans. 4his ;ongress con!ene" on the Jth of December# 1DBH.
:n March 8B# 1DBJ# the ;ommittee on 0ppropriations brought
forwar" 6ouse bill 8#CH(# which appropriate" money for a "efiN
ciency for the <ureau of engra!ing an" printing# an" section a
pro!i"e" for the issue of subsi"iary sil!er.
Mr. 1eagan# of 4exas# offere" an amen"ment making the tra"e
"ollar legal ten"er for any amount not excee"ing fifty "ollars# an"
the sil!er coins less than one "ollar for any amount not excee"ing
twenty-fi!e "ollars.
4his was agree" to. Geas 18C - ED "emocrats# 8H republicans# 1
in"epen"ent+ nays EC - 8D "emocrats# JH republicans# 1 in"eN
pen"ent. 0s amen"e" the bill passe". Geas 188 -H( "emocrats# B(
republicans# an" 8 in"epen"ents+ nays 1(( - D( "emocrats# 1D reN
publicans# an" 8 in"epen"ents.
4he bill was transmitte" to the 3enate# an" it was referre" to the
7inance ;ommittee# of which Mr. 3herman was chairman.
:n 0pril 1(# 1DBJ# Mr. 3herman# from the 7inance ;ommittee#
reporte" the bill with amen"ments+ one amen"ing section A so as
to authorize the coinage of a sil!er "ollar of C18.D grains - a legal
ten"er not excee"ing twenty "ollars in any one payment except
for customs# "ues# an" interests on public "ebt# an" stoppe" the
coinage of tra"e "ollars.
0nother - a new section C - authorize" the exchange of sil!er "olN
lars for an e5ual amount of ,nite" 3tates notes to be retire"# canN
celle"# an" not reissue"+ an" also for coining sil!er bullion at its
market !alue.
4he amen"e" bill thus reporte" by 3enator 3herman# authorize"
the coinage of a sil!er "ollar of C18.D grains# which# while it
woul" increase its legal ten"er "ebt-paying power from fi!e "olN
lars to twenty "ollars# coul" not be recei!e" for custom "ues# an"
coul" not be utilize" for the payment of interest on the public
4hese sil!er "ollars were to be exchange" for an e5ual amount of
,nite" 3tates notes# which were thus to be permanently retire"
from circulation.
4he propositions of the amen"e" bill# as reporte" by 3enator
3herman# shoul" it become a law# woul" not increase the !olume
of money a single "ollar# for the reason that the sil!er "ollar
woul" be solely use" to retire an e5ual amount of legal ten"er
4he most !icious part of the amen"e" bill was that which limite"
the legal ten"er "ebt-paying power of the sil!er "ollar to twenty
"ollars+ the legal ten"er currency# for which the sil!er "ollars
were to be substitute"# was an unlimite" legal ten"er# except for
"uties on imports an" interest on the public "ebt.
4herefore# the a"option of this measure woul" be the substitution
of a limite" legal ten"er sil!er "ollar for a full legal ten"er curN
rency# lea!ing gol" the sole unlimite" legal ten"er for the payN
ment of all "ebts# public an" pri!ate# inclu"ing "uties on imports
an" interest on the public "ebt.
4he amen"e" bill was "iscusse" in the 3enate# an"# on motion of
Mr. 3herman# sections A an" C of the amen"e" bill were stricken
out# an" that motion carrie" out of the bill the 6ouse amen"ment
offere" by Mr. 1eagan which propose" to make tra"e "ollars legN
al ten"er to the amount of fifty "ollars# which# by the act of 7ebN
ruary 18# 1DBA# were limite" to fi!e "ollars for any one payment.
<y this parliamentary "e!ice with the 6ouse bill# Mr. 3herman
succee"e" in killing that measure# the passage of which woul"
ha!e conferre" an enlarge" "ebt-paying power on the tra"e "ollar.
:n Mune 1(# 1DBJ# Mr. 3. 3. ;ox# from the ;ommittee on <ankN
ing an" ;urrency# reporte" a >oint resolution to issue the sil!er
coins in the 4reasury to an amount not excee"ing T1(#(((#((( in
exchange for an e5ual amount of legal ten"er notes# to be kept as
a special fun"# to be reissue" only upon the retirement of fracN
tional currency+ which was passe" without a "i!ision.
Mune 81# 1DBJ# in the 3enate# the 6ouse >oint resolution was
amen"e" by a""ing a section prohibiting the coinage of the tra"e
"ollar except for export tra"e+ thus striking "own the tra"e "ollar#
the only "ollar authorize" by the coinage law of 1DBA.
0gain# the fine talian han" of the money power was !isible in
the 3enate amen"ment to this >oint resolution.
:n Mune 1(# 1DBJ# Mr. ;ox# from the ;ommittee on <anking an"
;urrency# reporte" a resolution in three sections# pro!i"ing for an
increase" coinage of sil!er. t was passe" without "i!ision# an"
was transmitte" to the 3enate.
n the 3enate Mune 8B# 1DBJ# the bill was consi"ere" on the report
of the 7inance ;ommittee to strike out all after the enacting
clause an" insert four new sections. 4his was a substitute proN
pose" by the 3enate ;ommittee on 7inance# hea"e" by the "istinN
guishe" senior 3enator from :hio.
3ection 1 pro!i"e" for the coinage of sil!er "ollars of C18.D
grains# to be legal ten"er for sums not excee"ing twenty "ollars.
3ection 8 pro!i"e" for exchanging such "ollars an" minor coins
for legal ten"ers to be cancele" an" not reissue" or replace".
3ection A pro!i"e" for purchasing sil!er bullion at market rates
for such coinage# to be ma"e without loss in coinage an" issue.
3ection C# prohibiting legal ten"er of the tra"e "ollar an" limiting
its coinage to export "eman". 4his was before the law of Muly 88#
1DBJ# ha" been enacte".
0gain the scheme to substitute a limite" legal ten"er sil!er "ollar
for ,nite" 3tates notes an" treasury notes was brought forwar" in
these amen"ments.
4he continue" efforts of the 3enate to retire permanently the go!N
ernment legal ten"er notes were a part of the plan of the national
banking money power to force the business of the country to be
transacte" by a cre"it money.
4his bill also aime" at the coinage of sil!er on go!ernment acN
count alone# hence# shoul" the sil!er so coine" out of the bullion
purchase" by the go!ernment "ecline in bullion !alue as comN
pare" with gol"# the national banking money power woul" "eN
man" that the sil!er "ollar be re"eeme" in gol".
t furthermore took away all legal ten"er "ebt-paying power of
the tra"e "ollar# an" limite" its coinage to export "eman".
:n Mune 8D# 1DBJ# 3enator <ogy mo!e" to amen" section x of the
3enate bill by striking out the wor"s R9ot excee"ing twenty "olN
lars#R the effect of which woul" be to make the sil!er "ollar a full
legal ten"er for the payment of all "ebts. 4he amen"ment was
agree" to by a !ote of 1D to 1C.
:n Mune 8E# 1DBJ# the bill as amen"e" was recommitte" to the
7inance ;ommittee# where it slept the sleep that knows no wakN
:n Muly 1E# 1DBJ# in the 6ouse of 1epresentati!es# Mr. <lan"#
from the ;ommittee on Mines an" Mining# reporte" resolution
A#JAH# authorizing the free coinage of gol" an" sil!er.
4his resolution was carrie" o!er to the next session of ;ongress#
an"# on December 1A# 1DBJ# Mr. <lan" offere" a substitute for the
resolution of Muly 1E# 1DBJ# which pro!i"e" for the free an" unN
limite" coinage of the sil!er "ollar of C18U grains# with full legN
al ten"er power.
4his substitute# which restore" sil!er to the position it occupie"
prior to 1DBA# was passe" by a !ote of 1JD yeas to HA nays. t was
sent to the republican 3enate# referre" to the 7inance ;ommittee
where it was smothere" by Mohn 3herman.
:n 0ugust 1H# 1DBJ# a >oint resolution was a"opte" by ;ongress
which pro!i"e" for the creation of a Monetary ;ommission#
"'o consist of three Senators, to !e appointed !y the Senate, three
mem!ers of the 5ouse of Iepresentatives, to !e appointed !y the
Spea*er, and e<perts not e<ceedin" three in num!er, to !e selected
!y and associated $ith them%"
;ongress instructe" the commission to make an examination into
the money 5uestion# an" to gi!e its opinion as to
"'he !est means for providin" for facilitatin" the resumption of
specie payments%"
:n March 8# 1DBB# the commission ma"e its report# or more
strictly speaking# se!eral reports.
4he ma>ority report signe" by fi!e of its members# ga!e a history
of the bi-metallic laws in force pre!ious to 1DBA# together with
their effects on the !alue of commo"ities# tra"e# an" commerce#
an"# as its conclusion# a"!ocate" an imme"iate return to the bi-
metallic stan"ar" of sixteen to one.
n speaking of the effect of the !olume of money on !alues# an"
the baleful influences of falling prices on society# the ma>ority reN
port says: -
"3t the Christian era the metallic money of the Ioman empire
amounted to 6&,C88,888,888% +y the end of the fifteenth century it
had shrun* to less than 6.88,888,888% Aurin" this period a most e<#
traordinary and !aleful chan"e too* place in the condition of the
$orld% (opulation d$indled, and commerce, arts, $ealth, and free#
dom all disappeared%
"'he people $ere reduced !y poverty and misery to the most de#
"raded conditions of serfdom and slavery% 'he disinte"ration of so#
ciety $as almost complete%
"'he conditions of life $ere so hard that individual selfishness $as
the only thin" consistent $ith the instinct of self4preservation% 3ll
pu!lic spirit, all "enerous emotions, all the no!le aspirations of man
shriveled and disappeared as the volume of money shrun* and as
prices fell%
"5istory records no such disastrous transition as that from the Io#
man empire to the dar* a"es% Uarious e<planations have !een "iven
of this entire !rea*in" do$n of the frame$or* of society, !ut it $as
certainly coincident $ith the shrin*a"e in the volume of money,
$hich $as also $ithout historical parallel
'he crum!lin" of institutions *ept even step and pace $ith the
shrin*a"e in the stoc* of money and the fallin" of prices% 3ll other
attendant circumstances than these last have occurred in other his#
torical periods unaccompanied and unfollo$ed !y any such mi"hty
"1t is a su""estive coincidence that the first "limmer of li"ht only
came $ith the invention of !ills of e<chan"e and paper su!stitutes,
throu"h $hich the scanty stoc* of the precious metals $as increased
in efficiency%
+ut not less than the ener"i2in" influence of (otosi
and all the ar#
"osies of treasure from the ne$ $orld $ere needed to arouse the old
$orld from its comatose sleep, to ;uic*en the torpid lim!s of in#
dustry, and to plume the leaden $in"s of commerce%
"1t needed the heroic treatment of risin" prices to ena!le society to
reunite its shattered lin*s, to sha*e off the shac*les of feudalism, to
reli"ht and uplift the almost e<tin"uished torch of civili2ation%
'hat the disasters of the dar* a"es $ere caused !y decreasin"
money and fallin" prices, and that the recovery therefrom and the
Potosi - 0 city in <oli!ia# one of the highest in the worl"# an" the site of the
3panish colonial mint pro"ucing sil!er from the 1Jth ;entury to this "ay.
comparative prosperity $hich follo$ed the discovery of 3merica
$ere due to an increasin" supply of the precious metals and risin"
prices, $ill not seem surprisin" or unreasona!le $hen the no!le
functions of money are considered%
/oney is the "reat instrument of association, the very fi!er of social
or"anism, the vitali2in" force of industry, the protoplasm of civili2a#
tion, and as essential to its e<istence as o<y"en is to animal life%
Without money, civili2ation could not have had a !e"innin"9 $ith a
diminishin" supply it must lan"uish, and, unless relieved, finally
4he report sets out the reason why sil!er was "emonetize" in
t says: -
"/anifestly the real reason for the demoneti2ation of silver $as the
apprehension of the creditor classes ,money lendin" classes- that
the com!ined production of the t$o metals $ould raise prices and
cheapen money unless one of them $as shorn of the money function%
1n Europe this reason $as distinctly avo$ed%"
4his conclusion has been abun"antly !erifie"# in as much as
e!ery attempt ma"e by ;ongress for the restoration of sil!er as
legal ten"er money has been "enounce" as a scheme to rob the
public cre"itors - a charge which has been reiterate" thousan"s of
times in the press# in the halls of ;ongress an" elsewhere.
Professor <owen# of Massachusetts# an" 1epresentati!e =ibson
han"e" in a minority report# in which it was state" that e!ery atN
tempt ma"e pre!ious to 1DBA to establish a "ouble stan"ar" "has
!een a total failure%"
3enator <outwell# in his minority report as a member of the comN
mission# state" his conclusions in effect as follows+ he sai": -
"3 successful use of "old and silver simultaneously in any country
can !e effected only !y their consolidation upon an a"reed ratio of
value, or !y the concurrence of the commercial nations of the
6e# therefore# a"!ocate" a postponement of the free coinage of
sil!er by the ,nite" 3tates#
"ntil the effort to secure the cooperation of other nations has !een
faithfully tried%"
:n the Cth of March# 1DBB# 1utherfor" <. 6ayes was inaugurate"
Presi"ent of the ,nite" 3tates. 6e was the beneficiary of that
frau" - the 1eturning <oar" of /ouisiana. n the formation of his
cabinet he selecte" Mohn 3herman for the responsible post of 3ecN
retary of the 4reasury.
During the time he was at the hea" of that great "epartment# the
national banking money power became more imperious in its "eN
man"s upon the go!ernment. 4he ,nite" 3tates 4reasury was
ma"e wholly subser!ient to the clearing house of 9ew Gork ;ity.
4he immense resources of the 4reasury were practically place" at
the "isposal of the banks# which fact became so notorious# that
,nite" 3tates 3enator Mames <. <eck an" other members of ;onN
gress "enounce" 3ecretary 3herman for bestowing such munifiN
cent fa!ors upon a few great banks.
During the session of the 7orty-fifth ;ongress# which came into
power March C# 1DBB# an" which was in control until March C#
1DBE the Presi"ent was republican+ the 6ouse was "emocratic by
a !ote of 1HJ to 1AJ+ the 3enate consiste" of AE republicans# AJ
"emocrats an" 1 in"epen"ent. n the first or calle" session of the
7orty-fifth ;ongress# 9o!ember H# 1DBB# Mr. <lan"# of Missouri#
intro"uce" a bill in the 6ouse of 1epresentati!es entitle"#
"3n act to authori2e the free coina"e of the standard silver dollar
and to restore its le"al tender character%"
4he text of the bill was as follows: -
"+e it enacted !y the Senate and 5ouse of Iepresentatives of the
nited States of 3merica in Con"ress assem!led,
'hat there shall !e coined at the several mints of the nited States,
silver dollars of the $ei"ht of J&.U "rains troy of standard silver,
as provided in the act of January &C, &C0:, on $hich shall !e the
devices and superscriptions provided !y said act9 $hich coins, to#
"ether $ith all silver dollars heretofore coined !y the nited States
of li*e $ei"ht and fineness, and shall !e a le"al tender, at their nom#
inal value, for all de!ts and dues, pu!lic and private, e<cept $here
other$ise provided !y contract9 and any o$ner of silver !ullion
may deposit the same at any nited States coina"e mint or assay of#
fice, to !e coined into such dollars, for his !enefit, upon the same
terms and conditions as "old !ullion is deposited for coina"e under
e<istin" la$s%
"Section .% 3ll acts and parts of acts inconsistent $ith the provisions
of this act are here!y repealed%"
4he rules were suspen"e" by a !ote of 1JC yeas to AC nays# an"
the bill was passe" an" transmitte" to the 3enate.
:n 9o!ember 81# 1DBB# Mr. 0llison# from the 7inance ;ommitN
tee# reporte" the bill to the 3enate with amen"ments to strike out
the clause beginning - "3nd any o$ner of silver !ullion," an" to inN
sert in lieu thereof a purchasing clause# an" to a"" a section for
an international monetary conference.
7rom 1DJ8 up to 1DBH# the legislation of ;ongress ten"e" wholly
for the benefit of the $ast. 0lmost e!ery lair was enacte" with the
!iew of gi!ing the 9ew $nglan" states# 9ew Gork# an"
Pennsyl!ania a great prepon"erance o!er the rest of the nation+
exorbitant tariffs were le!ie" on importe" goo"s for the benefit of
$astern manufacturers# the bur"ens of which fell upon the conN
sumer+ foreign contract labor laws were a"opte" to affor" these
highly-protecte" manufacturers an abun"ant supply of cheap
labor as a means for crushing the !arious labor organizations+
out of the billions of money appropriate" by ;ongress "uring that
perio"# by far the greater portion was expen"e" in those few
states lying along the 0tlantic+
eastern corporations recei!e" subsi"ies of public money to the
amount of millions+ the great railway corporations# bur"ene" with
liabilities far excee"ing their assets# robbe" the west an" south of
hun"re"s of millions of "ollars by the imposition of hea!y transN
portation charges# an" these railways were owne" by $astern capN
italist+ while the rich sil!er mines of the Iest were practically
ren"ere" !alueless by the "emonetization of sil!er.
During the "ebate in the 3enate on this sil!er bill# 6on. Mohn M.
ngalls# a republican 3enator from -ansas# in a speech "eli!ere"
on the 1Cth of 7ebruary# 1DBB# use" the following strong lanN
guage: -
"1f !y any process all !usiness $ere compelled to !e transacted on a
coin !asis, and actual specie payments should !e enforced, the
$hole civili2ed $orld $ould !e !an*rupt !efore sunset%
'here is not coin enou"h in e<istence to meet in specie the one4thou#
sandth part of the commercial o!li"ations of man*ind% Specie pay#
ments, as an actual fact, $ill never !e resumed, neither in "old nor
silver in January, &C:?, nor at any other date, here nor else$here%
'he pretense that they $ill !e is either dishonest or delusive%"
4he 3enator in the same speech points to the fact that the $astern
section of the country ha" subor"inate" all 7e"eral legislation to
their "eman"s# he thus arraigns the gree" of the $ast: -
"'he Senator from Wisconsin $as ri"ht% 1t is not the east a"ainst the
"1t is the east a"ainst the $est and south com!ined% 1t is the corn
and $heat and !eef and cotton of the country a"ainst its !onds and
its "old9 its productive industry a"ainst its accumulations%
1t is the men $ho o$n the pu!lic de!t a"ainst those $ho are to pay
it, if it is to !e paid at all% 1f the !onds of this "overnment are ever
paid, they $ill !e paid !y the la!or of the country, and not !y its
'hey are e<empt from ta<ation and !ear none of the !urdens of soci#
"'he alliance !et$een the $est and the south upon all matters af#
fectin" their material $elfare hereafter is inevita!le% 'heir interests
are mutual and identical% With the removal of the causes of political
dissension that have so lon" separated them, they must coalesce,
and united they $ill !e invinci!le%
'he valleys of the /ississippi and /issouri, $ith their tri!utaries,
form an empire that most have a homo"eneous population and a
common destiny from the )ello$stone to the Dulf%
"'hese "reat communities have !een alienated !y factions that have
estran"ed them only to prey upon them and to maintain political su#
premacy !y their separation%
nfriendly le"islation has imposed intolera!le !urdens upon their
ener"ies9 invidious discriminations have !een made a"ainst their
products9 unjust tariffs have repressed their industries%
While vast appropriations have !een made to protect the har!ors of
the 3tlantic, and to erect !eacons upon every headland to $arn the
mariner $ith silent admonition from the "merchant4marrin" roc*s,"
the /ississippi $as left cho*ed $ith its driftin" sands Htil the darin"
"enius of Eads
undertoo* the "i"antic la!or of compellin" the
"reat stream to dred"e its o$n channel to the sea%
$a"s: - Mames <uchanan $a"s - 1D81-1DDB# 3cientist# $ngineer# 7inancier an"
<usinessman. Designe" an" built the worl"&s first steel bri"ge# an" built prominances
"esigne" to "eepen the channels in the ri!er Mississippi.
'he openin" of this avenue of commerce mar*s the epoch of the
emancipation of the $est and south from their !onda"e to the capit#
al of the east%
1n as*in" the passa"e of this !ill they are as*in" less than they $ill
ever as* a"ain%
When 1 reflect upon the !urdens they have !orne, the $ron"s they
have suffered, 1 am astonished at theirH moderation%"
4he charges ma"e by Mr. ngalls against the cupi"ity of the $ast
were true# an" at the same time it was a bitter con"emnation of
the recor" of the republican party.
During the same speech on this bill# the brilliant -ansan ha" reN
course to metaphor to upbrai" those who a"!ocate" a single
stan"ar" of gol"# an" at the same time he pai" a glowing tribute
to the monetary properties of the sil!er "ollar as the money of the
6e sai": -
"No endurin" fa!ric of national prosperity can !e !uilded on "old%
Dold is the money of monarchs9 *in"s covet it, the e<chan"es of na#
tions are effected !y it% 1ts tendency is to accumulate in vast masses
in the commercial centers, and to move from *in"dom to *in"dom in
such volumes as to unsettle values and distur! the finances of the
$orld% 1t is the instrument of "am!lers and speculators, and the idol
of the miser and the thief%
+ein" the o!ject of so much adoration, it !ecomes hau"hty and
sensitive and shrin*s at the approach of dan"er, and $henever it is
most needed it al$ays disappears% 3t the sli"htest alarm it !e"ins to
loo* for a refu"e% 1t flies from the nation at $ar to the nation at
peace% War ma*es it a fu"itive%
"No people in a "reat emer"ency ever found a faithful ally in "old%
1t is the most co$ardly and treacherous of all metals% 1t ma*es no
treaty that it does not !rea*% 1t has no friend $hom it does not soon#
er or later !etray%
3rmies and navies are not maintained !y "old% 1n times of panic and
calamity, shift and disaster, it !ecomes the chief a"ent and minister
of ruin%
No nation ever fou"ht a "reat $ar !y the aid of "old% Gn the con#
trary, in the crisis of "reater peril it !ecomes an enemy more potent
than the foe in the field9 !ut $hen the !attle is $on and peace has
!een secured, "old reappears and claims the fruits of victory% 1n our
o$n civil $ar it is dou!tful if the "old of Ne$ )or* and @ondon did
not $or* us "reater injury than the po$der and lead and iron of the
1t $as the most invinci!le enemy of the pu!lic credit%
Dold paid no soldier nor sailor% 1t refused the national o!li"ation% 1t
$as $orth most $hen our fortunes $ere lo$est% Every defeat "ave it
increased value% 1t $as in open alliance $ith our enemies the $orld
over, and all its ener"ies $ere evo*ed for our destruction% +ut as
usual $hen dan"er has !een averted and the victory secured, "old
s$a""ers to the front and asserts the supremacy%
+ut silver is the money of the people%
1t is the money of $a"es and retail% 1ts tendency is to$ard diffusion
and dissemination% 1t enters into the minute concerns of traffic, and
is e<chan"ed day !y day for daily !read% 1t penetrates the remotest
channels of commerce, and its a!undance, !ul*, and small su!divi#
sions prevents its deportation in sufficient amount to distur! or un#
settle values%
1f it retires at the approach of dan"er, or from the presence of an in#
ferior currency, it still remains at home ready to respond to the first
summons for its return%"
4he characteristics which he attributes to gol" in this beautiful
figure of speech# were those which belonge" to its owners# an"
thus he scathingly "enounce" the gree" of the gol" gamblers an"
bullion brokers of the $ast# who# "uring the war# re>oice" at e!ery
re!erse of the northern armies# for# with the sinking of the forN
tunes of the ,nion cause# the more !aluable became gol" proporN
4he sil!er bill as amen"e" by the 3enate was returne" to the
6ouse for concurrence an" passage. 4he manner in which the
6ouse bill was mutilate" by the 3enate arouse" the anger of the
6ouse# an" a fierce "ebate arose between the frien"s of sil!er an"
its opponents.
3ome of those who most strongly oppose" the bill as a concesN
sion to the Iest an" 3outh were men who were notorious for the
scan"als that blackene" their reputations as public men.
4hose members of ;ongress# who oppose" the remonetization of
sil!er in any form whate!er# ha"# in their past careers# shown a
remarkable inclination for ;re"it Mobilier stock# an" other corN
rupt "eals which ha" so "eeply "isgrace" prece"ing ;ongresses.
Get these ;re"it Mobilier statesmen were the ones who prate" the
lou"est for the "pu!lic credit," "the pu!lic faith," an" "honest
money%" t was 3atan preaching against sin.
0mong other powerful a"!ocates of the coinage of sil!er me
Mohn =. ;arlisle# who was recognize" on the floor of the 6ouse
as its ablest logician. Mr. ;arlisle charge" that the "emonetization
of sil!er was brought about by a conspiracy of the money power.
6e sai": -
"1 *no$ that the $orldHs stoc* of precious metals is none too lar"e,
and 1 see no reason to apprehend that it $il& ever !e so% /an*ind
$ill !e fortunate indeed if the annual production of "old and silver
coin shall *eep pace $ith the annual increase of population, com#
merce, and industry%
"3ccordin" to my vie$s of the su!ject, the conspiracy $hich seems
to have !een formed here and in Europe to destroy !y le"islation
and other$ise from three4sevenths to one4half of the metallic money
of the $orld is the most "i"antic crime of this or any other a"e%
"'he consummation of such a scheme $ould ultimately entail more
misery upon the human race than all the $ars, pestilences, and fam#
ines that ever occurred in the history of the $orld%
"'he a!solute and instantaneous destruction of half the entire mov#
a!le property of the $orld, includin" houses, ships, railroads and
other appliances for carryin" on commerce, $hile it $ould !e felt
more sensi!ly at the moment, $ould not produce anythin" li*e a
prolon"ed distress and disor"ani2ation of society that must inevit#
a!ly result from the permanent annihilation of one4half the metallic
money of the $orld%"
4his terrific arraignment of the money power was followe" by an
appeal to the 6ouse# in which he a"!ise" the blocking of the
wheels of go!ernment by a refusal to appropriate money for its
support shoul" the Presi"ent !eto the bill.
6e sai": -
" 'he stru""le no$ "oin" on cannot cease, and ou"ht not to cease,
until all the industrial interests of the country are fully and finally
emancipated from the heartless domination of syndicates, stoc* e<#
chan"es, and other "reat com!inations of money "ra!!ers in this
country and in Europe%
@et us, if $e can do no !etter, pass !ill after !ill, em!odyin" in each
some su!tantia& provision for relief, and send them to the e<ecutive
for his approval%
1f he $itholds his si"nature, and $e are una!le to secure the neces#
sary vote, here or else$here, to enact them into la$s not$ithstand#
in" his veto, let us, as a last resort, suspend the rules and put them
into the "eneral appropriation !ills, $ith the distinct understandin"
that if the people can "et no relief the "overnment can "et no
0fter a long "ebate the 6ouse finally ac5uiesce" in the senate
amen"ments. t was the bill as amen"e" by the 3enate or nothing#
for at that time the upper house was the stronghol" of the money
grabbers# syn"icates# an" combinations of capital# whose gree"
was so se!erely "enounce" in the powerful speech of Mr. ;arlN
4he bill as amen"e" by the 3enate finally passe" both houses#
an" was presente" to Presi"ent 6ayes# who returne" it to the
6ouse with his !eto an" a message stating his reasons for refusN
ing to sign the measure.
n his !eto message# the Presi"ent states that one of the reasons
why the bill "oes not meet his appro!al arose from the fact that
the propose" "ollar woul" be worth but ninety or ninety-two
cents# as compare" with the stan"ar" gol" "ollar.
t will be remembere" that the sole reason a"!ance" by Mohn
3herman# at this time 3ecretary of the 4reasury# for the "emonetN
ization of the sil!er "ollar in 1DJD an" subse5uent years# was# that
the sil!er "ollar was more !aluable than the gol" "ollar.
Presi"ent 6ayes# an" presumably his 3ecretary of the 4reasury#
urge" as a reason for the !eto of this bill pro!i"ing for the coinN
age of sil!er# that it was worth less than the gol" "ollar.
4he Presi"ent says: -
"'he ri"ht to pay duties in certificates for silver deposits $ill, $hen
they are issued in sufficient amount to circulate, put an end to the
receipt of revenues in "old, and thus compel the payment of silver
for !oth the principal and interest on the pu!lic de!t%"
'he future receipts of revenues have sho$n that this prophecy of
(resident 5ayes fell to the "round% 3fter the passa"e of this !ill over
his veto, the volume of "old in circulation and in the !an*s in#
creased in the course of a fe$ years to many millions of dollars%
4he Presi"ent further says: -
"'he standard of value should not !e chan"ed $ithout the consent
of !oth parties to the contract% National promises should !e *ept
$ith unflinchin" fidelity%
"'here is no po$er to compel a nation to pay its just de!ts% 1ts credit
depends on its honor%
"'he nation o$es $hat it has led or allo$ed its creditors to e<pect% 1
cannot approve a !ill $hich, in my jud"ment, authori2es the viola#
tion of sacred o!li"ations%
"'he o!li"ation of pu!lic faith transcends all ;uestions of profit or
pu!lic advanta"e%
"1ts un;uestiona!le maintenance is the dictate as $ell of the hi"hest
e<pediency as of the most necessary duty, and should ever !e care#
fully "uarded !y the e<ecutive, !y con"ress, and !y the people%"
4his plea for the poor bon" hol"er# that noble patriot who originN
ally bought bon"s as low as thirty-fi!e cents on the "ollar# bearN
ing gol" interest the e5ui!alent in currency to eighteen per cent.#
payable a year in a"!ance# an" use" by him as loa"e" "ice to
gamble on the public cre"it# was the clear ob>ect of the Presi"ent&N
s solicitu"e.
4he bon" hol"ers who secure" the passage of the ;re"it 3trengthN
ening 0ct of March 1D# 1DJE an act which enhance" the !alue of
his bon"s enormously# ha" become sacre" in the eyes of the weak
4he !eto message of the Presi"ent angere" ;ongress# an"# on the
same "ay# it ro"e rough sho" o!er his !eto by more than the neN
cessary two-thir"s !ote# an" the bill became a lair on the 8Dth "ay
of 7ebruary# 1DBD.
4o enable the rea"er to fully un"erstan" the coinage law of 1DBD#
we incorporate the text of the act in full.
t is as follows+ !iz.: -
"3n act to authori2e the coina"e of the standard silver dollar, and to
restore its le"al tender character%
"+e it enacted, etc, 'hat there shall !e coined, at the several mints
of the nited States, silver dollars of the $ei"ht of J&.U "rains troy
of standard silver, as provided in the act of January &C, &C0:, on
$hich shall !e the devices and superscriptions provided !y said act9
$hich coins, to"ether $ith all silver dollars heretofore coined !y the
nited States, of li*e $ei"ht and fineness, shall !e a le"al tender, at
their nominal value, for all de!ts and dues, pu!lic and private, e<#
cept $here other$ise e<pressly stipulated in the contract%
"3nd the secretary of the treasury is authori2ed and directed to pur#
chase, from time to time, silver !ullion at the mar*et price thereof,
not less than 6.,888,888 $orth per month nor more than 6J,888,888
$orth per month, and cause the same to !e coined monthly, as fast
as so purchased, into such dollars9
and a sum sufficient to carry out the fore"oin" provision of this act
is here!y appropriated out of any money in the treasury not other#
$ise appropriated%
"3nd any "ain or sei"niora"e
arisin" from this coina"e shall !e
accounted for and paid into the treasury, as provided under e<istin"
la$s relative to the su!sidiary coina"e:
(rovided, 'hat the amount of money at any one time invested in
such silver !illion, e<clusive of such resultin" coin, shall not e<ceed
67,888,8889 3nd provided further, 'hat nothin" in this act shall !e
construed to authori2e the payment in silver of certificates of depos#
it issued under the provisions of section .7J of the Ievised Statutes%
"Section .% 'hat immediately after the passa"e of this act the (res#
ident shall invite the "overnments of the countries comprisin" the
@atin union, so called, and of such other European nations as he
may deem advisa!le, to join the nited States in a conference to ad#
opt a common ratio !et$een "old and silver, for the purpose of es#
ta!lishin", internationally, the use of !i4metallic money and secur#
in" fi<ity of relative value !et$een those metals, such conference to
!e held at such place, in Europe or the nited States, at such time
$ithin si< months, as may !e mutually a"reed upon !y the e<ecut#
ives of the "overnments joinin" in the same, $henever the "overn#
3eigniorage - the "ifference between the !alue of the currency pro"uce"# an" the cost
to pro"uce it )i.e. the bullion costs X minting/coining costs*
ments so invited, or any three of them, shall have si"nified their
$illin"ness to unite in the same%
"'he (resident shall, !y and $ith the advice and consent of the sen#
ate, appoint three commissioners, $ho shall attend such conference
on !ehalf of the nited States, and shall report the doin"s thereof to
the (resident, $ho shall transmit the same to con"ress%
"Said commissioners shall each receive the sum of 6.7,888 and
their reasona!le e<penses, to !e approved !y the secretary of state,
and the amount necessary to pay such compensation and e<penses
is here!y appropriated out of any money in the treasury not other#
$ise appropriated%
"Section 0% 'hat any holder of the coin authori2ed !y this act may
deposit the same $ith the treasurer or any assistant treasurer of the
nited States, in sums not less than ten dollars, and receive therefor
certificates of not less than ten dollars each, correspondin" $ith the
denominations of the nited States notes%
"'he coin deposited for or representin" the certificates shall !e re#
tained in the treasury for the payment of the same on demand% Said
certificate shall !e receiva!le for customs, ta<es, and all pu!lic
dues, and, $hen on received, may !e reissued%
"Section J% 3ll acts and parts of acts inconsistent $ith the provisions
of this act are here!y repealed%"
0 comparison "rawn between the pro!isions of the original bill
intro"uce" by Mr. <lan" an" passe" by the 6ouse# an" those of
the act of 7ebruary 8Dth# will be instructi!e.
4he 6ouse bill was a free coinage measure# an" it place" sil!er as
a money metal on the same footing as gol". t propose" to restore
sil!er to the same position which it hel"# in law# prior to its "eN
monetization in 1DBA. 7ree coinage of gol" create" an unlimite"
"eman" for it as money.
,n"er free coinage# the owner of gol" bullion ha" the right of
entry to any mint of the ,nite" 3tates# he coul" ha!e his bullion
transforme" into gol" coin without charge# an" returne" to him as
full legal ten"er money.
4herefore# the law which conferre" the right of free coinage upon
the owner of gol" bullion create" an unlimite" "eman" of the use
of that precious metal as money+ the =o!ernment ha" ne!er reN
stricte" the amount of gol" coinage.
7ree an" unlimite" coinage of sil!er likewise woul" ha!e create"
a "eman" for it as money as extensi!e as its pro"uction. n all
ages# the chief use of the precious metals arose from their utility
as a me"ium of exchange - money. 4he "eman" for the use of
those metals has always excee"e" their supply.
<y the <lan"-0llison lair# the coinage of sil!er "ollars was limN
ite"# an" that coinage was on =o!ernment account alone.
0t the time of the passage of the <lan"-0llison law# the pro"ucN
tion of sil!er from the mines of the ,nite" 3tates amounte" to
more than TCH#(((#((( for that year. 3ince the "emonetization of
sil!er in 1DBA# its total pro"uction in the ,nite" 3tates amounte"
to T81(#(((#(((.
4his law pro!i"e" for the purchase of not less than T8#(((#((( of
sil!er nor more than TC#(((#((( per month.
4he bullion so bought by the =o!ernment was to be coine" into
"ollars as fast as purchase"# an" the gain or seigniorage arising
from this coinage was to be pai" into the 4reasury.
t will be seen that the 3ecretary of the 4reasury was not legally
compelle" to purchase more sil!er per month than the minimum
amount )T8#(((#(((*.
0 purchase of the minimum amount of sil!er woul" affor" a marN
ket for only one-half of the yearly pro"uction# an" this woul"
result in an accumulation of a large surplus for which there woul"
be no "eman".
4his surplus woul" fix the price of e!ery ounce of sil!er mine" in
the ,nite" 3tates# causing a fall in its bullion !alue.
4his result woul" affor" an opportunity for the national banking
money power to point to the sil!er "ollar as a "dishonest dollar," a
"?84cent dollar%"
Mr. 3herman hel" the 4reasury portfolio# an" it was a!erre" that
he woul" use all the influence of his office to "iscre"it the new
coinage. 6e was known to be an unrelenting enemy of the free
coinage of sil!er# an" his subse5uent speeches an" writings ga!e
abun"ant proofs of that fact.
t was further pro!i"e" in that act# that the amount of money at
any one time in!este" in such sil!er bullion# exclusi!e of such
resulting coin# shoul" not excee" TH#(((#(((.
<y this restriction the 3ecretary of the 4reasury coul" limit the
annual purchase of sil!er to T8E#(((#(((. 6e was not compelle"
to purchase sil!er excee"ing T8#(((#((( per month# or
T8C#(((#((( per annum# an" this policy which was carrie" out by
the 3ecretary# ma"e the =o!ernment a "!ear" in the sil!er market.
4his law ga!e rise to a net form of contracts base" upon the legal
ten"er clause which containe" the following language# "E<cept
$here other$ise e<pressly stipulated in the contract%"
4his exception was the most absur" pro!ision e!er embo"ie" in a
monetary law. t "eclare" the sil!er "ollar to be legal ten"er# yet it
conferre" upon money len"ers the power to "emonetize it by
pri!ate contract.
t ma"e the mere will of an in"i!i"ual superior to the collecti!e
will of the nation. t place" the gree" of the 3hylock
abo!e the
power of the constitution.
$!ery usurer was permitte" to constitute himself a ;ongress an"
a Presi"ent to "emonetize sil!er at will. Ihile the powerful =o!N
ernment of the ,nite" 3tates was compelle" to recei!e these silN
!er "ollars for "ebts an" "eman"s "ue it# the hol"ers of mortN
gages coul" exact gol" obligations.
t transferre" to the han"s of the national banking money power
the right to loan =o!ernment cre"it in the form of bank notes#
costing it one cent on the "ollar# at a high rate of interest# exact a
note payable in gol"# with the "vested privile"e" of making war
against the currency of the ,nite" 3tates.
t built up a powerful pri!ilege" class# whose interests woul" be
antagonistic to any future legislation of ;ongress# ha!ing for its
ob>ect an enlarge" use of sil!er as money#
n his uncontra"icte" e!i"ence before the <ritish gol" an" sil!er
commission# on Mune 8C# 1DDB# M. <arr 1obertson state" that
"'he =rench la$ ma*es it criminal to act on the !asis of premium
on money or discount on money% 1t al$ays did so%"
4he policy of 7rance# which has the most scientific system of
money in the worl"# makes it a crime for any one of its citizens to
attempt to "emonetize its money by pri!ate contract.
n that nation# the so!ereign power of the 3tate o!er the legal
!alue of money cannot be impaire" by the gree" of money
changers# bullion "ealers# an" bankers. 0fter the enactment of
this law a new system of written contracts pro!i"ing for the payN
ment of money came into !ogue# "enominate" ""old contracts," all
3hylock is a fictional character in 3hakespeare&s 4he Merchant of Fenice an" was also
a term use" to "escribe Rsomeone who len"s money at excessi!e rates of interest.R
of which containe" a stipulation that the obligation shoul" be
payable in
"Dold coin of the present $ei"ht and fineness or its e;uivalent%"
1ailroa" bon"s an" mortgages containing gol" clauses# aggregatN
ing many hun"re"s of millions of "ollars# were fastene" upon this
species of property# an" real estate mortgages an" promissory
notes amounting to immense sums mere ma"e payable in gol"
4his plan of the money-len"ing class actually ma"e an enormous
in"ebte"ness payable in gol"# a coin constantly appreciating in
!alue# an" it practically ma"e the single stan"ar" of gol" the finN
ancial policy of the country.
9ot a single ,nite" 3tates bon" expresse" an agreement to pay in
gol"# an" yet the =o!ernment turne" the great ma>ority of its citN
izens o!er to the ten"er mercies of the money-len"ers of the $ast
an" =reat <ritain# by authorizing them to exact gol" payments.
4he legality of contracting against any part of the legal ten"er
money of the nation is extremely "oubtful+ an" it scorns that# on
the plainest principles of >ustice# an" on the highest groun"s of
public policy# a contract in which it is sought to "emonetize legal
ten"er money is utterly !oi"# an" is therefore unconstitutional.
3ection 0 of the <lan"-0llison 0ct authorize" the Presi"ent to inN
!ite the countries of $urope to >oin the ,nite" 3tates in a conferN
ence to secure the a"option of a common ratio between gol" an"
sil!er# an" for the purpose of establishing an international bi-
metallic money# an" securing fixity of relati!e !alue between
these metals.
4he Presi"ent was authorize" to appoint three ;ommissioners to
represent the ,nite" 3tates at such conference# if any shoul" be
hel". 4he ;ommissioners were to report the "oings of the conferN
ence an" he was to transmit the same to ;ongress.
4his section marke" the beginning of those successi!e pilgrimN
ages of so-calle" international monetary commissions# who# as
the representati!es of the ,nite" 3tates# humiliate" the 0merican
people by begging the ai" of $uropean monarchies to assist in the
establishment of a financial system for this republic.
3ection A pro!i"e" for the issue of sil!er certificates to any perN
son who "eposite" with the 4reasurer or any 0ssistant 4reasurer
of the ,nite" 3tates sil!er "ollars in sums of not less than ten "olN
4he coin "eposite" for these certificates was to be retaine" in the
treasury for the payment of the sai" certificates on "eman". 4hese
certificates were recei!able for customs# taxes an" all public
"ues# an" when so recei!e" coul" be reissue".
4he ob>ect of this section in pro!i"ing for the issuance of sil!er
certificates was to ob!iate ob>ections against the use of sil!er beN
cause of its weight. 4he certificate was a cre"it money base" on
the sil!er "ollars so "eposite"# which latter constitute" a trust
fun" as a means for re"eeming the certificates.
4o 3enator <ooth# of ;alifornia# belongs the honor of suggesting
the pro!isions of section A of this law.
3ection C repeale" all former laws inconsistent with the act.
Ihen this bill was up for consi"eration before ;ongress# the naN
tional banking money power an" its subsi"ize" press continually
prophesie" that if the sil!er bill shoul" become a law# the gol" of
the nation woul" take flight to $urope# lea!ing this country upon
a sil!er basis.
4he lea"ing national bank presi"ents of 9ew Gork ;ity were esN
pecially acti!e in "enouncing the bill# an" numerous pre"ictions
were ma"e by them that it woul" be impossible to resume specie
payment if it became a law.
=eorge 3. ;oe# Presi"ent of the 0merican $xchange 9ational
<ank of 9ew Gork ;ity# publicly state" that he woul" gi!e
TH(#((( to be at the hea" of the line of those who woul" present
themsel!es at the sub-treasury on the 1st "ay of Manuary# 1DBE# to
offer greenbacks for gol"# shoul" Presi"ent 6ayes not !eto the
3o far as is known# Mr. ;oe still retains his TH(#(((# which he
publicly state" that he woul" offer for the pri!ilege of ha!ing the
first opportunity to present greenbacks for re"emption in gol"#
an" for the plain reason that greenbacks were at par with gol" -
that yellow "i!inity of the money changers - before the 1st "ay of
Manuary# 1DBE# approache".
:ne of the reasons urge" against the passage of the <lan"-0llison
law# as state" heretofore# was that it woul" en"anger the resumpN
tion of specie payments# an" that it woul" result in placing the
country on a sil!er basis.
:n the 1Eth of March# 1DBD# three weeks after the law was in
force# 3enators Morill# Dares# 7erry# Mones# 0llison# -ernan# IalN
lace# <ayar"# an" Foorhees# composing the 7inance ;ommittee
of the 3enate# ha" a conference with 3ecretary 3herman to obtain
his !iews upon the effect of the new sil!er coinage law upon reN
During this conference the following statements were ma"e by
the 3ecretary to the committee in answer to the in5uiries of its
members: -
Chairman# "What effect has the silver !ill had, or is li*ely to
have upon resumption>"
Se'retar+ Sherman# "1 do not $ant to tread on delicate "round in
ans$erin" that ;uestion, /r% Chairman% 1 shall have to confess that
1 have !een mista*en myself%
"No$, as to the silver !ill, 1 have $atched its operations very
closely% 1 thin* the silver !ill has had some adverse effects, and it
has had some favora!le effects, on the ;uestion of resumption%
"(erhaps the !est $ay for me to proceed $ould !e to state the ad#
verse effects first%
"1t has undou!tedly stopped refundin" operations% Since the a"ita#
tion of the silver ;uestion, 1 have not !een a!le lar"ely to sell !onds,
althou"h 1 have made every effort to do so%
"No$, another adverse effect the silver !ill has had is to stop the ac#
cumulation of coin%
"Since the &st of January $e have accumulated no coin, e<cept for
coin certificates, and e<cept the !alance of revenue over e<pendit#
ure% 'he revenues in coin !ein" more than enou"h to pay the interest
of the de!t and coin lia!ilities, $e accumulate some coin%
"3nother effect that the silver !ill has had is to cause the return of
our !onds from Europe% 3lthou"h the movement of our !onds in this
direction has !een pretty steady for more than a year, yet it is lat#
terly lar"ely increased, ho$ much 1 am not prepared to say%
"Gn the other hand, 1 $ill "ive the favora!le effects% 1n the first
place, the silver !ill satisfied a stron" pu!lic demand for !i4metallic
money, and that demand is, no dou!t, lar"ely sectional%
"No dou!t there is a difference of opinion !et$een the West and
South and the East on4this su!ject, !ut the desire for remoneti2ation
of silver $as almost universal%
"1n a "overnment li*e ours it is al$ays "ood to o!ey the popular
current, and that has !een done, 1 thin*, !y the passa"e of the silver
"Iesumption can !e maintained more easily upon a dou!le standard
than upon a sin"le standard the !ul*y character of silver $ould pre#
vent payments in it, $hile "old, !ein" more porta!le, $ould !e more
freely demanded, and 1 thin* resumption can !e maintained $ith a
less amount of silver than of "old alone%
Senator Ba+ard# ")ou are spea*in" of resumption upon the !asis
of silver, or of silver and "old>"
Senator Sherman# ")es, sir9 1 thin* it can !e maintained !etter
upon a !i4metallic, or alternative standard, than upon a sin"le one,
and $ith less accumulation of "old%
"1n this $ay remoneti2ation of silver $ould rather aid resumption%
"'he !onds that have !een returned from Europe have !een readily
a!sor!ed 4 remar*a!ly so% 'he recent returns in Ne$ )or* sho$ the
amount of !onds a!sor!ed in this country is at least a million and a
;uarter a day%
"We have sold scarcely any from the 'reasury since that time% 'his
sho$s the confidence of the people in our securities, and their rapid
a!sorption $ill tend to chec* the European scare%
Senator ,oorhee"# "'hat sho$s, /r% Secretary, that this cry of
alarm in Ne$ )or* $as unfounded% 'hen, this capital see*s our
!onds $hen this !i4metallic !asis is declared>"
Se'retar+ Sherman# ")es9 many circumstances favor this% 'he
demand for !onds e<tends to the West and to the !an*s%"
Senator -one"# "'hen, in its effect upon the return of the vast
amount of !onds you refer to, $ould there not !e an element of
stren"th added in favor of resumption, in that the interest on these
!onds returned $ould not !e a constant drain upon the country>"
Se'retar+ Sherman# "ndou!tedly%"
Senator -one"# "Would the fact that they come !ac* ena!le us to
maintain resumption much easier>"
Se'retar+ Sherman# "ndou!tedly%"
Senator Ba+ard# ")ou spea* of resumption upon a !i4metallic
!asis !ein" easier%
"Ao you ma*e that proposition irrespective of the readjustment of
the relative values of the t$o metals as $e have declared them>"
Se'retar+ Sherman# "1 thin* so% Gur mere ri"ht to pay in silver
$ould deter a "reat many people from presentin" notes for redemp#
tion $ho $ould readily do so if they could "et the li"hter and more
porta!le coin in e<chan"e%
"+esides, "old coin can !e e<ported, $hile silver coin could not !e
e<ported, !ecause its mar*et value is less than its coin value%"
Senator Ba+ard# "1 understand that it $or*s practically very $ell%
So lon" as the silver is less in value than the paper you $ill have no
trou!le in redeemin" your paper%
"When a paper dollar is $orth ninety4ei"ht cents no!odyHs "oin" to
ta*e it to the 'reasury and "et ninety4t$o cents in silver9 !ut $hat
are you to do as your silver coin is mintedH +y the &st of July ne<t or
the &st of January ne<t you have ei"hteen or t$enty millions of sil#
ver dollars $hich are in circulation and paya!le for duties, and ho$
lon" do you suppose this short supply of silver and your control of it
!y your coina"e $ill *eep it e;uivalent to "old 4 $hen one is $orth
ten cents less than the other>
Se'retar+ Sherman# "Just so lon" as it can !e used for anythin"
that "old is used for% 1t $ill !e $orth in this country the par of "old
until it !ecomes so a!undant and !ul*y that people $ill !ecome
tired of carryin" it a!out9 !ut in our country that can !e avoided !y
depositin" it for coin4certificates%"
3uch was the testimony gi!en by 3ecretary 3herman in reply to
the 5uestions propoun"e" to him by these "istinguishe" men# an"
it "emonstrate" the real reason why a single stan"ar" of gol" was
preferre" by the national banking money power.
=ol"# from its portability# coul" be more easily exporte" than silN
!er# an" large 5uantities of the former metal coul" be rea"ily shifN
te" back an" forth between 9ew Gork ;ity an" /on"on as a
means to create temporary panics# an" thus affor" the gol" gamN
blers an" stock# speculators opportunities to "epress or raise the
price of bon"s# stocks# an" securities whene!er it subser!e" their
n 1DBD# after the passage of the <lan"-0llison law# 3ecretary
3herman authorize" the sub-treasury at 9ew Gork ;ity to become
a member of the ;learing 6ouse 0ssociation# whose membership
consiste" of sixty-six national banks of that city. 4his association
was the most powerful financial bo"y in the ,nite" 3tates# an" it
was the hea" an" front of the money power.
4his act of 3ecretary 3herman was an excee"ingly shrew" mo!e
on his part to a"" an official sanction to the war that was to be
wage" against the use of sil!er an" sil!er certificates by the
;learing 6ouse 0ssociation. 4o affor" a consecuti!e statement of
the !arious financial measures of ;ongress# we must retrace our
steps to the 1Jth "ay of Manuary# 1DBD. 0t an" prior to this time a
contro!ersy arose as to whether ,nite" 3tates bon"s were payN
able in gol" solely.
4o set this 5uestion at rest fore!er# 3enator Matthews# of :hio#
submitte" a concurrent resolution in the 3enate# "eclaring that all
,nite" 3tates bon"s issue" un"er the 1efun"ing 0ct of Muly 1C#
1DB(# an" the 1esumption 0ct of Manuary 1C# 1DBH# coul" be pai"
at the option of the go!ernment in stan"ar" sil!er "ollars of C18U
grains without !iolation of the public faith.
0ll propose" amen"ments were !ote" "own# an" the resolution
was agree" to by a !ote of CA yeas to 88 nays.
:n Manuary 8E# 1DBE# the 6ouse agree" to the resolution in the
form in which it came from the 3enate by a !ote of 1DE yeas to
BE nays. Di!este" of its preamble which merely recite" the facts
in contro!ersy# the resolution is as follows: -
"Iesolved !y the Senate ,the 5ouse of Iepresentatives concurrin"
therein-, 'hat all the !onds of the nited States issued under the
said acts of Con"ress herein !efore recited are paya!le, principal
and interest, at the option of the "overnment of the nited States, in
silver dollars of the coina"e of the nited States, containin" J&.U
"rains each of standard silver9 and that to restore to its coina"e
such silver coins as a le"al tender in payment of said !onds, prin#
cipal and interest, is not in violation of the pu!lic faith nor in dero"#
ation of the ri"hts of the pu!lic creditor%"
t is in force to this "ay as "eclaratory of the financial policy of
the ,nite" 3tates.
:n December E# 1DBD# Mr. 7ort mo!e" that the 6ouse suspen"
the rules an" pass a resolution# "eclaring any "iscrimination
against stan"ar" sil!er "ollars by 9ational <anking 0ssociations
a "efiance of law# an" instructing the ;ommittee on <anking an"
;urrency to report a bill for with"rawing their circulation.
4he resolution recei!e" a ma>ority# but not the necessary two-
thir"s !ote# an" it faile" to pass. 4he republican members of the
6ouse !ote" almost soli"ly against the resolution.
4his resolution was brought forwar" in the 6ouse as a warning to
the ;learing 6ouse 0ssociation of 9ew Gork ;ity# compose"
largely of national banks# for its refusal to accept sil!er "ollars
an" sil!er certificates in settlement of balance "ue from the !ariN
ous banks.
0lthough the <lan"-0llison law was in effect but a few months#
the traitorous national banking money power at once begun a war
upon the lawful money of the ,nite" 3tates# an" this was "one
with the open consent of the 3ecretary of the 4reasury# who ha"
ma"e the sub-treasury at 9ew Gork ;ity a member of the ;learN
ing 6ouse 0ssociation as an ai" to the consummation of its
4his action of the national banks in thus "eliberately conspiring
to nullify a law of the ,nite" 3tates# ga!e origin to a warm "ebate
in ;ongress# "uring which 3ecretary 3herman was se!erely critiN
cize" for gi!ing official sanction to the acts of the associate"
During the session of the 7ifty-first ;ongress# at which time Mr.
3herman was a member of the 3enate# 3enator Morgan# of
0labama# in a "ebate upon the money 5uestion# recalle" this fact
an" asserte" that the former ha"# while 3ecretary of the 4reasury#
been cognizant of the "esigns of the clearing house banks to reN
fuse sil!er in payment of balances# an" that those banks were emN
bol"ene" to pursue that course by the ac5uiescence of the 3ecretN
6e procee"e" to 5uote from a statement ma"e by Mr. Ieston#
3ecretary of the Monetary ;ommission of 1DDJ# in which the latN
ter sai":
"Gn the Cth inst% [Novem!er, &C:C,] a committee of these !an*s
[Ne$ )or* Clearin" 5ouse 3ssociation] had a conference at Wash#
in"ton $ith the Secretary of 'reasury [/r% Sherman], at $hich $ere
present the 3ttorney4Deneral and some minor officials%
"'he result $as a plan su!mitted !y the !an*s on the &.th inst%, and
a"reed to, only one !an* representative ,/r% Col"ate- o!jectin"%
"'he leadin" features of it, are first, that the !an*s $ill reject silver
deposits, e<cept as re4paya!le in *ind9
second, that silver shall not !e allured as clearin" house money e<#
cept for small fractional earns not e<ceedin" 6&89
and third, that in respect to all payments !y "overnment drafts on
the Ne$ )or* !an*s or on the nited States assistant treasurer at
Ne$ )or*, they shall !e cleared at the clearin" house in Ne$ )or*,
at $hich a des* is to !e assi"ned to a representative of the nited
States 'reasury%
"3t the !an* meetin" on the &.th /r% Col"ate o!jected to the plan,
that it could only mean L'o fly in the face of Con"ress and to de#
clare the silver dollar that has !een declared a le"al tender to !e
n spite of the immense power of the banks# ai"e" by the official
power of 3ecretary 3herman# to "iscre"it the legal ten"er sil!er
"ollars an" sil!er certificates# ;ongress# at its !ery next session#
after this exposure of the con"uct of the ;learing 6ouse 0ssociN
ation an" that of 3ecretary 3herman# passe" a law re5uiring that
no national bank shoul" become a member of any clearing house#
or exercise any pri!ilege therein to any kin" whate!er# unless it
agree" to accept sil!er on "eposits an" recei!e sil!er certificates
as money through which the balances might be settle".
0lthough the organize" banks still continue" their aggressions
upon the rights of the people# an" although they exerte" their utN
most power to "egra"e the sil!er "ollar an" its representati!e# this
money became so popular with the people that they exchange"
gol" coin for sil!er certificates at the 4reasury of the ,nite"
4his exchange of gol" coin for sil!er began in 9o!ember# 1DD(#
an" continue" until the 4reasury ma"e a gain in gol" aggregating
4hus the absur" pre"ictions set forth in the !eto message of PresN
i"ent 6ayes# an" echoe" by the senseless clamors of the national
banks# were answere" by the common sense an" patriotism of the
people of the ,nite" 3tates.
n 1DBD# the year that the <lan"-0llison bill became a law# the
number of failures were 1(#CBD# with liabilities of T8DC#ADA#(((+
in the following year of 1DBE the list of failures were only J#JHD#
with liabilities of TED#1CE#((( - a remarkable "ecrease.
0ccor"ing to the pro!isions of the 1esumption 0ct of 1DBH#
greenbacks were re"eemable in specie on an" after the 1st "ay of
Manuary# 1DBE.
Prior to this time greenbacks an" ,nite" 3tates notes were on a
parity with gol"# an" hence on May A1# 1DBD# ;ongress enacte" a
law forbi""ing the further "estruction of these legal ten"ers# an"
the 3ecretary of the 4reasury was authorize" to re-issue them for
the payment of "eman"s against the ,nite" 3tates.
3enator 4hurman intro"uce" this bill in the 3enate# an" against
the combine" opposition of the national banks# secure" its pasN
sage through ;ongress# thus preser!ing this currency to that
n the meantime# howe!er# prior to Manuary 1# 1DBE# 3ecretary
3herman issue" a circular to the collectors of the !arious ports
throughout the ,nite" 3tates# "irecting them to recei!e ,nite"
3tates notes an" 4reasury notes in payment of "uties on importe"
4he act of Muly ll# 1DJ8# which pro!i"e" for the issue of 4reasury
notes# prohibite" the 3ecretary of the 4reasury from recei!ing
them for "uties on imports.
9e!ertheless 3ecretary 3herman# by a mere executi!e or"er# nulN
lifie" this part of that act by or"ering the collectors of custom "uN
ties to recei!e them.
4his or"er ma"e the 4reasury notes# in this respect# the e5ual of
4he ob>ect of the 3ecretary in a"opting this policy excite" consi"N
erable "iscussion in ;ongress# but the or"er was ac5uiesce" in by
the people# for the reason that the "iscrimination so long exerte"
against the greenback was with"rawn.
4he go!ernment honore" its own currency by recei!ing it for
taxes - the best form of re"emption e!er a"opte" by a nation.
;60P4$1 F.
46$ 904:90/ <09-3 I0=$ I01 ,P:9 46$ ;1$D4
:7 46$ ,94$D 3404$3.
"'he $isdom of the Whole nation can see farther than the sa"es of
Westminster +ell% 'he collective *no$led"e and penetration of the
people at lar"e are more to !e depended on than the !oasted
discernment of all the !ar%
'he reason is clear: 'heir eyes are not da22led !y the prospects of
an opposite interest% 'he Cro$n has no lure sufficiently temptin" to
ma*e them for"et themselves and the "eneral "ood%"
- $"mun" <urke.
4he profoun"est thinkers upon the sub>ect of free go!ernment
ha!e always maintaine" that the common people are inspire" by
nobler sentiments of >ustice than that select class who arrogate to
themsel!es all !irtue an" knowle"ge.
6istory has affirme"# time an" again# that the collecti!e - wis"om
of the people is the safest gui"e for a nation.
4he celebrate" $"mun" <urke# in that splen"i" "efense of
Ioo"fall# the publisher of the letters of Munius# goes so far as to
"eclare# in the august presence of the highest court of $nglan"#
that the sense of >ustice pre!alent among the common people is
truer than that entertaine" by those learne" in the law.
4he reason why the common people sel"om err in their instincts
of >ustice is# that they are not the highly fa!ore" sub>ects of
special pri!ileges# an" that they are not continually seeking
unearne" a"!antages o!er their fellow men.
:n the other han" the mo!ing reason why the wealthy#
pri!ilege"# an" aristocratic portion of mankin" is not animate"
an" go!erne" as largely by the plain principles of >ustice# as the
great ma>ority of common people# is !ery apparent# as it is an
establishe" fact that the possession of great wealth an" pri!ileges
ren"er its possessors eager for a""e" accumulations# an" this
results in a selfishness from which springs by far the larger part
of the unnecessary e!ils of go!ernment.
Iith this latter class the "esire of heaping up great wealth
"e!elops into a controlling passion - in many cases it "egenerates
into a mania.
4his obser!ation is true of the national banking money power.
9otwithstan"ing it recei!e" a gift of the most !aluable an"
profitable franchises e!er conferre" upon organize" capital# it
was continually "eman"ing new concessions at the han"s of
;ongress. t was insatiable.
4his money power perse!ere" in its !in"icti!e warfare against the
people# its subsi"ize" press publicly threatene" ;ongress with a
!isitation of wrath# an" it utilize" its control of the currency to
t asserte" that the country nee"e" a king# an" that a strong
go!ernment shoul" be erecte" upon the ruins of 0merican liberty.
4he national banks continue" their opposition to the coinage of
sil!er# but without a!ail.
:n 0pril 1J# 1DBE# the ;ommittee on ;oinage# Ieights# an"
Measures# by 6on. 0. 6. 3tephens# of =eorgia# reporte" 6ouse
bill 9o. C# which pro!i"e" that fractional sil!er coins shoul" be a
legal ten"er for any sum not excee"ing ten "ollars in any one
:n 0pril 1E# 1DBE# Mr. 3pringer mo!e" an amen"ment to the
thir" section of the bill# increasing the legal ten"er "ebt-paying
power of fractional sil!er coin to twenty "ollars in any one
4he bill so amen"e" in its thir" section passe" the 6ouse on the
88n" "ay of 0pril# 1DBE# an" it was transmitte" to the 3enate#
where# on May 8Dth# an amen"ment offere" by the ;ommittee on
7inance was a"opte"# striking out the wor" RtenR an" inserting
the wor" RtwentyR in lieu thereof.
4he bill thus amen"e" passe" the 3enate# was concurre" in by the
6ouse# an" became a law Mune E# 1DBE.
4he effect of this measure increase" the legal ten"er power of
fractional sil!er coins from fi!e "ollars to ten.
:n the same "ay the 6ouse passe" a bill pro!i"ing for the
exchange of tra"e "ollars for legal ten"er stan"ar" sil!er "ollars.
t was sent to the 3enate but that bo"y burie" it by a reference to
the 7inance ;ommittee.
6a" this propose" measure been enacte" into law# a large !olume
of full legal ten"er sil!er "ollars woul" ha!e been a""e" to the
circulation# increasing the amount of money at least thirty
millions# an" it woul" ha!e remo!e" a large mass of non-legal
ten"er tra"e "ollars as a "isturbing element in the sil!er market.
4he national banks oppose" this bill# an" hence it was smothere"
in the republican 3enate.
:n Mune 8B# 1DBE Mr. Fest# of Missouri# offere" the following
resolution in the 3enate: -
"Iesolved !y the Senate ,the 5ouse of Iepresentatives concurrin"-,
'hat the complete remoneti2ation of silver, its full restoration as a
money metal, and its free coina"e !y the mints of the nited States
are demanded ali*e !y the dictates of justice and $ise
:n Mune A(th this resolution was referre" to the ;ommittee on
7inance on motion of Mr. 0llison# by a !ote of 8A yeas to 88
4his resolution was ne!er reporte" from this committee back to
the 3enate.
:ne singularity which will attract the attention of the rea"er is#
that e!ery measure a"opte" by the 6ouse pro!i"ing for the
restoration of sil!er# was# on reaching the 3enate# uniformly
referre" to the 7inance ;ommittee# from whence it ne!er
0s it was then constitute"# the 7inance ;ommittee was compose"
largely of $astern 3enators# an" this fact affor"s an explanation
of the won"erful facility with which this committee nullifie" all
efforts of the 6ouse for reme"ial legislation.
n the meantime 3ecretary 3herman was a"ministering the
4reasury Department with a !iew of throwing "iscre"it upon the
sil!er coinage# an" he persiste" in the policy of refusing to pay
out sil!er "ollars# except where specific "eman"s were ma"e for
that money.
6is ob>ect in following out this line of policy# aime" at a large
accumulation of sil!er "ollars in the 4reasury# an" this con"ition
woul" supply him with arguments to con!ince ;ongress# if
possible# that no one "esire" sil!er as money.
4his intention was e!i"ence" by a communication to ;ongress by
him# in which he re5ueste" an appropriation for the construction
of a""itional !aults for the storage of stan"ar" sil!er "ollars.
0t this perio" ,nite" 3tates bon"s were at a !ery high premium#
an" this fact le" to a se!ere contraction of the currency by the
national banks.
t will be remembere" that the original 9ational <anking 0ct of
7ebruary 8H# 1DJA# pro!i"e" for a "istribution of circulating bank
notes# an" as a conse5uence of that pro!ision the power to
su""enly contract or expan" the !olume of circulating notes was
withhel" from the banks.
4his salutary pro!ision was repeale" by section C of the act of
Mune 8(# 1DBC# which authorize" the national banks at any time#
an" for any reason which they chose to consi"er sufficient# to
"eposit ,nite" 3tates notes an" treasury notes to secure their
circulating bank notes# an" contract the currency to the extent of
the substitution of go!ernment legal ten"ers for the bon"s
"eposite" as security by the national banks+ these banks then
with"rew their bon"s an" sol" them for the high premium which
they then comman"e".
4his power conferre" on the national banks# by which they coul"
contract the !olume of currency# was a stan"ing menace against
the prosperity of the country+ an" arme" with this "estructi!e
weapon they coul"# without any notice to the people# prostrate
e!ery in"ustry in the country.
4he extent to which this su""en contraction an" expansion was
practice" by the banks was clearly state" in a report ma"e by Mr.
=ilfillan# ,nite" 3tates 4reasurer# for the year 1DD(.
3ir =ilfillan says: -
"nder the construction placed upon the lair, !an*s $hich have
thus reduced their circulation have !een permitted to increase it
a"ain as often and as lar"ely as they chose, $hether their le"al
tender deposits $ere e<hausted or not%
"3n e<ample $ill !etter illustrate these operations%
"1n January and =e!ruary, &C:7, a certain !an* reduced its
circulation from 608C,J?8 to 6J7,888 !y deposits of le"al tender
"+et$een Septem!er .B, &C:B, and /ay .B, &C::, and !efore that
deposit $as e<hausted, it increased its circulation to 6J78,888%
"+et$een 3u"ust &Jth and Septem!er &8, &C::, it a"ain reduced its
circulation to 6J7,888%
"Gn Septem!er &?, &C::, nine days after completin" the deposits for
this reduction, it a"ain !e"an to ta*e out additional circulation,
althou"h 6J8.,778 of prior deposits remained in the 'reasury, and
!y the .Bth of that month its circulation had a"ain !een increased to
"July .., &C:C, it, for the third time, reduced its circulation to
6J7,888 and in 3u"ust and Septem!er, &C:?, a"ain increased it to
6J78,888, at $hich it no$ remains, the !alance of its former le"al
tender deposit then in the 'reasury !ein" 6&&.,B&7%"
4his report exhibits the "angerous power place" in the han"s of
the national banks to unsettle !alues# "isturb business# an" inflict
panics whene!er it was to the interests of the national banking
money power to exhibit their strength o!er the legitimate
business of the people.
Mr. =ilfillan further says: -
"No one $ill contend that this $as a le"itimate and proper method
of conductin" !usiness under the national !an*in" system, and yet it
can !e resorted to every4day !y every !an* in the nited States as
lon" as the fourth section of the act of June .8, &C:J, remains
"1t distur!s values, affects the money mar*et, and su!jects the
"overnment to unnecessary e<pense, merely to "ratify a spirit of
speculation and "ain on the part of the mana"ers of the !an*, and it
ou"ht to !e peremptorily for!idden in the future%"
4his last extract clearly "emonstrates that it was in the power of
the thousan"s of national banks to effect a combination# or trust#
for the contraction of the !olume of currency whene!er such
policy woul" be "eci"e" upon by them to influence the
legislation of ;ongress.
During 1DD( an" 1DD1# a large amount of the national "ebt woul"
fall "ue# an" pro!ision must be ma"e for the payment of bon"s
aggregating TD((#(((#(((.
4hese bon"s bore interest at the rate of C# CU an" H per cent per
During the session of 1DBE# 1epresentati!es =arfiel"# of :hio#
an" Ioo"# of 9ew Gork# both intro"uce" bills in the 6ouse#
pro!i"ing for the exchange of these maturing obligations for
bon"s bearing four per cent interest# an" running from twenty to
forty years.
4hese bills were referre" to the appropriate committee# where
they remaine" until the latter part of 1DD(.
0fter the presi"ential election of that year the committee reporte"
a substitute for the Ioo" bill# pro!i"ing for the fun"ing of these
maturing bon"s at three an" one-half per cent interest# an"
running from ten to forty years.
0 strenuous effort was ma"e to push this bill through the 6ouse#
but it was not successful# an" it was amen"e" by that bo"y#
making the bon"s re"eemable at the option of the go!ernment
after the expiration of fi!e years from their "ate of issue# an" the
rate of interest was re"uce" to three per cent per annum.
4he bon"s were to be sol" by public subscription# at not less than
par# an" no contract or awar" of these bon"s shoul" be ma"e by
the 3ecretary of the 4reasury to any syn"icate# or bankers# or
otherwise# until after the expiration of thirty "ays from the "ate of
the announcement that public subscriptions woul" be opene" for
the sale of sai" bon"s.
4he 3ecretary was authorize" to "esignate banks to recei!e
subscriptions for bon"s so offere".
3ection H of this Pen"ing 0ct was as follows: -
"=rom and after the &st day of July, &CC&, the three per cent !onds
authori2ed !y this act shall !e the only !onds receiva!le as security
for national !an* circulation, or as security for the safe4*eepin" and
prompt payment of the pu!lic money deposited $ith such !an*s:
"(rovided, 'hat the Secretary of the 'reasury shall not have issued
all the !onds herein authori2ed, or so many thereof as to ma*e it
impossi!le for him to issue the amount of !onds re;uired:
"3nd provided further, 'hat no !ond upon $hich interest has ceased
shall !e accepted or shall !e continued on deposit as security for
circulation or for the safe4*eepin" of the pu!lic money9 and in case
!onds so deposited shall not !e $ithdra$n, as provided !y la$,
$ithin thirty days after the interest has ceased4 thereon, the !an*in"
association depositin" the same shall !e su!ject to the lia!ilities
and proceedin"s on the part of the Comptroller provided for in
section 7%.0J of the Ievised Statutes of the nited States:
"3nd provided further, 'hat section J of the act of June .8, &C:J,
entitled H3n act fi<in" the amount of nited States notes, providin"
for a redistri!ution of the national !an* currency, and for other
purposes, !e, and the same is here!y, repealed9 and sections 7%&7?
and 7%&B8 of the Ievised Statutes of the nited States !e, and the
same are here!y, re4enacted%"
4his section was by far the most important part of the fun"ing
bill# an" its pro!isions aime" to curtail the immense powers of
the national banks.
t re5uire" them to substitute the new three per cent bon"s#
authorize" by this bill# as security for their circulating notes# in
lieu of the maturing bon"s
4he feature of this measure which the national banks regar"e" as
the most "angerous to their existence# was in that part of the bill
which ma"e the bon"s re"eemable# at the option of the
go!ernment# after the expiration of fi!e years from the "ate of
their issue.
4his woul" place the power in the han"s of the go!ernment to
"iscipline the national banks whene!er these corporations woul"
refuse to obey the lairs# or conspire against the interests of the
4he bon"s being re"eemable# at the option of the go!ernment#
after the expiration of fi!e years# the latter coul" at any perio"
after the lapse of the minimum time# call in those bon"s "eposite"
by the national banks to secure their circulation# an" thus
e!entually ri" the country of this gigantic money power.
7urthermore# this section woul" not permit national banks to
"eposit bon"s# upon which interest ha" cease"# to secure their
circulating notes.
9either woul" it allow them to continue bon"s on "eposit upon
which interest ha" cease". Iere it otherwise# the national banks
coul" perpetuate their existence against the will of the
go!ernment# by continuing on "eposit bon"s that were past "ue.
n case of failure on the part of the banks to with"raw their bon"s
which were "ue# an" upon which interest ha" cease"# within
thirty "ays after these bon"s mature"# the ;omptroller of the
;urrency was authorize" to call in the circulation of those banks
refusing to obey this pro!ision# an" win" up their affairs
accor"ing to the pro!isions of section H.8AC# of the 1e!ise"
3tatutes of the ,nite" 3tates.
7urthermore# the unlimite" power of the banks to contract or
expan" the currency conferre" upon them by section C# of the act
of Mune 8(# 1DBC# was taken away by the pro re-enactment of
sections H.1HE an" H.1J( of the 1e!ise" 3tatutes of the ,nite"
4he re-enactment of these two sections woul" place the control of
the circulating bank notes in the han"s of the ;omptroller of the
Ihen this three per cent fun"ing bill was before the 6ouse# the
greatest pressure was brought to bear upon that bo"y by the
combine" efforts of the national banks to secure the "efeat of the
4he halls of ;ongress swarme" with the agents# lobbyists# an"
attorneys of the money power who attempte" to intimi"ate
;ongress an" "efeat the bill.
4hreats were openly ma"e by these !enal scoun"rels# that# unless
the measure was with"rawn# the national banking money power
woul" punish the country by in"icting a monetary panic upon it.
4he 9ew Gork 4ribune# the lea"ing organ of this money power#
thus "escribe" the !ast power of the banks of the $ast# an" hinte"
at its possible exercise. t sai": -
"'he time is near $hen they ,the !an*s- $ill feel compelled to act
stron"ly% /ean$hile a very "ood thin" has !een done% 'he
machinery is no$ furnished !y $hich, in any emer"ency, the
financial corporations of the East can act to"ether on a sin"le dayHs
notice $ith such po$er that no act of Con"ress can overcome or
resist their decision%"
n its zeal to ser!e the purpose of the financial corporations of the
$ast# it expose" the traitorous sentiments of the financial
magnates of 9ew Gork ;ity.
t sai": -
"1t is astonishin", yea, startlin", the e<tent to $hich faith prevails in
money circles in Ne$ )or* that $e ou"ht to have a *in"%"
4he banks of the $ast# in their efforts to coerce ;ongress into
submission# at once commence" a rapi" contraction of the
currency "uring the time the bill was un"er consi"eration by the
n the short perio" of thirteen "ays# the banks of 9ew Gork ;ity
surren"ere" their circulating notes to the extent of T1D#B88#AC(
an" conspire" to precipitate a panic upon the country# with its
accompaniments of bankruptcy# financial ruin# an" suffering.
4his concerte" action of the 9ew Gork banks pro"uce" such a
flurry in the money market# that prices fell fi!e# ten# an" fifteen
per cent in a few moments+ an" interest at the rate of CM per cent
per annum was exacte" for the use of money by these infamous
conspirators against the human race.
4he situation in 9ew Gork ;ity became so acute# that the
3ecretary of the 4reasury relie!e" the con"ition of the people by
purchasing a large amount of bon"s# an" thereby increasing the
!olume of money by many millions+ while the ;ana"ian banks
forwar"e" TD#(((#((( to be thrown on the money market.
4his course of the banks le" to se!ere "enunciation of their policy
in ;ongress
n a speech in the 6ouse on the 1st of March# 1DD1# 6on. Mohn =.
;arlisle# strongly arraigne" the 9ew Gork banks as the bitterest
enemies of the go!ernment an" the people+ he sai": -
"+ut, /r% Spea*er, !y far the most dan"erous feature yet introduced
into the national !an*in" system is contained in that part of the
fourth section of the act of June .8, &C:J, $hich authori2es the
!an*s at any time, and for any reason $hich they may choose to
consider sufficient, to deposit la$ful money $ith the 'reasurer,
contract the currency to that e<tent and $ithdra$ their !onds9 and,
sir, it is not "oin" too far to say that until this feature is $holly
eliminated or materially modified there can !e no assurance of
safety to any le"itimate investment or !usiness enterprise in this
1f there $as ever a dou!t as to the dan"erous character of the
po$er $hich this part of the la$ "ives to the !an*s over the
!usiness and property of the people, the ar!itrary and unjustifia!le
proceedin"s of the last $ee* ou"ht to dispel it forever%
"'he po$er $as conferred in the first instance, as 1 have said, for a
special and temporary purpose, the e;uali2ation of the national
!an* circulation, !ut $hen the Iesumption 3ct of January &J,
&C:7, $as passed, $hich removed all restrictions as to the amount
of such currency and made the system entirely free, there $as no
lon"er any necessity for this clause, and it should have !een
instantly repealed% 1t is a standin" menace a"ainst the prosperity of
the country% 3rmed $ith this destructive $eapon the !an*s may at
any time, $ithout a momentHs notice or a shado$ of provocation,
stri*e do$n every industry and every commercial enterprise of the
"'he !an*s, or some of them at least, first !e"an to pervert this
section of the statute from its ori"inal purpose and a!use the po$er
$hich it conferred upon them !y depositin" la$ful money and
$ithdra$in" their !onds from time to time, in order to speculate
upon them in the mar*et%
"'hey thus $ithdre$ lar"e amounts of their circulation and
contracted the currency, not !ecause the reduced demands of
!usiness made the outstandin" volume of circulation unnecessary
or unprofita!le, !ut simply !ecause they $anted to reali2e the hi"h
premiums on their !onds and speculate in the securities upon
$hich the Dovernment had already delivered to them 78 per cent%
in notes%
"'hese notes $ould !e left outstandin" for the time !ein", !ut an
e;ual amount of 'reasury notes $ould, of course, !e $ithdra$n
from circulation and held at the Aepartment to redeem the !an*
notes as they mi"ht come in% 'he 'reasurer, in his last annual
report, descri!es this process !y reference to actual transactions in
his office9 and as his statement on this su!ject cannot !e condensed
$ithout impairin" its force% 1 "ive it in his o$n $ords%"
0fter 5uoting from the report of 1DD(# ma"e by 4reasurer
=ilfillan# Mr. ;arlisle continue": -
"nder this section the !an*s have it in their po$er to contract the
currency and produce financial distress, involvin" every interest in
the country and em!arrassin" the operations of the Dovernment
itself, $henever they may thin* it $ill promote their special interests
to do so%
"1f they do not li*e proposed4le"islation in Con"ress or else$here9 if
they are opposed to the success of a particular political party9 if
they conclude that they ou"ht to !e e<empt from all ta<ation, State
and =ederal9 if they $ant additional privile"es conferred upon them
in respect to any matter connected $ith their !usiness9 in short, if
their opinions and interests are not consulted in all cases
$hatsoever, they can resort at once to this tremendous po$er over
the fortunes of the people and thus !rin" the timid to terms and ruin
all $ho refuse to accede to their demands%
"3 plausi!le prete<t can al$ays !e found or invented for the
e<ercise of such a po$er as this, and po$erful influences can
al$ays !e !rou"ht to justify and sustain it%
"'he t$o 5ouses of Con"ress, representin" the a""re"ate interests
of fifty millions of people, have, after mature deli!eration, passed a
!ill $hich the !an*s have chosen to consider o!no<ious to them,
and fore$ith 4 $ithin thirteen days 4 they have contracted the
currency to the e<tent of 6&C,:..,0J8 and precipitated a crisis
$hich $ould have !een disastrous to the country had it not !een met
!y measures $hich they had no po$er to prevent%
"'he prompt action of the Secretary of the 'reasury in purchasin" a
lar"e amount of !onds at the City of Ne$ )or*, and the course of the
Canadian !an*s in thro$in" seven or ei"ht million dollars of their
loana!le capital on the mar*et, alone prevented a catastrophe from
the effects of $hich $e mi"ht not have entirely recovered for many
"When Secretary /cCulloch, several years since, in pursuance of
his contraction policy, !e"an to retire and cancel le"al tender notes
at the rate of 6J,888,888, per month, it produced such consternation
in !usiness circles that Con"ress $as forced to intervene at once
and arrest the process !y the passa"e of a joint resolution9 !ut no$
$e have seen nearly 6&?,888,888 of circulation $ithdra$n in less
than half a month, not !y the Dovernment, !ut !y institutions in the
mana"ement of $hich the Dovernment has no voice, and still
"entlemen here insist that the po$er under $hich this has !een
done, and under $hich it may at any time !e repeated, shall not !e
ta*en a$ay%
"Why, sir, the $hole contraction of le"al tender 'reasury notes
under the provisions of the Iesumption 3ct, from January &J, &C:7,
to /ay 0&, &C:C, $hen it $as prohi!ited !y &a$, $as only
60J,0&C,?CJ not t$ice as much in more than three years as the !an*
contraction had !een in less than t$o $ee*s%
"'his e<perience $arns us that $e cannot safely permit this "reat
po$er to remain in the hands of these institutions unchec*ed !y
le"al restrictions%
1t is an en"ine of destruction standin" in the very narro$est part of
the $ay to permanent industrial and commercial prosperity in this
country9 for there can !e no such prosperity any$here, in the midst
of sudden and enormous contractions of the currency9 nor $ill
prudent and e<perienced !usiness men em!ar* in lar"e and
e<pensive enterprises $hen the po$er to ma*e such contractions is
hold !y private and interested parties $ho ac*no$led"e no
restraints e<cept pu!lic sentiment and their o$n vie$s of the pu!lic
"+y la$ the volume of le"al tender notes is limited to 60J7,BC&,8&B,
$hile under the policy of the Dovernment nearly 6&78,888,888 in
"old and silver coin are permanently $ithheld from circulation and
hoarded in the 'reasury% Gf the 6J7J,888,888 "old coin in the
country the Dovernment and the !an*s held, on the &st day of
Novem!er last, 6.7J,888,888, and the people only 6.88,888,888%
"'he circulation of State !an*s is ta<ed out of e<istence9 the coina"e
of silver is limited !y statute to 6J,888,888 per month9 and so it
appears that !y statute or pu!lic policy every form of currency
$hich the people can use in the transaction of their !usiness is
restricted, e<cept national !an* notes%
"'hey alone are perfectly free from all restrictions, le"al or
other$ise, and upon them the people are compelled to rely under
e<istin" circumstances for the additional facilities of e<chan"e
necessary to ena!le them to carry on their "ro$in" industries and
conduct their rapidly increasin" commercial enterprises%
"What a fatal policy it is, in vie$ of these considerations, to retain
on the statute !oo* as part of our currency system a &a$ $hich
su!jects all these "reat interests to the ar!itrary $ill or mista*en
jud"ement of t$o thousand corporations%"
4he "angerous powers conferre" upon the national banks were so
clearly pointe" out by Mr. ;arlisle in his magnificent speech that
the bill passe" the 6ouse by a "ecisi!e !ote.
n the meantime# the policy of the banks in making war upon the
public cre"it recei!e" criticism from many >ournals which were
frien"ly to the national bank system.
Ie will 5uote a few extracts: -
"1t is a ;uestion $hether a cli;ue of !an*ers is to dictate to
Con"ress and the country $hat is for the !est interest of the country,
and to manipulate the money mar*et in order to depress the stoc*
- 9ew Gork 0"!ertiser.
"1t is rule or ruin $ith the national !an*s% When Con"ress "ets
do$n on its honora!le *nees to the national !an*s everythin" $ill
!e lovely%
"=attenin" on the 'reasury for years, the national !an*s have
entered into a conspiracy to $rec* the !usiness of the country
rather than su!mit to $hat they consider unfavora!le le"islation%
'he people $ill remem!er this a"ainst them, and the day of
rec*onin" is not as far off as they ima"ine%"
- ;hicago 9ews.
"Some of the national !an*s of this city have played a very
contempti!le part in the flurry of yesterday and to4day% 1t is not the
first time that they have acted in this $ay a"ainst the pu!lic credit%
1n one instance, $hich $e do not care to name at present, !ut $hich
$ill !e understood !y most Wall street people, the $ant of loyalty to
the pu!lic credit has sho$n itself on all occasions, from the
out!rea* of the civil $ar in &CB& do$n to the present time%"
- 9ew Gork ;ommercial.
"1t is understood that there is to !e an amendment offered in the
5ouse to the !ill providin" for the issue of "reen!ac*s to ta*e the
place of !an* circulation that may !e $ithdra$n% 1f this sensi!le
precaution is ta*en it $ill instantly restore confidence and ta*e
permanently a$ay from the !an*s this fearful po$er to $ithdra$ in
one day all their !ills from circulation, or, $hat is $orse, loc* up an
e;ual amount of "old and le"al tenders and leave the street utterly
$ithout means of doin" !usiness% Such terri!le po$er no set of men
should for one instant possess%"
- 9ew Gork =raphic.
4he 9ew Gork 4ribune uttere" the following implie" threats
against ;ongress shoul" the bill pass. t sai": -
"'he country *no$s that it has escaped a "reat disaster% Every$here
there is a feelin" of intense relief and than*fulness, as su!stantial
people come to reali2e ho$ terri!le a revulsion the enactment of the
Carlisle section $ould have caused%
"+ut it is not $ell to for"et that the dan"er has !een escaped only
upon condition that the fatal section is defeated%
"1f Con"ress or the (resident is led to !elieve that disaster has !een
and can !e averted !y any action of the 'reasury Aepartment, so
that the pendin" !ill can no$ !e passed $ithout causin" a "reat
calamity, the conse;uences of that error may !e incalcula!ly
disastrous% @et the situation !e fully understood%"
4he toryism of the 4ribune always shone forth conspicuously
when it "efen"e" the lawless banks of 9ew Gork ;ity.
"'he trade and "eneral !usiness of the country has !een su!jected
to a strain durin" the past $ee* more severe than any $hich has
!een put on them since &C:0%
"'his deplora!le state of affairs $as !rou"ht a!out !y the selfish
conspiracy of a certain num!er of national !an*s !ent on opposin"
the national $ill in the matter of esta!lishin" a lo$er national rate
of interest !y such duly chosen representatives of the people of the
nited States as they have thou"ht proper to adopt%
"Gur Dovernment and people $ho maintain it have su!mitted to
"reat sacrifices to afford all reasona!le support to national !an*s
+ut the !an*s have not *ept $ithin the reasona!le limits of their
demand for compensation for such financial services as they have
!een a!le to render the country%
"3 fe$ of these !an*s have not hesitated to invite the destruction of
the $hole system and provo*e popular an"er !y pursuin" a course
$hich must inevita!ly force on 3merican citi2ens the ;uestion
$hether le"islative and e<ecutive officers chosen to represent the
people or a fe$ !an* officers are to administer the financial
destinies of this country% 1t is not pro!a!le the natural resentment of
the le"islature a"ainst the attempted conspiracy $ill e<tend to the
condemnation of the $hole national system%
"+ut $e have no dou!t at the same time that $hen the indi"nation
has cooled off, those conspirators a"ainst the prosperity and credit
of the Iepu!lic $ill !e su!jected to such temperate and $holesome
discipline as shall !e a $arnin" to them and their *ind for years to
- 9ew Gork Iorl".
"1t stri*es us that the "entlemen in Wall street, $ho are tryin" to
prevent the Senate =undin" +ill from !ecomin" a la$, rather ma*e
a mista*e% ndou!tedly they have a ri"ht to e<press their opinions
a!out the !ill, !ut $hen it comes to threatenin" that, unless it is
modified to meet their vie$ers, they $ill $rec* the trade of the
entire country, they "o a step too far%
"'he avera"e Con"ressman has no such fear of !an*s and !an*ers
as to ma*e him alter his vote to avoid their displeasure, and as to
any possi!ility of the mischief they may do, he $ill soon find a $ay
to prevent it% 1f the officers of the !an*s should attempt, as some
foolish men here say they $ill do, to $ithdra$ their circulation
unless certain provisions in the !ill are stric*en out, it $ould !e
very easy to supply the deficiency $ith an additional issue of
"reen!ac*s, and if they try !y underhand means to th$art the
ne"otiation of the ne$ !onds !ecause the rate of interest is not hi"h
enou"h to please them, they can !e deprived of the privile"e of
issuin" circulation alto"ether%
"1t is a dan"erous thin" for the tail to attempt to $a" the do", for if
the do" "ets an"ry he can s$itch the tail a!out in a very unpleasant
$ay for the tail% 'he truth is, that in matters of national interest
there is no set of people as stupid as the Wall street financiers%
3!sor!ed in the !usiness of !uyin" and sellin" stoc*s and lendin"
money, they only consider $hat immediately effects to4dayHs
mar*ets, $ithout a foresi"ht of the future or re"ard for $hat is
"oin" on else$here%
"1n the present case they are evidently in !lissful i"norance of the
"eneral hostility of the people of the West and South4$est to the
national !an* system and the slender thread of toleration on $hich
it han"s% 1t needs only a "ood prete<t to secure the s$eepin" of the
$hole thin" out of e<istence, and the su!stitution for it of any
e<clusive national currency% 'hat prete<t all the Wall street !an*ers
seem !ent on furnishin", and Washin"ton $ill, $e fear, !e only too
"lad to sei2e upon it%"
- 9ew Gork 3un.
:n March 1# 1DD1# the ;hicago $xpress# which oppose" the
pretensions of the national banks# e"itorially spoke as follows: -
"'he fundin" !ill, as it passed !oth 5ouses of Con"ress, $as, in the
lan"ua"e of a Washin"ton dispatch, H'he most serious !lo$ the
national !an*s ever received from Con"ress since the or"ani2ation
of the national !an*in" system%"
"'he act of January, &C:7, clothed the national !an*s $ith the
po$er of unlimited and unrestricted contraction and e<pansion of
the currency% 1t "ave them a!solute control over the volume of
money, and conse;uently over the mar*et value of la!or and all
*inds of property%
"1t "ave them po$er to inflate the currency $hen they could ma*e
money throu"h the inflation of prices, and $hen their interests could
!e !etter served !y panic, depressed prices and "eneral !usiness
sta"nation and !an*ruptcy, they had po$er to accomplish their end
throu"h the contraction of their circulatin" notes%
"'he provisions of the ne$ fundin" !ill materially interfere $ith
their nicely4planned scheme, and deprive them of nearly all their
po$er over sudden contractions and inflation% 1t puts a limit to their
privile"es, and !ounds to their un$arranted po$ers%
"Without $aitin" even for the concurrence of the 5ouse in the sli"ht
Senate amendments, a lar"e and po$erful !an* lo!!y from Wall
street and the clearin" house association at once !ore do$n upon
the White 5ouse armed $ith ma"a2ines, Datlin" "uns and infernal
machines of dire calamities, $hich they threatened $ould surely
e<plode in the very heart of the nationHs !usiness and industries
from spontaneous i"nition, in case he did not intend his prero"ative
to save% 'hey $ere armed $ith authority from the national !an*s
represented !y the 3merican +an*ersH 3ssociation to inform his
E<cellency that in case he $ithheld his veto they $ould immediately
retire their circulation, in $hich case a money strin"ency $ould
follo$ $hich could !e terri!ly disastrous to every !usiness interest
producin" the most ruinous financial crash $hich ever !efell the
3enator Plumb# who was one of the three republican 3enators that
!ote" for the bill# state" his opinion as follows: -
"1 am a national !an* president, so 1 can spea* $ithout prejudice%
"1 tell you the crisis has come $hen $e shall see $hether the !an*s
run the Dovernment or the Dovernment the !an*s% 1 thin* the
Dovernment has a ri"ht to fi< the rate of interest it $ill pay, and it is
no !usiness of any set of men% 1t ma*es no difference to the people if
Wall street "am!lers do lose money, or railroad stoc*s stop risin"% 1t
$ould ma*e a difference if the hoes in $estern cornfields should
stop, and it is $ith the producers that the prosperity of the country
rests% @et the !ottom fall out of it if it $ill%
"1t is an artificial movement to coerce the Dovernment%"
4he fun"ing bill passe" ;ongress# an" was presente" to Presi"ent
6ayes# who# on March A# 1DD1# returne" the bill to the 6ouse of
1epresentati!es with his !eto# accompanie" by a message stating
his ob>ections to the measure.
4he following extracts from the message will gi!e the rea"er a
correct opinion of the influence that force" the Presi"ent to !eto
this measure# which was the result of the mature" labor of
4he Presi"ent says: -
"While in my opinion it $ould !e $ise to authori2e the Secretary of
the 'reasury, in his discretion, to offer to the pu!lic, !onds !earin"
0M per cent interest in aid of refundin",
"1 should not deem it my duty to interpose my constitutional
o!jection to the passa"e of the present !ill if it did not contain in
the fifth section provisions $hich, in my jud"ment, seriously impair
the value, and tend to the destruction of the present national
!an*in" system of the country%
"'his system has no$ !een in operation almost t$enty years%
"No safer or more !eneficial !an*in" system $as ever esta!lished%
1ts advanta"es as a !usiness are free to all $ho have the necessary
"1t furnishes a currency to the people $hich for convenience and the
security of the !ill holder has pro!a!ly never !een e;ualed !y that
or any other !an*in" system%
"1ts notes are secured !y the deposit $ith the "overnment of the
interest4!earin" !onds of the nited States%"
7urther on in his !eto message# Presi"ent 6ayes makes !igorous
ob>ections to section H of the act# on the groun"s that it
>eopar"ize" the existence of the national banks# an" there woul"
be no in"ucement for the organization of a""itional ones.
6e says: -
"1n short, 1 cannot !ut re"ard the fifth section of the !ill as a step in
the direction of the destruction of the national !an*in" system%"
0gain he says: -
"nder this section it is o!vious that no additional !an*s $ill
hereafter !e or"ani2ed, e<cept, possi!ly, in a fe$ cities or localities
$here the prevailin" rates of interest in ordinary !usiness are
e<tremely lo$%"
4he extreme solicitu"e manifeste" by the Presi"ent for the
national banks is apparent.
4hus the timi" 6ayes 5uake" before this august banking
monopoly# an" !etoe" this beneficial measure at the insolent
comman" of an organize" cli5ue# whose gree" was not e!en
satiate" with CU per cent usury.
7urthermore# this bill woul" ha!e resulte" in a sa!ing to the
=o!ernment of many millions per annum by a re"uction of the
rate of interest.
t will subse5uently appear that these bankers who threw the
country into a state of panic+ who threatene" ;ongress+ who
force" the weak 6ayes to !eto this bill+ who wante" a king# will#
in the near future# constitute themsel!es the special guar"ians of
that most sacre" ob>ect - the public cre"itS
4hese conspirators# who pre!ente" a re"uction in the interest on
the public "ebt# will# in a few years from this perio"# assume the
championship of the public faithS
n the meantime# that powerful ally of the money power# the
3ecretary of the 4reasury# was throwing the weight of his official
influence against the sil!er "ollar.
n one of his reports to ;ongress# he makes the following
recommen"ation with reference to the sil!er "ollar+ he says: -
"'he Secretary !elieves that all the !eneficial results hoped for in a
li!eral issue of silver coin !y issuin" this coin, in pursuance of the
"eneral policy of the act of &C70, in e<chan"e for nited States
notes, coined from !ullion purchased in the open mar*et, !y the
nited States%"
0n analysis of this recommen"ation# in !iew of the resumption
act of 1DBH# will illustrate the enmity of 3ecretary 3herman
towar" the use of sil!er as a stan"ar" money.
7irst+ 6e woul" limit all sil!er coins# whether "ollars or
otherwise# as a legal ten"er# to the amount of fi!e "ollars.
3econ"+ Iith this limite" legal ten"er sil!er coin he woul"
re"eem an" retire the ,nite" 3tates legal ten"er notes.
4hir"+ 6e woul" re"eem sai" sil!er coin in whatL - n gol".
0n" that woul" be the sole re"emption money.
4his policy of the 3ecretary aime" at the complete with"rawal
an" cancellation of TACJ#(((#((( of legal ten"ers# by a
re"emption in sil!er coin# the latter re"eemable in gol".
4his scheme of contraction woul" be followe" by continual
issues of bon"s to secure gol" for a re"emption fun" for this
t will be notice" that this man# who was so anxious to make
,nite" 3tates notes an" sil!er coin re"eemable in gol"# ne!er#
"uring his public career# once intimate" that national banks
shoul" re"eem their circulating notes in gol".
n 1DD(# 3ecretary 3herman again inflicte" one of his usual
recommen"ations on ;ongress# asking for the passage of a law to
prohibit the further coinage of sil!er.
Ie 5uote his exact language in which he a!ers: -
"=irst, 1t is too !ul*y for lar"e transactions, and its purpose is
confined mainly for payments for manual la!or, and for mar*et
purposes for chan"e% 'he amount needed for these purposes is
already in e<cess of the pro!a!le demand%
"Second, 1t is *no$n to contain a ;uantity of silver of less mar*et
value than the "old in "old coin%
"'his fact $ould not impair the circulation of such limited amount
as e<perience sho$s to !e convenient for use, !ut it does prevent its
!ein" held or hoarded as reserves, or e<ported, and pushes it into
active circulation, until it returns to the 'reasury, as the least
valua!le money in use%
"=or these reasons the Secretary respectfully !ut earnestly
recommends that the further compulsory coina"e of the silver dollar
!e suspended%"
4he phrase "compulsory coina"e" clearly in"icates the hostility of
the 3ecretary towar" sil!er.
0n examination of his reasons# urging the suspension of the
coinage of the sil!er "ollar# furnishes the strongest argument
against his position.
n the first place# the sil!er "ollars are too hea!y for large
transactions# therefore this fact places them beyon" the control of
the national banking money power.
4he gol" gamblers an" bullion brokers of Iall street foun" it
"ifficult to obtain control of those coins whose largest
"enominations were one "ollar pieces.
0t the !ery time that 3ecretary 3herman urge" this ob>ection
against the sil!er "ollar# the incon!enience# if any# of its size an"
weight was ob!iate" by the issuance of sil!er certificates in
"enominations of from ten to one thousan" "ollars.
6e says that it was the money of small transactions# such as the
payment of wages to labor# an" the purchase of pro!isions.
4his is one of the strongest reasons that coul" be a"!ance" for the
continue" coinage of the sil!er "ollar. 4his money that pai" the
wages of labor was worth one hun"re" cents on the "ollar.
0gain# he says that it was of less market !alue than the gol" in
the gol" "ollar.
4his is true of it as a were commo"ity# but as a legal ten"er# a
me"ium of exchange# it was the e5ual of gol" anywhere on the
face of the earth.
<ut the true animus of the 3ecretary against the sil!er "ollar
sprung from the fact that it was not hel"# or hoar"e"# or exporte"#
but that it was in acti!e circulation.
4his is the first time that an 0merican 3ecretary of the 4reasury
a"!ocate" a theory as absur" as the one urgent by Mr. 3herman.
4he principle upon which a true monetary system is base" is that
of circulation. Mints are not establishe" to coin money for the
purpose of hoar"ing it up in the !aults of banks.
t performs its true functions when it passes from han" to han" in
exchange for the commo"ities an" necessaries of life.
:ne hun"re" an" fifty years ago the celebrate" historian an"
philosopher# Da!i" 6ume# in speaking of the effects of hoar"ing
money# sai":
"3s re"ards prices, money loc*ed up in chests is as if it $ere
6e says# "1t is not e<ported%"
Must why 3ecretary 3herman "esire" a coin that can be rea"ily
exporte" to some foreign country# is not state" by him in his
report an" recommen"ations to ;ongress.
4he ob>ections urge" against sil!er because of non-export of that
coin# shows that it coul" not be rea"ily shippe" an" re-shippe"
across the 0tlantic# at the no" an" beck of the stock gamblers#
bullion brokers an" panic bree"ers of the 9ew Gork clearing
house an" /on"on.
4he 3ecretary sai"# "1t is in active circulation%"
4his constitutes no crime on the part of sil!er.
0ll money is coine" or issue" to subser!e the purposes of man by
being thrown into acti!e circulation as a me"ium of exchange.
4hese weak an" puerile reasons of 3ecretary 3herman against the
continue" coinage of sil!er "ollars ha" no effect upon ;ongress.
4hey were contemptuously ignore" by that bo"y.
4he chil"ish spite exhibite" by 3ecretary 3herman against sil!er#
his petty slan"ers against the stan"ar" "ollar# an" his sla!ish
"e!otion to the traitorous money power# "isguste" many of the
best men of the party to which he belonge"+ an" on March A(#
1DD(# the ;hicago 4ribune a"ministere" a stinging rebuke to his
t sai": -
"Since the passa"e of the silver la$ /r% Sherman has done
everythin" to dispara"e silver9 he has limited the coina"e to the
minimum9 he refused to e<ercise the DovernmentHs option to pay out
silver in any considera!le amounts9 he has restricted the issue of
silver certificates9 he made the 'reasury Aepartment a mem!er of
the Ne$ )or* Clearin" 5ouse, from $hich silver is e<cluded9 and
has !y $ord and letter and act done all in his po$er to discoura"e
the use of silver in the nited States%"
4he 4ribune "enounce" his truckling policy on the financial
5uestion in the following language:-
"3t the openin" of the present Con"ress he made the e<traordinary
recommendation that Con"ress stri*e from 6078,888,888 of the
"reen!ac* currency of the country its le"al tender character% 1t $as
a hi"h !id for the support of Wall street, !ut a fatal one addressed to
the producin" and industrial classes of the country%"
n the same e"itorial the 4ribune says: -
"1t is hi"hly impro!a!le that /r% Sherman $ould receive an
electoral vote from any State !et$een the 3lle"hany and Ioc*y
/ountains upon the issues of a!olition of silver money and
demoneti2ation of "reen!ac*s $hich $ould involve a contraction of
the o$n and paper le"al tender currency e<ceedin" 6J88,888,888
$hich mould produce ruin to every industrial interest and every
le"itimate enterprise%"
4he public career of Mohn 3herman is the most remarkable in the
annals of the nation. Ihen a young man# he turne" his attention
to the profession of the law# in which he earne" but meager fame
an" fortune. 0t this time he was a comparati!ely poor man.
0fter a brief# or rather briefless experience as a lawyer# he
"etermine" to enter public life an" was electe" to the 4hirty-
fourth ;ongress in 1DHC.
0fter ser!ing in the lower 6ouse until the outbreak of the war# he
was electe" to the ,nite" 3tates 3enate. During the fore part of
his career in that bo"y# he ser!e" as ;hairman of the ;ommittee
on 7inance# the most important an" influential position that can
be conferre" upon a member of the 3enate.
6e is the author of the present system of national banks# an" he
has left his impress upon the !arious financial measures of the
=o!ernment from 1DJ1 to 1DBH. :n the accession of 6ayes to
the Presi"ency# he was appointe" 3ecretary of the 4reasury at a
salary of TD#((( per annum.
During his term of office at the hea" of that great "epartment# he
was a firm frien" of the national banking money power which
continually wage" a war of extermination upon the currency of
the ,nite" 3tates.
0s 3ecretary of the 4reasury he execute" those great fun"ing
operations# by which it was allege" the people ha" been sa!e" a
!ast sum in interest# notwithstan"ing the singular fact that# "uring
his incumbency# the national banks persua"e" Presi"ent 6ayes to
!eto the fun"ing bill# which re"uce" the rate of interest upon the
national "ebt.
During these fun"ing operations# he selecte" !arious national
banks as "epositories for the money recei!e" from the sale of
:ne of these banks was known as the 7irst 9ational# situate" on
<roa"way# in 9ew Gork ;ity. t ha" a capital of TH((#((( an"
occupie" offices that were humble compare" with the palatial
5uarters of the great financial institutions of that city.
0ccor"ing to the sworn statement of the officials of this bank# its
total capital was TH((#((( on the A1st "ay of December# 1DBE+
on Manuary 1# 1DBD# the un"i!i"e" profits# after the payment of
"i!i"en"s# were T1C8#JB(+
on 0pril Cth of the same year the un"i!i"e" profits were
on Mune 1Cth# after the lapse of two months# the un"i!i"e" profits
were TJBE#(1D.DD+
on :ctober 8n"# these profits reache" the sum of TD(C#H11.8J+
on December 18# 1DBD# they were TDJB#B((.DC.
4he amount of "i!i"en"s pai" by this bank to its stockhol"ers#
"uring this time# has ne!er been ascertaine" or "isclose"# but that
it was !ery large a"mits of no "oubt.
6ere is a single national bank# the special protegY of 3ecretary
3herman# that# in the short space of ten months# accumulate"
un"i!i"e" profits which excee"e" its capital stock by more than
three hun"re" thousan" "ollars.
:n Manuary 1# 1DBD# this pet bank of the 3ecretary was the
custo"ian of =o!ernment fun"s amounting to T8C#BHE#ECD.H(.
:n 0pril Cth# of the same year# it hel" =o!ernment fun"s
amounting to TJE#E8B#B(C.CA+ on Mune 1Cth# those "eposits were
increase" to T18D#1(E#(B1.(C+ on :ctober 8n"# they were
t was from these "eposits of =o!ernment fun"s that the bank
accumulate" those enormous un"i!i"e" profits.
Ihy this comparati!ely small bank shoul" be ma"e the
"epository of =o!ernment fun"s to two hun"re" an" fifty-six
times its capital has ne!er been explaine" by 3ecretary 3herman.
0t this time# the sub-treasury of the ,nite" 3tates was situate" in
?$"itor&s 9ote:@ suspect this figure was scanne" incorrectly an" was in fact much
greater than shown here# though no e!i"ence can be foun" to support this supposition.
the same sty
as this pet bank# an" coul" ha!e been utilize" as a
"epository for this money.
t will be seen that this bestowal of official fa!or upon this bank
was worth the immense sum of twenty-one thousan" "ollars per
4he figures with reference to the amount of un"i!i"e" profits of
the bank# an" the amounts of public money "eposite" therein# are
taken from the report of the ;omptroller of the ;urrency for the
year 1DD(.
:n Manuary 1# 1DD(# 3enator <eck# of -entucky# calle" the
attention of the 3enate to these astonishing facts# an" in the
course of his speech sai": -
"1 came to the conclusion, loo*in" over these statements, that the
!est !an*in" capital a man can have is the "ood $ill of the
Secretary of the 'reasury%
"Suppose the Senator from Ne$ )or* $ere the !est !an*er and 1
$ere to "o to him and say, H1 $ant to "o into partnership $ith you,H
and the Senator should say to me, L
"What capital have you "ot>H 4 HNone%H
HWhat do you propose to do>H4 H1 propose to !rin" you the "ood $ill
and the deposits of the Secretary,H
"1 thin* the Senator $ould ta*e me into partnership, and he $ould
ma*e more money !y doin" it than he ever made in his life, and $e
$ould contri!ute lar"ely to any campai"n fund desired !y the
0t the time when this bank was ma"e# the custo"ian of these
fabulous sums of public money# Mohn 4hompson# a large
stockhol"er# was its !ice-presi"ent.
3ty - 0n agricultural term for the pen or enclosure use" by pigs. ,se" here probably
in a "erogatory sense. ?$".@
6e was informe" that this bank with a capital of only TH((#(((
ha" subscribe" as a purchaser of four per cent bon"s to an
amount excee"ing thirty millions of "ollars.
Ihen ac5uainte" with this fact# Mr. 4hompson proteste" against
the assumption of such a risk# an" sai": -
"1f these !onds $ere to fall in value one per cent it $ould $ipe out
three fifths of our capital% 1f they should fall t$o per cent, it $ould
a!sor! more than the entire capital of the !an*%"
Mr. 4hompson was assure" by its presi"ent that there was no
"anger incurre"# because of an agreement with the 3ecretary of
the 4reasury that the bank# in that case# woul" not be compelle"
to pay for the bon"s. Mr. 4hompson was astoun"e" at this
information# an" he sol" his stock in the bank# with"rew from its
"irectory an" organize" the ;hase 9ational.
During the a"ministration of 3ecretary Manning# the 4reasury
Department "eposite" sixty-three million "ollars with the !arious
national banks of 9ew Gork ;ity. 0t that time Mr. 3herman was
in the 3enate an" "enounce" the act of Mr. Manning in the
strongest language.
Get# 3ecretary 3herman ha"# while he was at the hea" of the
4reasury# "eposite" more than four times that sum in a single
During the entire public career of Mr. 3herman as 1epresentati!e
in ;ongress# as ,nite" 3tates 3enator# an" as 3ecretary of the
4reasury# he was not engage" in any other business.
Iith the exception of the four years that he was 3ecretary of the
4reasury# "uring which he recei!e" eight thousan" "ollars per
annum# his official yearly income ne!er excee"e" fi!e thousan"
n a letter to one of his political frien"s in the 3tate of :hio# Mr.
3herman "etails the immense sacrifices he ha" ma"e for the
public "uring the forty years that he was its ser!ant.
6e state" that his li!ing expenses annually a!erage" ten thousan"
"ollars "uring that time# an" that his officia1 income ne!er
e5uale" his expen"itures. 0t the time of the writing of that letter#
his resi"ence in Iashington was a palace whose sumptuousness
ri!ale" that of the crowne" hea"s of $urope.
n a""ition# he was one of the most extensi!e owners of real
estate at the capital. 6e is a !ery large hol"er of stocks in national
banks an" railroa" corporations.
4he miraculous process by which a high official of the
=o!ernment can expen" twice the amount of his salary for
or"inary expenses "uring the early part of his political career - at
which time he was a poor man - an" yet accumulate a
magnificent fortune out of the surplus# has long been a mystery#
for the solution of which Mr. 3herman has !olunteere" no
6is accumulation of millions e!inces a "egree of thrift that is
won"erful+ an" the facts in the career of 3enator 3herman surpass
the fabulous story of -ing Mi"as# whose touch turne" e!erything
to gol". Get this man is re!ere" by the national banking money
power an" its satellites as the ablest 0merican financier of the
age. 3ince 1DJ1# he has been on e!ery si"e of nearly e!ery
political an" financial 5uestion that has agitate" the country.
4o illustrate the facility with which he can change his position on
public 5uestions# we refer to his late action on the policy of the
,nite" 3tates towar" the recognition of ;uban n"epen"ence.
n the month of Manuary# 1DEB# he intro"uce" a fiery resolution in
the 3enate "eman"ing the spee"y recognition of ;uban
belligerency. 6e out->ingoe" the Mingoes.
4hree "ays afterwar"# he with"rew sai" resolution# with the lame
explanation that its a"option woul" be inexpe"ient at that time.
4he profits of the national banking system up to an" inclu"ing the
year 1DD( were immense.
n a report of the ;omptroller of the ;urrency for 1DD1# this
official states that the net earnings of the national banks for the
prece"ing twenty years were TH18#D8H#A8H# besi"es a surplus of
T1A(#(((#((( - the whole aggregating TJC8#D8H#A8H+ an" that this
enormous profit was earne" upon an a!erage capital of
TH((#(((#(((# - a net profit of o!er twel!e per cent annually
abo!e all expenses# inclu"ing the princely salaries pai" to the
executi!e officers of the respecti!e banks.
t will be aske"# why shoul" these financial institutions so often
seek to bring on stringencies in the money marketL 4he reason is
clear to those who un"erstan" what class of men are at the hea"
of the powerful national banks of 9ew Gork ;ity an" other
speculati!e centers.
0n examination of the "irectories of these great banks exhibits
the startling fact# that the executi!e officers# "irectors# an" hea!y
stockhol"ers of these institutions are the largest operators on the
3tock $xchange.
6a!ing control of almost unlimite" amounts of money# they are
enable" to "epress the !alue of stocks# bon"s# an" other securities
when they are buyers on the market+ an" can enhance the !alue of
stocks hel" by them when "esirous of selling.
4hus they are empowere" to correct the fortunes of the smaller
operators. 4he entire property of the nation# both real an"
personal# is at the absolute mercy of these national bank money
kings. 4he men# or combination of men# who control the !olume
of money of a nation are its masters# whether it is an absolute# or
a constitutional monarchy# or a republic.
t is a recognize" principle of finance# that the !olume of money
afloat in a country fixes the general le!el of prices of
commo"ities+ it is true that there are some exceptions to this
general rule# but they arise from unusual an" unforeseen
4he power of the national banks to su""enly contract the
circulating me"ium of the country# an" the tyrannical manner in
which they ha!e exercise" that pri!ilege in the past# has
awakene" the gra!est apprehension of the thinking men of the
n his report of 1DD(# 4reasurer =ilfillan
state" that the national
banks since the 8(th of Mune# 1DBC# up to the time of his report of
1DD(# ha" surren"ere" their circulation in a sum excee"ing
TDH#(((#(((# by "epositing legal ten"er notes for the re"emption
of their circulating notes.
n a""ition to this contraction spoken of by the 4reasurer in this
report# the national banks possesse" a""itional means of creating
a su""en scarcity of money.
<esi"es the circulating notes which these banks were authorize"
to loan as money# they controlle" "eposits of more than a billion
"ollars. 4herefore the loanable fun"s of these banks coul" be
transforme" into a most "ea"ly weapon against the legitimate
enterprise of the nation.
0ll that was necessary to bring on a monetary panic was a
concerte" plan on the part of these banks to call in their loans#
an" this action woul" be followe" by a crisis as surely as night
followe" the "ay.
Mames =ilfillan - )0pril 8H# 1DAJO0pril D# 1E8E* 1Ath 4reasurer of the ,nite" 3tates
;60P4$1 F.
904:90/ <09-3 3$;,1$ 0 ;:949,04:9 :7 46$1
"'he a!andonment of silver $ill result in the enhancement of the
!urden of all de!ts and fi<ed char"es, actin" as a dra" upon
production, and suffocation, stran"ulation, are $ords hardly too
stron" to e<press the a"ony of the industrial !ody $hen em!raced in
the fatal coils of a contractin" money%"
- 7rancis 0. Ialker.
"/any of our rich men have not !een content $ith e;ual protection
and e;ual !enefits, !ut have !esou"ht as to ma*e them richer !y act
of Con"ress%
"+y attemptin" to "ratify their desires $e have, in the results of our
le"islation, arrayed section a"ainst section, interest a"ainst interest,
and man a"ainst man in a fearful commotion $hich threatens to
sha*e the very foundation of our union%%
"1t is time to pause in our career9 to revie$ our principles, and, if
possi!le, to revive that devoted patriotism and spirit of compromise
that distin"uished the sa"es of the Ievolution and the fathers of our
"1f $e cannot at once, in justice to interests invested under
improvident le"islation, ma*e our Dovernment $hat it ou"ht to !e,
$e can at least ta*e a stand a"ainst all ne$ "rants of monopolies
and e<clusive privile"es9 a"ainst any prostitution of our
Dovernment to the advancement of a fe$ at the e<pense of the many,
and in favor of compromise and "radual reform in our code of la$s
and system of political economy%"
- 0n"rew Mackson.
n the presi"ential campaign of 1DD(# the two great political
parties arraye" themsel!es against each other in this contest with
the utmost zeal.
4he 9ational 1epublican ;on!ention met in ;hicago
4he battle cry of the 1epublican party in this notable contest was
"3 solid South a"ainst a solid North%"
4he money power >oine" in the senseless hue an" cry# an" by
playing upon the smoul"ering pre>u"ices of the people growing
out of the late war# an" by seeking to reopen the festering woun"s
of sectional hate# aime" to control the election an" conse5uently
the financial policy of the =o!ernment.
:wing to the "issensions of the 9ew Gork 3tate "emocracy#
which grew out of the gubernatorial
election of 1DBE# an" which
were not heale"# an" the la!ish use of money# the 1epublican
can"i"ates were successful.
0fter the Cth of March# 1DD1 the 1epublicans ha" full control of
the =o!ernment# an" there was no obstacle in their way to hin"er
or obstruct the execution of their policy.
Iilliam Iin"om#
of Minnesota# was selecte" by Presi"ent
=arfiel" for the post of 3ecretary of the 4reasury.
0fter the a">ournment of ;ongress in the early part of 1DD1#
3ecretary Iin"om an" the bon"-hol"ers mutually agree" that the
bon"s bearing fi!e an" six per cent interest then maturing# shoul"
be refun"e" at three an" one-half per cent# payable at the option
of the =o!ernment.
4his action of 3ecretary Iin"om ha" no authority in any law
then existing# an" was an unwarrante" assumption of the
constitutional power of ;ongress by an executi!e officer.
0n election for a go!ernorship typically of a city# such as 9ew Gork.
Iilliam Iin"om# )1D8B - 1DE1* ser!e" as 4reasury 3ecretary on two occasions in
1DD1# an" 1DDE-E1.
4he usurpation of legislati!e power by the 3ecretary of the
4reasury was tolerate" for the reason that it sa!e" the
=o!ernment a large amount of interest+
ne!ertheless# ;ongress# at its next session# sharply criticize" Mr.
Iin"om for this exercise of arbitrary power.
4he action of the bon"-hol"ers in !oluntarily accepting a lower
rate of interest than their contracts calle" for excite" a great "eal
of comment at the time.
4he supporters of the national banking money power ne!er
wearie" of pointing at this sacrifice by the national cre"itors as a
remarkable example of patriotism# an" asserte" that the bon"-
hol"ers an" national banks were not as "angerous to the liberties
of the people as their opponents "eclare" them to be.
4his apparent sacrifice of millions of interest annually was a rare
stroke of policy on the money power.
4he shrew" men at the hea" of the national banking system were
thoroughly ac5uainte" with those traits of character which
"istinguishe" who 0merican people are from all others of mo"ern
4hey knew that we# as a people# look to the e!ents of to"ay an"
"o not worry with apprehensions for the future.
Moreo!er# the country ha" entere" upon a career of prosperity#
the ten"ency of which was to make the people forgetful of the
wrongs heape" upon them in the past by the present banking
0ccor"ing to the pro!isions of the national banking law of 1DJA#
the charters of the national banks woul" expire in 1DDC# an" the
time seeme" propitious for this money power to carry into
execution the next step of its policy - which was to obtain the
passage of a law through ;ongress exten"ing the franchises of
the national banks.
4herefore# "uring the time that the fears of the people were
temporarily allaye" by the !oluntary acts of the bon"-hol"ers an"
banking interests in accepting a lower rate of interest on their
bon"s# the national banking money power seize" this gol"en
opportunity to secure an extension of their system.
6ence# at the next session of ;ongress# in 1DD8# Mr. ;rapo#
Massachusetts# intro"uce" a >oint resolution authorizing national
banking associations to exten" their corporate existence for the
perio" of twenty years.
4he speeches ma"e against its passage were !ery able# notably
those of 1epresentati!es ;arlisle an" ;ulberson.
3o powerful was the opposition against an extension of the
national banking system that the Democratic minority succee"e"
in engrafting a section upon the resolution# by which the
circulating notes of national banks coul" not be surren"ere" to an
amount excee"ing TA#(((#((( per month.
4his curtaile" the power of the banks to su""enly contract the
!olume of currency# by surren"ering up for cancellation large
amounts of their circulating notes# a practice to which they ha"
resorte" many times in the past twenty years.
During the "ebate upon this resolution it was shown by the
opponents of the national banking system that the 9ew Gork
;learing 6ouse 0ssociation ha" conspire" against the
constitutional power of ;ongress# by refusing to accept sil!er
"ollars an" sil!er certificates+ that this association of national
banks hel" themsel!es superior to the law# an" arraye"
themsel!es in soli" phalanx against the financial interests of the
Iilliam Iallace ;rapo )1DA(-1E8J* 1epublican ;ongressman# an" member of the
boar"s of many prominent businesses in Massachussetts. 0 /awyer# an" libertarian by
t was further shown that the poorer of the national banks was so
great that they ha" the means to unsettle business throughout the
country# an" that e!ery panic# from which the country suffere"
since the close of the war# was originate" by these banks.
<y an a""itional amen"ment to the resolution it was ma"e
compulsory on the part of the clearing house associations to
accept sil!er certificates in settlement of balances.
0gain# the pri!ilege of the national banks to institute suits at law
in the 7e"eral courts# as courts of original >uris"iction# was taken
away# an" this means of "ragging litigants hun"re"s of miles
from their homes at immense sacrifice of time an" money# was
"enie" to these corporations# which heretofore was one of their
most tyrannical means of harassing in"i!i"uals.
4herefore it will be seen that the stur"y opposition of the
Democratic minority in the 6ouse ha" succee"e" in extracting a
few of the sharpest fangs of the gree"y national banking money
0s amen"e"# the resolution passe" the 6ouse an" was transmitte"
to the 3enate.
During the 3enate "ebate on the >oint resolution to renew the
charters of the national banks# 3enator Foorhees elo5uently an"
truthfully "epicte" the !ast bounties that ha" been bestowe" upon
these creatures of the =o!ernment.
6e pointe" out the o!ersha"owing influence of the national
banking power.
:n Mune 1Eth# 1DD8# he sai": -
"3 !rief "lance at the conduct of the !an*s durin" the last year and
a half is all that 1 can indul"e in at this time, !ut it is sufficient to
prove the truth of $hat 1 say%
"1n the closin" days of the last Con"ress and of the last
3dministration the !an*s precipitated an issue upon the people
$hich ou"ht not to !e for"otten on an occasion li*e this9 an issue so
full of dan"er to constitutional li!erty that it ou"ht to !e faithfully
remem!ered no$ that they are as*in" a ne$ and indefinite lease of
"1t is no$ t$enty years a"o that this Dovernment first en"a"ed in
!uildin" up, fosterin", and encoura"in" the present vast and
overshado$in" system of national !an*in"%
"No favor ever demanded !y the !an*s has ever !een $ithheld, no
privile"e denied, until no$ they constitute the most po$erful
moneyed corporations on the face of the "lo!e%
"Con"ress has heretofore on nearly all occasions a!dicated its
po$ers under the Constitution over the finances of the !an*s, e<cept
$hen called upon to le"islate in their favor%
"'hey have demanded the violation of le"islative contracts $ith the
people, and the demand has !een "ranted, $here!y their o$n "ains
and the peopleHs !urdens have !een increased a thousand fold
!eyond ri"ht and justice%
"'hey have demanded the remission of all ta<ation on their !onds,
and it has !een conceded, thus leavin" the poor to pay the ta<es of
the rich%
"'hey have !een fortified in their stron"holds of moneyed caste and
privile"e !y dou!le lines of unjust la$s, supplemented $ith here a
redou!t and there a ditch, to "uard them from the correctin" hand of
popular indi"nation, until no$, deemin" themselves impre"na!le,
they !ully and defy the Dovernment%"
6e continue" as follows: -
"Sir, $ith full and unrestricted po$er over the volume of the
currency and, conse;uently, over all values conceded to the !an*s,
to"ether $ith ample machinery !y $hich in an emer"ency they can
defy the passa"e of any act of Con"ress, $hat is left to the
Dovernment e<cept an a!ject so on>
"'his Dovernment could not, to4morro$, "o to $ar in defense of its
fla", its honor, or its e<istence $ithout first as*in" permission to do
so of the "reat financial corporations of the country%
"1f there $as an invadin" army on our soil this hour, Con"ress could
not $ith safety or sho$ of success declare $ar to repel it $ithout
first supplicatin" co$ardly and unpatriotic capital, en"a"ed in
!an*in", not to contract the currency, $ithhold financial aid, and
leave the country to starve%
"1n fact, there is no measure of this Dovernment, either in peace or
in $ar, $hich is not $holly dependin" on the pleasure of the !an*s%
"'his Dovernment is at the mercy of its o$n creatures% 1t has
!e"otten and pampered a system $hich is no$ its master%
"'he people have !een !etrayed into the clutches of a financial
despotism $hich scorns responsi!ility and defies la$ful restraint%"
0t the present time the go!ernment is a submissi!e instrument in
the han"s of this money power.
0fter a full "iscussion in the 3enate# "uring which many
amen"ments were a""e" to the resolution# it was returne" to the
4he 6ouse agree" to the amen"e" bill with the exceptions of a
few of the 3enate amen"ments# in which it refuse" to concur.
4he bill then went back to the 3enate# which refuse" to rece"e
from its amen"ments.
,pon this "isagreement# both 6ouses appointe" ;ommittees of
;onference# who were to reconcile the "ifferences existing
between the two 6ouses with reference to the resolution as
0fter these committees ha" hel" se!eral meetings an agreement
was reache"# the resolution was reporte" back to the 3enate an"
6ouse an" the measure was a"opte".
4his act was appro!e" by the Presi"ent on the 18th of Muly# 1DD8.
6ence# this gigantic moneye" monopoly recei!e" a new lease of
life for the perio" of twenty years longer.
7rom this time on# it was the constant purpose of the national
banks to buil" up a colossal system of bank cre"it that woul"
make the entire business interests of the country tributary to its
n the congressional election of 1DD8 the 1epublicans were
o!erwhelmingly "efeate"# an" the 6ouse became Democratic by
a large ma>ority.
:n 7ebruary 18# 1DDC 3enator McPherson# of 9ew Mersey# a
millionaire an" national banker# intro"uce" a bill to gi!e national
banks the power to increase their circulating notes up to the par
!alue of the bon"s "eposite" by them to secure their circulation.
4he 3enate passe" the bill# but it was "efeate" in the 6ouse.
n this same month the sub-treasury at 9ew Gork ;ity# through
the 0ssistant 4reasurer# a""resse" an in5uiry to the Presi"ent of
the 9ew Gork ;learing 6ouse as to the effect of the go!ernment
paying its balances in sil!er money.
4his action of the 3ub-4reasurer was clearly for the purpose of
ren"ering the agitation against sil!er# an" it ha" the further
intention of gi!ing an excuse to the national bankers to
precipitate a panic# an" thus lay the foun"ation for a new "eman"
for more legislation in fa!or of the banks.
4his cowar"ly act of the sub-treasurer was an implie" a"mission
that the ;learing 6ouse 0ssociation was more powerful than
;ongress# an" that it was abo!e all law.
:n 7ebruary 1D# 1DDC#a bill for the retirement an" re-coinage of
the tra"e "ollar was taken up by the 6ouse.
0t this time the number of tra"e "ollars afloat in the country
approximate" TAJ#(((#(((# an" they ha" no legal ten"er "ebt-
paying power whate!er. 4hey were mere bullion.
:n 0pril 1st# 1DDC# the ;ommittee on <anking an" ;urrency# to
whom the bill ha" been referre"# reporte" it back to the 6ouse.
4his bill authorize" the go!ernment to recei!e these tra"e "ollars
for all "ues to the ,nite" 3tates+ they were to be recei!e" in
exchange for stan"ar" sil!er "ollars coine" un"er the <lan"-
0llison law+ after such exchange the tra"e "ollars were to be
coine" into stan"ar" "ollars.
3ection C of the act pro!i"e" that the tra"e "ollars so exchange"
shoul" be coine" un"er the act of 7ebruary 8D# 1DBD.
:n the motion of Mr. <lan"# 3ection C was stricken out# an" the
bill as thus amen"e"# shoul" it become a law# woul" a"" nearly
forty million legal ten"er sil!er "ollars to the !olume of money.
n its amen"e" form it passe" the 6ouse by a !ote of 1ED yeas to
CH nays# an" it was transmitte" to the 3enate.
n the meantime# after its passage by the 6ouse# the 9ew Gork
national banks ha" taken their cue from the letter a""resse" to
them by the 3ub-4reasurer# an" at once began a !igorous
contraction of the currency by refusing to loan money to the Iest
an" 3outh# an" calling in outstan"ing loans.
4his action of the 9ew Gork banks# with the tacit permission of
the 4reasury Department# brought on the great panic of 1DDC# in
which year alone there were 1(#EJD business failures# with
liabilities aggregating T88J#ACA#C8B.
0t the same time money comman"e" three per cent interest an"
commission per "ay on call.
4his was usury at the annual rate of ele!en hun"re" per centumS
t is asserte" that while the banks refuse" to loan money# an"
were surren"ering their circulating notes by "epositing ,nite"
3tates legal ten"ers with the ;omptroller of the ;urrency# that the
chief stock-hol"ers in these banks were using the "eposits of
these institutions in making loans at those exhorbitant rates of
t may be in5uire" by some# why "i" not the ;omptroller of the
;urrency exercise his lawful powers# an" procee" against these
banks for these notorious !iolations of lawL
4he facts were that e!ery ;omptroller of the ;urrency# since the
creation of that office# has been a willing instrument in the han"s
of the national banks# an" the ;omptrollers# time an" again#
authorize" these banks to !iolate the national banking law
whene!er it was to the financial interests of these corporations.
4he open an" notorious infractions of law practice" by these
banks foun" rea"y apologists in ;ongress# who au"aciously
asserte" that the banks were the best >u"ges of the policy to be
carrie" out by them# an" to that to enforce the law woul" close
these institutions# an" "epri!e the people of the benefits flowing
from this beneficient system.
4he history of the past thirty years exhibits this remarkable fact#
that each an" e!ery ;omptroller of the ;urrency# for his sla!ish
subser!iency to the national banks# has been rewar"e" by an
election to the presi"ency of some or one of these great financial
,pon the appearance# in the 3enate# of the 6ouse bill# pro!i"ing
for the recoinage of the tra"e "ollars# it was referre" to the
7inance ;ommittee# who reporte" a substitute of fi!e sections.
3ection 8 authorize" the exchange of tra"e "ollars for stan"ar"
"ollars# the time of exchange to be limite" to Muly 1# 1DDH.
3ection A pro!i"e" that these tra"e "ollars were to be coine" as
part of the bullion un"er the <lan"-0llison law.
3ection C pro!i"e" for a renewal of that farce# an nternational
Monetary ;ommission.
3ection H pro!i"e" that if no treaties coul" be ratifie" with
foreign nations for free coinage of sil!er before 0ugust 1# 1DDJ#
then a suspension of the further coinage of sil!er "ollars by the
,nite" 3tates shoul" take place by a repeal of the <lan"-0llison
9o action was seen upon this bill by the 3enate# an" the efforts of
the 6ouse to legitimize the tra"e "ollar by making it legal ten"er#
an" to increase the !olume of sil!er coin were again thwarte".
n his annual message to ;ongress# in December# 1DDC# Presi"ent
0rthur recommen"e" the cessation of the coinage of the sil!er
"ollar# an" ga!e as his reasons for such recommen"ation that
nearly 1DH#(((#((( ha" been coine"# of which only a little o!er
C(#(((#((( were in circulation.
Ie 5uote his language in full. 6e says: -
"1t appears that annually for the past si< years there have !een
coined in compliance $ith the re;uirements of the act of =e!ruary
.C, &C:C, more than 6.:,888,888%
"'he num!er no$ outstandin" is reported to !e nearly
6&C7,888,888, $hereof !ut little more than 6J8,888,888, or less
than t$enty4t$o per cent, are in actual circulation%
"'he mere e<istence of this fact seems to me to furnish of itself a
co"ent ar"ument for the repeal of the statute $hich has made such a
fact possi!le%"
Presi"ent 0rthur sought to con!ey the impression to ;ongress
that only C(#(((#((( sil!er "ollars were in circulation.
0t the time he penne" this message the recor"s in the 4reasury
Department showe" that 1AA#EC(#181 sil!er "ollars were in acti!e
circulation through their paper representati!e# the sil!er
certificate# an" that there were actually but 18#(((#((( sil!er
"ollars lying i"le in the 4reasury.
:ne striking fact which attracts attention is the following:
4hat the lea"ing opponents to the coinage of sil!er "ollars ha!e
ne!er yet agree" upon the facts# an" the arguments which they
a"!ance against the use of sil!er as money.
n his message of December 1# 1DDC# Presi"ent 0rthur urge" as a
weighty reason for the "iscontinuance of the coinage of sil!er
"ollars# that less than twenty-two per cent. of them were in actual
n his report of 1DD(# in which he a"!ise" the cessation of the
coinage of the sil!er "ollars# 3ecretary 3herman ga!e his reason
why sil!er shoul" not be coine"# in which he says that it was not
hel"# or hoar"e"# or exporte"# but it was pushe" into acti!e
n this same message Presi"ent 0rthur ma"e the following
reference to the tra"e "ollar: -
"While the trade dollars have ceased, for the present at least, to !e
an element of active distur!ance in our currency system, some
provision should !e made for their surrender to the Dovernment%
"1n vie$ of the circumstances under $hich they $ere coined and of
the fact that they never had a le"al tender ;uality, there should !e
offered for them only a sli"ht advance over their !ullion value%"
4his statement of the Presi"ent with reference to the legal ten"er
power of the tra"e "ollar is e!i"ence of those inaccuracies that
occur many times in the state papers of high officials.
4he Presi"ent a!erre" that tra"e "ollars were ne!er legal ten"er#
while the fact is that by the law of 7ebruary 18# 1DBA they were
ma"e legal ten"er for any one payment not excee"ing fi!e
4he law which conferre" upon them this legal power continue" in
force until Muly 88# 1DBJ# when the legal ten"er 5uality was taken
0 further inaccurate statement of the Presi"ent appears# when he
speaks of the amount of stan"ar" "ollars in circulation# which he
places at a little o!er C(#(((#(((.
Ihile the actual facts were that the !olume of sil!er "ollars in
circulation was 1BC#(((#(((.
3ecretary 3herman ha" urge" as an insuperable ob>ection against
the further coinage of sil!er "ollars that they were not hel"# or
hoar"e"# but were kept in acti!e circulation.
Presi"ent 0rthur aske" for the suspension of the <lan"-0llison
law of 1DBD on the groun"s that they "i" not circulate acti!ely
4his is not the first time that these two "istinguishe" gentlemen
"isagree" "uring their public careers# for while 3herman was
3ecretary of the 4reasury# an" Presi"ent 0rthur was collector of
the Port of 9ew Gork# they ha" a notable contro!ersy# with which
the public were "oubtless familiar.
Ihile Presi"ent 0rthur was re5uesting ;ongress to suspen" the
coinage of the sil!er "ollar# the banks of 9ew Gork ;ity
combine" to make a rai" on the 4reasury by presenting
greenbacks for gol".
4hat this was "one with the conni!ance of 3ecretary of the
4reasury# Mc;ulloch# is e!i"ent from the acts of that official.
6e ha" "ispatche" a telegram to the 3ub-4reasurer# in 9ew Gork
;ity# stating that the country woul" be on a sil!er basis in thirty
t was nothing less than a plot forme" by the bankers an" the
3ecretary to frighten ;ongress into repealing the <lan"-0llison
law of 1DBD.
n the meantime# the presi"ential campaign of 1DDC ha" resulte"
in the election of =ro!er ;le!elan"
# of 9ew Gork# o!er the
1epublican can"i"ate# Mames =. <laine.
Prior to his election to the Presi"ency# Mr. ;le!elan" ha" hel" the
office of Mayor of <uffalo# an" was =o!ernor of the 3tate of
9ew Gork# in which positions he ha" won much "istinction as an
honest an" capable executi!e.
3ome time pre!ious to his inauguration# the report became
current that the Presi"ent-elect was oppose" to the further
coinage of sil!er.
n or"er to ascertain the !iews of Mr. ;le!elan" upon this phase
of the financial issue# ;ongressman 0. M. Iarner an" ninety-four
members of the 6ouse# on the 11th "ay of 7ebruary# 1DDH# >oine"
in a letter to the in-coming Presi"ent# re5uesting that he outline
his future policy on the sil!er 5uestion# then agitating the country.
:n 7ebruary 8Cth# eight "ays before Mr. ;le!elan" was
inaugurate"# he ga!e out an open letter to the press in reply to
that of 6on. 0. M. Iarner.
n the course of that remarkable "ocument occurs the following
statement: -
"1 hope that you concur $ith me, and $ith a "reat majority of our
fello$ citi2ens, in deemin" it most desira!le at the present juncture
to maintain and continue in use the mass of our "old coin as $ell as
the mass of silver already coined%
"'his is possi!le !y a present suspension of the purchase and
coina"e of silver% 1 am not a$are that !y any other method is it
"1t is of momentous importance to prevent the t$o metals from
3tephen =ro!er ;le!elan" )1DAB O 1E(D* 6as the "istinction of being the only
Presi"ent to ha!e ser!e" 8 non-consecuti!e terms. $lecte" as the 88n" )1DDH* an" 8Cth
partin" company9
to prevent the increasin" displacement of "old !y the increasin"
coina"e of silver9
to prevent the disuse of "old in the custom houses of the nited
States in the daily !usiness of the people9
to prevent the ultimate e<pulsion of "old !y silver%"
4o state that the expectations of the Democratic party were ru"ely
shattere" by the position assume" by Mr. ;le!elan"# in his reply
to the letter of Mr. Iarner# woul" be putting it !ery mil"ly.
4he mass of the party expresse" great astonishment# not to say
in"ignation# at the bol" stan" taken by the Presi"ent-elect# in
which he aligne" himself with the single gol" stan"ar".
n his zeal for the suspension of the coinage of the sil!er "ollar#
Mr. ;le!elan" was le" into erroneous statements of facts as to the
allege" "isuse of gol" in the custom houses an" in the business of
the people.
t is a matter of public recor" that# in 1DD(# the imports of gol"
excee"e" the exports thereof by TBB#llE#AB1+
in 1DD1# the excess of imports of gol" o!er exports were
in 1DDA# TJ#1AA#8J1+
in 1DDC the exports of gol" o!er imports were T1D#8H(#JC(#
lea!ing a great balance of importe" gol" o!er exports "uring
those fi!e years of more than T1H(#(((#(((.
4his great gain of gol" took place "uring the time the <lan"-
0llison law was in operation.
,pon the appearance of this reply of Mr. ;le!elan" to the
communication of 6on. 0. M. Iarner an" others# the Iall street
cli5ue an" their allies seize" their opportunity.
4hey swoope" "own on ;ongress an" en"ea!ore" to force a
repeal of the sil!er law.
4he members of the 6ouse were besiege" by these hor"es of coin
!en"ers an" bullion brokers+
the national banking money power threatene" to !isit another
panic upon the people# an" pre"ictions were &freely ma"e that
gol" woul" go to a premium if the sil!er lair was not repeale".
4he Democratic members of ;ongress were informe" by the
thousan" per cent men of 9ew Gork ;ity that it was the wish of
Presi"ent-elect ;le!elan" that the law authorizing the coinage of
sil!er "ollars be repeale".
4he 9ew Gork 6eral"# one of the greatest >ournals of the $ast#
constantly kept in a prominent place in its columns# the legen"#
"We are still coinin" the 78 and :7 per cent dollars%"
$!ery means an" all possible influences were brought to bear
upon ;ongress to force it to repeal the <lan"-0llison law# but
without a!ail.
0 single attempt was ma"e to carry into effect the wish of the
Presi"ent-elect# but it faile" so ignominiously by such a "ecisi!e
!ote that no further effort was ma"e in that ;ongress.
t was as follows: :n 7ebruary 8J# 1DDH# 6ouse bill D8HJ# being
the sun"ry ci!il appropriation bill# was pen"ing before the 6ouse.
0 clause was tacke" to this bill# pro!i"ing for the suspension of
the operations of the law of 7ebruary 8D# 1DBD# - the <lan"-
0llison law. Mr. 1an"all# an $astern Democratic member of the
6ouse# mo!e" to suspen" the rules an" consi"er sai" clause.
4his motion was "isagree" to by a !ote of llD yeas to 1H8 nays#
an" this clause was aban"one" an" stricken from the bill.
4he letter of Mr. ;le!elan" was regar"e" by the 6ouse as an
open an" manifest attempt to influence ;ongress against the
continue" coinage of sil!er# an"# if such was the intention of the
Presi"ent-elect# he promptly recei!e" a well-"eser!e" rebuke for
his attempte" interference with the legislation of ;ongress.
:ne feature of the con"uct of Mr. 1an"all# in his effort to engraft
upon an appropriation bill a clause to repeal the <lan"-0llison
lair# exhibits the a!i"ity of the money power to seize e!ery
opportunity# howe!er slight# to gain its en"s by legislati!e
sanction# an" that is - imme"iately upon the appearance of the
Iarner letter# it presume" that the mere ipse "ixit
of =ro!er
;le!elan" woul" coerce ;ongress into submission to his !iews.
4he infamous nature of the financial legislation from 1DJ8 to
1DBH# in so enormously enhancing the !alue of the public "ebt#
an" in enriching the bon"-hol"ers at the expense of the
pro"ucti!e energy of the country# will be shown by the following
figures# taken from a work entitle"# "'he (hilosophy of (rice,"
5uote" in the Daily 9ews 0lmanac an" Political 1egister for
4he time co!ere" by "(hilosophy of (rice" is Muly 1# 1DJJ# up to
an" inclu"ing 1DDH.
RPhilosophy of PriceR says: -
R5ere is a ta!le sho$in" the de!t of the nited States on the &st of
July, &CBB and &CC7, includin" non4interest !earin" "reen!ac*s,
e<pressed in dollars, and also in the thin"s $or*in" fol*s have to
produce in order to "et the dollars $ith $hich to pay de!ts and
interest: 4
pse "ixit - /atin for: R6e himself sai" itR. :riginally coine" by 1oman politician
Marcus 4ullius ;icero in the 1st ;entury <;# asserting that the listener shoul" take at
face !alue without proof.
9ational Debt 1DJJ. 9ational Debt 1DDH.
Debt in "ollars......T8#BBA#(((#((( TD((#(((#(((
<eef# barrels......... 18E#(((#((( 1AH#(((#(((
;orn# bushels....... 8#(((#(((#((( A#(((#(((#(((
Iheat# bushels.... D((#(((#((( 1#BC(#(((#(((
:ats# bushels....... A#8J8#(((#((( C#AHB#(((#(((
Pork# barrels........ D8#(((#((( EJ#(((#(((
;oal# tons............ 81A#(((#((( C((#(((#(((
;otton# bales....... 18#(((#((( AC#(((#(((
<ar iron# tons...... 8C#(((#((( C(#(((#(((
"3lmost every product of la!or sho$s the same result% We paid from
&CBB to &CCJ the pu!lic de!t: 1nterest, 6&,C:8,888,888 and
principal a!out 6&,.88,888,8889
yet $e find that $hat there is left of it $hen measured !y la!or, or
the product of la!or, is fifty per cent "reater than the ori"inal de!t%"
4his colossal robbery of the nation# an" conse5uently of the
people# was planne" an" mature" by the national banking money
t is true that the i"ea of this system of banking ha" its origin in
$nglan"# an" it is also a fact that the scheme of legislating
increase" !alue into the bon"e" "ebt was suggeste" by the
influential bankers of /on"on.
$ach one of the series of enactments which legally confiscate"
billions of property of the tax-payers# an" which han"e" it o!er to
a few in"i!i"uals# was place" upon the statute-books un"er the
false an" mislea"ing plea of maintaining the "Credit of the nation
4hat "istinguishe" historian# Prof. M. ;. 1i"path# elo5uently
"escribe" the legislati!e process by which the !alue of the public
"ebt was !astly increase".
6e sai": -
"1t is the hardship of $ar that !rin"s de!t upon the country $hich
en"a"es in it% 1n our o$n case $e piled up a de!t mountain$ise%
"'he prodi"ious pile reached the clouds%
"1n any old nation there $ould have remained no hope at all of
payin" it%
"1t $ould simply have !een laid upon posterity as an everlastin"
"'he principal ;uestion, ho$ever, $ith Con"ress and $ith the
people of the nited States, $as ho$ they should measure and
mana"e this de!t%
"Dold and silver had disappeared% (aper money prevailed and
"'he premium on coin arose to almost t$o hundred per cent%
"'he dollar of the la$ and the contract !ecame a paper dollar,
$hich, as measured !y the standard of "old, $as, for a considera!le
period, $orth less than fifty cents%
"+ut $hat $as the e;uity of this situation>
"Gne class of statesmen, !ac*ed up and insti"ated !y the creditor
classes, held that the dollar $as al$ays the "old and silver dollar%
(ractically this $as not so%
"'heoretically and even constitutionally it $as pro!a!ly so%
"=or many years to"ether the dollar of the la$ and the contract
$as, to all intents and purposes, a dollar of paper%
"Aurin" the same period the modicum of "old and silver remainin"
in the country 4 thou"h it $as stamped and !randed $ith the names
of coins 4 $as really merchandise%
"3t len"th the !ottom $as reached 4 or the top, as the case may !e 4
and the readjustment !ecame necessary%
"'hen came on the $arfare !et$een the advocates of the so4called
Hhonest dollarH and the paper dollar $ith $hich, and on the !asis of
$hich, the !usiness of the country had !een so lon" transacted%
"'he advocates of hi"h payment too* the Hhonest dollarH as their
catch4$ord, and, to ma*e a lon" narrative !rief, they $on $ith it,
and !y a series of le"islative enactments, entailin" the "reatest
hardships on the producin" interests of the country, succeeded in
t$istin" up, turn !y turn, the standard unit in the financial mill, until
the so4called resumption of specie payment $as finally, after
fourteen years from 3ppomatto<
, effected%
"'hus the value of the national de!t $as au"mented from year to
year as rapidly as it $as paid a$ay%%%
"3s fast as payment $as made the value of the dollar in $hich it
$as e<pressed $as increased%
"'o the de!tor class all this $as the la!or of Sysiphus%
"'he toiler la!oriously rolled the stone to the top of the hill9
!ut ever, $hen near the crest, it "ot a$ay $ith him and returned
$ith thunderin" and the roar of !an*ruptcy to the !ottom%
"'o the present day the process has !een *ept up, and,
not$ithstandin" the multiplied !illions upon !illions $hich the
3merican people have paid in principal and interest upon that
patriotic $ar de!t, $hich e<pressed their devotion and sacrifice, it
is the truth of history, that the de!t itself, is at the present time,
0ppomattox - the final battle in the 0merican ;i!il Iar# in 1DJH
7rom =reek mythology - 3ysiphus was con"emne" to roll a boul"er up a hill# for all
eternity# only to watch it roll "own again.
$orth virtually as much to the holders as it $as $hen it reached its
nominal ma<imum 4 in 3u"ust, &CB7%"
n his effort to con!ey an a"e5uate i"ea of the nature of that
legislation# which ha" plun"ere" the 0merican people of billions
of "ollars# this renowne" scholar an" writer ha" recourse to the
sublime imagery of 6omer.
Prof. 1i"path "emonstrates that the public "ebt was not "ecrease"
at all# although billions ha" been applie" to its payment.
9ot only is this true of the public "ebt# but the same process of
"epreciating the !alue of property has likewise enhance" the
!alue of pri!ate "ebts.
4he amount of property that has been transferre" from "ebtors to
cre"itors# as a necessary result of the enormous appreciation of
money brought about by contraction of its !olume# is beyon"
n a great speech# Ien"ell Phillips
# illustrates the means by
which the money power absorbe" the wealth of the country# by
>uggling with the currency.
6e sai": -
"1n other $ords, it $as the currency, $hich, ri"htly arran"ed,
opened a nationHs $ell sprin"s, found $or* for $illin" hands to do,
and filled them $ith a just return, $hile honest capital, daily lar"er
and more secure, ministered to a "lad prosperity%
"Gr it $as currency, $ic*edly and selfishly ju""led, that made
merchants !an*rupt and starved la!or into discontent and slavery,
$hile capital added house to house and field to field, and "athered
into its miserly hands all the $ealth left in a reined land%
Ien"ell Phillips - )1D11 O 1DDC* traine" as a lawyer# then became an 0merican
abolitionist# a"!ocate for 9ati!e 0mericans# an" orator.
"'he first ;uestion, therefore, in an industrial nation is, $here ou"ht
control of the currency to rest> 1n $hose hands can this almost
omnipotent po$er !e trusted>
"Every $riter of political economy, from 3ristotle to 3dam Smith,
avo$s that a chan"e in the currency alters the price of every ounce
and yard of merchandise and every foot of land% Whom can $e
trust $ith this despotism> 3t present the !an*s and the money *in"s
$ield this po$er%
"'hey o$n the yard4stic*, and can ma*e it lon"er or shorter, as they
"'hey o$n every pound $ei"ht, and can ma*e it heavier or li"hter
as they choose%
"'his e<plains the riddle, so mysterious to common people, that
those $ho trade in money al$ays "ro$ rich, even $hile those $ho
trade in other thin"s "o into !an*ruptcy%"
:n the Ar" of 7ebruary# 1DDJ# 6on. 1. [. Mills# of 4exas# in the
heat of righteous in"ignation elo5uently arraigne" that unlimite"
a!arice that was continually besieging ;ongress to enhance the
!alue of bon"s an" securities at the expense of the pro"ucers.
6e sai": -
"+ut in all the $ild, rec*less, and remorseless !rutalities that have
mar*ed the footprints of resistless po$er there is some e<tenuatin"
circumstance that miti"ates the severity of the punishment due the
"Some have !een the product of the fierce passions of $ar, some
have come from the antipathy that separate alien races, some from
the superstitions of opposin" reli"ions%
"+ut the crime that is no$ sou"ht to !e perpetrated on more than
fifty millions of people comes neither from the camp of a con;ueror,
the hand of a forei"ner, nor the altar of an idolator%
"+ut it comes from those in $hose veins runs the !lood of the
common ancestry, $ho $ere !orn under the same s*ies, spea* the
same lan"ua"e, reared in the same institutions, and nurtured in the
principles of the same reli"ions faith%
"1t comes from the cold, phle"matic mar!le heart of avarice,4
avarice that see*s to paraly2e la!or $ith the !urden of de!t, and fill
the land $ith destitution and sufferin" to "ratify the lust for "old,4
avarice surrounded !y every comfort that $ealth can command, and
rich enou"h to satisfy every $ant save that $hich refuses to !e
satisfied $ithout the suffocation and stran"ulation of all the la!or of
the land%
"With a forehead that refuses to !e ashamed, it demands of
Con"ress an act that $ill paraly2e all the forces of action, shut out
la!or from all employment, increase the !urden of de!ts and
ta<ation, and send desolation and sufferin" to all the homes of the
n his first annual message to ;ongress# December D# 1DDH# the
Presi"ent took a "eci"e" stan" against the continue" coinage of
n this "ocument he says:
"'he necessity of an addition of the silver currency of the nation as
is compelled !y the silver coina"e act is ne"atived !y the fact that
up to the present time only a!out fifty millions of the silver dollars
so coined have found their $ay into circulation, leavin" more than
one hundred and si<ty4five millions in the possession of the
Dovernment, the custody of $hich has entailed considera!le
e<pense for the construction of ne$ vaults for its deposits%
"3"ainst this latter amount there are outstandin" silver certificates
amountin" to a!out ninety4three millions of dollars%"
7urther on in this same message he sai": -
"3t times durin" the past si< months fifty4ei"ht per cent% of the
receipts for duties have !een in silver or silver certificates, $hile the
avera"e $ithin that period has !een t$enty per cent%"
0 comparison of the statements in his message with the
pre"ictions !enture" in the Iarner letter will be instructi!e.
n the latter he "esire" - R'o prevent the disuse of "old in the custom
houses of the nited States9" in his message of December D# 1DDH#
he shows that instea" of sil!er "isplacing gol" in the payment of
"uties# only about twenty per cent of the latter were pai" in sil!er
or sil!er certificates.
Must why the payment of twenty per cent of the "uties in sil!er
shoul" arouse the apprehensions of the Presi"ent is not !ery
7urthermore# the !ery purpose of coining these sil!er "ollars was
to enable people to transact business# to pay their "ebts to each
other# an" to the =o!ernment.
Mr. ;le!elan" further says: -
"'he condition in $hich our 'reasury may !e placed !y a
persistence in our present course, is a matter of concern to every
patriotic citi2en $ho does not desire his Dovernment to pay in silver
such of its o!li"ations as should !e paid in "old%"
0gain he says: -
"We have no$ on hand all the silver dollars necessary to supply the
present needs of the people and to satisfy those $ho from sentiment
$ish to see them in circulation, and if their coina"e is suspended,
they can readily !e o!tained !y all $ho desire them%
"1f the need of more is at any time apparent their coina"e can !e
4he Presi"ent then recommen"s the suspension of the coinage of
sil!er "ollars coine" un"er the law of 1DBD.
0ccor"ing to the Presi"ent&s theory an" reasoning# the most
effecti!e means of supplying the !olume of money nee"e" by the
people woul" be a suspension of its coinage.
n this message Presi"ent ;le!elan" came out s5uarely in fa!or
of perpetuating the national banking system.
n this course he allie" himself with the money power# an" earne"
the unen!iable "istinction of being the first Democratic Presi"ent
that a"!ocate" the policy of "elegating the power of issuing
money to pri!ate corporations.
n this course he was sustaine" by a few $astern Democratic
members of ;ongress# but he coul" not lea" the great bo"y of the
Iestern an" 3outhern Democracy to accept that 4ory-1epublican
system of finance that ha" been importe" from /on"on in 1DJA.
During the following year# the use of sil!er an" sil!er certificates
increase" from T1CA#(((#((( to T1JB#(((#(((# which in"icate"
the great popularity of this form of money with the people.
9otwithstan"ing these facts# the Presi"ent in his next annual
message# December J# 1DDJ# sai":
"1 see no reason to chan"e the vie$s e<pressed in my last annual
messa"e on the su!ject of compulsory coina"e% "
:n December 1B# 1DDJ# 3enate bill 9o. 1EE# pro!i"ing for the
re"emption of the tra"e "ollars for stan"ar" sil!er "ollars# the
tra"e "ollars so re"eeme" to be sent to the mints for coinage as
part of the bullion to be purchase" un"er the <lan"-0llison law of
7ebruary 8D# 1DBD# passe" the 3enate.
:n 7ebruary 18# 1DDB# 3enate bill 1EE was pen"ing before the
6ouse# an" it was amen"e" to authorize the receipt of tra"e
"ollars for go!ernment "ues# an" in exchange for stan"ar"
"ollars# an" for coining the sai" tra"e "ollars into stan"ar"
"ollars# not as part of the bullion an" coinage un"er the <lan"-
0llison law.
4he bill# as amen"e"# passe" by a !ote of 1BC yeas to AJ nays+
both 6ouses appointe" a ;ommittee of ;onference# which
reporte" a substitute that axe" the perio" of six months from the
"ate of the act for the exchange of tra"e "ollars for stan"ar"
"ollars# or for fractional sil!er coin.
4he tra"e "ollars so exchange" were to be recoine" an" not
counte" as part of the sil!er to be purchase" un"er the <lan"-
0llison law of 1DBD.
4his act became a law without the appro!al of the Presi"ent.
<e it sai" to the eternal honor of the 6ouse of 1epresentati!es#
which was Democratic# the a"!ice an" recommen"ations of the
Presi"ent fell on "eaf ears# an" this co-or"inate branch of the
=o!ernment woul" not be coerce" into repealing the <lan"-
0llison sil!er law.
n spite of the fears of Presi"ent ;le!elan" that gol" woul" be
"isplace" by the increase" coinage of sil!er# the net gain of gol"
"uring his a"ministration was increase" many millions.
n the meanwhile the monetary stringency of 1DDC continue" in
all its se!erity# an" e!en the banks of 9ew Gork ;ity felt the
effects of the panic# which was the "irect result of their concerte"
4hese great financial institutions of 9ew Gork ;ity calle" upon
the =o!ernment for assistance+ whereupon 3ecretary of the
4reasurer Manning# a national banker# came to their relief by
"epositing with these banks go!ernment money to the amount of
TJA#(((#((( without interest for the use of that enormous sum#
which ha" been wrung from the people by a bur"ensome system
of taxation.
6a" the farmers of -ansas# or 9ebraska# re5ueste" the 7e"eral
=o!ernment to loan them the public fun"s to assist them in
agricultural pursuits# the millionaire beggars an" paupers of Iall
3treet woul" ha!e emitte" a lou" an" prolonge" howl that woul"
ha!e been hear" to the nethermost parts of the earth.
4he people of -ansas an" 9ebraska woul" ha!e been assaile" by
e!ery epithet that coul" ha!e been coine" from the $nglish
4he national bank monopoly# the gol" gamblers# stock
speculators# railroa" wreckers# the 3hylocks# who gla"ly exacte"
a thousan" per cent usury# with the subsi"ize" press an" its
satellites# woul" ha!e "enounce" the har" working farmer of
-ansas or 9ebraska as a "lon" $his*ered hay4seed," a "socialist," a
"dan"erous anarchist," or a "cran*%"
4he 9asts an" the =illams# fame" in caricature# woul" ha!e
expen"e" all their genius in hol"ing him up to ri"icule.
Ihile it woul" be "angerous socialism for the =o!ernment to
assist the farmer "uring his calamities# it was the highest essence
of patriotism to sa!e the panic-bree"ers of 9ew Gork ;ity from
the conse5uences of their own traitorous con"uct by "onating
them the use of TJA#(((#((( in go!ernment fun"s.
n the meantime# notwithstan"ing the ai" recei!e" from the
7e"eral =o!ernment# the banks of 9ew Gork ;ity organize" a
cli5ue with the intention of making a rai" upon the gol" in the
4he base ingratitu"e of the 9ew Gork banks arouse" the ire of
3ecretary Manning# an" he calle" upon those banks who ha"
organize" a corner against the 4reasury gol"# an" informe" them
of what woul" follow if they perse!ere" in that course.
6e sai":
")ou may precipitate a panic%
"'he Dovernment is stron"9 the Dovernment can stand a panic, !ut
you $ill have the panic if you continue to em!arrass the
Dovernment as you have done%"
6e continue": -
"5ere are t$enty million dollars in round silver dollars, not
"Dive me your "old for it and stop this raid upon the 'reasury, or
else you shall have the panic%"
4he heroic treatment of 3ecretary Manning was a warning to
these scoun"rels# who woul" willingly sink the =o!ernment if
money coul" be ma"e by the operation.
4he stern threats of the 3ecretary frustrate" this attempt to loot
the 4reasury of its gol"# an" to coerce ;ongress into repealing the
<lan"-0llison sil!er law.
n his annual message of December# 1DDB# Presi"ent ;le!elan"
relegate" the financial 5uestion to the rear# an" pushe" the tariff
issue to the front.
4his "ocument is >ustly regar"e" as one of the strongest state
papers that e!er emanate" from the pen of the Presi"ent.
n this message the Presi"ent urge" the necessity of a complete
reformation of the then existing tariff# an" he took strong groun"s
in fa!or of suppressing the trusts.
,pon the appearance of this message# the lea"ers of the
1epublican party charge" the Presi"ent with ha!ing committe"
the Democracy to the policy of <ritish free tra"e.
Mr. <laine# who was in Paris at the time when the contents of the
message were ma"e public# a!aile" himself of the opportunity to
answer the Presi"ent by a counter blast# in the form of an
exten"e" inter!iew hel" with a representati!e of the 9ew Gork
Meanwhile# since 1DDA# the national banks stea"ily continue"
their policy of contracting the currency# by substituting
go!ernment legal ten"er notes for the ,nite" 3tates bon"s
"eposite" with the ;omptroller of the ;urrency to secure their
circulating notes.
4his policy# to a large extent# neutralize" the benefits "eri!e"
from the increase" use of sil!er.
4he ob>ect of the banks# in thus with"rawing their bon"s
"eposite" to secure their circulating notes# were for the a!owe"
purpose of obtaining the great premium which they brought in the
market - a premium which range" as high as twenty-nine per cent
on the "ollar.
<esi"e the contraction brought about by the process of "epositing
legal ten"er notes to re"eem the circulating notes of national
banks# the latter form of currency was surren"ere" by the banks#
an" the bon"s "eposite" to secure these bank notes were taken up
by the "epositors an" sol" for the premium.
4his worke" a "ouble contraction of the currency.
During this time the =o!ernment was re"eeming its bon"s# an"
this process of re"emption was carrie" on by the payment of a
large premium to the bon"-hol"ers an" national bankers.
n his report for the year 1DE8# the ;omptroller of the ;urrency
showe" the extent to which this system of contraction was carrie"
on from 1DDA to 1DDD by these fiscal agencies of the
7rom :ctober A1# 1DDA# to :ctober A1# 1DDC# the national banks
surren"ere" their circulating notes to the amount of T8C#1B(#JBJ+
from :ctober A1# 1DDC# to :ctober A1# 1DDH# the banks
surren"ere" T1H#HCH#CJ1+ from :ctober A1# 1DDH# to :ctober A1#
1DDJ# national bank notes were contracte" THJ#HE(#HAA+
from :ctober A1# 1DDJ# to :ctober A1# 1DDB# the banks
surren"ere" up their notes to the amount of TH(#CEH#HDE+
from :ctober A1# 1DDB# to :ctober A1# 1DDD# a further "ecrease
was ma"e by cancelling national bank notes to the amount of
t will be ascertaine" that the total !oluntary contraction of
national bank currency# from 1DDA to 1DDD# reache" the great sum
of T1JA#(((#(((.
0lthough the <lan"-0llison law was in operation# an" the
=o!ernment was throwing !ast sums of money into circulation
by the re"emption of bon"s# yet the !olume of money in
circulation was not increase".
7or nearly e!ery "ollar emitte" by the 4reasury Department for
the re"emption of bon"s# the national banks surren"ere" up
almost an e5ual amount of their circulating notes.
:n 7ebruary 8E# 1DDD# 6ouse bill 9o. H(AC was pen"ing in the
6ouse of 1epresentati!es. 4his measure authorize" the 3ecretary
of the 4reasury to apply the surplus in the 4reasury to the
purchase or re"emption of ,nite" 3tates bon"s.
4he bill passe".
4he ob>ect of this measure aime" at relie!ing the money market
of its stringency by the purchase of bon"s# an" the conse5uent
increase of the !olume of currency.
:n March 8J# 1DDD# 6ouse bill H(AC came up in the 3enate# an"
3enator 3pooner offere" a substitute# "eclaring section 8 of the
sun"ry ci!il appropriation law of Mune A(# 1DD8# a permanent
4he substitute was agree" to by the 3enate.
3enator <eck offere" an amen"ment# "irecting the 3ecretary of
the 4reasury# on the retirement of national bank circulation# an"
on failure of other banks to take out an e5ual amount# then to
purchase an e5ui!alent amount of sil!er bullion in excess of the
minimum# re5uire" un"er the law of 7ebruary 8D# 1DBD# to be
coine" an" use" as pro!i"e" in sai" act.
4he amen"ment was agree" to by a !ote of A8 yeas to 1A nays.
During the "ebate on the amen"ment offere" by 3enator <eck#
3enator Plumb ma"e the following remarks: -
"1t is estimated that there are in circulation, includin" that $hich is
loc*ed up in the 'reasury and held in the !an*s as a reserve fund,
a!out 6&,B88,888,888, of all *inds of currency of the nited States,
"old and silver, the surplus of "old and silver certificates, "reen!ac*
notes and national !an* notes, all told, and there are more than
6B8,888,888,888 of property $hich must finally !e measured !y this
volume of currency%
"1t has !een contracted durin" the last year more than five per cent
in addition to all that has occurred !y reason of a!rasion and loss%
No man can tell the volume of "reen!ac*s outstandin"%
"Nominally it is 60JB,888,888 and a fraction, !ut that volume has
!een su!ject to all the accidents $hich have occurred durin" the
past t$enty4five years, $here!y money has !een consumed, $orn
out, lost, and it is dou!tful if the amount is really over 6088,888,888
"+ut say nothin" a!out that, the retirement of the national !an*in"
circulation durin" the t$elve months has !een five per cent, of the
total amount of the currency outstandin"%
"'here has !een durin" that period a phenomenal depreciation of
the prices of property%
"'here has !een the "reatest depreciation of the price of
a"ricultural products the country has ever *no$n%"
n speaking of the effects of contraction of the currency in
"epreciating the !alue of property# he sai": -
"'he contraction of the currency !y five per cent% of its volume
means the depreciation of the property of the country
"Ae!ts have not only increased, !ut the means to pay them have
diminished in proportion as the currency has !een contracted%
"Events !ased upon non4le"islation have proved of advanta"e to
&enders, !ut disastrous to !orro$ers%"
4he bill then went to the 6ouse# but as it was near the close of the
session# it "i" not recei!e any consi"eration.
Meanwhile the panic of 1DDC# as it was calle" - but which really
began in 1DD8 - rage" throughout the entire a"ministration of
Presi"ent ;le!elan".
4he aggregate number of failures for the years 1DDH# 1DDJ# 1DDB
an" 1DDD were H1#BCD# an" the liabilities were TBHJ#HEB#DDA.
t was "uring this perio" of business failures an" general
"epression e!erywhere# with the conse5uent sacrifice of property
at ruinous prices# that the hol"ers of ,nite" 3tates bon"s were
obtaining a premium for their bon"s ranging as high as twenty-
se!en per cent.
n his annual message of December# 1DDD# Presi"ent ;le!elan"
again urge" the repeal of the <lan"-0llison law.
6e sai": -
"'he Secretary recommends the suspension of the further coina"e of
silver, and in such recommendation 1 earnestly concur%"
,p to 9o!ember A(# 1DDD# A18#HB(#EE( sil!er "ollars ha" been
coine"# of which J(#EB(#EE( were in acti!e use# not inclu"ing
sil!er certificates to the amount of T8AB#C1D#ACJ- making a total
of T8ED#ADE#AAJ in sil!er "ollars an" certificates that were in
acti!e circulation.
t will be obser!e" that the many pre"ictions of Presi"ent
;le!elan"# as to the capacity of the country to use sil!er as
money# were utterly "iscre"ite" by these facts.
4he "etermine" opposition of the Presi"ent to the coinage of
sil!er was one of the strange features of an otherwise highly
successful a"ministration.
Iith the exception of his hostile attitu"e to sil!er as money# an"
his a"!ocacy of the perpetuation of the national banking system#
Mr. ;le!elan" ga!e the people an a"ministration of public affairs
that she" honor upon himself# an" its efficiency was not
surpasse" by any in the annals of 0merican history.
During the four years that he "irecte" the public affairs of the
nation# the public "ebt was re"uce" in the magnificent sum of
t is true that this !ast "ecrease of the public "ebt in the short
perio" of four years resulte" in an immense profit to the bon"-
hol"ers an" national bankers who surren"ere" their bon"s for
4he amount of premium on the bon"s so surren"ere" was
THE#(((#(((# an" this measure" the profit obtaine" by the banks
an" bon"-hol"ers in the process of re"eeming the "ebt.
n a""ition to this !ast "ecrease of the public "ebt# a surplus of
TDA#8JE#88( was accumulate" in the 4reasury o!er an" abo!e the
gol" reser!e of T1((#(((#(((.
n a""ition to this !ast sum of money# the result of a frugal an"
honest a"ministration# a bank security fun" of TD8#HEB#8H( in
legal ten"ers was accumulate" as a trust fun" for the re"emption
of national bank notes.
4he total amount of cash in the 4reasury on the Cth of March#
1DDE# when his successor was inaugurate"# was T8JH#DCJ#CC1.
6is a"ministration of other "epartments of the =o!ernment was
notably successful.
4ens of millions of acres of the public lan"s# fence" in by great
corporations# were restore" to the public "omain+ an" the
usurpers "ri!en off by the !igorous policy of the Presi"ent.
/an" grants embracing many millions of acres were forfeite" an"
thrown open for settlement.
7or the first time since 1DJ1# the n"ian Department was honestly
manage"# an" the re" man recei!e" >ust an" humane treatment at
the han"s of the ,nite" 3tates.
9e!ertheless the ultimate baleful results of his influence in fa!or
of the national banks# an" a single stan"ar" of gol"# e!entually
more than counteracte" an honest# economical management of
the public affairs of the country.
;60P4$1 F.
46$ 904:90/ <09-9= M:9$G P:I$1 3$;,1$3
;:MP/$4$ ;:941:/ :7 46$ 41$03,1G.
"Iesolved, 'hat Con"ress has no po$er to charter a nited States
!an*9 that $e !elieve such an institution to !e one of deadly
hostility to the !est interests of the Dovernment, dan"erous to our
repu!lican institutions and the li!erties of the people, and
calculated to place the !usiness of the country $ithin the control of
a concentrated money po$er and a!ove the la$s and the $ill of the
- Democratic Platform# 1DC(.
"'he ri"ht of issuin" paper money as currency, li*e that of issuin"
"old and silver coins, !elon"s e<clusively to the nation, and cannot
!e claimed !y any individuals%"
- 0lbert =allatin.
n the presi"ential campaign of 1DDD# =eneral <en>amin 6arrison
was the successful can"i"ate for the presi"ency.
4he national 1epublican platform# on which Mr. 6arrison stoo"#
!igorously charge" the a"ministration of Presi"ent ;le!elan"
with ha!ing attempte" to "emonetize sil!er.
4he acti!e opposition of Presi"ent ;le!elan" to the use of sil!er
as money ga!e some color to this charge. :n the Cth of March#
1DDE# =eneral 6arrison was "uly inaugurate".
7or 3ecretary of the 4reasury he selecte" the 6on. Iilliam
Iin"om# of Minnesota.
n a""ition to ha!ing the Presi"ency# the 1epublicans ha" control
of both branches of ;ongress.
Mohn 3herman occupie" his ol" position of ;hairman of the
7inance ;ommittee of the 3enate.
n his first annual message to ;ongress# December A# 1DDE#
Presi"ent 6arrison pai" special attention to the coinage of sil!er
un"er the <lan"-0llison law of 1DBD.
6e sai": -
"'he total coina"e of silver dollars $as, on Novem!er &, &CC?,
60J0,B0C,88&, of $hich 6.C0,70?,7.& $ere in the 'reasury vaults
and 6B8,8?C,JC8 $ere in circulation%
Gf the amount in the vaults 6.::,0&?,?JJ $ere represented !y
outstandin" certificates, leavin" 6B,.&?,7:: not in circulation and
not represented !y certificates"
n this message# Presi"ent 6arrison ga!e ;ongress an" the people
the clearest an" fairest statement with reference to the number
an" circulation of sil!er "ollars that was yet presente" by any
Presi"ent up to his time.
$!ery one who woul" a!ail himself of the facts state" in this
"ocument knew# that# of the sil!er "ollars coine" un"er the
<lan"-0llison law of 1DBD# all were in acti!e use an" circulation
except the small sum of TJ#81E#HBB.
4he facts state" by Presi"ent 6arrison amply pro!e" that the
pre"ictions an" apprehensions of Presi"ent ;le!elan" an" others#
with reference to the continue" coinage of stan"ar" sil!er "ollars#
were absolutely groun"less.
4his remarkable absorption of sil!er in the channels of tra"e an"
commerce# e!ince" the great popularity of this money with the
4he Presi"ent further says: -
"'he evil anticipations $hich have accompanied the coina"e and
use of the silver dollar have not !een reali2ed%
3s a coin it has not had "eneral use, and the pu!lic 'reasury has
!een compelled to store it%
+ut this is manifestly o$in" to the fact that its paper representative
is more convenient% 'he "eneral acceptance and use of the silver
certificates sho$s that silver has not !een other$ise discredited%"
t seems from the opinion of Presi"ent 6arrison# as expresse" in
this message# that the use of the sil!er certificate in lieu of the
coin it represents# was the only e!i"ence by which it was shown
that sil!er was "iscre"ite".
f the issuance of sil!er certificates operates to "iscre"it the sil!er
"ollar# then# by a parity of reasoning# the use of gol" certificates
as a substitute for gol" coin "iscre"its gol".
0t the time the Presi"ent state" that sil!er was "iscre"ite" by the
use of certificates# there were outstan"ing gol" certificates
aggregating T1JH#(((#(((.
f the hol"er of sil!er "ollars "eposits that coin in the 7e"eral
4reasury# an" recei!es therefor sil!er certificates# an" thus
"iscre"its the sil!er "ollar# then the owner or hol"er of gol" coin#
or bullion# who "eposits his coin or bullion in the 4reasury# an"
accepts gol" certificates# also "iscre"its gol".
4he partial eulogy bestowe" by Presi"ent 6arrison upon sil!er
was inten"e" as a reflection upon those public utterances of Mr.
;le!elan"# in which the latter oppose" the use of sil!er as money.
7arther on in the same message the Presi"ent sai": -
"1 thin* it is clear that if $e should ma*e the coina"e of silver at its
present ratio free, $e must e<pect that the difference in the !ullion
values of "old and silver dollars $ill !e ta*en into account in
commercial transactions, and 1 fear the same result $ould follo$
any considera!le increase of the present rate of coina"e%"
Presi"ent <arren was an able lawyer# an" was traine"
"'o ma*e the $orse appear the !etter reason%"
7rom the tenor of the language of Presi"ent 6arrison first 5uote"#
he "elicately ri"icules the se!ere strictures of Presi"ent ;le!elan"
upon sil!er as money# an" he seeks to cast reproach upon the late
n the language last 5uote"# the Presi"ent# with the ability of a
skille" special plea"er# uses innuen"o against free coinage# an"
he speaks of the "ifference in the bullion !alue respecti!ely of
gol" an" sil!er coin# as a great obstacle in the way of free coinage
of the latter metal.
6a!ing thus cunningly state" his ob>ections to the free coinage of
sil!er# he carrie" his fears from that sub>ect into the system of
go!ernment purchase of bullion# an" its coinage into "ollars
un"er the <lan"-0llison law# an" he suggeste" that there is peril
in the further continuation of the coinage of sil!er "ollars.
0t this time# 3ecretary Iin"om recommen"e" his plan to
;ongress# which pro!i"e" that any owner of sil!er bullion coul"
"eposit it in the 4reasury# an" recei!e therefor sil!er certificates
upon the bullion !alue of the sil!er so "eposite".
Ihen Mr. Iin"om recommen"e" this plan# the bullion !alue of
the sil!er "ollar was only se!enty per cent. of the bullion !alue of
the gol" "ollar# an" the a"option of his plan by ;ongress woul"
ha!e create" two classes of sil!er money an" sil!er certificates.
4he sil!er certificate issue" un"er the <lan"-0llison law woul"
ha!e represente" far less bullion !alue than the certificates issue"
un"er his plan.
t can be seen that the ob>ect of the Iin"om plan was to
"isparage the sil!er "ollars an" their paper representati!es issue"
un"er the <lan"-0llison law# an" to supply the national banking
money power with an opportunity to "enounce the stan"ar" sil!er
"ollar as a "cheap dollar," a "dishonest dollar," a ":84cent dollar%"
4hen "eman"s woul" be ma"e upon the =o!ernment to protect
its cre"it by re"eeming the stan"ar" sil!er "ollars in gol".
4his woul" compel the issue of nearly TC((#(((#((( in interest-
bearing bon"s to secure gol" for re"emption purposes+
an" woul" ha!e resulte" in a contraction of the currency e5ual to
the amount of stan"ar" sil!er "ollars coine" since 7ebruary 8D#
4he Iin"om plan was transmitte" to ;ongress# where it was
intro"uce" as 6ouse bill HAD1.
:n Mune H# 1DE(# 6ouse bill HAD1# known as the Iin"om 3il!er
<ullion Purchase <ill# was pen"ing in the 6ouse. Mr. <lan"
mo!e" to recommit# with instructions to the committee to report
back a bill for the free coinage of sil!er.
4he motion was "efeate" by a !ote of 11J yeas to 1C( nays.
0 substitute offere" by Mr. ;onger was then passe"# an" was
known as 6ouse bill HAD1.
:n Mune 1Bth# 6ouse bill HAD1 was reporte" by the 7inance
;ommittee of the 3enate with sun"ry amen"ments+
while it was pen"ing# Mr. Plumb# of -ansas# offere" an
amen"ment for free an" unlimite" coinage of sil!er+
which was agree" to by a !ote of CA yeas to 8C nays.
4he bill as amen"e" into a free coinage measure was then passe"
by the 3enate.
:n Mune 8Hth# the 3enate bill came up in the 6ouse# an"# after
long wrangling# the 3enate free coinage amen"ment was
<oth 6ouses appointe" a ;onference ;ommittee which# after
long "eliberation# brought in a conference report.
n a speech on this conference report# 6on. 1. P. <lan" expose"
the trickery of the 1epublican members of that committee in
hol"ing secret meetings to pre!ent the free coinage members
from participating in its "eliberations.
6e sai": -
"No$, /r% Spea*er, the "entleman from 1o$a [/r% Con"er] says this
!ill is the result of a free and fair conference%
1 deny it% We had !ut one meetin" in $hich all the conferees $ere
represented% 'hat $as the meetin" appointed for last 'hursday%
"We $ere to have another meetin" of the conferees, !ut !efore the
date of the meetin" arrived, 1 $as notified that my presence $as no
lon"er needed and that $hen my services $ere re;uired, 1 $ould !e
1n the meantime, secret meetin"s or caucuses $ere held !y the
Iepu!lican mem!ers of that conference and this !ill $as concocted
and prepared !y them9
and 1 never received a notice to attend another meetin" of this
conference until this !ill $as a"reed to and the report $as ready to
!e si"ned9
and 1 $as simply as*ed $hether 1 a"reed to it or not%"
n the 3enate "ebate on the bill reporte" by the ;onference
;ommittee# 3enator ;ockrell# of Missouri# pointe" out that this
measure was "esigne" for the "egra"ation of sil!er as a money
metal# an" that the 3ecretary of the 4reasury was in!este" with
such great powers that he coul" practically "emonetize sil!er by
refusing to pay it out for the re"emption of the 4reasury notes#
which# un"er this act# woul" be issue" to buy the sil!er bullion
out of which sil!er "ollars were to be coine".
n reply to these remarks of 3enator ;ockrell# 3enator 3herman
state"# that# if the 3ecretary shoul" thus "iscriminate against the
use of sil!er# he ought to be impeache".
:n Muly 1(th# the report was agree" to in the 3enate by a !ote of
AE yeas# all 1epublicans# to 8J nays# all Democrats.
:n Muly 18th# the 6ouse concurre" in the conference report by a
!ote of 188 yeas# all 1epublicans# except one in"epen"ent# an" E(
nays# all Democrats.
4hus the so-calle" 3herman 3il!er Purchasing /aw of Muly 1Cth#
1DE( foun" its way upon the statute books.
t will be notice" that in the !ote of both 6ouses upon this bill#
not a single Democrat member fa!ore" its passage.
4hey knew that in the han"s of a 3ecretary of the 4reasury hostile
to sil!er# this law woul" become the most formi"able weapon of
the national banking money power to strike a "ea"ly blow against
the continue" coinage of that metal into money.
4he full text of this act is as follows:-
"3n act directin" the purchase of silver !ullion and the issue of
'reasury notes thereon, and for other purposes%"
"+e it enacted:
"'hat the Secretary of the 'reasury is here!y directed to purchase,
from time to time, silver !ullion to the a""re"ate amount of
J,788,888 ounces, or so much thereof as may !e offered in each
month, at the mar*et price thereof, not e<ceedin" 6& for 0:&%.7
"rains of pure silver, and to issue in payment for such purchases of
silver !ullion 'reasury notes of the nited States to !e !e prepared
!y the Secretary of the 'reasury, in such a form and of such
denominations, not less than 6& nor more than 6&,888, as he may
prescri!e, and a sum sufficient to carry into effect the provisions of
this act as here!y appropriated out of any money in the 'reasury not
other$ise appropriated%

"Section .%
'hat the 'reasury notes issued in accordance $ith the provisions of
this act shall !e redeema!le on demand, in coin at the 'reasury of
the nited States, or at the office of any 3ssistant 'reasurer of the
nited States, and $hen so redeemed may !e re4issued9
!ut no "reater or less amount of such notes shall !e outstandin" at
any time than the cost of the silver !ullion and the standard silver
dollars coined therefrom, then held in the 'reasury, purchased !y
such notes9
and such 'reasury notes shall !e a le"al tender in payment of all
de!ts, pu!lic and private, e<cept $here other$ise e<pressly
stipulated in the contract, and shall !e receiva!le for customs,
ta<es,and all the pu!lic dues, and $hen so received may !e
and such notes, $hen held !y any National +an*in" 3ssociation,
may !e counted as a part of its la$ful reserve%
'hat upon demand of the holder of any of the 'reasury notes herein
provided for, the Secretary of the 'reasury shall, under such
re"ulations as he may prescri!e, redeem such notes in "old or silver
coin, at his discretion, it !ein" the esta!lished policy of the nited
States to maintain the t$o metals on a parity $ith each other upon
the present le"al ratio, or such ratio as may !e provided !y la$%
"Section 0%
'hat the Secretary of the 'reasury shall each month coin .,888,888
ounces of silver !ullion purchased under the provisions of this act
into standard silver dollars until the &st day of July, &C?&, and after
that time he shall coin of the silver !ullion purchased under the
provisions of this act as much as may !e necessary to provide for
the redemption of the 'reasury notes herein provided for, and any
"ain or sei"nora"e arisin" from such coina"e shall !e accounted
for and paid into the 'reasury%
"Section J%
'hat the silver !ullion, purchased under the provisions of this act,
shall !e su!ject to the re;uirements of the e<istin" la$ and the
re"ulations of the mint service "overnin" the methods of
determinin" the amount of pure silver contained, and the amount of
char"es or deductions, if any, to !e made%
"Section 7%
'hat so much of the act of =e!ruary .C, &C:C, entitled H3n act to
authori2e the coina"e of the standard silver dollar and to restore its
le"al tender character,H as re;uires the monthly purchase and
coina"e of the same into silver dollars of not less than 6.,888,888
nor more than 6J,888,888 $orth of silver !ullion, is here!y
"Section B%
'hat upon the passa"e of this act the !alances standin" $ith the
'reasurer of the nited States to the respective credits of national
!an*s for deposits made to redeem the circulatin" notes of such
!an*s, and all deposits thereafter received for li*e purpose, shall !e
covered into the 'reasury as a miscellaneous receipt, and the
'reasurer of the nited States shall redeem from the "eneral cash in
the 'reasury the circulatin" notes of said !an*s $hich may come
into his possession su!ject to redemption9 and upon the certificate
of the Comptroller of the Currency that such notes have !een
received !y him and that they have !een destroyed and that no ne$
notes $ill !e issued in their place, reim!ursement of their amount
shall !e made to the 'reasurer, under such re"ulations as the
Secretary of the 'reasury may prescri!e, from an appropriation
here!y created, to !e *no$n as the national !an* note redemption
!ut the provisions of this act shall not apply to the deposits received
under section 0 of the act of June .8, &C:J re;uirin" every national
!an* to *eep in la$ful money $ith the 'reasurer of the nited States
a sum e;ual to five per cent of its circulation, to !e held and used
for the redemption of its circulatin" notes9
and the !alance remainin" of the deposits so covered shall, at the
close of each month, !e reported on the monthly pu!lic de!t
statement as de!t of the nited States !earin" no interest%
"Section :%
'hat this act shall ta*e effect thirty days from and after its
4his sil!er purchasing law# as it finally passe" ;ongress# was the
offspring of the fertile brain of Mohn 3herman# an" future e!ents
"emonstrate" that it was so cunningly planne" that it terminate"
in making sil!er a cre"it money.
3enator 3herman# who# as chairman of the ;ommittee on 7inance
of the ,nite" 3tates 3enate# succee"e" in getting this bill through
;ongress# afterwar" publicly state" that this measure was for the
express purpose of "efeating the free coinage of sil!er.
:n 0ugust A(# 1DEA# 3enator 3herman "eli!ere" a speech urging
a spee"y repeal of the lair for the passage of which he ha" bent
all his energies to secure in 1DE(.
6e sai": -
"Gur Aemocratic friends have denounced this purchasin" clause as
a misera!le ma*eshift% 1t $as a ma*eshift, !ut 1 thin* a "ood one%
1f $e defeat the free coina"e of silver on the ratio of &B to &%
1 !elieve in this respect it has rendered the country an enormous
Iith unparallele" brazen effrontery# he state" in his Memoirs#
lately publishe"# that he woul" ha!e !ote" for the repeal of this
law within ten "ays after its passage# after he ha" by this means
"efeate" the free coinage measure propose" by the 3enate.
0n examination of the pro!isions of the act of Muly 1C# 1DE(# in
connection with the circumstances atten"ing its passage# will
exhibit some remarkable facts.
n substance# the 3ecretary of the 4reasury was authorize" to
purchase# from time to time# sil!er bullion to the aggregate
amount of C#H((#((( ounces# or as much thereof as woul" be
offere" in each month at the market price# not excee"ing T1 for
each AB1.8H grains of pure sil!er.
0n" in payment of such bullion# 4reasury notes of the ,nite"
3tates were to be prepare" by the 3ecretary of the 4reasury in
"enominations of not less than T1 nor more than T1#(((.
4hat the 4reasury notes so issue" shoul" be re"eemable on
"eman"# in coin# at the 4reasury of the ,nite" 3tates# or at the
office of any assistant treasurer of the ,nite" 3tates# an"# when so
re"eeme"# coul" be reissue".
4hat no greater or less amount of such notes shoul" be
outstan"ing at any time than the cost of the sil!er bullion an" the
stan"ar" sil!er "ollars coine" there from# then hel" in the
4reasury# purchase" by such notes.
4hat such 4reasury notes shoul" be a legal ten"er in payment of
all "ebts# public an" pri!ate# except where otherwise expressly
stipulate" in the contract.
4hat such notes shoul" be recei!able for customs# taxes# an" all
public "ues# an" when so recei!e" coul" be reissue". 4hat such
notes coul" be counte" a part of its lawful reser!e by any
9ational <anking 0ssociation.
4hat# upon "eman" of the hol"er of any of the 4reasury notes so
issue"# the 3ecretary of the 4reasury shoul" re"eem such notes in
gol" or sil!er coin# at his "iscretion.
4hat it was the establishe" policy of the ,nite" 3tates to maintain
the two metals on a parity with each other upon the present legal
ratio# or such ratio as may be pro!i"e" by law.
3ection A of this act was so cunningly contri!e" that it operate"
to hoar" up the sil!er "ollars coine" un"er this law.
4his section to which we "irect the attention of the rea"er is as
follows: -
"'hat the Secretary of the 'reasury shall each month coin .,888,888
ounces of the silver !ullion purchased under the provisions of this
act into standard silver dollars until the first day of July, &C?&, and
after that time he shall coin of the silver !ullion purchased under
the provisions of this act as much as may !e necessary to provide
for the redemption of the 'reasury notes herein provided for%"
4he language of this section pro!i"e" for the re"emption of the
4reasury notes in sil!er "ollars# when not taken in connection
with section 8.
4he inference to be "rawn from this language which we ha!e
5uote" is# that for e!ery "ollar in 4reasury notes emitte" for the
purchase of sil!er bullion# a sufficient number of "ollars must be
coine" therefrom to re"eem these notes.
4o maintain an a"e5uate supply of such sil!er "ollars a!ailable
for the re"emption of such notes# they must be kept in!iolate in
the 4reasury for that i"entical purpose.
4his woul" prohibit them from going into circulation.
3tore" up in the 4reasury !aults by a literal interpretation of this
language# a large accumulation of these "ollars woul" be
ine!itable# an" woul" affor" a Presi"ent an" 3ecretary of the
4reasury# unfrien"ly to sil!er# an opportunity to point to them as
e!i"ence that they were not "esire" as money for actual
4his was actually "one by Presi"ent ;le!elan" in his message of
0ugust D# 1DEA# in which he a"!ise" the spee"y repeal of the
purchasing clause of this law.
n that "ocument# he pointe" out that the sil!er coin an" bullion
in the 4reasury ha" increase" more than T1CB#(((#((( between
the 1st of Muly# 1DE(# up to the 1Hth of Muly# 1DEA.
6ence# it will be seen that the sil!er "ollars coine" un"er this law
coul" be hoar"e" up in the 4reasury at the mere will of the
3ecretary# while# at the same time# he coul" use his "iscretion in
re"eeming such 4reasury notes wholly in gol".
4his policy was carrie" into effect by 3ecretaries 7oster an"
3ection A also pro!i"e" that any gain or seigniorage# which
woul" be the "ifference between the coinage !alue of the sil!er
so purchase" an" its bullion !alue# shoul" be pai" into the
3ection C pro!i"e" that so much of the <lan"-0llison act of
7ebruary 8D# 1DBD# in so far as it re5uire" the monthly purchase
an" coinage of sil!er bullion into sil!er "ollars of not less than
T8#(((#((( not more than TC#(((#((( shoul" be repeale".
3ection J of this act pro!i"e" that# upon its passage# the legal
ten"er notes "eposite" by the national banks for the re"emption
of the circulating notes of such banks# an" all "eposits thereafter
recei!e" for like purpose# shoul" be pai" into the 4reasury as a
miscellaneous receipt# an" that national bank notes shoul" be
re"eeme" out of a fun" to be create" an" known as the national
bank note re"emption account.
Ihen we construe the propositions embrace" in the act of Muly
1C# 1DE(# we ascertain#-
"=irst, 'hat the free coina"e system, $hich had e<isted prior to
&C:0, $as a!solutely destroyed !y this enactment9 and that the
purchase of silver !ullion !y the Dovernment made this metal a
mere commodity9 $hile the holder of "old $as "ranted the privile"e
of ta*in" his !ullion to the mints and have it coined into money of
unlimited le"al tender de!t4payin" po$er%
"Second, 'hat the purchase of J,788,888 ounces of silver per month,
$ould not e<haust its annual production, !ut a lar"e surplus $ould
remain on the mar*et, the presence of $hich $ould inevita!ly result
in a depreciation of its !ullion value 4 the value of silver produced
durin" &C?8 $as, 6:8,JBJ,888 and its price per ounce $as 6&%87%"
4herefore# the pro"uction of sil!er for that year was not less than
B(#(((#((( ounces.
4he total amount of sil!er pro!i"e" for by the 3herman law was
HC#(((#((( ounces per annum# lea!ing an annual surplus of
1J#(((#((( ounces to act as a "epressing element on the price of
Moreo!er this surplus woul" accumulate year by year# gra"ually
but surely lowering the bullion price of sil!er.
n one respect# the policy embo"ie" in the 3herman law was
similar to that of the <lan"-0llison law in this# that# while these
two laws professe" to sol!e the sil!er 5uestion# they aggra!ate"
the mischief by affor"ing a greatly limite" market for sil!er# an"
conse5uently a restricte" "eman" for it with a resultant fall of
4he abolition of free coinage of sil!er# an" its purchase an"
coinage on go!ernment account alone# was a"opte" at the
cunning suggestion an" at the instigation of Mohn 3herman.
4he ob>ect of this policy# by which the =o!ernment purchase"
sil!er an" coine" it into "ollars# was a shrew" scheme to make
sil!er a mere cre"it money re"eemable in gol" alone.
3houl" the sil!er "ollars so coine" fall in bullion !alue# a "eman"
woul" be ma"e upon ;ongress to maintain the public cre"it by
guaranteeing the bullion parity of the sil!er "ollar with that of
,n"er the pro!isions of the 3herman law# the 3ecretary of the
4reasury coul" go into the open market an" buy sil!er from the
lowest competiti!e bi""er# an" that process meant a continual fall
in its price.
4he =o!ernment became a RbearR in the sil!er market.
:ne feature of the 3herman law that was extremely !icious# was
couche" in that pro!ision forbi""ing the 3ecretary of the 4reasury
to pay more than one "ollar for each AB1.8H grains of pure sil!er.
0 maximum price was fixe" beyon" which the 3ecretary coul"
not go+
but there was no minimum below which he coul" not buy.
4his pro!ision was a statutory "eclaration of hostility towar"
4he policy of $nglan"# in fixing the price of gol" to be pai" by
the <ank of $nglan"# establishe" a minimum# below which that
bank# coul" not go on penalty of forfeiture of its charter.
4he financial system of the ,nite" 3tates# as it was embo"ie" in
the so-calle" 3herman law# aime" at the "estruction of the !alue
of sil!er# of which it was the largest pro"ucer in the worl"+ the
policy of =reat <ritain aime" at the enhancement of the !alue of
gol"# of which it was the largest hol"er.
n payment for the sil!er purchase"# the 3ecretary of the 4reasury
was authorise" to issue 4reasury notes# re"eemable on "eman"# in
coin# at the 4reasury of the ,nite" 3tates# or at the office of any
assistant treasurer of the ,nite" 3tates# an" when so re"eeme"#
they coul" be reissue".
;oin meant gol" an" sil!er at the time this law came in force.
Ihile the first part of the act "eclare" these notes re"eemable in
coin# a subse5uent clause of the same section pro!i"e":-
"'hat upon demand of the holder of any of the 'reasury notes herein
provided for, the Secretary of the 'reasury shall, under each
re"ulations as he may:
prescri!e, redeem such notes in "old or silver coin at his discretion,
it !ein" the esta!lished policy of the nited States to maintain the
t$o metals on a parity $ith each other upon the present le"al ratio,
or such ratio as may !e provided !y la$%"
4his last clause ma"e the whole section ambiguous.
4he first clause "eclare" the 4reasury notes re"eemable in coin+
the last clause makes them re"eemable in gol" or sil!er coin.
4he rea"er will notice how cunningly this re"emption clause is
wor"e". 4he 3ecretary of the 4reasury was or"ere" to re"eem the
4reasury notes in gol" or sil!er coin# not gol" an" sil!er coin.
6ence# the 3ecretary of the 4reasury# in his "iscretion# coul"
re"eem the 4reasury notes in either kin" of coin.
4he ablest writers on law ha!e always pointe" out the "angers of
lea!ing the execution of laws sub>ect to the "iscretion of those
officers whose "uty it is to carry them into effect.
Many of the most !aluable rights of man ha!e been thrown away#
by !esting too much authority in the "iscretion of those officials
whose "uty re5uires them to properly execute laws.
4hat is the best law which lea!es the least to the "iscretion of the
authority appointe" to execute it.
:ne other singular pro!ision of this measure rea"s as follows: -
"1t !ein" the esta!lished policy of the nited States to maintain the
t$o metals on a parity $ith each other upon the present le"al ratio,
or such ratio as may !e provided !y la$%"
4his language "rew an in!i"ious "istinction between the coin an"
the metal of which it is compose".
4he clause "oes not say parity of the two coins# but metals.
3houl" this pro!ision be construe" against the ,nite" 3tates# the
=o!ernment woul" become the guarantor of the !alue of the
bullion in the stan"ar" sil!er "ollar# shoul" its !alue be less than
that in the gol" "ollar. 3il!er woul" become a mere cre"it money
re"eemable in gol".
4his parity clause constitute" the "endless chain" so graphically
"escribe" by Presi"ent ;le!elan" in his special message to
;ongress in 0ugust# 1DEA.
3houl" the 3ecretary of the 4reasury surren"er his "iscretion of
re"eeming 4reasury notes in gol" or sil!er coin# this parity clause
woul" subser!e two "istinct purposes#-
7irst# t woul" con!ert e!ery 4reasury note into a !ehicle for
transferring the gol" in the 4reasury to the !aults of the national
3econ"# 4his process of re"emption in gol" woul" gi!e the
national banking money power an opportunity to unsettle
business by bringing on a panic# an" to "eman" the with"rawal
an" "estruction of the greenbacks an" 4reasury notes.
4he 4reasury notes issue" un"er the law of 1DE( were mere
promissory notes payable on "eman"# an" ha" the act which
authorize" their issue ma"e them re"eemable in the sil!er "ollars
coine" out of the bullion purchase" un"er that law# the national
banking money power# an" the gol" speculators of /on"on an"
9ew Gork ;ity coul" not ha!e "raine" the 4reasury of its gol"
t is un5uestionable# that the so-calle" 3herman law was
ambiguously wor"e" by its authors with the ultimate "esign of
seriously impairing the !alue of sil!er.
6owe!er# the large amount re5uire" un"er the pro!ision of that
act ser!e" to stea"y its bullion !alue# reckoning that !alue from a
gol" basis.
Moreo!er# the issue of 4reasury notes utilize" to purchase the
re5uire" amount of sil!er a""e" many millions to the !olume of
money in circulation.
;onse5uently the prices of agricultural pro"ucts were enhance"#
an" the power of 1ussian an" n"ian competition in the wheat
markets of the worl" was measurably re"uce".
n speaking of these facts in his report of 1DE(# 3ecretary 1usk#
of the Department of 0griculture# sai": -
"'he recent le"islation loo*in" to the restoration of the !i4metallic
standard of our currency, and the conse;uent enhancement of the
value of silver, has un;uestiona!ly had much to do $ith the advance
in the price of cereals%
'he same cause has advanced the price of $heat in Iussia and
1ndia, and in the same de"ree reduced their po$er of competition%
En"lish "old $as formerly e<chan"ed for cheap silver, and $heat
purchased $ith the cheaper metal $as sold in Dreat +ritain for
/uch of this advanta"e is lost !y the appreciation of silver in those
countries% 1t is reasona!le, therefore, to e<pect much hi"her prices
for $heat than have !een received in recent years%"
Despite those ambiguities an" inconsistencies that were embrace"
in the pro!isions of the so-calle" 3herman law# an" which were
craftily "esigne" by its framers to cripple the coinage of sil!er as
a me"ium of exchange# the a""ition of the 4reasury notes to the
circulation ha" raise" prices correspon"ingly in the ,nite" 3tates
- 3ecretary 1ust a"mitte" the fact.
3o marke" was this effect# that Presi"ent 6arrison ma"e special
reference to the matter in his message in December# 1DE1.
6ence# the national banks were planning to array their
concentrate" power against the issuance of the 4reasury notes#
the control of which ha" temporarily escape" their grasp.
3oon after the intro"uction of the Iin"om 3il!er <ullion
Purchase <ill# the 3ecretary of the 4reasury atten"e" a ban5uet at
9ew Gork ;ity as the guest of the associate" bankers.
Ihile in the act of "eli!ering an a""ress. Mr. Iin"om was
su""enly prostrate" by an attack of apoplexy which pro!e" fatal.
4he Presi"ent chose 6on. ;harles 7oster# of :hio# as his
successor. 4he new 3ecretary of the 4reasury was a national
banker# an" ha" earne" some reputation as an a"roit politician.
Prior to the appointment of Mr. 7oster as 3ecretary of the
4reasury# ,nite" 3tates bon"s were rapi"ly rising in !alue until
they were worth from 8H to 8E per cent abo!e par.
n the meantime# the banks of 9ew Gork ;ity# <oston# an" other
financial centers of the $ast# were hoar"ing up gol"# 4reasury
notes of the issue of 1DE(# an" greenbacks.
4he ob>ect of this combine" action of the eastern national banks#
in thus hoar"ing up these !arious kin"s of money# was for the
purpose of embarrassing the 4reasury of the ,nite" 3tates.
Ihile these banks were engage" in this operation# the bon"-
hol"ing syn"icates of $urope ha" unite" to force 0ustro-6ungary
to con!ert her immense "ebt of T8#C((#(((#((( into gol" bon"s#
which was a part of the scheme to han"cuff the whole ci!ilize"
worl" to the single stan"ar" of gol".
Ihile the syn"icates of $urope were engage" in carrying out
their schemes against 0ustria# the national banking money power
of the $ast ha" mature" a plan to sell its bon"s at a high
premium# a process which woul" ha!e nette" them a profit
ranging from 8H to 8E cents on the "ollar.
4he purpose of this combination was two-fol"+ in the first place#
the bankers woul" gain this great premium by the re"emption of
their bon"s# an" this re"emption woul" result in "raining the
4reasury of its gol"+ as a next step# a "eman" woul" be ma"e by
them for the issue of new bon"s to replenish the gol" reser!e.
4hese bon"s woul" be purchase" by the same cli5ue who ha"
sol" the former bon"s an" gaine" millions by the operation.
During this time# the financiers of 0ustria ha" conclu"e" to fun"
the bon"s of that country into gol" obligations# a policy to which
they were force" by the 1othschil"s who ha" her by the throat.
4o effect these fun"ing operations# gol" must be secure"
somewhere to execute the man"ates of the money kings of
4he <ank of $nglan" hel" immense reser!es of gol"+ the <ank of
7rance ha" yet far more+
1ussia ha" a !ast treasure excee"ing TH((#(((#(((.
9otwithstan"ing these facts the necessary gol" coul" not be
"rawn from the <ank of $nglan" by 0ustria to effect her fun"ing
operations# for# at the first attempt of the latter to obtain gol" in
/on"on# this great bank woul" imme"iately raise its price# a
practice to which it ha" always resorte" to pre!ent the
exportation of gol" from $nglan".
9either coul" it be obtaine" from the <ank of 7rance# whose
charter forba"e it to pay out more than fi!e per cent in gol" for
export at any one time.
4he <ank of 7rance was un"er rigi" super!ision of the
=o!ernment# an" it was the ser!ant of the 7rench 1epublic# not
its master.
4he immense accumulations of gol" in 1ussia were unassailable#
as that $mpire woul" not pay out a single rouble in gol".
6ence# the only source of supply of gol"# to which resort coul"
be ha" by 0ustria# was that store" up in the ,nite" 3tates
4reasury an" in the banks of 9ew Gork ;ity.
4hese banks ha" hoar"e" up more than T8((#(((#((( of gol"# a
fact of which they boaste".
4hey woul" not pay out a "ollar of their immense hol"ings of this
coin# as it woul" be utilize" by them to buy up any bon"s that
might be issue" to maintain that absur" thing known as the ""old
<ut one great obstacle lay in the way of with"rawing gol" from
the 4reasury for export# an" that was embrace" in section e# of
the 3herman law of Muly 1C# 1DE(# which pro!i"e" that the
3ecretary of the 4reasury shoul" re"eem the treasury notes of
1DE( in gol" or sil!er coin at his "iscretion.
4he option# or right# of this =o!ernment to re"eem its treasury
notes in either gol" or sil!er coin was !este" in the "iscretion of
the 3ecretary of the 4reasury.
4his "iscretion# or option# was the sole barrier in the path lea"ing
to the 4reasury of the ,nite" 3tates.
Iith the ob>ect of ascertaining the policy of 3ecretary 7oster# a
gran" ban5uet was gi!en at the Delmonico
restaurant by the
Delmonico was the premier restaurant in 9ew Gork at that time# where the rich an"
famous "ine".
9ew Gork bankers# an" Mr. 7oster was in!ite" to atten" as the
special guest of the occasion.
4he 3ecretary accepte" the generous hospitality of these
financiers# an" again the Mountain >ourneye" to Mohamme".
0fter these "istinguishe" patriots ha" feaste" themsel!es on the
costliest !ian"s
of the season# an" ha" imbibe" large 5uantities
of sparkling champagne# these financiers calle" upon the
honorable 3ecretary to state his position upon the re"emption of
the treasury notes an" greenbacks.
6e was also re5ueste" to "efine his actual powers with reference
to issuing bon"s to maintain the gol" reser!e
4he eminent 3ecretary# inspire" by these representati!es of great
wealth# gathere" aroun" the festal
boar"# an" buoye" up by the
ele!ating influence of the champagne furnishe" by these money
kings# then an" there "eclare" that he woul" re"eem the 4reasury
notes an" greenbacks in gol"# an" that he woul" perse!ere in that
4he 3ecretary sai": -
"'he Iesumption 3ct confers authority upon the Secretary of the
'reasury to issue !onds to any e<tent that he may !e called upon to
do, and to increase, maintain, or decrease his "old reserve%
'he act of July &J, &C?8, commands me to preserve the parity of
"old and silver%
1t has al$ays !een the custom of this country to pay its o!li"ations
in "old, and therefore should there !e any trou!le a!out this, and
the present hundred millions of "old, or the Ieserve =und, $ere to
!e called out or intrenched upon, it $ould !e $ithin the SecretaryHs
po$er to issue !onds for "old up to five per cent and to replace or
increase that Ieserve =und%"
!ian"s - 7rom the 7rench RFian"eR for meat
festal - :f or pertaining or relating to a R7eastR# or festi!al.
4hus# at the ban5uet table of these <elshazzars of 9ew Gork ;ity#
3ecretary 7oster transferre" the option of the =o!ernment to
re"eem its notes in gol" or sil!er to that hor"e of money lor"s#
the presi"ents of the associate" national banks of 9ew Gork ;ity.
4hese bank presi"ents at once communicate" the "ecision of
3ecretary 7oster to their allies in $urope# an" an un"erstan"ing
was ha" between the money power of the ,nite" 3tates an"
$urope# that the national banks of 9ew Gork ;ity woul" supply
the 4reasury notes necessary to "eplete the 4reasury of its gol".
4he interests of the financiers of the $ast an" of $urope were
i"entical# an" the offer of the one was accepte" by the other.
0t the time of this Delmonico ban5uet# there were eight !arieties
of money in circulation in the ,nite" 3tates# exclusi!e of
subsi"iary sil!er# nickel# an" copper coins# !iz:-
7irst# gol" coin# with unlimite" legal ten"er for all "ebts of e!ery
kin"# public an" pri!ate.
3econ"# gol" certificates# limite" to the amount of gol" "eposite"
in the 4reasury# not legal ten"er# but coul" be counte" as part of
the national bank reser!es# recei!able for all public "ues# an"
coul" be reissue" by the =o!ernment.
4hey were re"eemable in gol" coin alone. =ol" certificates were
the paper representati!es of the gol" as a more con!enient form
of that coin+ an" their "enominations range" from T8( to
4hir"# 3il!er "ollars# the coinage of which since 1DBD ha" been
limite"# of full legal ten"er for all "ebts# except where otherwise
specifie" in the contract# recei!able for all taxes "ue the ,nite"
3tates an" exchangeable for sil!er certificates.
7ourth# 3il!er certificates# limite" to the amount of sil!er "ollars
"eposite" in the 4reasury by their hol"ers# not legal ten"er# but
coul" be counte" as part of bank reser!es# recei!able for all "ues
by the =o!ernment# re"eemable in sil!er "ollars alone+ their
"enominations range" from T1 to T1#(((.
7ifth# ,nite" 3tates notes# known as greenbacks# their !olume
limite" by the law of 1DBD to TACJ#JD1#1(J# unlimite" legal
ten"er for all "ebts# public an" pri!ate# except "uties on imports
an" interest on the public "ebt# re"eemable in coin in sums of TH(
an" upwar"s at the sub-treasuries of 9ew Gork ;ity an" 3an
7rancisco. 4he "enominations were i"entical with those of the
sil!er certificates.
3ixth# ;urrency certificates# limite" by amount of ,nite" 3tates
notes "eposite" therefore# not legal ten"er# coul" be counte" as
part of the national bank reser!es# not recei!able by the
=o!ernment for taxes# exchangeable for ,nite" 3tates notes#
re"eemable in that money at the sub-treasury where issue". 4heir
"enominations range" from TH#((( to T1(#(((.
3e!enth# 4reasury notes of 1DE(# issue" for the purchase of sil!er
un"er the 3herman law# unlimite" legal ten"er# unless otherwise
specifie" in the contract# recei!able for all "ues by the ,nite"
3tates# exchangeable for all kin"s of money except gol"
certificates# re"eemable in coin in sums of not less than TH( at the
,nite" 3tates 4reasury an" the !arious sub-treasuries. 4heir
"enominations were the same as sil!er certificates.
$ighth# 9ational bank notes# printe" by the =o!ernment# an"
gi!en to national banks# limite" to ninety per cent of the ,nite"
3tates bon"s "eposite" therefore in the 4reasury# legal ten"er for
payment of "ebts to national banks# for "ues to the ,nite" 3tates
except "uties on imports# are legal ten"er for payments by the
,nite" 3tates# except interest on the public "ebt an" re"emption
of currency# re"eemable in lawful money at the issuing bank an"
at the 4reasury.
4heir "enominations are the same as ,nite" 3tates notes with the
exception of one an" two "ollar notes.
,n"er the re"emption features of the national bank law# by which
national bank notes were re"eemable in greenbacks# these bank
notes were really re"eemable in gol".
4he circulating notes of national banks coul" be presente" to the
4reasury Department for re"emption in greenbacks# an" this
latter currency coul" be imme"iately presente" for re"emption in
4herefore# these bank notes were in reality re"eemable in gol" at
the 4reasury of the ,nite" 3tates# an" this scheme of con!erting
these bank notes into go!ernment "eman" obligations# payable in
gol"# was systematically worke" by the national banks.
3uch was the heterogeneous mass of the !arious kin"s of coin
an" currency afloat in the nation.
4o Mohn 3herman# the great necromancer
of 0merican finance#
belongs the cre"it of originating this combati!e an" incongruous
state of currency.
Ie except the sil!er "ollar.
4his system of finance was planne" an" a"opte" for the sole
benefit of the national banks# as it furnishe" them with the means
of "iscriminating against the go!ernment issues of currency.
n that conglomerate mass of cru"ities# the machinery necessary
to operate the "endless chain" upon the gol" reser!e can be easily
seen when taken in connection with the parity clause of the
3herman law# as construe" by such eminent financiers as ;harles
Poster an" 3ecretary ;arlisle.
9ecromancer - "eri!e" from =reek# an" /atin to be a reference to R<lack MagicR or
being able to call up spirits to foretell the future. ,se" here in insult.
4his explanation of the !arious kin"s of coin an" currency is
gi!en here to affor" the rea"er a !iew of the means by which the
money power geare" up that "endless chain," an" con!erte"
e!ery greenback# treasury note# an" bank note into bu"gets that
were attache" to this chain to "ip the gol" from the 4reasury# an"
pass it to the control of the foreign an" "omestic gol" gamblers.
:n his return to Iashington# 3ecretary Poster issue" a circular
in!iting proposals for the purchase of bon"s by the =o!ernment.
4he bankers of 9ew Gork ;ity at once respon"e"# an" in se!enty-
fi!e "ays the 3ecretary purchase" bon"s# the face !alue of which
was TBH#D8D#8((# but for which was pai" TDJ#8JJ#BA(# a profit to
the bankers of T1(#CAD#HA( in premiums.
4he 3ecretary also a"!ance" interest to the bon"-hol"ers nine
months before it was "ue. 4he amount of prepai" interest was
T18#((E#EH1. 4he total amount "onate" to the 9ew Gork banks
by this 5uon"am 3ecretary of the 4reasury in the way of prepai"
interest an" premium on bon"s was T8E#(((#(((.
=ratuity upon gratuity# franchise upon franchise# ha!e been
heape" upon the richest men of the nation# the !ery men who
cause" panic after panic# an" who# before many months woul"
elapse# woul" exert their immense power to bankrupt tens of
thousan"s of business men# throw out of employment hun"re"s of
thousan"s of working men# an" force the entire nation into a
con"ition of want an" misery that was appalling.
0t first these money kings fawne" at the feet of the =o!ernment
for special pri!ileges+ before long we will see them turn upon an"
ren" the !ery han" that conferre" these immense pecuniary
benefits upon them.
4he national banks of 9ew Gork ;ity# which# from 1DDH to 1DE8#
recei!e" the tremen"ous sum of nearly TB(#(((#((( in premiums
on the bon"s hel" by them# prepai" interest to the amount of tens
of millions# a gratuitous loan of TJH#(((#((( of the public fun"s
without interest# now saw themsel!es in a position in which they
"etermine" to measure their strength against that of the
3ecretary 7oster# who ha" transferre" the purse of the
=o!ernment into the han"s of these money kings# met with what
might be terme" retribution for his cowar"ly surren"er to the
banking power.
6e became a bankrupt "uring that great panic of 1DEA# which was
brought on by the concerte" action of the !ery men who wine"
an" "ine" him at Delmonico&s in 1DE1.
n his extremities# he calle" upon his 9ew Gork banker frien"s for
ai"+ they laughe" in his face+ he was mercilessly "ri!en to the
6is liabilities excee"e" T1#(((#(((# of which he was scarcely
able to pay ten per cent on the "ollar.
0fter the Delmonico episo"e# the money power mature" their
plans to rai" the gol" reser!e in the ,nite" 3tates 4reasury.
4he construction of the 3herman law# as publicly announce" by
3ecretary 7oster# ma"e this scheme comparati!ely easy of
4he money kings of $urope# an" the national banking money
power# >oine" their forces to consummate a common purpose# the
former to obtain gol" out of the 4reasury an" sell it at a premium
to 0ustria# the latter to force an issue of bon"s an" a suspension
of sil!er coinage un"er the 3herman law.
4he way was now clear for this combine" money power to
execute its purpose.
4he initial step was now taken.
:n the 1Hth of 0ugust# 1DE8# the firm of 6ei"elbach# ckelheimer
2 ;o.# Mewish bankers of 9ew Gork ;ity# agents of a foreign
syn"icate# presente" T1#(((#((( in treasury notes at the sub-
treasury in that city# an" "eman"e" gol" for them# an" state" that
they wante" this gol" for shipment abroa".
Iithout any hesitation# 0ssistant 4reasurer 1oberts ga!e this firm
the re5uire" gol". :n this fact becoming known# a lea"ing >ournal
of 9ew Gork ;ity inter!iewe" 0ssistant 4reasurer 1oberts with
reference to this transaction.
During the course of the inter!iew# Mr. 1oberts was aske" what
steps ha" been taken by the a"ministration to obstruct or pre!ent
the exportation of gol".
6e replie": -
"No steps have !een ta*en !y the administration to prevent or
o!struct the e<port of "old% 'he Dovernment stands ready to
meet all its o!li"ations in "old and $ill pay them in "old%"
n this inter!iew# the 0ssistant 4reasurer ga!e notice that the
4reasury stoo" rea"y to furnish all the gol" re5uire" by the gol"
gamblers an" foreign bon" syn"icates necessary to place 0ustria
upon a gol" stan"ar".
t woul" furnish the gol"# an" the speculators obtaining it woul"
"ispose of it at a premium.
4hus the promise which the associate" bankers of 9ew Gork ;ity
ha" extorte" from 3ecretary 7oster# in which he "eclare" that he
woul" pay out gol" in the re"emption of treasury notes an"
greenbacks# was a part of the concerte" scheme to force the
repeal of the 3herman law of 1DE(# an" the issue of bon"s to
obtain gol".
t will be aske"# why "i" those national banks who owe" their
!ery existence to the =o!ernment# an" from whom they recei!e"
those !aluable franchises which earne" them billions of "ollars#
"eliberately conspire to embarrass the 4reasury of the ,nite"
7irst# <ecause it brought to the ai" of these banks the most
powerful concentration of capital in the worl"# whose interests
were i"entical with those of the national banks.
3econ"# t woul" "rain the 4reasury of its gol"# an" this woul"
force an issue of long-time interest bearing bon"s# which woul"
ser!e as a basis for the continuance of the national banking
4hese banks were accumulating gol" to buy those bon"s# while
they were assisting the foreign gol" speculators in their efforts to
"rain the 4reasury.
4hir"# t affor"e" the banks the opportunity of "eman"ing the
permanent with"rawal from circulation an" the conse5uent
"estruction of TH((#(((#((( in treasury notes an" greenbacks#
this currency to be supplante" by an e5ual issue of national bank
notes "onate" outright to those institutions.
7ourth# 4he national banks coul" point to the sil!er "ollar as
"epreciate" coin# an" "eman" its re"emption in gol" to
"/aintain the parity of the metals%"
7ifth# 4he whole !olume of go!ernment legal ten"er notes#
treasury notes# sil!er "ollars# an" sil!er certificates woul"
become mere cre"it money# an" the sole legal ten"er woul" be
gol" alone.
3ixth# t !irtually "epri!e" the 7e"eral =o!ernment of its
constitutional power to fix the !alue of money# an" transferre"
that highest element of so!ereignty to the bullion brokers of the
3e!enth# t enable" the national banks to obtain a construction of
the parity clause of the 3herman law# which !irtually
"emonetize" sil!er. n the meantime# the 6ouse of
1epresentati!es ha" passe" the ini5uitous 7orce <ill# which went
to the 3enate.
:n Manuary H# 1DE1# Mr. 3tewart mo!e" to consi"er 3enate bill
CJBH# replacing the 7orce <ill. 4he motion was agree" to by a
!ote of AC yeas to 8E nays.
:n Manuary 1C# 1DE1# the same 3enator mo!e" a free coinage
amen"ment to this bill# which ha" been lai" asi"e up to that time.
4he amen"ment was agree" to by a !ote of C8 yeas to A( nays.
Mr. Fest
then offere" a free an" unlimite" coinage pro!ision as
a substitute# an" that was agree" to by a !ote of AE yeas to 8B
:n Manuary 1H# 1DE1# 3enate bill CJBH being the substitute
offere" by Mr. Fest# came up in the 6ouse of 1epresentati!es#
whereupon it was referre" to the ;oinage ;ommittee# which# on
7ebruary 81# 1DE1# ma"e an a"!erse report on the measure an" no
further action was ha" on the bill.
n a report of the ;ommittee on ;oinage on one of these
measures# pro!i"ing for the free coinage of sil!er# the character of
those who appeare" before this committee at hearings gi!en by it#
an" oppose" the free coinage of sil!er# is thus "escribe": -
"3lmost every man $ho appeared in opposition to free coina"e $as
a president or some other e<ecutive officer of some !an*, some
"reat insurance company or other firm, corporation or association
controllin" vast a""re"ations of capital%"
=eorge =raham Fest )Dec J# 1DA( O 0ug E# 1E(C* <orn in 7rankfort# -entucky# was
a lawyer an" politician# ser!ing as Missouri ;ongressman.
Iith reference to those who were a"!ocating free coinage the
report says: -
"pon the other hand, it may not !e out of place for us to mention
the circumstance !y $ay of contrast, that at the conclusion of /r%
3t*insonHs statement /r% Aunnin", the duly accredited a"ent of the
Vni"hts of @a!or, and various other *indred or"ani2ations
comprisin" nearly J,888,888 voters, stepped for$ard and laid on
the ta!le the petition of these toilin" millions, prayin" for the free
coina"e of silver%
"1n addition to this it is proper for us to call attention to the further
fact that the "reat or"ani2ation *no$n as the =armersH 3lliance has
adopted a demand for the free coina"e of silver as the cardinal
feature of its creed%"
n his message to ;ongress# December A# 1DE1# Presi"ent
6arrison oppose" free coinage# an" ga!e his reasons for it in the
following language: -
"1 am still of the opinion that free coina"e of silver under e<istin"
conditions $ould disastrously effect our !usiness interests at home
and a!road%"
:n Muly 1C# 1DE8# 3enator 3herman intro"uce" a bill to repeal the
purchasing clause of the law of Muly 1C# 1DE(.
n the latter part of 1DE8 an" in the months of Manuary an"
7ebruary# 1DEA# the foreign gol" speculators perse!ere" in
"raining the 4reasury of its gol" for shipment abroa".
Ihile this process was being carrie" on# the press of 9ew Gork
;ity was issuing startling reports of the financial con"ition of the
3ome of these >ournals publishe" "aily statements of the amount
of gol" taken out of the country# an" "eman"e" that 3ecretary
7oster replenish the gol" reser!e by an issue of bon"s.
Mr. 7oster meekly obeye"# an" on the 8Ar" of 7ebruary# 1DEA# he
issue" a written or"er to the ;hief of the <ureau of $ngra!ing
an" Printing# "irecting him to prepare plates for the printing of
:n hearing of the "ecision of the 3ecretary of the 4reasury to
issue bon"s# the bankers of 9ew Gork ;ity forme" a syn"icate for
the purchase of the propose" issue.
4he or"er to prepare the plates for bon"s became known to
Presi"ent 6arrison# an" it was counterman"e" by him# an" he
state" that this was a "de!t4payin" administration%"
3o the propose" issue of T1((#(((#((( of bon"s "i" not
materialize at this time.
Presi"ent 6arrison graciously inten"e" that the incoming
a"ministration of Presi"ent ;le!elan" shoul" bear the o"ium of
increasing the national "ebt in time of peace.
t will be instructi!e to institute a comparison between the
financial con"ition of the pro"ucers of the country with that of
the bon"-hol"ing class.
n speaking of the enormous mortgage an" other in"ebte"ness of
the Iest an" 3outh in 1DE(# 7re"eric Iaite sai": -
"@ast year, after turnin" the scale at ei"ht thousand millions, the
mort"a"e inde!tedness continued its up$ard fli"ht, not !ein"
contented $ith an increase of ..8 per cent, or nearly four times the
increase in the true value of real estate%
"1n a $ord, the total net private inde!tedness of the 3merican
people e;ualed, in &CC8, !ut 6B,:78,888,888%
@ast Septem!er it amounted to nineteen thousand seven hundred
millions, an increase of thirteen thousand millions in the short
period of t$elve years%"
;ongressman Ialker# of Massachusetts# makes the total
in"ebte"ness of the people of the ,nite" 3tates to reach the gran"
aggregate of thirty-two billion "ollars.
Ihile the pro"ucers were being eaten up by usury# the bon"-
hol"ers were recei!ing from twenty-fi!e to twenty-nine per cent.
premium on their bon"s.
n 1DJJ# the national "ebt was T8#BDA#(((#(((# the gol" !alue of
which at that time "i" not excee" T1#1((#(((#(((.
,p to the early part of 1DEA# T1#BHJ#(((#((( ha" been pai" on the
principal+ the payments of interest were T8#HAD#(((#(((#
THD#(((#((( were pai" in premiums# making a total payment of
4he amount "ue in 1DEA was T1#(8B#CH(#(((# an" this resi"ue of
the "ebt woul" purchase more of the pro"ucts of labor than the
original amount.
n 1DJH the entire "ebt coul" ha!e been pai" with 1#((B#(((#(((
bushels of wheat at the price it then brought.
0fter this !ast amount of interest# principal an" premium was
applie" on this "ebt as state" abo!e# it woul" re5uire
8#(HC#E((#((( bushels to pay the resi"ue of the "ebt in 1DEA.
n 1DJB# 1C#1DC#((( bales of cotton woul" ha!e pai" the total
n 1DEA at the price for which cotton sol"# it woul" re5uire
AC#8H1#J(( bales of that pro"uct to pay the remain"er of the "ebt.
4his after TC#AH8#(((#((( were pai" thereon.
4he profits of the national banking money power# from 1DB8 to
1DE1# on its circulating notes "onate" to it by the =o!ernment
were# accor"ing to the 9ew Gork Iorl" 0lmanac#
3uch were the results of that <ritish scheme of finance which was
fastene" on the 0merican people.
4hose who are we""e" to the "elusi!e i"ea of protection# as the
panacea for the ills now seriously affecting all in"ustries# must
bear in min" that this frightful con"ition of the pro"ucer sprung
up un"er the highest tariff laws since 1DJ1.
;60P4$1 K.
M:9$G P:I$1 :7 $9=/09D 09D ,94$D 3404$3
;:M<9$D 4: 0996/04$ 3/F$1.

"3"ainst the insidious $iles of forei"n influence ,1 conjure you to
!elieve me, fello$ citi2ens- the jealousy of a free people ou"ht to !e
constantly a$a*e, since history and e<perience prove that forei"n
influence is one of the most !aneful foes of Iepu!lican
- =eorge Iashington.
"@et us found a Dovernment $here there shall !e no e<tremely rich
men and no a!jectly poor ones%
@et us found a Dovernment upon the intelli"ence of the people and
the e;uita!le distri!ution of property%
@et us ma*e la$s $here there shall !e no "overnmental partnership
$ith favored classes%
@et us protect all in life, li!erty, and property, and then say to every
3merican citi2en, $ith the "ifts that Dod has "iven you, your !rain
and !ra$n and ener"y, $or* out your o$n fortunes under a just
Dovernment and e;ual la$s"
- 4homas Mefferson.
7or the purpose of enabling the rea"er to thoroughly un"erstan"
the nature of the e!ents that woul" take place in 1DEA# an"
succee"ing years# we will "irect some attention to the sil!er
agitation in =reat <ritain in 1DE8.
t was heretofore state"# that =reat <ritain was the first nation to
a"opt a single stan"ar" of gol"# an" that this financial system
"ates from the year 1D1J.
n many respects# $nglan" is the most won"erful country on the
face of the earth.
6er colonial possessions are immense# all of which en>oy some
"egree of self-go!ernment# except that of n"ia# which is
go!erne" exclusi!ely by a Ficeroy appointe" by the home
n"ia has an area of 1#H((#((( s5uare miles# inhabite" by a
population numbering 8DH#(((#((( of in"ustrious people.
Prior to Mune 8H# 1DEA# n"ia was on a sil!er stan"ar".
<efore the ,nite" 3tates "emonetize" sil!er in 1DBA# the
pro"uction of wheat an" cotton in n"ia was insignificant# an" her
manufactures of cotton fabrics were in their infancy.
Iith the "emonetization of sil!er by the ,nite" 3tates in the year
mentione"# the pro"uction of wheat an" cotton in n"ia
commence" on a large scale# an" her manufactures of cotton
goo"s "e!elope" !ery rapi"ly.
6er remarkable growth in this "irection was owing solely to the
"emonetization of sil!er by the ,nite" 3tates an" other nations#
which action cause" a tremen"ous fall in the bullion !alue of that
9ot only "i" this "e!elop the resources of n"ia# but the latter
country became the most "angerous competitor of the ,nite"
3tates in the wheat an" cotton market of the worl".
n 1DJJ# the first fifty bales of cotton yarn were shippe" from
# an" the growth of the tra"e was not !ery rapi" until
n 1DBH# n"ia exporte" 1#(((#((( poun"s of cotton yarn# the
following year H#(((#((( poun"s# this ha" increase" annually
until 1DDE# when its exportation reache" JH#(((#((( poun"s.
<ombay is now known by its post-colonial name of Mumbai
n 1DE1# the exports of cotton yarn from n"ia were 1JH#(((#(((
poun"s. 6er exportations of raw cotton increase" at the same
ratio. 4he number of cotton mills# from 1DBJ to 1DDB# increase"
1(( per cent# the number of spin"les 1(H per cent# cotton piece
goo"s 8CA per cent# an" cotton yarn 1#(HD per cent.
Prior to 1DBC# the pro"uction of wheat in n"ia was !ery small#
but within fi!e years after the "emonetization of sil!er by the
,nite" 3tates# she exporte" 11#E((#((( bushels.
During the succee"ing years# her shipments of wheat stea"ily
grew in magnitu"e# until they reache" the enormous total of
HE#(((#((( bushels in 1DE1. 4he gol" price of wheat fell
4he "emonetization of sil!er by the ,nite" 3tates operate" as an
export bounty on the pro"ucts of n"ia# an" the greater the fall of
sil!er# the more beneficial to the wheat an" cotton growers of that
:riental country. 4he sil!er coins of n"ia were of unlimite" legal
ten"er "ebt-paying power. 3he ha" no gol" coinage.
3ince 1DBA# the history of prices pro!es that the purchasing
power of sil!er o!er commo"ities has been practically
unimpaire"# that is stable. 4his its especially true of the sil!er
coins of n"ia.
4his fact was shown by the <ritish =ol" an" 3il!er ;ommission
of 1DDH# compose" of twel!e of the ablest financiers of $nglan"#
six of whom were a"herents of the gol" stan"ar"# an" the other
six bi-metallists.
4his commission ma"e an exhausti!e examination into the cause
lea"ing to the fall of the gol" price of sil!er. 4his commission
unanimously reporte" that the purchasing power of the rupee
continue" unimpaire"# an" that the prices of commo"ities
measure" in sil!er remaine" practically the same in that country.
:n page EH of its final report# the commission sai": -
"1n 1ndia, in the opinion of nearly all the $itnesses $hom $e have
e<amined, the purchasin" po$er of the rupee continues unimpaired
and the prices of commodities measured in silver remain practically
the same%
We have no evidence to sho$ that silver has under"one any material
chan"e in relation to commodities, althou"h it has fallen lar"ely in
relation to "old9 in other $ords, the same num!er of rupees $ill no
lon"er e<chan"e for the same amount of "old as formerly, !ut, so
far as $e can jud"e, they $ill purchase as much of any commodity
or commodities in 1ndia as they did !efore%"
n a separate report# six of these commissioners ma"e use of the
following language as an answer that falling prices result from
facilities for pro"uction.
4hey say: -
"We are not insensi!le to the fact that facilities for production are
ha!itually increasin", and the cost of production is constantly
!ecomin" less%
+ut these factors have al$ays !een in operation since the $orld
!e"an9 and $hile $e reco"ni2e their tendency to depress the prices
of commodities, they are not, in our opinion, sufficient to account
for the a!normal fall in prices, $hich has !een apparent since the
rapture of the !i4metallic par, and only since that time%"
4he process by which the "epreciation of sil!er built up the
in"ustries of n"ia at the expense of those of the gol" stan"ar"
countries was apparent.
Ihen the /on"on merchant went to n"ia to buy wheat an"
cotton# he ascertaine" that his gol" woul" not purchase any more
of her pro"ucts than an e5ual amount of sil!er expresse" at a ratio
of fifteen an" one half to one.
4herefore# the $nglish merchant woul" sen" his gol" to the
,nite" 3tates# an" purchase cheap sil!er with it# ship this sil!er to
n"ia an" purchase the wheat an" cotton of that country.
f the price of sil!er in /on"on was JH cents per ounce# the
$nglish merchant woul" buy exchange on the ,nite" 3tates to the
amount of T1A#(((+ with this he coul" purchase 8(#((( ounces of
sil!er bullion.
4his bullion# when shippe" to n"ia# woul" be worth the mint
price of T1.AA per ounce. Iith this cheap sil!er# the wheat
merchant woul" fin" it more profitable to buy n"ian wheat at
T1.8( per bushel# than to purchase the same pro"uct in the ,nite"
3tates paying therefore BH or D( cents per bushel reckone" on a
gol" basis.
n a few years after the "emonetization of sil!er by the ,nite"
3tates# the $nglish re>oice" at the blow which was thus "ealt to
0merican commerce.
0t a meeting of the <ritish an" colonial ;hambers of ;ommerce#
hel" in /on"on in 1DDJ# 3ir 1obert 9. Poller# a member of
Parliament# a banker# an" an ex-mayor of /on"on. sai": -
"'hat the effect of the depreciation of silver must finally !e the rain
of the $heat and cotton industries of 3merica, and !e the
development of 1ndia as the chief $heat and cotton e<porter of the
0t the same time that the export tra"e of n"ia grew so rapi"ly#
she manufacture" more largely for herself. 4he reason was
3houl" she attempt to import foreign manufacture" goo"s from
gol" stan"ar" countries# the rate of exchange against her woul"
be e5ual to the "epreciation existing between her sil!er compare"
to the gol" of the nation from whom she woul" purchase.
4o illustrate:
3uppose a merchant of <ombay or ;alcutta
procee"e" to
$nglan" an" purchase" goo"s to the amount of 1((#(((
;alcutta now known as -olkata on the east of the n"ian sub-continent
so!ereigns# it woul" re5uire gol" coin for the payment of them# as
the stan"ar" of !alue there is gol".
6e woul" fin" it necessary to con!ert his sil!er rupees into
exchange on /on"on# in or"er to obtain the gol"# to pay for the
goo"s# an" the result woul" be that he woul" lose the "ifference
between the bullion !alue of the sil!er compare" with that of
;onse5uently# this loss of exchange woul" be an insurmountable
obstacle in the way of his sil!er stan"ar" country purchasing
from that which was on a gol" basis.
4his woul" stimulate home manufactures in sil!er using
countries# that is - those nations on a sil!er basis.
4his "ifference in the loss of exchange woul" operate more
effecti!ely# in restricting foreign importations into sil!er stan"ar"
countries# than the moat rigi" protecti!e tariff laws e!er enacte".
0nother !ery important effect of the "isparity between the !alue
of gol" an" sil!er in the commercial intercourse of nations woul"
be as follows:
7irst# 4hose nations on a sil!er basis woul" tra"e with each other#
the population of which by far excee"e" that of the gol" stan"ar"
countries+ secon"# $nglan" woul" be the greatest sufferer shoul"
n"ia continue on a sil!er stan"ar".
4hese two conclusions were fully borne out by subse5uent
4he great :riental nations purchase" immense 5uantities of
manufacture" goo"s from n"ia# while there was a great falling
off in the sales of the same class of merchan"ise heretofore
supplie" by $nglan".
4he statesmen an" financiers of the latter entertaine" gra!e fears#
that# if the ,nite" 3tates shoul" "eclare for free coinage of sil!er#
it woul" unite the Iestern 6emisphere an" the sil!er using
countries of 0sia into a great commercial union# a result that
woul" en" in making the ,nite" 3tates the greatest commercial
an" manufacturing nation on earth.
4hese fears were well expresse" in a !ery significant e"itorial in
the /on"on 3tan"ar"# which a""e": -
"What if the nited States should no$ join /e<ico in declarin" for
the free coina"e of silver, and thro$in" over "old as too dear%
What if the t$o 3merican continents held out the hand to 3sia and
H@et us have the $hite metal for our standard%H
Chile, no$ hard4hit, $ould ea"erly respond and all the states of
South 3merica and /e<ico, $ith Japan and China and Java
4 in
fact the $hole mi"hty East ,$hich cares little for Simla
-% 1t is a
"reat dan"er to $hich the present out!urst of alarm and fear must
not render En"land o!livious%"
4he great cotton manufactures of the latter nation were stea"ily
losing groun" in ;hina# Mapan# an" other :riental countries# an"
as those !aluable markets were lost to $nglan"# they were gaine"
by colonial n"ia.
Moreo!er# the cheap wheat of n"ia was in!a"ing the markets of
$nglan"# to the immense loss of the wealthy lan"e" nobility of
the mother country.
4hese two powerful interests combine" in a memorial to the
<ritish Parliament# an" on 0pril 88# 1DE8# a commission
appointe" by the 3ecretary of 3tate for n"ia# with instructions to
Ma!a now part of n"onesia
3imla a city in the n"ian state of 6imachal Pra"esh# formerly the summer capital of
<ritish rule" n"ia# an" was a reference to the go!ernment of the <ritish 1a>.
4his commission was set up by the <ritish 3ecretary of 3tate for n"ia
chaire" by /or" 6erschell# to examine the currency of n"ia# an" ran from
take e!i"ence upon the a"!isability of closing the n"ian mints to
the free coinage of sil!er.
0s a striking coinci"ence# which un"oubte"ly pro!es that there
was an un"erstan"ing between the money power of $nglan" an"
that of the ,nite" 3tates# ha!ing for its ob>ect the annihilation of
sil!er as money# we point to the fact# that in a few "ays after the
appointment of the commission to in!estigate free coinage of
sil!er in n"ia# 3enator 3herman intro"uce" a bill in the ,nite"
3tates 3enate to repeal the sil!er purchasing clause of the so-
calle" 3herman law# at that time the only law recognizing sil!er
in this country.
0s further proof that the national banking power of 0merica ha"
unite" with the capitalists of $nglan" against the use of sil!er as
money# we refer to the following circumstance:
During the sitting of the 6erschell ;ommission an international
monetary conference was in session at <russels.
4he ,nite" 3tates was represente" at this gathering of the
nations. $x-=o!ernor Mc;reary# one of the 0merican
representati!es# in a speech upon sil!er# sai": -
"Spea*in" for myself only, 1 e<press the opinion that the silver la$
*no$n as the act of &C?8, no$ in force in my country, $ill !e
repealed% 1t is possi!le this $ill !e done at the present session of
1f not this session, 1 !elieve it $ill certainly !e repealed at the ne<t
session of Con"ress%"
4he foreign nations gathere" at <russels# therefore# were semi-
officially notifie" that the sole law pro!i"ing for the coinage of
sil!er in the ,nite" 3tates woul" be repeale" in the near future.
6enry I. ;annon# a colleague of Mr. Mc;reary# an" the
presi"ent of the ;hase 9ational <ank in 9ew Gork ;ity# sai": -
"'he nited States has seriously ta*en into consideration the idea
of repealin" the Silver (urchase 3ct of &C?89 the t$o political
parties as $ell as the "reat !an*ers of Ne$ )or* have advised this
repeal, and if durin" this conference some arran"ement is not
attained, it is more than pro!a!le that 3merica $ill not continue
disposed to !uy annually 7J,888,888 ounces of silver at the mar*et
4hus the people of the ,nite" 3tates were again betraye" by their
"elegates to this conference# an" the 6erschell ;ommission
recei!e" notice that the ,nite" 3tates was oppose" to sil!er.
0t the time this commission was appointe" to in!estigate the
effects of free coinage of sil!er in n"ia upon the <ritish cotton
export tra"e# $nglan" occupie" a comman"ing position as the
great cre"itor nation of the worl"# her aggregate hol"ings of
stocks# bon"s# securities# an" other forms of public an" pri!ate
in"ebte"ness ran into the billions.
n a speech in the <ritish Parliament# Mr. =la"stone
his country as the greatest cre"itor nation on the face of the globe.
0mi" the boisterous cheers of the 6ouse of ;ommons# he
"eclare" that =reat <ritain was the cre"itor of other nations in a
sum not less than T1(#(((#(((#(((S
6er colonies of 0ustralia# 3outh 0frica# an" Fancou!er ha" risen
to be the greatest gol" pro"ucing regions of mo"ern times.
0ustralia alone ha" long surpasse" ;alifornia# we might say the
,nite" 3tates# in the extent an" richness of her gol" resources.
6ence# it was the policy of $nglan" to enhance the exchange
power of gol"# as she was the great cre"itor an" the great gol"
pro"ucing nation of the present "ay.
Moreo!er# her imports greatly excee"e" the !alue of her exports.
6er imports of raw materials an" brea" stuffs far excee"e" that of
Iilliam $wart =la"stone# born in /i!erpool# 1D(E rose to be Prime Minister on C
separate occasions# e!entually resigning in 1DEC - age" DC years of age.
any other nation# an" by limiting the worl"&s !olume of money#
an" increasing the purchasing power thereof# she woul" be
enable" to obtain her supplies much cheaper on a single stan"ar"
of gol"# than un"er a uni!ersal bi-metallic system.
t is almost impossible to grasp the immense extent of her
commercial power.
$nglan" owns more than three fourths - nearly four fifths - of the
steamships afloat on the ocean# an" nearly one half of the sailing
fleet of the worl"# pro!i"ing employment for AH(#((( seamen.
6er income from her merchant marine aggregates TC((#(((#(((
per annum.
3he aspires to monopolize the tra"e of 0sia# 0frica# an" 3outh
0merica# an" by supplying these people with the pro"ucts of her
manufactures# she stro!e to pro!i"e employment for her "ense
4he 0siatic an" the 3outh 0merican nations were chiefly on a
sil!er basis# an" this forme" a barrier to the extension of her tra"e
an" commerce.
6ence# the manufacturing# agricultural# an" cre"itor classes of
=reat <ritain "eman"e" relief at the han"s of the <ritish
Parliament# an" they pointe" to the fact that the cotton
manufacturers of n"ia were securing the control of those markets
heretofore supplie" by the mills an" factories of /ancashire+ an"
that the low price of $nglish wheat resulte" from n"ian
6ence the appointment of this commission at the hea" of which
was /or" 6erschell.
,pon the organization of this commission it procee"e" to take
e!i"ence relating to the cause of the "ecline of the <ritish cotton
tra"e in the 0siatic countries.
Many of the lea"ing cotton manufacturers appeare" before this
bo"y# an" ga!e !aluable testimony with reference to the causes of
the "epression existing in the cotton manufactures of $nglan".
,pon the conclusion of its in!estigations# it ma"e a report to
Parliament# in which it was pointe" out that the rise in the price
of gol"# beginning in 1DBA# the year that sil!er was "emonetize"
by the ,nite" 3tates# an" the resulting "epreciation of sil!er# ha"
built up a large cotton-spinning tra"e in n"ia.
4he report says: -
"Soon after the rise of "old !e"an in &C:0, a lar"e cotton4spinnin"
trade, !e"an previously in 1ndia, $ith En"lish machinery to supply
1ndia itself, felt at once the stimulus supplied !y the difference in
1t prospered rapidly, "re$, and continues "ro$in" fast and steadily,
and e<ports to China and other silver countries%
5ere are comparisons of the En"lish and 1ndian e<ports of cotton
yarn, in pounds, to China, 5on" Von", and Japan, $hich have for
some time !een supplied annually to the Economist !y /r% 3!raham
5a$orth, of /anchester%
'hey sho$ ho$ the product of silver $a"es !eats the product of
"old $a"es, and !eats them more as the diver"ence !et$een the
metals $idens%
"'he ;uantities are "iven in pounds $ei"ht%
'he contrast !et$een the stationary ;uantities from En"land and
the rapid e<pansion of the 1ndian e<port indicates plainly a sad
future for @ancashire trade if "old $a"es there must continue
competin" $ith silver $a"es in forei"n mar*ets%
1ndia $ill on the present footin" !eat @ancashire every$here,
mean$hile in the lar"e class of "oods made of 1ndian cottons, !ut
ultimately in any material%"
t then procee"s to gi!e statistics showing that from 1DBJ to
1DD1# $nglan" annually exporte" to ;hina an" Mapan# cotton
goo"s !alue" at TAD#HJ(#(((.
n"ia exporte" only T1E#JC1#(((. 7rom 1DD8 to 1DDB# the annual
exportations of $nglan" ha" fallen off to TAA#JD8#(((# while
n"ia ha" increase" from T1E#JC1#((( to TB1#A1E#(((.
n 1DDD# $nglan" sent to ;hina an" Mapan TCC#JC8#J(( worth of
cotton goo"s# while the exportations of n"ia to these two
countries increase" from TB1#A1E#((( in 1DDB# to T11C#B(B#A((
in 1DDD.
n 1DDE# $nglan" sent to ;hina an" Mapan TAH#B8(#8(( of these
cotton goo"s# an" n"ia sol" T18J#BJJ#D(( against T11C#B(B#A((
the prece"ing year.
n 1DE(# $nglan" exporte" to ;hina an" Mapan TAD#(HB#C((. n
the meantime# in the same year# the n"ian export increase" from
T18J#BJJ#D(( to T1CH#118#D(( worth of cotton manufactures# an"
it was time for the $nglish merchants to stop this ri!alry.
4he chil" ha" outgrown the parent.
4he colonial manufacturers ha" taken away the market in Mapan
an" ;hina# an" it was necessary to "o away with sil!er in or"er
that the monopoly of this $astern tra"e might go back where it
ha" originally been# to the $nglish manufacturer an" the $nglish
4he conclusions of this commission# base" on an exhausti!e
in!estigation into the causes of the "ecline of the <ritish cotton
tra"e# "emonstrate" that the continue" "epreciation of the gol"
price of sil!er acte" as a rigi" protecti!e tariff against the
manufactures of gol" stan"ar" $nglan"+ an"# that owing to the
loss of exchange which woul" accrue to sil!er stan"ar" countries
tra"ing with those on a gol" basis# the former woul" naturally
tra"e with each other to the exclusion of the latter.
4he only loss that woul" accrue to n"ia was in those cases in
which she owe" "ebts to $nglan"+ for# by con!ersion of her sil!er
coin into <ritish sterling exchange "rawn to "ischarge these
obligations# she woul" lose the "ifference between the bullion
!alue of sil!er an" that of gol".
<ut for this loss# she was amply compensate" by the immense
growth of her tra"e an" manufactures# through which her means
of payment were proportionately increase".
During the sittings of this commission# the ,nite" 3tates was in
the mi"st of the presi"ential campaign of 1DE8. 7or the thir" time
=ro!er ;le!elan" obtaine" the Democratic nomination for
Presi"ent# although there was consi"erable opposition to his
0s he ha" thrown "own the gauntlet to the highly protecte"
manufacturing interests in his message of 1DDB# he was regar"e"
as the lea"er of his party.
n the election of 1DDD# he ha" recei!e" a large plurality of the
popular !ote# an" it seeme" poetic >ustice that he shoul" measure
strength with his opponent of 1DDD.
4he Democratic platform "enounce" the 3herman 3il!er
Purchasing law as "3 co$ardly ma*eshift," an" "eman"e" its
4he term "ma*eshift" in the sense in which it was useful# meant
that it was an obstacle to the free coinage of sil!er# an" that this
was the reason why a law of that character was a"opte" by the
7ifty-first ;ongress - which became o"ious as the "!illion4dollar
n 1DEA# "uring the "ebate upon the repeal of the purchasing
clause of the 3herman law# 3enator 3herman a"mitte" that this
law was "esigne" solely for the purpose of "efeating the free
coinage of sil!er.
4he Democratic platform se!erely "enounce" the Mc-inley tariff
law of 1DE(# "3s the culminatin" atrocity" of tariff legislation.
:ne of the most ini5uitous features of this measure was the sugar
bounty clause# by which the sugar growers of /ouisiana an"
Fermont recei!e" large sums of money from the general
=o!ernment for their sugar pro"uct.
4his inure" to the benefit of a few millionaire sugar planters# one
of whom in a single year recei!e" the great sum of TCJC#((( as
his share of the sugar bounty.
4he 1epublican con!ention re-nominate" Presi"ent 6arrison an"
en"orse" the Mc-inley tariff law.
Mr. ;le!elan" was electe" by an immense ma>ority of the
electoral !ote# an" his plurality of the popular !ote o!er Presi"ent
6arrison was more than three hun"re" thousan".
mme"iately after the election of Mr. ;le!elan"# the national
banking money power began to lay plans to force the country
upon a single stan"ar" of gol"# an" to increase the !olume of
their circulating notes.
:n December J# 1DE8# ;ongressman 6arter# a national banker#
intro"uce" a bill in the 6ouse pro!i"ing for the uncon"itional
repeal of the 3il!er Purchase law# an" to replenish the gol"
reser!e of the ,nite" 3tates 4reasury.
4o a"" to the clamor against the sil!er "ollar# Mr. 6arter# a
member of ;ongress from :hio# successfully en"ea!ore" to array
the =ran" 0rmy of the 1epublic against the continue" purchase
an" coinage of sil!er.
6e secure" lists of the members of the !arious posts throughout
the country# but more particularly a""resse" himself to those that
were situate" in Democratic ;ongressional "istricts.
;ircular letters# printe" by the =o!ernment# were maile" by him
to many thousan"s of pensioners# informing these !eterans that
their pensions woul" be pai" in "seventy4cent dollars," an"
re5uesting them to >oin in memorials to their 1epresentati!es in
;ongress to !ote for the repeal of the purchasing clause of the
3herman law.
Democratic 3enators an" members of ;ongress recei!e"
thousan"s of these letters from their constituents# thus inspire"#
re5uesting them to !ote for a single stan"ar" of gol".
4his outrageous interference of Mr. 6arter with the constituents
of other members of ;ongress recei!e" scathing rebukes on the
<oors of ;ongress.
4his was a part of the program of the money power# an" it
practically ser!e" notice on the 6erschell ;ommission that the
,nite" 3tates woul" cease the further coinage of sil!er# an" that
this country was apparently in sympathy with the financial policy
of $nglan".
4he money power of $nglan" an" 0merica struck han"s# an"
forme" a compact to utterly annihilate sil!er as a money metal
,pon the appearance of the 6arter bill in the 6ouse of
1epresentati!es# the bankers of /on"on cable" to the 9ew Gork
$!ening Post# December D#1DE8# the news that:
"'he !elief is sli"htly "ro$in" that 1ndia $ill assume a "old
standard sooner or later% "
:n December Eth# the same Mournal publishe" a cablegram from
/on"on# in which it was state"#
"'hat the silver ;uestion is still paramount% 'here is a !elief that the
1ndia Council $ill refrain from ma*in" sales !elo$ some minimum%
'he 1ndian Dovernment is alle"ed to !e contemplatin" an
immediate chan"e of the silver standard to "old%"
:n the same "ay# Mr. Iilliams# of Massachusetts# brought
forwar" a bill for the uncon"itional repeal of the purchase clause.
n the meantime# the great >ournals in the financial centers of the
country began a crusa"e for the gol" stan"ar".
:n December Eth# the ;hicago 4ribune# e"itorially sai": -
"@et the Sherman act of July &J, &C?8, !e repealed at once $ithout
$aitin" for an e<tra session%"
During this time that these !arious repeal measures were
intro"uce" into the 6ouse of 1epresentati!es# an" while the
0merican press was clamoring for the passage of those bills
which woul" entirely cut off the further coinage of sil!er# the
6erschell ;ommission was in session.
n $nglan"# this commission pointe" to the efforts ma"e in
;ongress to cut off the further coinage of sil!er as an in"ication
of hostility towar" that metal# an" asserte" that the passage of any
such bill woul" result in a great "epreciation of that metal.
4he intro"uction of these !arious bills# seeking to repeal the sole
law that in anywise recognize" sil!er as a money metal# an"
which conse5uently stea"ie" its bullion !alue# spee"ily became
known to the 6erschell ;ommission.
n its report the commission referre" to these bills# an" base" its
conclusions largely upon the effect of a repeal of the purchasing
clause by the ,nite" 3tates. 4he report state": -
"/oreover, a stron" a"itation e<ists in the nited States $ith
respect to the la$ no$ in force providin" for the purchase of silver%
=ears have !een and are entertained that there may come to !e a
premium on "old, and stron" pressure has !een !rou"ht to !ear
upon the Dovernment of that country $ith a vie$ to !rin" a!out an
alteration of that la$%"
s it not self-e!i"ent# that these !arious bills to repeal the
purchasing clause were brought forwar" in ;ongress at this time#
with a !iew to influence the 6erschell ;ommission against the
continue" coinage of sil!er in n"iaL
4he propose" action of the ,nite" 3tates he strongly urge" as a
reason why the mints of n"ia shoul" be close" to free coinage.
$!ery mo!ement# or propose" mo!ement# ma"e by the a"!ocates
of a single stan"ar" of gol" in the ,nite" 3tates# looking to the
complete "ownfall of sil!er# was spee"ily transmitte" to $nglan".
n its report the 6erschell ;ommission says: -
"1n Aecem!er last, a !ill $as introduced in the Senate to repeal the
Sherman 3ct, and that any such measures $ill pass into la$ it is
impossi!le to foretell, !ut it must !e re"arded as possi!le9 and
althou"h in the li"ht of past e<perience, predictions on such a
su!ject must !e made $ith caution, it is certainly pro!a!le that the
repeal of the Sherman 3ct $ould !e follo$ed !y a heavy fall in
Ihile the people of $nglan" were being frightene" by the bogey
of "epreciate" sil!er# which was asserte" woul" result from the
probable repeal of the 3herman /aw by the ,nite" 3tates# the
gol" stan"ar" a"!ocates of 0merica were pointing to the probable
closing "own of the mints of n"ia to the free coinage of sil!er as
a reason for repealing the 3il!er Purchasing law of Muly 1C#1DE(.
n this way the money power of $nglan" an" the ,nite" 3tates
playe" into the han"s of each other.
0t this time# the 6ouse of 1epresentati!es was strongly
Democratic# an" it was in fa!or of the use of sil!er as money#
an"# conse5uently# the repeal of the 3herman /aw was impossible
as long as no better sil!er measure was propose" as a substitute
for this "co$ardly ma*eshift%"
n the meantime Presi"ent-elect ;le!elan" attempte" to influence
;ongress to repeal the 3herman law.
6e "elegate" Mosiah [uincy
as his en!oy to !isit Iashington#
ascertain the sentiments of Democratic members of ;ongress
upon the sil!er 5uestion# an" to make known to these 3enators
an" 1epresentati!es that he "esire" the spee"y repeal of the
3herman law.
:n December 81# 1DE8# 3enator McPherson intro"uce" a >oint
resolution in the 3enate# authorizing an" "irecting the 3ecretary
of the 4reasury to suspen" all purchases of sil!er bullion as
pro!i"e" for in the first section of the act of Muly 1C# 1DE(.
,pon Mr. McPherson&s re5uest the bill was printe" an" lai" upon
the table# to be calle" up by him at some future time after the
holi"ay recess. Iith reference to the action of this 3enator# the
;hicago 4ribune sai":-
"5is remar*s $ill !e listened to $ith "reat interest, !ein" re"arded
as the unofficial e<pression of the vie$s of the (resident4elect%"
0fter the holi"ay recess# the 6ouse reassemble" Manuary C# 1DEA#
an" ;ongressman 6arter intro"uce" a >oint resolution similar to
that of Mr. McPherson in the 3enate.
:n 7ebruary Eth# 6ouse 1esolution 1(1CA# permitting national
banks to issue bank notes up to the par !alue of bon"s "eposite"
by them was to be ma"e the special or"er of the 6ouse# after the
bill pro!i"ing for the repeal of the purchasing clause of the
3herman /aw was passe".
n e!ery instance# each attempt to suspen" the coinage of sil!er#
an" to retire the greenbacks# was followe" by an effort to confer
Mosiah [uincy )1BB8-1DJC* was a member of the ,.3. 6ouse of 1epresentati!es#
ser!ing as a 7e"eralist congressman# an" also Presi"ent of 6ar!ar" ,ni!ersity Man 8E#
1D8E - 0ug 8B# 1DCH.
greater powers an" pri!ileges upon national banks. 4hese two
4ory-1epublican schemes of finance always went han" in han".
t was e!i"ent that none of these measures coul" be force"
through ;ongress at this time.
:n 7ebruary 18th# 6enry Fillar"
# a lea"ing stock speculator of
9ew Gork ;ity# who was charge" with wrecking the 9orthern
Pacific 1ailway ;ompany# ma"e his appearance in Iashington#
an" publicly announce" that he was the en!oy of Presi"ent-elect
;le!elan"# an" that it was Mr. ;le!elan"&s wish that the 3herman
law be repeale".
4he efforts of Mr. Fillar" to influence ;ongress were fruitless.
3hortly after the appearance of Mr. Fillar" at the ;apitol# Don M.
put in an appearance at Iashington as the
representati!e of Presi"ent-elect ;le!elan".
6e likewise informe" ;ongress that the incoming Presi"ent
"esire" the repeal of the 3herman law.
4he next morning after Dickinson left for Iashington# the
following inter!iew with Mr. ;le!elan" was publishe" in the
9ew Gork 6eral". 6e sai":-
"'he repeal of the Sherman act ,unconditionally- is the "reat
necessity of the hour% Continuance of the silver purchasin"
operation, made mandatory !y the Sherman la$, is a menace to the
!usiness and financial interests of the country%
1 am not yet $ithout hope that that this la$ $ill !e repealed !y the
present Con"ress%
Whatever influence 1 have is !ein" e<erted to that end%
6enry 7er"inan" 6einrich =usta! 6ilgar" Fillar"# born in <a!aria )0pr 1(#
1DAH - 9o! 18# 1E((* emigrate" to ,.3. in 1DHA# speaking no $nglish# became
a >ournalist an" latterly a newspaper# rail an" electricity company ;$:.
Donal" M. Dickinson )Man 1B# 1DCJ O :ct 1H# 1E1B* was a lawyer an"
Democratic politician for Michigan# on the national committee. n 1DDJ he was
appointe" Postmaster =eneral by Presi"ent ;le!elan".
'he date at $hich the repeal should !ecome operative is
immaterial, save that the sooner the !etter%"
n its e"itorial comments upon this inter!iew with Mr. ;le!elan"#
the 6eral" sai": -
"3s a party man, as an upholder of the re"ular or"ani2ation, as a
vindicator of the machine, /r% Cleveland $ill stand on firm "round
$hen he declares that every aspirant for office patrona"e, favor, or
any consideration, $ill !e e<pected to line up for the repeal of the
silver la$%"
0 Iashington special to the ;hicago 4ribune# 7ebruary 1st# sai":
"(resident Cleveland is threatenin" an e<tra session if the silver
purchase la$ is not repealed% Aon Aic*inson is the !earer of the
ne$s% Aon has !een at it all day intervie$in" Aemocratic Senators
and the leaders in the 5ouse includin" Spea*er Crisp% 5e holds a
!i" u"ly clu! in the shape of patrona"e, $hich is e<pected to !rin"
Aemocratic mem!ers to time%"
9otwithstan"ing the appearance of Don Dickinson at
Iashington# an" the implie" threats of Presi"ent-elect ;le!elan"#
the 3enate "efeate" a motion to take up the bill to repeal the
sil!er law by a "ecisi!e !ote.
n the 6ouse# the bill which ha" been intro"uce" there was also
"efeate". 4he actions of Presi"ent-elect ;le!elan"# in his attempt
to force the /egislati!e Department of the =o!ernment to submit
to his will# met with an inglorious "efeat at the han"s of this
0fter the "efeat of these !arious measures the <anker&s
Magazine# of 9ew Gork ;ity# sai":-
"'he tum!le in the stoc* mar*et durin" =e!ruary had for one of its
causes, unloadin" of stoc*s as fast as any one $ould !uy them in
anticipation that the "old reserve $ould not !e replenished, and that
an e<tra session $ould !e called early, and an attempt !e made to
coerce its mem!ers into repealin" the Silver (urchasin" 3ct
unconditionally% "
4he ;ommercial <ulletin sai":-
"'he ;uic*est, if not the only $ay to repeal the Silver (urchase lair
is to precipitate a panic upon the country, as nothin" short of this
$ill convince the silver men of their error, and arouse pu!lic
sentiment to a point $hich $ill compel the ne<t Con"ress to repeal
the Sherman la$ $hether it $ants to or not%"
Ihile the money power of the ,nite" 3tates# ai"e" by the press
an" the unprece"ente" con"uct of Presi"ent-elect ;le!elan"# was
engage" in the scheme to totally cut off the further coinage of
sil!er# the 9ew Gork banks were with"rawing tens of millions of
gol" from the 4reasury an" shipping it abroa".
0t the time these banks were engage" in this transaction# they
raise" the rate of interest on call loans to twenty-fi!e per cent.
Ihile plun"ering the =o!ernment of its gol" as a part of the
scheme to force an issue of bon"s# they robbe" the people by
extorting illegal rates of interest.
$!ery step taken by the money power to force a repeal of the
3herman law was cable" to /on"on with the a!owe" purpose of
influencing $nglan" to close the n"ian mints to the free coinage
of sil!er.
$!ery step thus far taken by the money power of the ,nite"
3tates an" of $nglan" to strike "own sil!er was in pursuance of a
well-"efine" plan to shackle the people to an appreciating gol"
;60P4$1 K.
904:90/ <09-9= M:9$G P:I$1 <19=3 :9 46$
P09; :7 1DEA.
"'he "reatest financial mista*e of my life $as in $hat 1 had to do
$ith the passa"e of the present National +an* 3ct% 1t ou"ht to !e
repealed9 !ut !efore it can !e done there $ill !e such a contest
!et$een the !an*s on the one side, and the people on the other as
has never !een $itnessed in this country%"
- 3almon P. ;hase
"=ifty men in these nited States have it $ithin their po$er, !y
reason of the $ealth $hich they control, to come to"ether $ithin
t$enty4four hours and arrive at an understandin" !y $hich every
$heel of trade and commerce may !e stopped from revolvin", every
avenue of trade !loc*ed, and every electric *ey struc* dum!% 'hose
fifty men can paraly2e the $hole country, for they control the
circulation of currency and can create a panic $henever they $ill%"
- ;hauncey M. Depew.

0fter the e!ents narrate" in the prece"ing chapter# Mr. ;le!elan"
once more assume" the "uties of the high office to which he was
6is con"uct pre!ious to his inauguration# in attempting to
influence ;ongress before he was in!este" with the constitutional
power to a""ress that bo"y# in the official capacity of Presi"ent#
arouse" the gra!est fears of the rank an" file of the "emocracy.
3almon Portlan" ;hase: )1D(D -1DBA*# 9ew Gork ;ity /awyer an" politician# anti-
sla!ery lea"er before the ,.3. ;i!il Iar# 3ecretary of the 4reasury )1DJ1OJC* 0uthor of
the 9ational <ank 0ct of 1DJA+ resigne" Mun 8E# 1DJC.
;hauncey M. Depew# )great-great-nephew of 1oger 3herman*# a 9ew Gork 3enator+
born in 9.G.# )0pr 8A# 1DAC - 0pr H# 1E8D* gra"uate" from the Peekskill Military
0ca"emy )1DH8* an" from Gale )1DHJ*+ stu"ie" law+ a"mitte" to the bar )1DHD*+
1epublican member of 3tate assembly 1DJ1-1DJ8+ secretary of 3tate of 9ew Gork
)1DJA*+ appointe" ,nite" 3tates Minister to Mapan by Presi"ent 0n"rew Mohnson.
Iith much sorrow# the people saw their chosen i"ol ally himself
with the national banking money power# an" they percei!e" that
he inten"e" to use the immense patronage of his office to coerce
;ongress into submission to his will.
4o a"" further to their misgi!ings# Presi"ent ;le!elan"# in the
appointment of e"itors of influential newspapers to highly-
salarie" offices# e!i"ence" his plain purpose to subor"inate the
press to his !iews.
4he number of lea"ing >ournalists appointe" by him to the most
lucrati!e an" honorable posts# far excee"e" similar appointments
ma"e by any of his pre"ecessors. 4o the intense "isgust of that
great party which ha" so fre5uently honore" him# he relegate"
tariff reform to the backgroun".
6e aggra!ate" this "istrust# which was now manifeste" against
him# by appointing one of the ablest corporation lawyers of the
country to the office of 0ttorney-=eneral+ !iz.# 6on.1ichar"
4he only lea"ing appointment ma"e by him# which
anywise allaye" this feeling of "istrust# was that of Mohn =.
;arlisle for 3ecretary of the 4reasury.
During his career in ;ongress# Mr. ;arlisle was the ablest
opponent of the national banking system an" a single stan"ar" of
gol" that the country e!er knew.
7or logic# argument# an" elo5uence# his arraignment of the
money power# in 1DBD# an" 1DD8# was the most notable e!er
hear" in ;ongress.
3ubse5uent e!ents will show that he became the greatest
1ichar" :lney )3ep 1H# 1DAH - 0pr D# 1E1B*+ lawyer - =ra"uate" from <rown
,ni!ersity )1DHJ* //.<. from 6ar!ar" /aw 3chool )1DHD*+ a"mitte" to the bar )1DHE*
an" 6ouse of 1epresentati!es for Massachusetts )1DBC*# ,.3. 0ttorney =eneral# an"
3ecretary of 3tate )1DEA*.
to a noble cause that e!er appeare" in 0merican
Presi"ent ;le!elan" ha" long recognize" the splen"i" ability of
Mr. ;arlisle as an opponent to the national banking money power#
an" he resol!e" to con!ert him into an a"!ocate of that merciless
gree" which ha" hitherto absorbe" the wealth of the people.
6ence his appointment.
4hat the time ha" come in which to make a bol" stroke for the
perpetuation of its system# this money power imme"iately
percei!e" upon the accession of Mr. ;le!elan" to the Presi"ency.
4his power knew that Presi"ent ;le!elan" was a man whose
firmness# energy# an" ability# ha" been sel"om e5uale" by any of
his pre"ecessors in office# that he was a staunch frien" of the gol"
stan"ar" an" of the national banking system# an"# therefore# it
"etermine" to wreck the country# if necessary# to teach the people
an "o!ject lesson%"
t resol!e" to bring on a panic# the like of which ha" ne!er been
!isite" upon any people. $!ery monetary panic from which the
0merican people ha" suffere"# was the "eliberate work of that
class of men who pompously ascribe" to themsel!es the sum an"
substance of all the financial wis"om of the nation.
4he national banking money power# in planning an"
consummating the panic of 1DEA# ha" se!eral ob>ects in !iew.
7irst# 4he permanent with"rawal an" "estruction of the
greenbacks an" the treasury notes of 1DE(# amounting to
TH((#(((#(((# an" the issue of an e5ual amount of bon"s#
running from fifty to one hun"re" years.
4hese bon"s were to ser!e as a basis for national bank notes# the
issue an" control of which woul" net the banks at least
0postate - 0 person who has aban"one" their religious faith# political party#
principles# or cause. ?Mi""le $nglish# from :l" 7rench@
TC(#(((#((( in interest per annum.
3econ"# 4he with"rawal from circulation of more than
H((#(((#((( sil!er "ollars# an" the substitution therefor of an
e5ual amount of bank notes# the loaning of which woul" annually
bring the banks an a""itional profit of TC(#(((#(((.
<on"s were to be issue" to take up these "ollars# the bullion
composing them to be thrown upon the market an" sol" as "old
jun*," to use the phrase of 9ational <anker /yman M. =age.
4hir"# 4he wrecking of those great railway properties of the
country which it "i" not control# by "epreciating their stocks an"
bon"s "uring the panic# buying such stocks an" bon"s at the
lowest possible figure# thus securing ownership of all the means
of transportation.
7ourth# 0n opportunity to exhibit its power o!er ;ongress an" the
people. 4he immensity of this money power is almost beyon"
comprehension. 4he hea" an" front of this great power is the
;learing 6ouse 0ssociation of 9ew Gork ;ity# compose" of the
membership of sixty-six national banks# whose "eposits
aggregate" nearly a billion of "ollars in 1DEA.
0 large part of this !ast accumulation of money# hel" by these
associate" banks# was not loane" to be in!este" in legitimate
business enterprises. t was utilize" to manipulate the price of
4hat accurate financial writer of the 9ew Gork 3un# Matthew
Marshall# in the early part of 1DEA# state" that one half of all the
loans of these associate" banks were ma"e to the stock
speculators of Iall street# those men who organize" cli5ues an"
rings to wreck railroa" properties.
Iith few exceptions# the thirteen thousan" banks scattere" o!er
the lan" obey the "ictates of the ;learing 6ouse to the minutest
letter. 9ew Gork ;ity is the seat of the most gigantic
concentration an" combination of capital in the Iestern
t is the home of those great banks# of the loan an" trust
companies# an" of the ma>ority of the enormously wealthy life#
fire# an" marine insurance companies of the ,nite" 3tates.
Iall 3treet is the arena of the railway# gas# street railway# sugar#
coffee# an" oil magnates. t is a city where a fortune of less than
ten millions is not consi"ere" worthy of public notice.
4he great banking house of 1othschil" is ably represente" by the
<elmonts+ /ombar" street# /on"on# has its agent there in the
person of M. Pierpont Morgan
9ew Gork ;ity is the center of exchange of 0merica. 4hirteen
thousan" banks of the ,nite" 3tates# pri!ate# state an" national#
continually maintain large "eposits of money in her national
banks for the payment of "rafts.
4hese "eposits of money from all parts of the nation amount to
many millions# an" ten" to make money scarce in the 3outh an"
Iest# an" concentrate it in a few banks in the metropolis.
0ccor"ing to the pro!isions of the national banking law# the
national banks of the great cities of the country were selecte" as
the reser!e agents of the A#B(( national banks throughout the
<y that law# these banks were re5uire" to keep in reser!e from
fifteen to twenty-fi!e per cent of the total amount of "eposits in
their custo"y+ an" they were authorize" to "eposit this great
1eser!e 7un" in the national banks of 9ew Gork ;ity# a system
which further a""e" many millions of "ollars to the hol"ings of
Mohn Pierpoint Morgan - foun"er of =eneral $lectric ;ompany by the merger of
$"ison $lectric an" 4hompson-6ouston $lectric companies# an" foun"er of ,.3. 3teel.
MPMorgan <anking arose naturally out of the !ast wealth he create"# an" with others
foun"e" the 7e"eral 1eser!e.
those banks# with a conse5uent "rain of money upon all other
"istricts of the nation.
4he banks of 9ew Gork ;ity were thus enable"# from these
immense accumulations of money# to make loans at the low rate
of one per cent# "eposite" by these banks to secure their
circulating notes# reache" the magnificent sum of TC1E#DDB#111.
Ie "o not inclu"e in this calculation the usury gathere" from
their currency or bank notes.
n its yearly almanac for 1DEA# the 9ew Gork Iorl"# a >ournal
frien"ly to national banks# shows that the Profits of those banks
from 1DB8 to 1DE1 were the !ast aggregate of T1#(D1#EED#HDJ.
4heir a!erage capital "uring that perio" was TH((#(((#(((.
4here are scores of these banks# which# after "istributing great
"i!i"en"s to their stockhol"ers# ha!e a surplus an" un"i!i"e"
profits excee"ing their entire capital stock. 4hese facts are taken
from the sworn reports of the officials of these banks.
0t the hearing before the ;ommittee on ;urrency in December#
1DEC# =eorge ;. Iilliams Presi"ent of the ;hemical 9ational
<ank of 9ew Gork ;ity# ga!e the following sworn statement as to
the profits of his bank. Ie here 5uote the e!i"ence of Mr.
Iilliams in reply to the 5uestions of Mr. Iarner# a member of the
r. .arner:
"So that the capital of your !an* no$ represents ho$ many millions
of dollars> "
r. .illiam"#
"Gur capital is 6088,888 and our surplus a!out 6:,888,888%"
r. .arner:
")our stoc* is $orth a!out 6J,088 a share>"
r. .illiam"#
")es, Sir9 it sells for that% 1t sells for more than it is $orth%"
r. .arner:
"=orty4three times as much as its par%"
"What is the amount of your !ond deposit>"
r. .illiam"#
"'he Chemical +an* has never ta*en out any circulation $hatever%
Gur !ond deposit is 678,8889 !ut $e have never circulated any
4he ;hairman pursue" this line of 5uestioning# an" elicite" the
following a"missions:-
The Chairman#
"/r% Williams, some mem!ers of the committee desire to understand
e<actly the condition of your !an*% What did you state the capital
r. .illiam"#
"'hree hundred thousand dollars%"
The Chairman#
"3nd the surplus>"
r. .illiam"#
"'he surplus and undivided profits are a!out 6:,888,888% 'he
surplus is 6B,888,888 and the undivided profits a little over a
million dollars, ma*in" a little over 6:,888,888 of surplus and
undivided profits%"
The Chairman#
"3nd ho$ much deposits>"
r. .illiam"#
"'hirty million dollars"
The Chairman#
"What dividend do you pay per annum on your stoc*>"
r. .illiam"#
"We pay no$ &78 per cent% per annum%"
4he astonishing annual profits of that bank is shown by the
The Chairman#
")ou stated the dividend last year $as &78 per cent%"
r. .illiam"#
")es, Sir%"
The Chairman#
"What $ere the undivided profits of that year>"
r. .illiam"#
"Well, 1 have not it in mind9 !ut o$in" to the panic our profits last
year $ere not as lar"e as usual% sually $e e<pect to add to our
surplus &88 per cent% !esides the dividend $e pay of &78 per cent%"
The Chairman#
"'hat is 6088,888 a year> "
r. .illiam"#
")es, Sir%"
r. Chairman#
"3nd a dividend of &78 per cent !esides> "
r. .illiam"#
")es, sir% 1n the year of the panic of &C?0, this institution "athered in
a profit of .78 per cent%"
0 partial list of other banks of 9ew Gork ;ity is appen"e"# to
illustrate their unhear"-of profits:
4he par !alue of the stock of the Mechanics& 9ational <ank is
T8H per share+ it is now worth T1EH per share.
4he par !alue of the stock of the mporters& an" 4ra"ers& 9ational
<ank is now worth TH(( per share.
4he par !alue of the stock of the 6ano!er 9ational <ank is T1((
per share+ it is now worth TAC( per share.
4he par !alue of the stock of the =allatin 9ational <ank is TH(
per share+ it is now worth TA(( per share.
4he par !alue of the stock of the <roa"way 9ational <ank is T8H
per share+ it is now worth T8H( per share
4he par !alue of the stock of the ;hatham 9ational <ank is T8H
per share+ it is now worth TA(( per share.
4he par !alue of the stock of the ;ity 9ational <ank is T1(( per
share+ it is now worth TJ(( per share.
4he par !alue of the stock of the ;orn $xchange 9ational <ank is
T1(( per share+ it is now worth TA(( per share.
4he par !alue of the stock of the 7ifth 0!enue 9ational <ank is
T1(( per share+ it is now worth TA#((( per share.
4he par !alue of the stock of the ;hase 9ational <ank is T1(( per
share+ it is now worth TH(( per share.
4he par !alue of the stock of the 7ourth 9ational <ank is T1((
per share+ it is now worth T1DH per share.
4he "ifference between the face# or par !alue# of the stocks of
these banks# an" the market !alue thereof# results from the
surplus an" un"i!i"e" profits# which are accumulate" after the
payment of large perio"ical "i!i"en"s to the stockhol"ers.
9ot satisfie" with these unparallele" incomes# these national
banks# in connection with others of 9ew Gork ;ity# constitute that
;learing 6ouse# which persistently claime" the special# bounties
of the =o!ernment in the way of tens of millions of prepai"
interest# premiums on bon"s# an" gratuitous loans of public
money# aggregating hun"re"s of millions of "ollars.
4he money kings at the hea" of these banks are the most
persistent an" greatest beggars on earth. 4hey are the financiers
who ha!e brought on e!ery panic since 1DJH# an"# from the
tumbling of stocks an" wreckage of fortunes# gather in the wealth
of the country.
n 1DEJ# the great trust companies of that city hel" "eposits of
money aggregating T8C8#(((#(((+ an" pai" "i!i"en"s of 8H to C(
per cent. to their stockhol"ers.
4hey were as strong in 1DEA.
4hese trust companies are the hol"ers of hun"re"s of millions of
"ollars in bon"s of railway# street railway# gas# an" electrical
companies# locate" chiefly in the Iest an" 3outh. 4he income
from these stocks an" bon"s accelerates the flow of money to the
Many of these corporations# whose stocks are so hel" by the
capitalists of 9ew Gork ;ity# are bon"e" from two to fi!e times
their actual !alue# thus operating as a hea!y bur"en upon those
communities who ha!e grante" these corporations !aluable
0 single street railway corporation in one of the Iestern 3tates
was purchase" by two $astern speculators for T8#(((#(((+ they
at once procee"e" to issue bon"s upon this property to the
amount of TC#(((#(((# which they sol" to a trust company in
9ew Gork ;ity.
4hey also issue" stock to the amount of TC#H((#(((# which was
"ispose" of by these scoun"rels# making a total "ebt of
TD#H((#((( upon a property costing but T8#(((#(((.
4he people of that city pay the interest upon these bon"s# an" the
"i!i"en"s upon this stock# by submitting to exorbitant charges.
4his money power# with the eyes of 0rgus
an" the han"s of
# has likewise seize" upon the natural gas resources of
the Iest.
0 syn"icate of $astern capitalists purchase" the natural gas
properties in the 3tate of n"iana# the total outlay in cash being
t imme"iately procee"e" to issue bon"s thereon to the amount of
TD#8H(#(((# which were sol" to a trust company in 9ew Gork
4he procee"s of these bon"s pai" for the entire in!estment
besi"es yiel"ing a surplus or bonus of T8#J((#(((.
n a""ition stocks were issue" on this property to the amount of
4he interest an" "i!i"en"s on these stocks an" bon"s are
s5ueeze" out of the people of that 3tate# an" the money goes to
increase the hoar"s of the millionaires of the $ast.
4he same is true of the stock-yar"s of the Iest. 0 single stock-
yar" company of -ansas ;ity is enormously o!er-capitalize". n
or"er to make the "i!i"en"s to transmit to the $astern
stockhol"ers# corn was bought at ten cents per bushel# an" sol" at
one "ollar per bushel to those who are compelle" to fee" their
stock shippe" through those yar"s.
3uch is the robbery practice" on the Iest by what is calle" the
culture an" soun" finance of the $ast.
4he more than one hun"re" thousan" miles of railways tra!ersing
the Iest an" 3outh# cost on an a!erage T8(#((( per mile for
their construction.
0rgus - =reek Mythological character. 3on of Peus an" 9iobe. Peus& first chil" by a
mortal# an" a giant with a hun"re" eyes.
<riareus - =reek Mythological character with 1(( arms an" H( hea"s# the son of
,ranus# an" =aea. )6ea!en an" $arth* also known as 0egeon.
4he a!erage bon"e" in"ebte"ness is TJA#((( per mile# an" the
interest on these bon"s is met by extortionate rates of
transportation acting as a means of le!ying hea!y tribute upon the
agricultural pro"ucts of these sections. 4hese bon"s are chiefly
hel" in 9ew Gork ;ity an" $nglan".
4he ini5uity of this system can be faintly un"erstoo"# when it is
borne in min"# that many of these railways were originally built
by immense contributions of money an" lan" by cities#
townships# counties# an" 3tates# through which they run# in
a""ition to the enormous lan" grants bestowe" upon these
corporations by the general =o!ernment# the last of which
aggregate" more than two hun"re" million acres of !aluable
public lan"s.
4he wealth of the insurance companies is almost incalculable.
4here are single life insurance companies in that city# whose
resources e5ual that of so!ereign 3tates.
4hree of these corporations ha!e assets excee"ing TJ((#(((#(((.
4he agents of those companies are plante" o!er all the entire
Iest an" 3outh# an" the perio"ical flow of money to the $ast
ri!als the re!enue of nations.
4his !olume of money takes its origin from nearly e!ery farm
house# hamlet# !illage# town# an" city in the ,nion# con!erges at
the general agencies# an" thence pours a mighty floo" of "ollars
into the treasuries of the home companies.
7rom 1DJE to 1DDE# a perio" of twenty years# the 3tate of llinois
contribute" T1AD#C8H#CAA to the !arious insurance companies of
the $ast.
t recei!e" back# in the way of losses pai"# only TDC#E8E#8(C#
lea!ing a surplus or profit o!er expen"itures of THA#CEJ#88E.
4his "rain was from a single 3tate.
4he aggregate from the Iest an" 3outh in the last twenty years
woul" reach billions.
4hese insurance companies# in turn# loane" this money to the
3outh an" Iest at exorbitant rates of interest# resulting in an
a""itional "rain on those sections.
4hen there are the loan an" mortgage companies of 9ew Gork
;ity an" the $ast who make a specialty of loaning money on the
farm lan"s of the Iest an" 3outh.
4he hol"ings of these companies aggregate more than one billion
"ollars+ an" the annual flow of money to the $ast for interest
charges is at least T1H(#(((#(((.
n speaking of the astonishing increase of the mortgage "ebt of
the Iest# 7re"eric ;. Iaite sai":
"'he most astonishin" increase of all, ho$ever, is in the real estate
mort"a"e inde!tedness, as disclosed !y the investi"ations of the
eleventh census%
@et us remem!er that this is lar"ely the de!t of the hardest $or*in"
and the poorest paid of all our 3merican citi2ens, namely, the
farmers and the la!orers $ho are tryin" to o!tain a home of their
o$n !y honest toil%
"1n the t$enty4one States for $hich the mort"a"e inde!tedness has
!een ta!ulated, the a""re"ate amount in force, at the close of &CC?,
$as four thousand five hundred and forty4seven millions $ith the
"reat States of Ghio, 'e<as, and California, and $hole "roups of
lesser States yet to !e heard from%%
"'he "rand a""re"ate $ill !e no less than si< thousand three
hundred millions% 'he a""re"ate in &CC8 $as only a!out t$o
thousand five hundred millions%"
4he number of these loan an" mortgage companies is !ery great#
not only in 9ew Gork ;ity# but in other $astern cities. n an
article upon this sub>ect# the Political 3cience [uarterly# for
3eptember# 1DDE# sai":
"+oston num!ers more than fifty a"encies of farm mort"a"e
companies% 1t is computed that (hiladelphia alone ne"otiates yearly
more than 6&7,888,888 on Western loans% Vansas and Ne!ras*a
have one hundred and thirty4four incorporated mort"a"e
"'he companies or"ani2ed under the la$s of other States !ut
operatin" in these t$o States increase the num!er at least t$o
"1n this rec*onin", no account is ta*en of firms and individuals,
althou"h a lar"e amount of money is directly invested !y lenders of
this class%"
4he financial resources of <oston are a mere bagatelle# when
compare" with those of 9ew Gork ;ity# )an" the former has more
than fifty of these loan an" mortgage companies.*
4he 7orum# for March# 1DE(# makes the following astonishing
"1t is impossi!le to say ho$ much has !een invested in the West in
real estate securities, !ut the amount is enormous%
=ive mort"a"e companies in 'ope*a, Vansas, report that the loans
made !y them, and still outstandin", amount to 6..,888,888%
Gf this sum C8 per cent% has !een invested in Vansas% =ive companies
at Vansas City, report 6BC,888,888 outstandin"%
'his amount has !een placed in a do2en Western States%"
4his remarkable state of affairs in the Iest an" 3outh will be
consi"ere" strange# in !iew of the facts that these sections are the
foo"-pro"ucing regions of the country# an"# that while they fee"
this whole nation# they furnish more than three fourths of the
exports which maintain a balance of tra"e in fa!or of the ,nite"
4he high-han"e" an" oppressi!e manner# in which these loan
agencies an" companies ha!e in!oke" the law to foreclose their
mortgages on the farms of the Iest# is a scan"alous abuse of
0s the impro!e" farms were only ple"ge" for the payment of a
sum of money ne!er excee"ing in any case more than fifty per
centum of the !alue of the nake" lan"# the security was goo".
9e!ertheless# many thousan"s of suits for foreclosure were
institute" on the slightest failure to pay the interest coupons+
"ecrees of sale were accor"ingly entere"# an" the lan" sol" to pay
the "ebt# whereupon these mortgagers woul" bi" in the entire
mortgage" premises for a fraction of the claim# obtain the
property for a mere nominal sum# an" yet hol" a large resi"ue of
the >u"gment o!er the hea" of the unfortunate "ebtor to seize
what other property the mortgagor woul" happen to possess# an"
thus sweep away all into the coffers of these !oracious usurers.
4his ini5uitous use of the process of the law to rob the "ebtors of
the Iest an" 3outh of their whole substance# is a "ark an"
"amnable blot on the >urispru"ence of the ,nite" 3tates# an" it
woul" shame the har"ene" nature of a <ashi <azouk
4he future historian will mar!el at the patience "isplaye" by
these people un"er these circumstances.
;losely allie" to the moneye" corporations of 9ew Gork ;ity#
an" ha!ing a unity of interest with them# are the A#B(( other
national banks scattere" o!er the country.
0n examination of the list of officers an" "irectors of the national
banks of 9ew Gork ;ity# <oston# 6artfor"# 9ew 6a!en#
Pro!i"ence# Phila"elphia# <rooklyn# <altimore# ;hicago# an"
other lea"ing cities# re!eals some mar!elous facts.
<ashi-<azouk was an irregular sol"ier of the 4urkish:ttoman army. 4hey
were particularly note" for their lack of "iscipline.
t will "emonstrate that the presi"ents an" "irectors of the
national banks of the first-name" city# control the operations of
the loan an" trust companies# the gigantic life insurance
corporations# the sugar trust# an" the 3tock exchange.
4hese financial magnates are hea!y stockhol"ers in what we
calle" natural monopolies# such as street railway companies# an"
corporations which furnish water an" light for the cities of the
6. :. 6a!emeyer# the sugar trust king# is the hea!iest stockhol"er
in the Iestern 9ational <ank. 1ussell 3age# the great stock
speculator of 9ew Gork ;ity# is the chief owner of the mporters&
an" 4ra"ers& 9ational <ank.
0n" so the list coul" be in"efinitely exten"e"# showing that the
great stock gamblers of Iall street# the organizers an" managers
of oppressi!e trusts# the wreckers of railroa"s# the hea"s of great
insurance companies# the merchant princes# the highly protecte"
manufacturing lor"s# the owners of great newspapers# are the
in"i!i"uals at the hea" of the national banking money power.
n the city of ;hicago# all the members of the great packing house
an" stock-yar" trusts are hea!ily intereste" as owners an"
"irectors of national banks.
ts millionaire merchants# grain gamblers# owners of street
railway stocks# an" gas properties# "ictate the election of officers
of these banks.
0s another means of securing control of the entire !olume of
money# the national bank managers# with won"erful prescience#
organize" trust companies in e!ery great city of the country to act
in the capacity of recei!ers# trustees# executors# a"ministrators#
an" guar"ians# with the intention of monopolizing the probate
business of the courts.
Proof of the strongest nature can be pro"uce"# to show that these
national banks ha!e loane" money to flourishing manufacturing
enterprises# then# at an opportune moment# force" their "ebtors
into bankruptcy# ha" their trust companies appointe" recei!ers of
the trust estate# charge" enormous fees for settling up the affairs
of the bankrupts# while the officers of these banks# as pri!ate
in"i!i"uals# bought in the assets of these unfortunates at a great
t is sai" of a national bank presi"ent# who is also at the hea" of
one of these trust companies# that he keeps himself thoroughly
!erse" in the financial con"ition of the "ebtors of his an" other
banks# that he carefully watches the growth of the business of
these "ebtors until they become ripe for plucking# an" that# as a
bon-!i!ant examines a fowl to ascertain its con"ition# so this
great financier waits for his !ictim until he reaches that stage that
he can be thrown into bankruptcy# when he pounces on him as the
!ulture pounces on its helpless prey.
4he recei!ership of his trust company "oes the rest. ,p to the
early part of 1DEA# this money power ha" built up a system of
bank cre"it that was stupen"ous in its proportions.
,n"er its manipulations of the !olume of money it ha" force"
nearly all business on a bank-borrowing basis.
n a report of the ;omptroller of the ;urrency for 1DEA# the
loanable fun"s of all the banks of the ,nite" 3tates# on the A(th
"ay of Mune of that year# aggregate" TJ#C18#EAE#EHC.
t may seem a mystery to many how it can be possible# that# with
a !olume of money of but T1#J((#(((#((( in the nation# these
banks ha!e a loanable fun" of four times that amount.
4he process# of leger"emain
# by which these financial
institutions expan" T1#J((#(((#((( of actual money to
TJ#C18#EAE#EHC of loanable bank cre"its# an" exact the highest
rate of interest on the latter is a matter which has confoun"e"
many stu"ents of finance.
4he process of the banks# in buil"ing up this colossal system of
cre"it# an" subor"inating the immense interests of the country to
their "ictation# is !ery simple.
4he loanable fun"s of the banks consists of their pai"-up cash
capital# "eposits# an" their loans to customers.
4his expansion of the loanable fun"s of a bank can be most
clearly explaine" by the example of the 7irst 9ational <ank of
;hicago# of which /yman M. =age was Presi"ent# pre!ious to his
appointment to the 3ecretaryship of the 4reasury.
4his bank has a capital of TA#(((#(((# loans an" "iscounts of
T1B#B8A#B8B an" total assets of TAE#H((#(((. 4he 5uery arises
how can a bank with but TA#(((#((( capital loan nearly
T1D#(((#((( an" ha!e assets of nearly TC(#(((#(((L
t makes these loans out of the money "aily "eposite" with it# or#
more clearly speaking# on what it owes to others.
t not only controls its own money# but the money of the business
community in which it is situate".
4o further illustrate the metho"s of banks in swelling the amount
of loanable fun"s# an" conse5uently their power to reap interest
therefrom# take the following case:
0 merchant goes to one of these great banks# an" his cre"it being
first class# he borrows TA((#((( on thirty# sixty# or ninety "ays&
/eger"emain# is "efine" as: Rsleight of han"R# R;unning "eceptionR# or R4rickeryR
from the ol" 7rench term meaning R/ight of 6an"R - a magician.
4he interest is "e"ucte" out of the loan in a"!ance# an" the
balance cre"ite" to the borrower# who "oes not take this money
out of the bank to his place of business.
4his borrowe" money remains with the bank for the payment of
checks "rawn against it by the merchant.
:wing to this process# the bank# while making a profit out of the
loan# still has the use of the money out of which to make
a""itional loans# an" so this process goes on in"efinitely.
4he supply of money in the bank for the payment of checks an"
"rafts is maintaine" by the "aily "eposits of its hosts of
4his is the i"entical process by which the system of banks ha!e
expan"e" T1#J((#(((#((( to TJ#C((#(((#((( of loanable interest-
bearing bank cre"its.
4his loanable bank cre"it means an annual income of at least
TC((#(((#((( to these institutions.
4his is a substantial reason why the system of banks# throughout
the length an" brea"th of the lan"# eulogize cre"it# an" why they
are oppose" to a sufficient !olume of money# an" exalt cre"it
abo!e actual cash.
4his !ast income of the banks operates as a tax upon the people -
a tax which ultimately falls with crushing weight upon the
laboring man.
4he wholesale merchant borrows a large sum of money from one
of these great banks at the pre!ailing rate of interest which is
"e"ucte" in a"!ance.
6e a""s this payment of interest to the cost of the goo"s# an"
charges a profit upon the whole amount thus in!este".
4he retailer buys these goo"s with the interest charge an" the
profit mingle" with the price.
n many cases# he borrows the money un"er the same process as
the wholesale merchant# an" he a""s the interest charge to the
cost of the goo"s so purchase"# an" thus he extracts a profit upon
this from the ultimate purchaser# who is the consumer of them.
4herefore# these enormous profits of the cre"it system of the
banks le!y tribute upon e!ery article necessary for the sustenance
an" comfort of life.
n this connection# let it be borne in min" that the sole class upon
whom rests the enormous bur"ens of go!ernment# an" from
whom has been extorte" those almost incomprehensible sums of
money that foun" their way into the coffers of the bankers an"
bon"-hol"ers# is the pro"ucers of wealth.
4he creation of wealth arises in three ways+ !ia.# transmutation#
transformation# an" transportation.
4he man who plows# sows# an" reaps# is engage" in the first-
name" process+
the mechanic# or laborer# who a""s !alue to the raw material# is
an example of the secon"+
the "istribution of the pro"ucts of the agriculturist# an" the skille"
or unskille" workman# falls in the pro!ince of the last name".
4hese processes are the sole means of a""ing to the stock of
material wealth. <ankers# merchants# an" those belonging to
what are calle" the learne" professions# "o not a"" a single penny
to a nation&s stock of wealth.
4he banker an" the money len"er merely gathers toll from those#
who borrow the me"ium of exchange to carry on business.
4he merchant of e!ery "escription who obtains a profit on the
merchan"ise he buys an" sells# merely takes the "ifference
between the cost an" selling price of goo"s from the customers#
an" a""s it to his own possessions.
4his process "oes not a"" a farthing to the wealth of the nation as
a whole.
/awyers# physicians# an" all other members of the professions#
only absorb what is pro"uce" by others.
4here is no way un"er hea!en by which these classes of persons
a"" anything to the wealth of a people
0ll 4ownship# Municipal# ;ounty# 3tate# an" 7e"eral officers# are
merely consumers of what is pro"uce" by those who are engage"
in the processes of transmutation# transformation# an"
$!ery tax le!ie" an" collecte" by the =o!ernment# an" its !arious
political an" territorial sub"i!isions# is a transference of wealth
from the people# to be in turn# gi!en to those who are the official
organs of lawful authority.
4hese "efinitions of the pro"ucing an" non-pro"ucing classes are
matters of e!ery-"ay obser!ation# an" are susceptible of complete
t is upon the shoul"ers of the pro"ucing class that rest the
crushing weight of go!ernment# the enormous gains of national
banks# an" other wealth-consuming elements.
4hese bur"ens are surely bearing "own the people into a
bottomless abyss of bankruptcy.
:ne of the means that greatly increase" the power of the national
banks of 9et Gork ;ity# was their selection as "epositories of
go!ernment fun"s "uring the last thirty years.
n a speech of ;omptroller $ckles# at a ban5uet gi!en in his
honor by these banks# he thus extols these pets of the
6e sai": -
"3s "overnment depositories the national !an*s have received,
stored in their vaults, and accounted for 67,07B,B.7,C?& $ithout
e<pense to the Dovernment%"
"3llo$in" the rate of three ei"hths of one per cent%, as a reasona!le
compensation for such services, $hich is the same as that fi<ed !y
the act of /arch 0rd, &C:7, as the compensation of dis!ursin"
officers for pu!lic !uildin"s, it $ould amount to 6.8,8C:,0J:%"
4hink of itS
4hese few banks ha" the use of more than fi!e billions of
go!ernment money# increasing their loanable fun"s to that extent#
an" from which they gathere" scores of millions of profit.
4hrough the agency of the railway an" the telegraph# the national
banking money power of to"ay can reach e!ery part of the ,nite"
3tates in twenty-four hours.
4he national banks know the !alue of organization# an" they ha!e
brought it to a perfection that woul" excite the a"miration of a
3hortly after the inauguration of Presi"ent ;le!elan"# the national
banks of 9ew Gork ;ity transmitte" the following infamous
circular to the thousan"s of banks scattere" throughout the ,nite"
4he contents of the circular are as follows: -
"Aear Sir:
'he interests of national !an*ers re;uire immediate financial
le"islation !y Con"ress% Silver, Silver certificates and treasury
notes, must !e retired and national !an* notes upon a "old !asis
made the only money%
'his $ill re;uire the authori2ation of from 6788,888,888 to
6&,888,888,888 of ne$ !onds as a !asis of circulation%
)ou $ill at once retire one third of your circulation and call in one
half of your loans% +e careful to ma*e a money strin"ency felt
amon" your patrons, especially amon" influential !usiness men%
3dvocate an e<tra session of Con"ress for the repeal of the
purchasin" clause of the Sherman la$ and act $ith the other !an*s
of your city in securin" a lar"e petition to Con"ress for its
unconditional repeal, per accompanyin" form%
se personal influence $ith con"ressmen and practically let your
$ishes !e *no$n to your Senators% 'he future life of national !an*s
as fi<ed and safe investments depends upon immediate action, as
there is an increasin" sentiment in favor of Dovernment le"al tender
notes and silver coina"e%"
Ihile the national banks of that city were engage" in this
conspiracy to wreck the business interests of the country# they
were rai"ing the gol" reser!e of the ,nite" 3tates 4reasury to
force an issue of bon"s.
;oinci"ent with the appearance of this circular# which a"!ise" the
bringing on of this panic# the following remarkable "ocument
was put forth by the national banking money power.
t is as follows:-
"Aear Sir:
'he present financial situation re;uires the follo$in" action !y
Con"ress, $hich should !e favored !y all interests, to $it:4
"&% (ass a resolution repealin" purchase clauses of Sherman silver
".% (ass a !ill authori2in" the issue of 6088,888,888 of nited
States 0 per cent% !onds, paya!le in "old, directin" the nited States
'reasurer to sell 6&88,888,888 immediately in Europe, $ith the
stipulation that none of them should !e resold $ithin the nited
the 'reasurer to ta*e this 6&88,888,888 of "old and issue
6&88,888,888 of "old certificates a"ainst it, and deposit them in the
different national !an*s of the nited States pro4rata to their
capital and circulation, upon ade;uate security !ein" "iven to the
Dovernment securin" such deposits9 such deposits to !e preferred
liens upon all assets of each !an*, etc%
"1t should also direct the 'reasurer to sell 6&88,888,888 of such
!onds immediately in Europe under similar conditions, the money to
!e placed in the nited States 'reasury or left on deposit in @ondon,
(aris, and +erlin, for use !y the Dovernment in payin" deficiencies
!et$een the DovernmentHs receipts and e<penditures, and dra$n as
"'he remainin" 6&88,888,888 should !e held su!ject to sale
$henever the necessities of the Dovernment or the financial
interests of the country demand it%
"+rin"in" 6.88,888,888 of "old to this country, in addition to the
!alance of trade in our favor, $ould immediately esta!lish
confidence in our financial stren"th%
"0% (ass a resolution callin" an international conference to
esta!lish an international a"reement as to the use of silver as
currency, to !e held $ithin t$enty days after the passa"e of such
'$enty daysH notice !y ca!le is amply sufficient to allo$ time for
every "overnment to appoint men $ho understand the su!ject
thorou"hly, and have them meet at some convenient place%
"'he dele"ates representin" the nited States should !e selected !y
Con"ress and named in the resolution, t$o of them to !e Senators
from the silver States and t$o of them e;ually representative of the
other side of the ;uestion%
"J% (ass the act increasin" national !an* circulation to par of
deposited !onds%
"'he a!ove le"islation $ould immediately inspire confidence here
and a!road in 3merican finances and start the $heels of !usiness,
no$ helplessly clo""ed% =or the future the follo$in" action should
!e ta*en:
"7% (ass a resolution appointin" a committee, to consist of five Ne$
)or* !an*ers of the hi"hest standin" and one each from +oston,
(hiladelphia, Chica"o, St% @ouis, Cincinnati, Nashville, 3tlanta,
Savannah, Ne$ Grleans, Dalveston, San =rancisco, Aenver, St%
(aul, Aetroit, +uffalo, and (itts!ur"h, the committee to immediately
meet, consider, and report to an adjourned session of Con"ress a
!ill incorporatin" a nited States National +an*, founded on the
same lines as the National +an* of En"land and the National +an*
of =rance, to !e entirely divorced and free from politics9
and it !ein" e<pressly stipulated that one half of the committee shall
!e selected from Iepu!lican !an*ers and one half from Aemocratic
"3 national !an* is a!solutely necessary for the future financial
safety of the country% nder present conditions there is no elasticity
to our currency% "=ive per cent% of our financial !usiness is done
$ith cash, ?7 per cent% $ith credit%
"'o4day credit is lar"ely destroyed, $hich leaves us tryin" to do
more than one half of the !usiness of the country on the
insi"nificant per cent% cash, and a considera!le proportion of this
cash hoarded and ta*en out of circulation%%
"'o meet emer"encies li*e this, $e should have a national !an*,
havin" po$er to ma*e almost an unlimited issue of currency $ith
the same po$er and self4interest, $hen confidence returns, to ta*e
and return all this specially4issued currency and retire it%
"'he +an* of En"land and the +an* of =rance have po$er to issue 4
millions upon millions of additional currency $henever necessary to
protect and conduct the finances of the country, and they e<ercise
this po$er, arid therefore such e<treme panics as ours are un*no$n
in those countries%
When the crisis is over, this e<tra currency is retired%
"'here is no ;uestion as to the safety of this po$er9 it has !een
e<ercised !y these "reat !an*s in these t$o countries for
"enerations, and has !een their financial salvation, and $e can
have no permanent financial, safety in the nited States until $e
create a similar national !an* or else ma*e the nited States
'reasury a !an* and authori2e and direct that in times of panic and
destruction of credit the Dovernment shall issue currency to an
e<tent necessary to meet the emer"ency, and deposit it in the
national !an*s of the country%
Gf the t$o measures, it is certainly prefera!le to have a "reat
national !an*, founded on almost e<actly the lines of the +an* of
En"land, thus ta*in" financial ;uestion and mana"ement entirely
out of the influence of politics, !ecause the "overnment of the =irst
National +an* of En"land is entirely in the hands of the "reatest
!usiness men of the country, $ho have no interest $hatever in
politics, e<cept as citi2ens%
)ours truly,
Wm% I% Con$ay%"
4his "ocument was place" in the han"s of members of ;ongress
with a !iew of influencing their action.
4he first "eman"# couche" in this circular# re5ueste" ;ongress to
repeal the purchase clause of the 3herman law.
4he secon" "eman"e" the passage of a bill authorizing the issue
of TA((#(((#((( of ,nite" 3tates bon"s# payable in gol"# an"
T1((#(((#((( of gol" thus recei!e"# an" for which interest was to
be pai" by the nation# shoul" be gi!en to the "ifferent national
banks as a loanable fun".
4he thir" "eman"s the repetition of that farce - the calling of an
international monetary conference.
4he fourth - the passage of an act permitting national banks to
increase their circulation up to the par !alue of the bon"s
"eposite" by these.
7ifth# 4he passage of a resolution authorizing a committee of
bankers to frame a bill incorporating a national bank# operating
on the same principles as the <ank of $nglan".
4his propose" bank to be en"owe" with the power of making an
unlimite" issue of currency# the !olume of which coul" be
contracte" whene!er the self-interest of the banks saw fit to
curtail this !olume of money.
4hus the 4ory-$astern system of finance was outline" by the
money power.
4he historical inci"ent of Di"ius Mulianus
bi""ing-in the 1oman
$mpire# that he might absorb its entire re!enues for his personal
benefit# was not a circumstance compare" to the monumental
gree" of the national banking money power.
3ubse5uent history has fully "emonstrate" that se!eral of the
"eman"s set forth in this circular ha!e foun" their way upon the
statute-books of this nation# an" that the remaining are gra"ually
taking the form of propose" legislation.
Di"ius Mulianus# was 1oman $mperor for JJ "ays in 0.D. 1EA after buying the throne
at auction. :ne of his first acts was to "e-!alue the currency by re"ucing its sil!er
content# to pay the wages of the guar"s whose loyalty he bought. 7or this he was
re!ile" an" e!entually kille".
4his great scheme of buil"ing up a mighty system of bank cre"it
woul" place se!enty millions of 0mericans at the mercy of the
money mongers of /on"on an" 9ew Gork ;ity.
4his bank cre"it system# embo"ie" in the national bank plan# has
its center in /on"on# an" this woul" be true of any system of
bank currency# no matter how carefully frame".
4his was the case with the ,nite" 3tates bank# an" it applies
more emphatically to the present system.
n a great speech on the banking 5uestion# 4homas 6. <enton#
more than fifty years ago# so clearly# logically# an" powerfully
trace" this bank cre"it currency system to its source that it merits
careful rea"ing.
6e sai":-
"'he !an*s at that center to $hich currency flo$s, hold the po$er of
controllin" those in re"ions $hence it comes, $hile the latter
possess no means of restrainin" them9 so that the value of
individual property, and the prosperity of trade, throu"h the $hole
interior of country, are made to depend on the "ood or !ad
mana"ement of the !an*in" institutions in the "reat seats of trade
on the sea!oard%
"+ut this chain of dependence does not stop here% 1t does not
terminate at (hiladelphia or Ne$ )or*, it reaches across the ocean,
and ends in @ondon, the center of the credit system%
'he same la$s of trade, $hich "ive to the !an*s in our principal
cities po$er over the $hole !an*in" system of the nited States,
su!ject to the former, in their turn, to the money po$er in Dreat
"1t is not denied that the suspension of the Ne$ )or* !an*s in &C0:,
$hich $as follo$ed in ;uic* succession throu"hout the nion, $as
partly produced !y an application of that po$er9
and it is no$ alle"ed, in e<tenuation of the present condition of so
lar"e a portion that their em!arrassments have arisen from the
same cause%
=rom this influence they cannot no$ entirely escape, for it has its
ori"in in the credit currencies of the t$o countries9 it is
stren"thened !y the current of trade and e<chan"e, $hich centers in
@ondon, and is rendered almost irresisti!le !y the lar"e de!ts
contracted there !y our merchants, our !an*s, and our States%
"1t is thus that the introduction of a ne$ !an* into the most distant
of our villa"es, places the !usiness of that villa"e $ithin the
influence of the money po$er of En"land%
1t is thus that every ne$ de!t $hich $e contract in that country
seriously affects our o$n currency and e<tends over the pursuits of
our citi2ens its po$erful influence%
We cannot escape from this !y ma*in" ne$ !an*s, "reat or small,
state or national%
'he same chains $hich !ind those no$ e<istin" to the center of this
system of paper audit, must e;ually fetter every similar institution
$e create%
1t is only !y the e<tent to $hich this system has !een pushed of late,
that $e have !een made fully a$are of its irresisti!le tendency to
su!ject our o$n !an*s and currency to a vast controllin" po$er in a
forei"n land9 and it adds a ne$ ar"ument to those $hich illustrate
their precarious situation%
Endan"ered in the first place !y their o$n mismana"ement, and
a"ain !y the conduct of every institution $hich connects them $ith
the center of trade in our o$n country, they are yet su!jected,
!eyond all this, to the effect of $hatever measures, policy, necessity,
or caprice, may induce those $ho control the credits of En"land to
resort to%"
4his great statesman# who so ably expose" the "angers of a bank
currency which woul" "egra"e the ,nite" 3tates into a mere
"epen"ency of the "@ittle 1sle !eyond the seas," has long since
passe" away# but his solemn warning still beckons to the people#
an" points out the folly of trusting themsel!es to the embrace of
that boa constrictor - the banking monopoly.
n the month of 0pril# 1DEA# the 9ew Gork bankers ha" a
conference with 3ecretary ;arlisle at Iashington# in which they
"eman"e" that he issue bon"s to the amount of T1H(#(((#(((.
3ecretary ;arlisle woul" not acce"e to their "eman"s at this time.
4he refusal of Mr. ;arlisle to grant the "eman"s of these bankers
angere" them# an" they returne" to 9ew Gork ;ity "etermine" to
force an issue of bon"s at all hazar"s.
4hey continue" to rai" the gol" reser!e more fiercely than e!er.
n the meanwhile# with a few honorable exceptions# the banks
throughout the country execute" the man"ates couche" in that
circular issue" from 9ew Gork ;ity.
/oans were refuse"#an" outstan"ing obligations were
remorselessly calle" in by these tools of the money kings. 0s an
excuse for that con"uct# it was asserte" that "confidence" was lost.
4he press of 9ew Gork ;ity# with few exceptions# owne" bo"y
an" soul by the national banking money power# ai"e" in the work
by its senseless clamor.
t calle" attention to e!ery shipment of gol" that went out of the
country as a fearful calamity.
:ne of these newspapers "aily printe" in large figures on its front
page the low state of the gol" reser!e.
4hey "enounce" the sil!er "ollar as a R784cent dollar," a "dishonest
dollar," a "fiat dollar%"
n short# the !ocabulary of abuse was exhauste" by them when
speaking of sil!er as money.
4he 3herman sil!er law was pointe" to as the whole cause of the
panic now raging.
4he mercenary character of the 9ew Gork press# an" its
ownership by foreign capitalists an" the national banking money
power# is best illustrate" by that !eteran Mournalist# ;olonel
6e says: -
"'he fashion of editin" the more influential or the more successful
daily ne$spapers !y ca!le"ram has completely destroyed $hat little
virility $as left in their editorial pa"es%
"'he non4resident o$nership of ne$spapers leads to one serious
result, $hich, 1 thin*, has not !een "enerally considered%
"'he o$ner receives from his ne$spaper property, at stated
intervals, returns in money% 5e is !eyond the reach of proofs% 'he
address of his !an*er is al$ays *no$n% 'hither, on the first of every
month, lar"e sums of money must !e for$arded%
"'he tendency of non4resident o$nership must, therefore,
necessarily !e to measure everythin" !y a pecuniary test% 'he
morale of the paper, its course of pu!lic measures, and its treatment
of the interests of the people, $hose trustee it professes to !e, $ith
such protestations, are considered only from the point of vie$ of the
countin" room%
"'he $orst phase of non4resident o$nership is itsH a!solute
3uch is the stinging in"ictment brought against these great
>ournals by this able writer.
n speaking of the tyranny of that press# I P. 3t. Mohn# Presi"ent
of the Mercantile 9ational <ank# an a"!ocate of free coinage of
sil!er# sai": -
"'here is a very $idespread unrest of opinion on this topic and the
allied topic, called the Hsilver ;uestion,H even in Ne$ )or* and Ne$
En"land% (u!lic opinion is under a ne$spaper terrorism in Ne$
)or*% /en $ho a"ree $ith me fully, and 1 *no$ many of them of
considera!le $ealth, prefer to *eep silent for the present%
3ny no!ody $ho $ill $rite at len"th a lot of nothin"ness adverse to
silver money $ill !e accorded certain ne$spapersH space and !e
di"nified into "reat authorities%
3 rejoinder, if complete, and the more complete the more certainly,
is denied even a limited space%
3"ain, other men !elieve that until a chan"e of administration here
approaches it $ill merely cost them influence to spea* their
conclusions favora!le to silver money%
'hen, too, certain ne$spapers shield their readers a"ainst
intelli"ence and co$ them out of any timid convictions they mi"ht
6e a""e": -
"+ut conditions current here and else$here are forcin" the truth
upon "eneral attention, and a re!ellion a"ainst this tyranny and
concealment of facts $ill manifest itself ere lon" in Ne$ )or* as
1 have recently !een ur"ed !y commercial !odies of t$o important
Eastern cities to address them at len"th upon my convictions%
1 declined on the "round that 1 have tal*ed so much that 1 deem it
un$ise to !e heard a"ain on the topic until invited to spea* !y my
immediate associates in the City of Ne$ )or*%
"'he paper that 1 no$ as* the privile"e of readin", $as prepared for
a monthly ma"a2ine of importance%
1 as*ed the space at first, !ut after$ard $ithdre$ the re;uest%
'he editor ur"ed my carryin" out my first intention% 5is private
secretary heard the matter in the rou"h and ur"ed me the more to
complete it for his ma"a2ine%
1 learn this mornin" that more accepta!le matter $ill cro$d me out,
$hich is only another evidence of $hat you "entlemen, aimin" to
serve your country, are entitled to complain of in the Eastern press%"
0mong all the bankers of that city# Mr. 3t. Mohn was the sole
financier who urge" the a"option of free coinage# an" a
continuance of the greenbacks an" treasury notes as a part of the
!olume of money.
6is example was a green oasis ami"st the barren "esert of a!arice
of the national banking element.
4he press still continue" this warfare upon sil!er# greenbacks#
an" the treasury notes+ an" e"itorially en"orse" the course of the
bankers in creating a monetary stringency.
n urging a repeal of the 3herman law# the ;ommercial <ulletin
sai": -
'he Ne$ )or* Sun 3pril .?, &C?0, e<posed this scheme of the Ne$
)or* !an*s, and char"ed that they sent a!road 6&&8,888,888 of "old
to assist the Iothschilds to demoneti2e silver in 3ustria and
t sai":-
"@et us point to another fact, and $e are done%
Never !efore have the lar"e !an*in" institutions of Chica"o and the
West ordered their "old in such lar"e ;uantities direct from Europe,
and in this fact is found one reason $hy our !an*ers are pu22led
over the anomaly that, althou"h all these millions are comin" to the
country, they e<perience little or no relief therefrom%%
'he other reason, "entlemen, is, in order to force the repeal of the
Sherman 3ct and to ;uic*ly esta!lish your po$er over the plain
people of this land, you first send out of the country one hundred
and ten millions of the peopleHs currency in order to assist the
Iothschilds to demoneti2e silver in 3ustria and else$here, and then
let it remain there, to teach the West and South an Ho!ject4lesson,H as
the (resident called it, until you found it $as necessary to recall it
in order to save your o$n house from destruction%
No$, you have not only tau"ht the West and South an o!ject4lesson,
!ut yourselves one as $ell, and you can !e sure of it%"
4he 3un is an a"!ocate of a single stan"ar" of gol"# but the
scoun"relism of the 9ew Gork banks arouse" its in"ignation.
Meanwhile# Presi"ent ;le!elan" was han" in glo!e with the
treasonable banks# as the following from the 9ew Gork 3un fully
t sai" on 0pril 8D# 1DEA:-
"Secretary Carlisle decided yesterday mornin" to have a tal* $ith
the Ne$ )or* !an*ers%
@ate on Wednesday evenin" after his arrival from Washin"ton, he
conferred $ith 3ssistant 'reasurer Jordan, and e<43ssistant
'reasurer James J% Canda%
3s a result the Secretary yesterday mornin" su""ested that he meet
the !an* presidents and private !an*ers at four oHcloc* in the
'he postponement in the naval revie$ !ecause of the storm caused
some delay, as Secretary Carlisle accompanied (resident Cleveland
on the Aolphin%
"'he Secretary landed $ith the (residential party at the foot of
Ninety4si<th street, and $as there met !y the Colum!ian reception
committee, includin" (resident J% Ed$ard Simmons, of the =ourth
National +an*%
"'he Secretary and /r% Simmons $ere driven to the home of
(resident Deor"e D% Williams, of the Chemical +an*, and chairman
of the Clearin" 5ouse 3ssociation, at 0J West =ifty4Ei"hth street%
"'he follo$in" "entlemen $ere there to "reet the Secretary: /r%
Jordan, /r% Canda, (resident (er*ins, of the 1mportersH and
'raders", (resident Sherman, of the +an* of Commerce9 (resident
Cannon, of the Chase9 (resident 1ves, of the Western9 (resident
Dallatin9 (resident Coe, of the 3merican E<chan"e, and (resident
Woodyard, of the 5anover, all national !an*s%
'he conference !et$een the Secretary and the !an* presidents
lasted some$hat over an hour%
'here $as the utmost "ood feelin" displayed, and the Secretary said
that he $as there to ma*e a free, fran*, and open statement of $hat
he !elieved to !e the financial policy of the Dovernment%
"1n the first place, the Secretary said that an issue of !onds just at
this time mi"ht !e an effective remedy, !ut it $ould only !e
temporary, and that it $ould !e follo$ed !y distur!ances in the
money mar*et, and $ould in the end retard the determination of the
administration to repeal the Sherman silver la$%
'he Secretary said positively that there $ould !e no !ond issue
e<cept as a last resort%
3s the Secretary outlined the policy of the Dovernment, it $as that
nothin" $ould !e done that in any $ay $ould retard or chec* the
determination of the Cleveland administration concernin" the
repeal of the Sherman la$%
'he Secretary $ent over the currency la$s of the country, and said
they $ere in !ad shape and needed revision% 5e said the revision
should start $ith the Sherman la$% 'here is a determination also to
sho$ to the miners of silver the evil effects of the Sherman la$ on
their o$n fortunes%
"(resident ClevelandHs advisers have told him that the only $ay to
induce the Western and South4Western Senators and Con"ress to
consent to a repeal of the Sherman la$ is to demonstrate to their
constituents that they are losin" money every day that this la$ is in
'he missionary $or* in that direction has !een started !y a num!er
of the !an*ers in the solid communities of the East% 'hey are daily
refusin" credits to the South, South4$est, and West, fearin" the
effects of the Sherman la$%
"'he Chica"o !an*ers, it $as said, are carryin" out the same line of
policy% Secretary Carlisle, in his tal* $ith the !an* presidents,
made his stand very clear%
1t is to !e heroic treatment all the $ay throu"h on the Sherman la$9
and possi!ly !y the ne<t session of Con"ress, the silver mine o$ners
and the adherents of silver in the Senate and the 5ouse $ill !e
ready to consent to a repeal of the la$%
"'he !an* presidents, replyin" to Secretary Carlisle, cordially
informed him that they $ould !e ready at all times to co4operate
$ith him in the successful administration of the financial policy of
the administration%
Every!ody shoo* hands, and there $as harmony all round%
"1n the meantime the Secretary continues to receive offers of "old
from une<pected sources%"
n its e"itorial comments upon this historical meeting of
3ecretary ;arlisle an" these bankers# the 3un of 0pril 8Eth# says:-
"'he conference yesterday !et$een Secretary Carlisle and a num!er
of the !an*ers of this city $as of "reat value in that it resulted in a
definite understandin" of the financial policy of the administration,
as indicated in this column last 'uesday%
'hat policy is to interpose no o!stacle to the natural operations and
lo"ical results of the Sherman la$%
1n a $ord, the administration proposes to allo$ the people to reap
the re"ards of their o$n folly%
"'he statement of /r% Carlisle to the Ne$ )or* !an*ers ma*es it
clear that, $hile /r% Cleveland $or*s in Con"ress, the !an*ers $ill
!e e<pected to $or*, not in Ne$ )or* only, !ut throu"hout the
country, doin" their utmost to pinch !usiness every$here in the
e<pectation of causin" a money crisis that $ill affect Con"ress
po$erfully from every ;uarter%
'here is an e<plicitness in these declarations and a !oldness in
ma*in" them that $ould !e astoundin" $ere not the country too
familiar $ith /r% Cleveland and his methods to !e astonished !y
anythin" from him%"
4hese utterances of the 3un became prophecy# in !iew of the
means utilize" by Presi"ent ;le!elan" in forcing a repeal of the
3herman law.
6e "$or*ed in Con"ress" with the immense patronage at his
"isposal# as subse5uent e!ents "emonstrate" to a certainty.
:n May 1st# the 3un announce" that Presi"ent ;le!elan" woul"
soon call an extra session of ;ongress# an" urge upon that bo"y
an imme"iate repeal of the 3herman law.
t sai": -
"'here is to !e an e<tra session of Con"ress to afford the
opportunity of repealin" the Sherman la$ as soon as possi!le% War
$ill !e opened a"ainst silver, nota!ly the Sherman la$%"
During the waging of this war against sil!er by the national
banking money power# ai"e" by Presi"ent ;le!elan"# the
6erschell ;ommission was in session in /on"on# ha!ing un"er
"eliberation the 5uestion of closing the mints of n"ia to free
4he only obstacle in the way of $nglan" forcing n"ia to a gol"
stan"ar" was the existence of the 3herman law.
4his commission was informe" of e!ery step taken by the
national banking money power an" by Presi"ent ;le!elan" to
coerce ;ongress into repealing that law.
3ir 1eginal" Ielby who appeare" before that commission as an
expert financier# after the speech of 3ecretary 7oster at the
Delmonico ban5uet was 5uote" by the chairman# informe" that
bo"y# that
"3mericans calmly told him ,authorities $ith $hom he discussed the
silver matter- that, la$ or no la$, the intention is to maintain the
e;uality $ith "old and to suspend the purchase of silver if
necessary, that this $as the permanent policy of the 'reasury, and
account is ta*en of it, and !an*s act upon it%"
4he only authority# from whom this witness coul" ha!e recei!e"
such information# was 0mbassa"or <ayar"# who# "uring his
ser!ice in the ,nite" 3tates 3enate was a rigi" gol" mono-
metallist# an" an ar"ent supporter of national banks.
4he 6erschell ;ommission was informe" that Presi"ent
;le!elan" woul" call an extra session of ;ongress an" force a
repeal of the 3herman law.
4he commission at once close" its "eliberations# ma"e a report
recommen"ing that the mints of n"ia be close" to the free
coinage of sil!er# which was "one on the 8Hth of Mune# 1DEA.
:n Mune 8Bth# two "ays after the mints of n"ia were close" to the
free coinage of sil!er# 6enry ;lews# the official mouthpiece of
Iall 3treet# publishe" the following comment on the situation.
6e sai": -
"'here is every reason $hy Con"ress should !e !rou"ht to"ether at
the very earliest possi!le day% 'he houses that $ere en"a"ed until
lately in shippin" "old !ecame so 2ealous in that enterprise that
they tried to outstrip each other%
'he result $as that more "old $as actually shipped than Europe
'he natural result must appear in the return of the surplus thus
e<ported% E<chan"e has no$ fallen, indeed, to the specie4importin"
point% 3s soon as our crops ripen, there $ill !e inevita!ly a return of
a "ood deal of "old to the country%
Gne of the ar"uments in favor of the repeal of the Sherman la$ has
!een that the !aser metal has driven the finer metal out of the
1n a little $hile, $ith "old returnin" to us, the stren"th of that
ar"ument $ill !e sapped%
3n early session of Con"ress $ill leave the ar"ument still in full
n three "ays after the closing of the n"ian mints# sil!er fell
twenty cents an ounce.
:n the A(th "ay of the same month# Presi"ent ;le!elan" issue"
his proclamation re5uesting ;ongress to meet in special session
0ugust B# 1DEA.
;60P4$1 K.
3P$;0/ 3$33:9 :7 ;:9=1$33 1$P$0/3 46$
36$1M09 /0I.

"1 cannot suppose that every!ody is $ise% Just thin* of the folly of
the nited States $hen they $ere a de!tor nation in adoptin" a "old
'hey *ne$ nothin" a!out currency matters9 they did not *no$ that it
$as "oin" to increase their de!t enormously% "
- Daniel Iatney.
/abor is prior to# an" in"epen"ent of capital. ;apital is only the
fruit of labor# an" coul" ne!er ha!e existe" if labor ha" not first
existe". /abor is the superior of capital an" "eser!es much the
higher consi"eration.
"No men livin" are more $orthy to !e trusted than those $ho toil up
from poverty9 none less inclined to ta*e or touch au"ht $hich they
have not honestly earned%
@et them !e$are of surrenderin" a political po$er $hich they
already possess and $hich, if surrendered, $ill surely !e used to
close the doors of advancement a"ainst such as they, and to fi< ne$
disa!ilities and !urdens upon them Htil all of li!erty shall !e lost%"
- 0braham /incoln.
4he substance of the proclamation issue" by Presi"ent ;le!elan"#
con!ening the special session of ;ongress# is as follows: -
"Whereas the distrust and apprehension concernin" the financial
situation, $hich pervade all !usiness circles, have already caused
"reat loss and dama"e to our people, and threaten to cripple our
merchants, stop the $heels of manufacture, and !rin" distress and
privation to our farmers, and $ithhold from our $or*in" men the
$a"e of la!or9
"3nd, $hereas, the present perilous condition is lar"ely the result of
a financial policy $hich the e<ecutive !ranch of the Dovernment
finds em!odied in un$ise la$s $hich must !e e<ecuted until
repealed !y Con"ress9
"No$, therefore, 1, Drover Cleveland, (resident of the nited States,
in performance of a constitutional duty, do, !y this proclamation
declare that an e<traordinary occasion re;uires the convenin" of
!oth 5ouses of the Con"ress of the nited States at the Capitol in
the City of Washin"ton on the :th day of 3u"ust ne<t, at &. oHcloc*
noon, to the end that the people may !e relieved, throu"h
le"islation, from present impendin" dan"er and distress%"
:n the Bth of 0ugust# 1DEA# ;ongress met promptly at the hour
in"icate" in the call. <oth 6ouses organize" an" the Presi"ent
was notifie" of the fact.
:n the Dth of 0ugust# he transmitte" a special message to the
6ouse an" 3enate# respecti!ely# in which he set forth his reasons
for existing financial "epressions# an" urge" the repeal of the
3herman law as the means to "ispel the "istrust which wrought
such "istress among the people.
6e sai": -
"'he e<istence of an alarmin" and e<traordinary !usiness situation,
involvin" the $elfare and prosperity of all our people, has
constrained me to call to"ether in e<tra session the peopleHs
representatives in Con"ress, to the end that throu"h a $ise and
patriotic e<ercise of the le"islative duty $ith $hich they solely are
char"ed, present evils may !e miti"ated and dan"ers threatenin" the
future may !e averted%
"Gur unfortunate financial pli"ht is not the result of unto$ard
events nor of conditions related to our natural resources9 nor is it
tracea!le to any of the afflictions $hich fre;uently chec* national
"ro$th and prosperity%
"With plenteous crops, $ith a!undant promise of remunerative
production and manufacture, $ith unusual invitation to safe
investment, and $ith satisfactory assurance to !usiness enterprise,
suddenly financial distrust and fear have sprun" up on every side%
Numerous moneyed institutions have suspended !ecause a!undant
assets $ere not immediately availa!le to meet the demands of
fri"htened depositors%
"Survivin" corporations and individuals are content to *eep in hand
the money they are usually an<ious to loan, and those $ho en"a"e
in le"itimate !usiness are surprised to find that the securities they
offer for loans, thou"h heretofore satisfactory, are no lon"er
accepted% Ualues intended to !e fi<ed are fast !ecomin" conjectural,
and loss and failure have invaded every !ranch of !usiness%"
0n analysis of this extract of his message a""s accumulati!e
e!i"ence# that this panic was pre-arrange" by the nationa1 banks
to coerce ;ongress to repeal the hate" 3herman law. 4he
Presi"ent asserts that all the elements of prosperity were at han"#
an" su""enly "istrust sprung up on e!ery si"e. n speaking of the
coinage of sil!er# he sai": -
"+et$een the &st day of July, &C?8, and the &7th day of July, &C?0,
the "old coin and !ullion in our 'reasury decreased more than
6&0.,888,888 $hile durin" the same period the silver coin and
!ullion in the 'reasury increased more than 6&J:,888,888%
"nless Dovernment !onds are to !e constantly issued and sold to
replenish our e<hausted "old, only to !e a"ain e<hausted, it is
apparent that the operation of the Silver (urchase @a$ no$ in
force, leads in the direction of the entire su!stitution of silver for the
"old in the Dovernment 'reasury, and that this must !e follo$ed !y
the payment of all Dovernment o!li"ations in depreciated silver%"
0 perusal of this part of his message exhibits his animus
sil!er. 6e further says: -
"3t this sta"e, "old and silver must part company, and the
Dovernment must fail in its esta!lished policy to maintain the t$o
metals on a parity $ith each other%
"Diven over to the e<clusive use of a currency "reatly depreciated
accordin" to the standard of the commercial $orld, $e could no
lon"er claim a place amon" nations of the first class, nor could our
0nimus is a latin wor" for the soul in a man+ in a more general sense it coul" also
mean courage# bra!ery# will or spirit.
Dovernment claim a performance of its o!li"ation, so far as such an
o!li"ation has !een imposed upon it, to provide for the use of the
people the !est and safest money%"
Iith a remarkable "isregar" of existing facts# he speaks of a
"epreciate" currency. 6e a""s: -
"'he *no$led"e in !usiness circles amon" our o$n people that our
Dovernment cannot ma*e its Sat e;uivalent to intrinsic value, nor
*eep inferior money on a parity $ith superior money !y its o$n
independent efforts, has resulted in such a lac* of confidence at
home, in the sta!ility of currency values that capital refuses its aid
to ne$ enterprises, $hile millions are actually $ithdra$n from the
channels of trade and commerce to !ecome idle and unproductive in
the hands of timid o$ners%
"=orei"n investors, e;ually alert, not only decline to purchase
3merican securities, !ut ma*e haste to sacrifice those $hich they
already have%"
4he last sentence of the abo!e extract affor"s a key to the reason
why# in the opinion of the Presi"ent# the 3herman law shoul" be
repeale"# that is# with reference to the war wage" by him against
0t the !ery time that the Presi"ent was penning this message# in
which he asserte" that the stock of sil!er coin an" bullion in the
4reasury ha" increase" more than T1CB#(((#(((# sil!er
certificates were sol" at a premium of two per cent# by the money
brokers of 9ew Gork ;ity. :n the Hth of 0ugust# two "ays before
;ongress met# a great banking firm of 9ew Gork ;ity ha" the
following a"!ertisement inserte" in the 9ew Gork 4imes an" in
the 6eral": -
"W3N'EA4S1@UEI AG@@3IS 4 We desire to purchase at a
premium of N per cent%, or 6:%78 per thousand, standard
silver dollars in sums of 6&,888 or more, in return for our
certified chec*s paya!le throu"h the clearin" house%
Ximmerman K =orsha$, +an*ers, && Wall Street%"
4he ob>ect of storing up T1CB#(((#((( of sil!er coin an" bullion
in the 4reasury# at a time when it was at a premium# an" then
pointing at this accumulation of money an" bullion# as a reason
for re5uesting hostile legislation against it# is a "amning blot
upon the a"ministration.. t exhibits the length to which Presi"ent
;le!elan" went# in his efforts to make sil!er the scapegoat for the
traitorous acts of the national banking money power# in assailing
the cre"it of the =o!ernment# an" in precipitating the panic.
Iith reference to that part of his message# where Presi"ent
;le!elan" sought to con!ey a wrong impression to the people
with reference to the 5uantity of sil!er on han" in the 4reasury#
an" in which he asserts that bon"s must be constantly issue" to
replenish the gol" reser!e# an" that there was "anger of the
=o!ernment going on a sil!er basis# we refer to the following
resolution by the 3enate 0ugust 1J# 1DEA: -
"Iesolved, 'hat the Secretary of the 'reasury !e, and he is here!y,
directed to report to the Senate $hat amount, if any, of the treasury
notes issued under the act of Ju&y &J, &C?8, commonly called the
Sherman 3ct, have !een durin" the present month redeemed !y the
Dovernment, at the re;uest of the holders thereof, in silver dollars,
and $hether the holders of such notes $ere advised, at the time of
such redemption, that they could have "old instead of silver if they
so desired%
"'he Secretary of the 'reasury is also directed to inform the Senate
$hether "old coin has !een recently presented to the 'reasury
Aepartment, or any su!4treasury, and silver dollars as*ed in
e<chan"e therefore9 and, if so, if such e<chan"es have !een made,
and $hether the department $ould or could e<chan"e silver dollars
for "old coin if re;uested to do so !y holders of "old%"
:n the 1Bth of the same month# the 3ecretary# after reciting this
resolution# replie" as follows: -
"1n response thereto, 1 have the honor to say that durin" the present
month, treasury notes issued under the act of July &J, &C?8,amount4
in" to 6:&J,B0B have !een redeemed !y the Dovernment in silver
While 1 do not pretend to have *no$led"e of the de"ree of
information possessed !y the holders of the notes so redeemed, 1 am
of the opinion that they $ere fully advised at the time of such
redemption that they could have "old instead of silver, if they so
1 !ase this opinion upon the "eneral pu!licity $hich has !een "iven
to the terms of the 3ct, no less than upon the instructions of this
department to the 'reasurer and 3ssistant 'reasurers of the nited
States, $hich have !een to the effect that such notes $ere
redeema!le in silver dollars at the option of the holders%
1 am also supported in my !elief !y the fact that in the circular of
this department, issued to the pu!lic for their "uidance in their
dealin"s $ith the 'reasury, and containin" the re"ulations $hich
"overn the issue, redemption, and e<chan"e of the paper currency
and the "old, silver, and minor coins of the nited States, there is a
para"raph $hich reads as follo$s: 4
"J% HDold coin is issued in redemption of nited States notes, in
sums not less than 678, !y the 3ssistant 'reasurers in Ne$ )or* and
San =rancisco, and in redemption of treasury notes of &C?8, in li*e
sums, !y the 'reasurer and all the 3ssistant 'reasurers%H
"1n further response to the resolution, 1 have to say that recently
"old coin has !een presented at an office of this department, and
silver dollar as*ed in e<chan"e therefore, and that the e<chan"e
$as not made for the reason that all the silver dollars in the
'reasury at the time $ere re;uired under the provisions of the la$s
relatin" to the currency to !e held in the treasury to cover
outstandin" silver certificates and treasury notes issued under the
act of July &J &C?8%
3t present the department $ould not and could not e<chan"e silver
dollars for "old coin if re;uested to do so !y holders of "old, for the
same reason9 !ut if the condition of the funds of the 'reasury $ere
each as to afford a mar"in of silver dollars in e<cess of silver
certificates and treasury notes outstandin", such e<chan"es $ould
!e made%
Iespectfully yours,
J% D% Carlisle, Secretary%"
4hus# while Presi"ent ;le!elan" was hol"ing up the 4reasury
accumulation of sil!er as a scarce to frighten ;ongress an" the
people# the 3ecretary of the 4reasury# nine "ays after Presi"ent
;le!elan" transmitte" his message to ;ongress# officially states
that gol" coin was recently offere" for these "espise" "784cent
dollars," an" the exchange coul" not be ma"e because the
4reasury "i" not contain any of this money a!ailable to supply
the "eman"s.
4he 3ecretary also says that at that time# the "epartment woul"
not# an" coul" not# exchange sil!er "ollars for gol" coin because
it "i" not ha!e them.
n the face of this statement of the 3ecretary# where is that awful
a!alanche of sil!er which so frightene" the Presi"ent# that he
con!ene" ;ongress in special session to sa!e the country from
being o!erwhelme" in "isaster by itL
6ere were hol"ers of gol" coin actually offering gol" coin# that
superior money# for sil!er. :ne curious feature of this con"ition
was# that# while the 3ecretary was paying out gol" to the 9ew
Gork bankers for export# the a!erage 0merican citizen was
offering to take sil!er in exchange for gol".
:n the 1(th of 0ugust# Mr. Iilson# of Iest Firginia# intro"uce"
6ouse bill 9o. 1# pro!i"ing for the repeal of the purchasing
clause of the 3herman law. :n the same "ay# a resolution was
a"opte" limiting the "ebate on that measure to fourteen "ays.
,pon the appearance of this repeal bill in the 6ouse# the
;hambers of ;ommerce# <oar"s of 4ra"e# an" !arious other
commercial bo"ies floo"e" ;ongress with petitions praying for
the repeal of that law.
4he newspapers of the $ast kept up a terrific "in
;ongress to prompt action.
Meanwhile# a great "ebate was going on in the 6ouse. :n the
18th of 0ugust# Mr. 6en"rix# a national banker# representing a
<rooklyn "istrict# "eli!ere" a speech in the 6ouse urging the
repeal of the purchasing clause. 6e sai": -
"Iepeal the Sherman silver la$, "entlemen9 adjourn and "o home9
and let the country ta*e care of the rest%"
7urther on# he pre"icte" that a repeal of this law woul" compel
$nglan" to make proposals for a monetary conference#
whereupon the following collo5uy
took place between Mr.
6en"rix an" Mr. <lan":-
r. $endri/:
"@et us try the e<periment just once and see $hether $e cannot
!rin" this proud old lady do$n from her perch% 1 predict to you that
inside of three months 4 !efore this Con"ress meets a"ain 4 if you
repeal this Sherman la$ and adjourn, En"land $ill ma*e proposals
to this country to come into a monetary conference and see $hat
can !e done for the sa*e of her $ard, 1ndia% 'he propositions
already said to have come throu"h financial ma"nates% 'heir names
are not "iven, and therefore 1 distrust the information, !ecause
$hen men are mentioned 1 li*e to *no$ $here 1 can find them%"
r. Bland#
"Will the "entleman allo$ me a ;uestion ri"ht there>"
r. $endri/#
")es, sir%"
r. Bland#
"1 understood the "entleman to say a moment a"o that $e $ere
evolutin" to$ard a "old standard%"
"in - 0 collo5uialism in certain parts for a lou" persistent noise or racket. 6ere it
probably means a persistent campaign in their newspapers.
;ollu5uy - /ate mi""le $nglish originating from /atin -collo5uium# to mean a
"iscussion - especially religious# or to mean ha!e a formal con!ersation
r. $endri/#
")es, sir%"
r. Bland#
"3nd no$ you claim that En"land is evolutin" to$ard silver%
"[ @au"hter%]
3uch was the absur" inconsistency in which this national bank
member of ;ongress in!ol!e" himself. :n the same "ay# M. D.
6arter# of :hio# also a national banker# with a !iew to show that
there was an abun"ance of money in circulation# ma"e the
following statement: -
"Dentlemen tal* a "ood deal a!out our circulation per capita% 1
have very little faith in this per capita claptrap% @et us tal* a little
a!out our per capita circulation% 'hey tell us that $e have "ot 6.J
of circulation per capita, !ut under our !an*in" methods $hat have
$e "ot>
"=irst, the national !an*s have 6.: per capita, as represented !y
deposits9 the savin"s !an*s hold 6.: per capita9 for the trust
companies and the private !an*s 6&C is a very small estimate% 3dd
these fi"ures to"ether and you $ill find $hat amount of circulation
your !an*in" methods "ive you%
"'hey "ive you 6:. per capita% 1n other $ords, throu"h this
machinery of !an*in" $e have increased the currency of the country
three times over% +ut that is not all% @oo* at the clearin" house
returns% 'hey sho$ that for the year endin" $ith the 08th of June
last, $e had e<chan"es amountin" to 6&,888 per capita throu"hout
this country%"
n less than fi!e minutes after this "eli!erance# he utterly
o!erthrew his former assertions by the following: -
")our !oasted millionaires, your o$ners of !an*s, your men $ho
employ thousands of operatives in their manufactories, are !e""in"
at the doors of the !an*s for accommodations as small as 6&88 and
6.88% 3nd here at the capital of this "reat nation, $ith everythin",
accordin" to the theory of the silver men, to ma*e prosperity, if you
"o $ith a Ne$ )or* draft to a !an*, a "ood !an* 4 for there are
none !ut "ood !an*s in Washin"ton and not very many of any other
*ind in the nited States 4 if you "o to any of these !an*s $ith a
draft on Ne$ )or* for 6J8, 678, or 6&88, you can scarcely "et it
0 perusal of the ;ongressional 1ecor"# containing this "ebate#
will bear out the statement that e!ery gol" stan"ar" a"!ocate who
urge" the repeal of the 3herman law# pro"uce" arguments in
fa!or of repeal that ate each other up as fast as they issue" from
his mouth. 6on. <urke ;ockran# that arrogant an" much-!aunte"
orator# in the course of one of his usual frothy speeches# ma"e the
following statement# 0ugust 8Jth: -
"/r% Spea*er, 1 venture the assertion that $e are not sufferin" to4
day from a lac* of money, !ut from a redundancy of money9 and 1
thin* that proposition can !e demonstrated to the satisfaction of any
man $ho sits in this 5all%
"3ccordin" to the statement of the Secretary of the 'reasury the
circulation today e<ceeds !y some seventy millions the amount in
circulation last year, !ut last year the volume of !usiness $as vastly
"reater than it is today% 1f a smaller amount of money !e a!le to
circulate a "reater ;uantity of commodities, $ill any!ody pretend
that the ;uantity of money $e have no$ is not sufficient for all the
purposes of commerce>"
7ourteen "ays prece"ing this statement of Mr. ;ockran# he ha" a
check for T1(( payable on a 9ew Gork bank# an" he coul" not get
it cashe" in Iashington# because at that time the banks of the
former city refuse" to pay the checks of their "epositors.
1epresentati!e <owers# of ;alifornia# gi!es the following !ersion
of this fact# he sai": -
"3 curious circumstance happened to me yesterday% Gne of my
constituents of California came to me $ith a 678 chec* on a Ne$
)or* national !an*, dra$n in Ihode 1sland, a fe$ hours from here,
and could not "et it cashed at the !an*s in Washin"ton% 'o4day, my
friend, Colonel Coc*ran, many of you *no$ him, came to me $ith a
chec* for a hundred dollars, dra$n on a Ne$ )or* !an* and he
could not "et it cashed in Washin"ton% 1 sent it off for collection%"
4his statement of Mr. <owers was ma"e in the presence of Mr.
;ockran# 0ugust 18# 1DEA# an" yet# in !iew of this fact# the latter
subse5uently asserte" that the country was suffering from a
re"un"ancy of moneyS 4he men"acity of those members who
spoke for repeal was shameless in the extreme.
Mr. Patterson# of 4ennessee# strongly "enounce" sil!er in a
speech ma"e by him 0ugust 1Cth. 6e "eclare" that the cause of
the panic originate" from the fear of the people against the use of
"epreciate" "ollars. 0t this i"entical perio"# the 9ew Gork banks
were offering a premium for the stan"ar" sil!er "ollar.
4he following "ebate took place between him an" Mr. Iilliams: -
r. .illiam"% o& i""i""ippi:
"1f it !e true that the masses $ho are scared !y the causes $hich the
"entleman states, !ut $hich they do not understand, and that the
capitalist, $ho does understand this ;uestion, is scared for a
different reason, $hy is it that the capitalists are to4day payin" a
premium for the silver dollar in Ne$ )or* City>"
r. Patter"on#
"Well, that, /r% Spea*er, is a !usiness matter $hich 1 have not
r. B+n(m#
"'hey are payin" a premium for paper money, too%"
r. Patter"on#
")es, they are payin" a premium, 1 understand, for other small
currency% 1 cannot "ive the reason for that, unless it !e to secure
currency to pay $a"e4earners% 'he ;uestion is outside my line of
thou"ht and of my ar"ument%"
:n the same "ay# Mr. 6arter sai" that the sil!er "ollar was worth
only fifty-eight cents. 4he following collo5uy took place between
him an" Mr. ;ox# of 4ennessee: -
r. Co/#
"Will the "entleman from Ghio yield for an interruption>
r. $arter#
"1 yield $ith pleasure to my friend from 'ennessee%
r. Co/#
"1 have listened $ith a "reat deal of pleasure to the "entlemanHs
ar"ument% 5e has that the silver dollar is $orth to4day fifty4four
r. $arter#
"=ifty4ei"ht cents%"
r. Co/#
"Well, fifty4ei"ht cents% No$, the ;uestion is, do you *no$ of any
man in the nited States $ho has silver dollars that he $ill sell at
that price, fifty4ei"ht cents>"
r. $arter#
"Certainly not, under present conditions% +ut 1 *no$ every man $ho
has a silver dollar4"
r. Co/#
"Gne moment, please% Aoes not the 7C4cent silver dollar !uy just as
much of the products of this country as any other dollar>"
r. $arter#
"'o that 1 ans$er yes% +ut that is not the point% 'hat is the present
condition under limited coina"e, !ut you are proposin" to chan"e it%
1n further ans$er to my friend from 'ennessee, $hom 1 re"ard as an
authority on his side of this su!ject, 1 say to him that $hile that is
true to4day, the very mornin" that you have !y your la$ esta!lished
free coina"e in this country, then it ceases to !e true, and that every
dollar in e<istence $hich is no$ held up to its full nominal value !y
our present la$ $ill sin* to fifty4ei"ht cents, the !ullion value, as
soon as your la$ !ecomes operative%"
4his is an example of the reckless statements put forth by these
;uckoo statements. :n 0ugust 81st# Mr. ;ooper# of n"iana#
who# by some mysterious process# ha" su""enly become an
a"!ocate of the gol" stan"ar" national banking system# "eli!ere"
a speech lau"atory of cre"it. 6e sai":-
"Some "entlemen may as*, Why not have more money and less
credit> /y ans$er to that is this, $ith credit you $ould not need the
money and you $ould not $ant it, and $ithout credit it $ould not
circulate, and you could not "et it, ho$ever "reat the volume mi"ht
!e% +esides, the $orld is not movin" in that direction9 'he time has
come $hen Ha "ood name is rather to !e chosen,H even in the
commercial $orld, Hthan "reat riches%H 3 "ood name $ill cause the
transfer of more property to4day than all the camels of Jo!
have carried% 3 "ood name unloc*s the vaults of the usurer, turns
the $heels of industry, and sets the sails of commerce upon the seas%
Cash is the la$ of the sava"e, confidence an inspiration and
instrument of civili2ation%"
0t the time he ma"e those remarks# the great national banks of
9ew Gork ;ity were "iscounting the checks of their "epositors.
4his "istinguishe" )L* statesman# after his failure to return to
;ongress in 1DEC# gla"ly accepte" the postmastership of a small
city# in or"er to obtain some of that cash which he ha" "enounce"
as "the la$ of the sava"e%" :n 0ugust 1Cth# Mr. <oatner# who
oppose" the striking "own of sil!er# se!erely arraigne" the
supporters of the repeal bill. 6e sai": -
"1 char"e, sir, that the advocates of this measure, these thic*4and4
thin "old men of the Aemocratic party and of the Iepu!lican party
$ho have !een endeavorin" ever since 1 have !een in Con"ress to
force this Dovernment to an issue of cheap !onds, are responsi!le
for the e<citement $hich has created the destruction of pu!&ic
confidence, and has caused a run upon the !an*s and the
$ithdra$al of lar"e amounts of money from circulation% 'hey are
the men $ho have so$n the $ind, and $e are no$ reapin" the
$hirl$ind% 'here is nothin" in or a!out the Sherman la$, there is no
deduction that can !e dra$n from that la$, $hich $ould justify
Mob - 7rom the <ook of Mob in the :l" 4estament of the <ible - Mob a go"-fearing
man has a series of calamities that are "esigne" to test his faith. 6e is thus mentione" in
the 9ew 4estament )Mames H:11* as being a man who prese!eres an" is patient an" is
rewar"e" by =o" for his patience.
any!ody in ma*in" the assertion that the nited States Dovernment
is not "ood for every o!li"ation that it has put upon the mar*et%"
4his charge of conspiracy on the part of the gol" stan"ar"
national banking element in the 6ouse was not "enie" by the
supporters of that system. :n the 1st of 0ugust# Mr. ;ox ma"e
the following attack upon Mr. 6en"rix an" the other national
bank members of ;ongress. 6e sai": -
"/r% 5endri<, $ho sits just in front of me, delivered his defense of
his position for this repeal% 1 char"e here in his presence that nearly
one year a"o there $as issued from the +an*ersH 3ssociation at Ne$
)or* a circular to the rural !an*s all over this country, as*in" for a
contri!ution to procure the repeal of the Sherman act%
"Aoes he or any man from Ne$ )or* City deny> 'hat $as !efore the
panic% 'rue, a second circular follo$ed, condemnin" the cler* of
that association for issuin" that circular, and pro!a!ly dischar"ed
him9 !ut have you retracted the purpose announced> 1 $ant a reply
if 1 have done any one injustice%
"Aid you tacitly a"ree or discuss the ;uestion in Ne$ )or* that you
$ould not rediscount notes from the South unless $e $ould vote for
the unconditional repeal of the Sherman act> Aid not one of your
spea*ers in one of your !an*ersH meetin"s openly declare that you
could and $ould control the finances of this Dovernment>
"Aid your papers not !oast that you had in your city t$o hundred
millions of "old hoarded in your vaults>
"1f 1 do any man injustice, 1 pause for correction% 5ere is the
fundamental error% @et this Dovernment rule for the people% @et it
rule its finances for the purpose of trade and commerce, and forever
let it put its everlastin" stamp of indi"nation and condemnation on
le"islation that le"islates one manHs property up and anotherHs
do$n% Dive as a fair and e;ual fi"ht for human happiness%
0t the time this "ebate was going on in the 6ouse# the banks of
9ew Gork were refusing to pay checks "rawn on "eposits+ an"
were issuing ;learing 6ouse certificates in lieu of money.
$xchange on 9ew Gork banks range" at from ten to fifty "ollars
on the thousan".
0fter 5uoting a 9ew Gork bank circular# Mr. 6atch# of Missouri#
ma"e the following criticism on the national banks of that city.
:n 0ugust 8Ar"# he sai": -
"=ifty dollars on a thousand dollars in e<chan"e on Ne$ )or*% Why,
sir, usually in the West Ne$ )or* e<chan"e is at a small premium or
at par% 1 received a fe$ days a"o a letter from the cashier of a !an*
in $hich 1 do my !usiness at 5anni!al, /issouri% 5e informed me
that he could not ta*e Ne$ )or* e<chan"e for anythin" less than 6&
on the hundred dollars or 6&8 on the thousand dollars%
"1 thou"ht that enormous9 !ut here it appears !y this Ne$ )or*
circular that there are other cities in the country that have not as
much confidence in the Ne$ )or* !an*in" system as the !an*ers in
my o$n to$n% 1n some of these other cities they $ill not ta*e
e<chan"e on Ne$ )or* +an*s at less than 678 on the 6&,888%
"What have the !an*s of Ne$ )or* !een doin" to *eep up
confidence% No!ody ever lost confidence in the !an*s of Ne$ )or*
until after they entered into that conspiracy in 3pril last to produce
a panic in this country4 money famine and a panic% +ut they lost
confidence in each other%
"@et me tell my Ne$ )or* friends ri"ht no$ that, in my jud"ement,
the most herculean tas* ever attempted in any le"islative !ody on
the face of DodHs "reen earth since the creation of 3dam do$n to
the present time $ill !e to restore confidence !et$een the Ne$ )or*
!an*ers% 'hey *no$ each other too $ell% [@au"hter%]
"3nd there is such a splendid minority of them that have
em!ellished the pa"es of Ne$ )or* financial history in the last fe$
years !y movin" across the line into Canada, that 1 suppose the ne<t
step $ould !e to esta!lish confidence !et$een the !an*ers of Ne$
)or* on this side and those on the other side of the Canadian
"/r% Spea*er, 1 offered on yesterday evenin" to "ive my
distin"uished friend from Ne$ )or* [/r% =ello$s] part of my time,
and 1 intended if he accepted it to ma*e !ut one condition, !ecause
$e all *no$ him to !e a splendid la$yer9 !ut 1 $anted some le"al
a!ility to !la2e the road alon" that $ay so as to point out in a clear
manner the use of and the character of $hat is called Hclearin"
house certificates%H
"1 as* the "entleman, or any other "entleman from Ne$ )or* $hen
he has the floor, to please tell us $hat a clearin" house certificate
is, and ho$ it can !e used as money $ithout violatin" the la$s of
the nited States> Ao you pay any ta< on it> What is it> 'he
promise to pay of a class of men $ho $ill not ta*e even their o$n
promises to each otherW 3nd tell me another thin"%
"Why is it every national !an* in the City of Ne$ )or* to4day, and
for the past thirty days, has !een doin" !usiness in open and
notorious violation of the la$, a!solutely refusin" to pay its chec*s
$hen presented at the counter> Why is that>"
4his challenge of Mr. 6atch was not accepte" by the able an"
brilliant 7ellows. 4he Missouri congressman truthfully portraye"
the metho"s an" character of the 9ew Gork bankers in their
systematic efforts to influence the legislation of congress. 0
member of that ;ongress bore testimony to the fact# that he ha"
se!enteen thousan" "ollars on "eposit in a bank in 9ew Gork
;ity# an" that he ha" presente" a check for two hun"re" "ollars at
its counter for payment# an" that he was refuse" his own money.
Matthew Marshal# the able financial e"itor of the 9ew Gork 3un#
expose" the conspiracy of the banks in aggra!ating the "istress
then pre!alent. :n 0ugust 81# 1DEA# he sai": -
"'he ;uestion is, ho$ much lon"er our !an*s can, $ithout !rin"in"
on a catastrophe, continue in their course of increasin" the volume
of clearin" house certificates and of denyin" to their depositors
payment in la$ful money of their chec*s% 'hus far depositors have
!een very patient and have "ood4naturedly su!mitted to the
enforced scalin" do$n of their dues9 !ut they cannot !e e<pected to
su!mit to it forever%
"3 !an* that cannot or $ill not pay claims a"ainst it in the re"ular
course of !usiness is, !y the decisions of our State courts, insolvent,
and, if the +an*ruptcy 3ct of &CB: $ere no$ in force, a refusal !y a
!an* for forty days to pay chec*s on demand $ould !e a
commission of !an*ruptcy%"
4he cli5ue of national bank congressmen "i" not e!en attempt to
repel these bitter accusations. 4hey knew they were true in e!ery
During the panic now raging# a stock gambler of Iall 3treet
rushe" into the 3tock exchange# an" excite"ly announce" that one
of the greatest banks in the city ha" faile". 0 tremen"ous fall of
stocks imme"iately took place# an" this kna!e bought in !ast
5uantities of the securities in>uriously affecte" by this false
rumor. t is sai" that this scheme nette" this stock gambler the
sum of T1(#(((#(((. :n 0ugust 1D# 6on. M. ;. 3ibley referre" to
the false reports sprea" abroa" by these lawless speculators# an"
he instance" this recent case. 6e sai": -
"3nother reason for your panic has !een char"ea!le directly to the
action of your Wall street "am!lers, $ho have circulated rumors !y
the $holesale% 'hey permitted one of these "am!lers to "o into
their cham!er a fe$ $ee*s a"o and announce that one of the
"reatest !an*s in Ne$ )or* had failed% 3nd ho$ did that !ody
punish him for puttin" in circulation this false report>
"'hey suspended him for a year9 and it is said his profits throu"h
!ear operations since this panic commenced have netted him in
clear cash over 6&8,888,888% 1 thin* he can afford to stand the
suspension% "
0cts like that "escribe" by ;ongressman 3ibley ne!er faile" to
win the a"miration of the stock gambling element. Men who
were able to engineer a consummate piece of !illainy like the
abo!e to a successful termination# were haile" as heroes by the
smaller fry of Iall 3treet. 4he press of the city glowingly
referre" to such achie!ements as "master stro*es of financial
Mr. 3ibley spoke of the great "ecline in the farmlan"s since 1DBA.
6e sai": -
"We can only jud"e of the future !y the past and the present%
Everythin" has declined since you demoneti2ed silver, since you
commenced hostile le"islation a"ainst it% (ennsylvania farmlands
to4day are not $orth forty cents upon the dollar of $hat they $ere in
&C:0% 1s not that correct>
r. $i'!"# "1 am sorry to say it is the fact%"
4he gentleman upon whom Mr. 3ibley calle" to !erify his
statement# was a 1epublican member of ;ongress# an" a fanatical
belie!er in the efficacy of a high protecti!e tariff# an" he ma"e
this a"mission long before the Iilson tariff bill became a law.
:n 0ugust 8Hth# 1epresentati!e Doolittle# of Iashington 3tate#
expose" the means practice" by the bankers of the $ast in
strangling the in"ustries of the Pacific coast. 6e sai": -
"'here are many thin"s 1 $ould !e "lad to say upon this su!ject, !ut
my time is limited% 3 "reat deal has !een said durin" this de!ate as
to the cause or causes of the trou!le that is no$ upon us% When 1
came to this city last January to $itness the closin" of the =ifty4
Second Con"ress, 1 left my home on the shores of (u"et Sound
$hen, so far as confidence $as concerned, everythin" $as as placid
as a /ay mornin"% 'here $as not a man $ho had not the utmost
confidence in the !an*s throu"hout that entire country% 1 *no$ that
durin" the latter days of that Con"ress an effort $as made here to
repeal this purchasin" clause of the so4called Sherman la$, and
also to o!tain an issue of "old4!earin" !onds from the Dovernment%
"1 *no$ that those attempts failed% pon reachin" my home early in
3pril, 1 found that circulars $ere !ein" received !y every !an*in"
man and !y people en"a"ed in every !usiness on the (acific coast,
from Ne$ )or* and other money centers of the country% 1 *no$ that
these circulars $ere full of statements fore!odin" financial disaster
and ruin%
"'hey contained notice that credits should !e shortened and that
Puget 3oun" - nlet on the coast in the state of Iashington - 9orth Iest ,nite"
money should !e $ithdra$n in many instances $here it had !een
loaned to people in the West9 and all this trou!le $as to result from
the failure of the =ifty4second Con"ress in its last session to repeal
the so4called Sherman 3ct%
"'hese people, interested selfishly in the repeal of the Sherman la$
and in their attempt to cause the issuance of "old4!earin" !onds,
$ere endeavorin" to stampede !usiness men all over the Western
country into a support of their position%
"No$, /r% Spea*er, it is much easier for people to tear do$n credit
and confidence than it is to esta!lish that credit and confidence% 'he
result of sendin" out these circulars over the West $as that the
confidence of people re"ardin" financial conditions !e"an to $ane9
they !e"an to lose confidence in the !an*in" and other financial
institutions of their States and to$ns% 'his $as the immediate cause,
1 *no$, "enerally over the (acific coast of the failures that
n the light of this accumulate" e!i"ence# who will "eny that the
mur"erous panic of 1DEA was planne" by the national banking
money power to force a repeal of the purchasing clausesL
4he whole tenor of the arguments a"!ance" by those who urge"
the repeal of the purchasing clause of the 3herman law was to
restore "confidence," to pre!ent the exportation of gol" to foreign
countries# an" to maintain the cre"it of the ,nite" 3tates. <ut the
following "eclaration ma"e by Mr. 6en"rix# Presi"ent of the 7irst
9ational <ank of 9ew Gork ;ity# otherwise known as "=ort
Sherman," clearly shows what influence was brought to bear upon
;ongress to procure this legislation.
:n 0ugust 8Dth# he sai": -
"'here are petitions from nearly thirteen thousand !an*ers in the
hands of different mem!ers here $hich re"ister the sentiment
a"ainst the foolishness of our silver4supportin" policy% 'he $ave of
popular opinion has reached this 5ouse% 1t !eto*ens a revolution in
the 3merican mind%
We are not to fool any lon"er $ith a depreciated and a rejected
money metal, and try to !ear alone a !urden $hich civili2ed nations
should share in common% 'he silver pro!lem $ill, after our action
remain in the $orld, and on the $orld, !ut not on this country
alone% We can ta*e care of the forty cents of credit in our silver
dollar% We can *eep all of our lar"e stoc* in free circulation on a
parity $ith "old, and the !an*s $ill ta*e care to *eep in such
position as to meet the demands for forei"n e<chan"es%"
4he "ebate upon the repeal bill came to an en" 0ugust 8Dth# an"
a !ote was taken on the measure# an" it was a"opte" by 8AE yeas
to 1(D nays. 0n analysis of this !ote will pro!e that the $astern
Democrats an" 1epublicans cast an almost soli" !ote for the bill.
t is also e!i"ent that Presi"ent ;le!elan" "$or*ed in Con"ress" by
means of the enormous influence of his patronage# for an
inspection of the !ote bears testimony to the fact# that scores of
members of the 6ouse !ote" to repeal the purchasing clause who
ha" been lifelong a"!ocates of the free coinage of sil!er. 4he
uncon"itional repeal of that clause "i" not lea!e a single law
upon the statute-books of the nation that woul" pro!i"e for the
coinage of a single a""itional "ollar of sil!er.
4he national banking money power once more gaine" its point by
wholly eliminating the further use of sil!er as money.
mme"iately upon the repeal of the purchasing clause by the
6ouse# the 9ew Gork bankers cable" the news to /on"on. 4he
action of the 6ouse ga!e great satisfaction to the money-len"ing
classes of $nglan"# as the following extracts from the /on"on
press abun"antly pro!e.
n speaking of the effect of the action of the 6ouse upon the price
of sil!er# the /on"on 4imes# on 0ugust 8Eth# sai": -
"1t is the e<pirin" effort of the silver party% Silver, deprived of the
support of the Sherman 3ct, $ill sin* to a level too lo$ to suit the
!i4metallist notions of a proper ratio or to facilitate the
esta!lishment of a dou!le standard%"
:n the same "ay the Pall Mall =azette e"itorially sai": -
"When confidence 4 and credit are restored !y the repeal of the
pernicious Sherman 3ct, the tas* of fiscal reform ,sin"le "old
standard- in the nited States $ill !ecome easier%"
4he Daily 9ews of the same "ate thus expresse" its !iews: -
"'he Aaily Ne$s to4day e<presses the opinion that the repeal of the
Sherman 3ct $ill prove a serious !lo$ to !i4metallists throu"hout
the $orld, !ut a "reat victory for common sense and the sin"le
t appears# therefore# that the sole ob>ect of repealing the
purchasing clause of the 3herman law was for the express
purpose of "epri!ing sil!er of its only support# thus lowering its
!alue# an" thereby furnishing reasons against its use as money.
s it not singular# that e!ery effort ma"e by the associate" banks
of the ,nite" 3tates against sil!er# met the hearty appro!al of the
influential press of =reat <ritainL
;60P4$1 K.
3$904$ F:4$3 7:1 1$P$0/.
"1 !elieve in the people, in universal suffra"e as fitted to secure the
!est results that human nature leaves possi!le 1f corruption seems
rollin" over us li*e a flood, it is not the corruption of the hum!ler
classes 4 it is millionaires, $ho steal !an*s, mills and rail$ays9 it is
defaulters, $ho live in palaces and ma*e a$ay $ith millions9 it is
money *in"s, $ho !uy up Con"ress9 it is the dema"o"ues and
editors in purple and fine linen $ho !id 678,888 for the presidency
- Ien"ell Phillips.
Ihile this great "ebate was taking place in the 6ouse# the turmoil
in the business in"ustries throughout the ,nite" 3tates was
beyon" the powers of "escription. 6un"re"s of great failures
were occurring# inclu"ing banks as well as other lines of
4he colossal cre"it system# which ha" been built up by the
national banking money power# fell with a crash that shook the
business interests of the nation from one en" to the other.
4he >uggernaut which the 9ew Gork bankers ha" sent forth to
trample "own the business of the country in or"er to influence
;ongress# ha" got beyon" the control of those lawless financiers
who ha" assaile" the cre"it of the nation# an" who ha" "estroye"
the property rights of tens of thousan"s.
4he concerte" cry of "$ant of confidence" in the ability of the
=o!ernment to re"eem its obligations# returne"# with ten-fol"
force# to assail the !ery national banks which ha" originate" that
false an" "elusi!e rumor.
4housan"s of "epositors imme"iately with"rew their money from
the banks# aggra!ating the "istress then pre!alent.
4hat the rumors set afloat by the banks# attacking the cre"it of the
=o!ernment# "i" not impair the confi"ence of the "epositors in its
financial ability is "emonstrate" to a certainty. =reenbacks#
treasury notes# sil!er# an" sil!er certificates# were taken with
a!i"ity by the with"rawing "epositors an" hoar"e". =ol" was not
n a short time# the 9ew Gork banks were unable to pay their
"epositors# an" they# in common with the banks of <oston an"
Phila"elphia# issue" clearing house certificates to the amount of
TJA#(((#(((# which were use" to pay their "epositors in lieu of
4his act of the associate" banks of the $ast# in issuing these
certificates# was a clear !iolation of the law which assesse" a tax
of ten per cent.# upon 3tate bank notes# an" all other paper
"esigne" to circulate as money except national bank notes.
4he !ery banking power# which ha" "eman"e" an" secure" the
passage of that law# was the first who !iolate" its pro!isions.
<esi"es these lawless acts# the 9ew Gork banks refuse" to cash
the checks of their "epositors# an" charge" a premium of three
per cent. for paying out the money which they owe" to the public.
n the meantime# the money brokers of 9ew Gork were charging
enormous rates of interest# an" were selling money at a premium
ranging from three to se!en per cent.
4he Iashington Post is authority for the statement that one firm
of money brokers in 9ew Gork ;ity ma"e a profit of TJ((#((( by
selling currency at a premium.
0 financial writer of 9ew Gork ;ity state" that 1ussell 3age
ma"e a "aily profit of twenty thousan" "ollars by loaning money
at an enormous rate of interest "uring the panic.
0s proof of the foregoing facts# a 9ew Gork banking house issue"
the following circular letter 0ugust 1Dth: -
"'he Ne$ )or* City !an*ers have 60:,0C8,888 certificates
outstandin"% +oston has 6&&,&88,888% Gther !an*ers in the South
and West perhaps have enou"h money out to ma*e fifty millions of
!an* certificates%
"3ddin" these various amounts to"ether, $e find a possi!le increase
of a!out one hundred millions since July &, to replace the un*no$n
amount of currency and "old dra$n out of the !an*s and hoarded in
vaults and other places since /ay last%
"Where it resem!led the one talent more than the ten talents%"
"Currency commands three per cent% premium, and has sold as hi"h
as five per cent% E<chan"e on this city from many Western cities has
recently ran"ed from five to fifty dollars per 6&,888% /any Western
people claim the de"ree of credit desired !y Eastern !an*ers is
sho$n !y their $illin"ness to pay depositors%
"Eastern !an*s appear to have no sympathy for Western methods in
not issuin" !an* certificates% /any individuals have sold their
chec*s on the street for funds to meet maturin" o!li"ations or ma*e
needed purchases% Credit seems to have !een strained from here to
the (acific coast, and attac*ed on all sides and !enefitin" !ut fe$%"
4he Mercantile 9ational <ank of 9ew Gork ;ity was the only
bank that "i" not exact unlawful rates of interest.
Mr. 3t. Mohn was at the hea" of this institution# an" he woul" not
permit this bank to practice the extortion in !ogue at the other
Ihen before the 6ouse ;ommittee on ;urrency# in December#
1DEC# he testifie" as follows:-
r. $a(gen:
"What rate of interest did you char"e durin" the panic a year a"o>
r. St. -ohn:
"4he /ercantile National +an* of Ne$ )or* never e<acts more than
7 per cent% from its dealers, under the present administration of
thirteen years% 'here $as one instance durin" that panic of &C?0 in
$hich $e did e<act C per cent, 1 thin*% We had !een !adly a!used,
and mi"ht have e<acted .8 per cent."
r. $a(gen:
"What $as the current rate a!out>"
r. St. -ohn:
"'here $as no current rate% @enders "ot anythin" they chose to
r. $a(gen:
"1t $as much hi"her than it is no$>
r. St. -ohn:
")es9 !ro*ers paid on prime security three4fourths per cent per day
and 7 per cent per annum9 .:B per cent% per annum for some days%"
r. -ohn"on# o& Indiana:
"Can you "ive us, in a succinct form, your e<planation as to ho$
there can !e a remedy for the hi"h price of money in the
a"ricultural districts in crop4movin" times>"
r. St. -ohn:
"1f there $ere a lar"er a""re"ate of money in the nited States it
could circulate over our vast territory $ithout occasionin" alarm% 1f
1 *ne$ that the $orld !elieved that @ouisville is a!solutely
prosperous, 1 $ould li*e to lend much of my money in @ouisville% 1
$ould do so $ith the same certainty that 1 have mentioned as
pertainin" to Ne$ )or*% 1 merely tale @ouisville as the illustration,
!ecause you mention it%"
4he statements of Presi"ent 3t. Mohn shows the extent of the
panic in 9ew Gork ;ity# an" awar"s a !iew of the 3hylock tactics
practice" by the money lor"s of the $ast.
t has been asserte" by competent authority# that while these
banks were refusing to pay out the fun"s "ue their tore# that this
money was loane" out by them through brokers at the rates of
interest state" by Mr. 3t. Mohn# !iz# 8BJ per centum.
9ot only "i" the banks of 9ew Gork ;ity "isobey the law by
issuing clearing house certificates# but the great ele!ator owners
an" flour manufacturers of Minneapolis bought millions of
bushels of wheat by paying for it in certificates similar to those of
9ew Gork ;ity. 4he clearing house of <irmingham# 0labama.#
issue" certificates for sums as low as fifty cents.
4he excuse ten"ere" by the banks for not paying out money was#
that the "epositors were frightene" by "$ant of confidence," an"
that they# the banks# ha" not the money to pay claims against
t was "uring this time of scarcity of money# that the 6on. <ourke
;ockran "eclare" that the country was suffering from a
re"un"ancy of currencyS
4he unlawful acts of the 9ew Gork banks became so notorious
that# on the 88n" of 0ugust# 1DEA# the following resolutions of
in5uiry were offere" in the 3enate by Mr. Peffer
"Iesolved, 'hat the Secretary of the 'reasury !e directed to inform
the Senate 4
"=irst, Whether, and in $hat respect, the national !an*s, or any of
them, in the cities of +oston, Ne$ )or*, and (hiladelphia are !ein"
no$ conducted in violation of la$%
"Second, Whether said !an*s are payin" depositorsH chec*s
promptly in la$ful money%"
Mr. Peffer# from the ;ommittee on ;laims.
'hird, Whether said !an*s, or any of them, are demandin" rates of
interest hi"her than those provided !y la$ for the loan of money or
in discountin" notes and !ills%"
mme"iately upon the appearance of this resolution# 3enator
McPherson# the national bank sugar trust speculator# mo!e" its
reference to the 7inance ;ommittee. 4his was "one for the
purpose of smothering the resolution.
3enator =orman apologize" for the "elin5uent banks an" asserte"
that# if the ;omptroller strictly enforce" the law# many of these
banks woul" be compelle" to close their "oors. 6e argue" that
the banks were the best Mu"ges of what shoul" be "one in the
n reply to the remarks of 3enators McPherson an" =orman#
3enator 6ill sai": -
"1 am as an<ious, sir, as the Senator from /aryland can possi!ly !e
to relieve the financial distress of this country% 1 $ill "o $ith him as
far as he $ill "o in the effort to *eep out partisanship in the
disposition of the financial ;uestion% =rom the hour $e first met in
this !ody my efforts have !een to$ard !rin"in" a!out a proper
solution of the ;uestion, and my efforts have !een just as 2ealous,
just as earnest, as have !een the efforts of the Senator from
/y position upon this "reat financial ;uestion has not !een
misunderstood% 1 spo*e upon this su!ject last =e!ruary $hen 1
thou"ht 1 sa$ the dan"er comin" to the country% 1 did not hear the
elo;uent voices of some other "entlemen aidin" me in that contest%
"What is the precise ;uestion> Dentlemen do not understand one
another upon the other side of it% 1 thou"ht 1 heard an intimation
that there had !een somethin" $ron" some$here% 1 jud"ed that
much from the su""estion of the Senator from /assachusetts%
5e disavo$ed any intention of sayin" that there had !een any
$ron" any$here% 'hen the Senator from /aryland steps for$ard
and says, H)es9 there has !een a violation of the la$, a conceded
violation of the la$ on the part of national !an*s, $rin*led at !y
'hat is the idea $e "et from his remar*s% 1 do not *no$ $hether that
is true or not% 1 thin*, $hether it is true or not, it ou"ht to !e
"What do you $ant to refer to this committee> 1s it a committee of
investi"ation to investi"ate the acts of the Comptroller of the
Currency> 4 No% =or $hat purpose is the resolution to !e referred>
"3s 1 understand the Senator from /aryland, the only o!ject of a
reference to the committee is for the purpose of not actin" upon it,
for the purpose of suppressin" it in the interest of the pu!lic $elfare%
'hat seems to !e the idea% 'here has never !een a cause so !ad in
the history of the country that its advocates have not al$ays felt that
they acted in the interest of the pu!lic $elfare%
"'he resolution is a simple one% What is it> 1t simply as*s the
Comptroller of the Currency to "ive us certain information in his
possession as to $hat has !een done in his office, or !y the national
!an*s of the country, so far as he understands $hat has !een done%
'he details of the resolution 1 do not propose to "ive% What is the
o!jection to it> 1s it a proposition to try the Comptroller of the
Currency> 1s it a proposition to arrai"n the national !an*s for a
violation of their duty> 4 No9 it is a simple, ordinary and proper
resolution9 and 1 say courtesy, to the distin"uished Senator from
Vansas, entitles the resolution to !e passed here and no$% What
reason can there !e "iven a"ainst it>
"'he Senator from /aryland says there are "reat times in the
history of the country $hen $e must rise a!ove partisanship% 1
a"ree $ith him% What has that to do $ith this ;uestion> 'here are
"reat times $hen $e must !e e;ual to the occasion% What has that to
do $ith suppressin" an ordinary resolution of in;uiry> 'he
resolution does not provide for the appointment of a committee to
investi"ate any!ody% 'he resolution does not provide for ma*in"
char"es a"ainst any!ody%
"3re you afraid of the facts> 'his very de!ate $ill cause in;uiry
into $hat has !een done% 'his de!ate in the Senate of the nited
States $ill direct attention to the ;uestion, and every person $ill !e
apt to in;uire to4morro$ mornin" $hat has !een done !y national
!an*s, and $hat has !een done !y the Comptroller of the Currency,
that the Senate of the nited States dare not pass a simple, ordinary
resolution of in;uiry>
"What are you afraid of> 3re $e not tryin" to ;uiet the e<istin"
panic> 1s the panic to !e ;uieted !y such proceedin"s as this> 3re
resolutions callin" for information to !e suppressed, put do$n,
shelved, put into a committee and there pi"eonholed> Can $e not
stand the li"ht of day on this su!ject> Cannot the acts of our
officials, $hoever they may !e 4 and 1 myself ma*e no char"es
a"ainst them $hatever 4 stand a simple in;uiry>
"What $ill this committee do> 'he Senator from Ne$ Jersey says
that the committee $ill loo* into the matter, and the fair inference
from his remar*s is that if they find anythin" $ron", they $ill not
report the resolution, !ut if they find everythin" has !een ri"ht, then
they $ill report the resolution% Why can $e not ma*e that in;uiry
no$> 1 appeal to the Senators around this Cham!er that there is no
reasona!le, tena!le o!jection that is presented $hy the resolution
should not !e passed% Why should not the distin"uished Senator
from Vansas !e treated the same as every other mem!er of this
!ody> 5e has the same ri"hts to offer a resolution and have it
"5o$ lon" is it since a resolution of in;uiry has !een referred to a
committee !efore !ein" allo$ed to pass> 1 have not heard it in the
last year and a half that 1 have !een here% 'herefore, 1 say to you, it
is not a ;uestion of patriotism% 1t is not a ;uestion as to $hat should
!e done in this "reat hour of distress% 1t is a simple, ordinary
;uestion of senatorial courtesy9 and 1 have heard no reason yet
presented $hy the resolution of the Senator from Vansas should not
!e passed% 1 do not a"ree $ith him in his peculiar notions of finance
1 do not !elon" to his party% 5e has his o$n vie$s upon these
;uestions, !ut he has a ri"ht to have any proper, le"itimate
information spread upon the records of the Senate, and there can !e
no o!jection to it%"
3enator Iashburn expresse" his fears that the passage of the
resolution woul" close almost e!ery bank in the country# an"
place it in the han"s of a recei!er.
6e sai": -
"1t seems to me if the resolution is passed and $e receive the reply
$hich is inevita!le, that it $ill !e notice to the Comptroller of the
Currency to administer the la$ literally and technically9 the result
of $hich $ill !e to close almost every !an* in the country and place
it in the hands of a receiver%
"'hat is a calamity $hich, it seems to me, $e should loo* for$ard to
$ith "reat hesitation% 1 do not !elieve it is the duty of patriotism, of
party, or of "ood common sense to infect anythin" of that *ind into
the present deplora!le condition%"
4he 3enator who ma"e the abo!e statement was a supporter of
the national banking system# an" the remar5ue abo!e 5uote" will
exhibit the lawless character of those men# who attacke" the
cre"it of the ,nite" 3tates# an" who !iolate" the laws of 3tate an"
nation in almost e!ery transaction in which they were engage".
During the "ebate on the motion to refer to the 7inance
;ommittee# 3enator 4eller sai": -
"'he !an*s have another function, $hich is to transmit money from
one !an* to another% Commerce can scarcely !e carried on unless
that function is in active force% +usiness cannot !e done !et$een
Ne$ Grleans and Chica"o, Ne$ Grleans and Ne$ )or*, and all
around, unless !ills of e<chan"e can !e used% 'hey are the a"encies
of commerce%
"5ave these !an*s fulfilled that function> =or more than si< $ee*s
the !an*s of the city of Ne$ )or*, and other cities $hich 1 mi"ht
mention, have simply declined to pay drafts dra$n on them !y
outside !an*s for the money that those !an*s have on deposit%
"+et$een a city that is entered !y at least si< railroad trains a day,
and can !e reached in t$enty4four hours, and the city of Ne$ )or*,
the rates of e<chan"e have !een 60 on the hundred9 and !et$een
the city of Ne$ )or* and the sty of (hiladelphia there has !een an
a!solute refusal on the part of the !an*s of (hiladelphia to pay
drafts on the sty of Ne$ )or* in any *ind of money%
"1 have in my dra$er here a letter from a Western !an*er, $ho tells
me that throu"h his !an* he had a draft of 6:,888 on a (hiladelphia
!an*, $hich he sent to a !an* in the City of Ne$ )or*, and the !an*
there returned it to him sayin", LWe $ill present no drafts to the
!an*s of (hiladelphia, !ecause they decline to pay%H 'hen, throu"h
other a"encies, this !an*er sent his draft to (hiladelphia for money
admitted to !elon" to the dra$er, and the !an*s of (hiladelphia
simply add: HWe cannot afford to pay this, and $e $ill not pay it%H "
3enator <utler a""e" the following testimony to that a""uce" by
Mr. 4eller.
6e sai": -
"1 $ould state one fact $hich comes $ithin my o$n personal
*no$led"e% 1 met a "entleman on a train last ni"ht, $ho informed
me that, as (resident of a lar"e manufacturin" esta!lishment in the
South, he had deposited in one of the !an*s of the city of Ne$ )or*
a lar"e amount of money, and had tele"raphed and $ritten to that
!an* to send him 67,888 of currency $ith $hich to pay his la!orers
on Saturday ni"ht%
r. Alli"on#
"3 national !an*>"
r. B(tler#
"1 am not prepared to say that it $as a national !an* 4 1 do not
*no$ a!out that 4 !ut it $as one of the !an*s of the city of Ne$
)or*% 5e said that that !an* at first declined to do it, !ut finally sent
him 67,888 in currency and char"ed him &M per cent% for sendin"
him his o$n money% 1 said to this "entleman, H)ou certainly did not
pay it>H
HWhy,H said he, H1 $as o!li"ed to pay it%H H'o pay &U per cent% for
sendin" you your o$n money>H )es, sir%H 'hat is one instance% 3s has
!een stated !y some Senator, 1 !elieve that a chec* on a manHs o$n
deposit has to !e discounted at 0 per cent%
"1 have heard a "reat deal a!out the $ant of confidence in the
country, !rou"ht a!out !y the Sherman 3ct% 'he Sherman 3ct has
a!out as much to do $ith that $ant of confidence as a pe!!le in a
millpond has to do $ith stirrin" the $aters% 1t is, unless $e are all
misinformed, a $ant of honesty 4 and $e may as $ell spea* plainly 4
and the sooner the country finds it out the !etter it $ill !e for
4hese were but a few of the facts brought out by the "ebate on
this resolution with reference to repeate" !iolations of law# an" of
the mean oppressions practice" upon the people by those lawless
national bankers# who ha" boaste" that they woul" teach the
people an "o!ject lesson%"
4he resolution was finally referre" to the 7inance ;ommittee#
which subse5uently reporte" it back in a mo"ifie" form an" it
was passe".
:n 3eptember 1Jth# the Deputy ;omptroller ma"e a report in
reply thereto# in which he state" that the ;omptroller ha" no
official information that the national banks of 9ew Gork# <oston#
an" Phila"elphia were !iolating the law.
t will be notice" that the ;omptroller himself "i" not reply to the
resolution# an" secon"ly# that the resolution "i" not call for
official information.
7urthermore# the sub-treasury in 9ew Gork ;ity was a member of
the ;learing 6ouse 0ssociation# an"# as such# was cognizant of
the metho"s of the national banks composing that bo"y.
During this time# the 3enate was "ebating the 5uestion of
repealing the purchasing clause of the 3herman law.
:n 0ugust 8Hth# 3enator 6ill# of 9ew Gork# strongly arraigne"
those men who brought on the panic. 6e sai": -
"Some portion of the present panic may !e traced to a concerted
effort on the part of numerous mono4metallists to produce it, in
order to further discredit silver as a part of the standard money of
the coin% 'hat fact is apparent every$here $e turn%
"We o!serve it in their senseless ar"uments constantly used a"ainst
free !i4metallic coina"e and their ceaseless endeavors to confuse
the present issue !y characteri2in" it as a contest !et$een mono4
metallism and !i4metallism% 'hey seemed to !e deli"hted $hen the
first ray of financial trou!le appeared% 'hey hailed the recent action
of 1ndia $ith ill4concealed satisfaction% 'hey tal*ed a"ainst silver,
mornin", noon, and ni"ht%
"'hey denounced, not simply the Sherman silver purchase !ill, !ut
the future use of silver as money% With "houlish "lee they $elcomed
every !an* failure, especially in the silver States, little dreamin"
that such failures $ould soon occur at their o$n doors%
"'hey encoura"ed the hoardin" of money, they inau"urated the
policy of refusin" loans to the people even upon the !est of security9
they circulated false petitions, passed a!surd and alarmin"
resolutions, predicted the direst disaster, attac*ed the credit of the
Dovernment, sou"ht to e<act a premium upon currency, and
attempted in every $ay to spread distrust !roadcast throu"hout the
"'he !est financial system in the $orld could not stand such an
or"ani2ed and vicious attac* upon it%
"'hese distur!ers 4 these promoters of the pu!lic peril 4 represent
lar"ely the creditor class, the men $ho desire to appreciate the "old
dollar in order to su!serve their o$n selfish interests, men $ho
revel in hard times, men $ho drive harsh !ar"ains $ith their fello$
men in periods of financial distress, and men $holly unfamiliar $ith
the true principles of monetary science%
"1t is not stran"e that the present panic has !een induced,
intensified, and protracted !y reason of these mali"n influences%
"5avin" contri!uted much to !rin" a!out the present e<i"ency,
these men are no$ utterly una!le to control it%
"'hey have so$n to the $ind, and $e are all no$ reapin" the
$hirl$ind to"ether%"
4he courage of the 9ew Gork 3enator was gran"ly illustrate" in
this speech# in which he points out the unlimite" gree" of those
so-calle" financiers# to whom nothing was sacre" "uring their
traitorous warfare against the nation an" the people.
:ne of the singular inci"ents# occurring "uring the struggle for
repeal# was that in which 3enator 3herman became a conspicuous
a"!iser of Presi"ent ;le!elan" an" 3ecretary ;arlisleS
4he strange anomaly of this lifelong 1epublican becoming a
warm supporter of the financial policy of the a"ministration is
one of the won"ers of 0merican politics.
:n :ctober 1Bth# 3enator 3herman ma"e the following pre"iction
of the astonishing benefits that woul" accrue from a repeal of the
3herman law. 6e sai":
"1n the present condition of affairs there is no money to !uy cotton
and corn and $heat for forei"n consumption% +rea* do$n the
!arrier no$ maintained !y the Senate of the nited States, chec*
this viper called o!struction to the $ill of the majority, "ive the
Senate free po$er and play, and in ten days from this time the s*ies
$ill !ri"hten, !usiness $ill resume its ordinary course, and the
clouds that lo$er upon our house $ill !e in the deep !osom of the
ocean !uried%"
s it not remarkable that this man# who# for many years# has
en>oye" the reputation of being one of the greatest of 0merican
financiers# shoul" influence ;ongress to enact the law of Muly 1C
1DE(# an" then# within a perio" of three years# assert that a repeal
thereof woul" brighten the skies# cause the resumption of
business# an" bury the clou"s in the bosom of the oceanL
,n"er the rules of the 3enate# the measure coul" not be force"
through that bo"y as rapi"ly as the national banking power
n this great "ebate upon the bill to repeal the purchasing cause of
the 3herman law# those 3enators in fa!or of that measure
persistantly urge" as a reason for repeal that a "flood of silver"
threatene" the financial stability of the =o!ernment.
4he absur"ity of that line of argument is apparent# when
reference is ha" to the gol" an" sil!er pro"uction of the ,nite"
7rom 1BE8# up to an" inclusi!e of 1DE8# the !alue of gol"
pro"uce" in this country was T1#EDB#(((#(((# of sil!er only
T1#1CJ#DJE#(((# excess of gol" o!er sil!er# TDC1#(((#(((.
3enator 4eller challenge" the gol" monometallists to point out
where this "flood of silver" was store" up.
4hey feebly referre" to n"iaS
4he 9ew Gork Press in"ulge" in a !icious tira"e upon 3enator
Foorhees# ;hairman of the 7inance ;ommittee# taking him to
task for what it calle" a "ereliction of "uty in not forcing a !ote
upon the bill.
:n 0ugust 8Jth# the 9ew Gork $!ening Post uttere" the
following implie" threats because the 3herman law was not
t sai": -
"We hear a "reat many reports from Washin"ton to the effect that
the Senate is firm a"ainst any repeal of the Silver (urchase la$% We
advise the pu!lic to attach little importance to the state of mind
$hich prevails at the present moment in the Senate or amon" the
senatorsH constituents%
"'he medicine of the silver crisis is still $or*in" and the pan"s
$hich it produces mill !e more acute as the time "oes on% Gne
calamity mill come thunderin" after another until the only possi!le
remedy is applied%
"+an*s $ill fail, railroads $ill default, manufactories $ill close,
$or*in"men $ill lose their situations, there $ill !e a shorta"e of
money for crop4movin", affairs $ill "ro$ steadily $orse, until the
mind cure is effected%
"Senators may roar a"ainst capitalists till the crac* of doom
$ithout openin" the poc*et!oo* of one of them% 1n fact, the louder
they roar, the ti"hter $ill those poc*et!oo*s !e closed% Nor $ill the
time ever a"ain come $hen money can !e o!tained $ith the
customary ease so lon" as that silver la$ stands unrepealed%
"5ence $e repeat that the frame of mind that the Senate may !e in
at the present time is no inde< of $hat it may !e t$o $ee*s hence%
'here is dynamite enou"h in the financial situation to !urst the
Senate and !oth political parties%"
4he Phila"elphia Press of the same "ate sai": -
"'he Ne$ )or* !an*s for several days have !een endeavorin" to
!rin" a home influence on nited States Senators, to induce them to
vote for the repeal of the July silver la$%
"'o this end correspondents of the Ne$ )or* !an*s in the West and
South have !een told that they need not e<pect to "et money from
Ne$ )or* until the purchasin" clause $as repealed, and the
Southern and Western !an*ers have stron"ly ur"ed to $rite to their
senators and insist that they $or* and vote for immediate repeal%
"'his movement has "iven rise to the recent feelin" in Ne$ )or* that
the silver majority in the Senate could !e overcome, as the influence
of the !an*s of the metropolis, $hen concentrated on any o!ject, is
re"arded as invinci!le%
"'here is a feelin" that the strain is not as "reat as it $as, and
improvement is hoped for% Some an<iety e<ists as to the action of
savin"s !an* depositors $hen the thirty and si<ty day limit e<pires
ne<t month%
"'he re;uirements of money for the crops $ill also !e a potent
factor, !ut no one is disposed to contemplate future conditions,
especially if they are li*ely to !e unpleasant%"
4hese papers were organs of the national banks# an" they spoke
the sentiment of that power.
:n 3eptember 88n"# the Daily n"icator# a financial paper of 9ew
Gork ;ity# publishe" the following: -
"'here are ominous rumors in the street that Ne$ )or* $ill a"ain
put the scre$s on the Senate%
"Whether this is street tal* or not remains to !e seen9 !ut the
hardenin" of the rate of sterlin" e<chan"e at the time of lar"e
merchandise e<ports and in the middle of our e<portin" season,
loo*s as if "old e<ports $ould !e made to influence the silver
"'here is no ;uestion !ut that the !an*s of Ne$ )or* are still
$ithholdin" money from merchants, $hile possessin" millions of
idle cash, !ecause of a tacit arran"ement not to unloose it until the
Senate votes for repeal%
"No$, if the "old e<portin" movement !e"an, that $ould !e another
stri*in" occurrence on $hich to impin"e pu!lic thou"ht, and on
$hich popular ar"ument could !e !ased% 'here is one point lac*in"
in any pro"ram of this *ind%
"'he pu!lic have learned that the influence of the silver !ill on
!usiness has !een overestimated%
"'he predictions of those $ho have ur"ed that everythin" depended
on repeal have not !een verified% 1ndeed, much that $as said has
!een disproved !y recent occurrences, and the feelin" that the
influence of the la$ $as $ildly e<a""erated for political effect has
spread at Washin"ton and else$here%
"E<ports of "old at this time mi"ht emphasi2e this feelin" and,
ri"htly or $ron"ly, it $ould !e said that the "old $ent out at the
!ehest of Wall Street% Not an hour $ould !e "ained in the Senate for
the repeal cause !y any such movement%"
4hese are but a few of the many thousan" bol" utterances of the
subsi"ize" press of the national banking money power# an" they
affor" conclusi!e e!i"ence that the panic of 1DEA emanate" from
the concentrate" money power of the $ast.
f the foregoing are not e!i"ence of the power of the 9ew Gork
banks to "estroy the business of the country# then no facts coul"
e!er be pro!en. 3eptember 8Eth# the 9ew Gork 4ribune cautione"
the bankers to refrain from gi!ing publicity to their threats.
t sai":-
"'he 'ri!une trusts that !an*ers of this city $ill permit a su""estion
$hich is for their o$n as $ell as the pu!lic interest% Several of them
are reported as havin" made particularly alarmin" statements
re"ardin" the disasters $hich, they venture to predict, $ill follo$ a
failure of the Senate to the pendin" Silver (urchase repeal !ill%
"Such statements are not li*ely to do any "ood $hatever, !ut are
eminently calculated to do men harm% 1t is not to !e supposed that
these influential !an*ers are deli!erately tryin" to "et up another
panic, $ith all its distressin" conse;uences%
"'hey mi"ht $ell remem!er, ho$ever, that the remar*s they are
reported as havin" made, mi"ht, in a certain contin"ency, prove
e<tremely costly to the !an*s and to the !usiness men of this city%
"1t is not as if there $ere any important end to !e "ained !y such
alarmin" utterances% Gn the contrary, it is hi"hly pro!a!le that the
ur"ency of Ne$ )or* !an*ers may "o far to prejudice the very cause
they desire to aid, particularly $ith some mem!ers of the Senate
from the West and South $hose support of the repeal !ill is
essential% Senators of the nited States ou"ht to !e far a!ove mere
prejudice a"ainst a measure, !ecause any $orthy !ody of citi2ens
advocate it $ith peculiar 2eal%
"'hat some Senators are not is the unfortunate fact%
"'he idea that a measure is passionately desired !y Ne$ )or*
!an*ers, in the jud"ement of those $ho *no$ the Senate !est, is apt
to dama"e that measure more than it $ill help it% 1f !an*ers of this
city $ish to do their utmost to assist the passa"e of the repeal !ill,
they may find it $ise not to tal* vehemently for pu!lication%
"1t is a less important fact that sound !usiness men are not !y any
means a"reed a!out the necessity of action on the silver ;uestion at
this time%"
4he 4ribune procee"s to warn the banks against expecting too
much from the repeal of the 3herman law.
t sai".: -
"'here $as such a"reement some time a"o, !efore the $idespread
disasters $hich it $as hoped to aver had come% +ut it is not so clear
no$ as it $as then supposed to !e that a sin"le act of le"islation
$ould unloc* countless hoards, and !rin" untold millions hither
from En"land, and restore confidence and set all the mills at $or*,
"Whether all these thin"s $ould have resulted at once is not the
;uestion% 'here have !een many thousand failures% /ore than seven
hundred !an*s have failed $ith lia!ilities amountin" to more than
6&:8,888,888% 3 considera!le num!er of the manufacturin" force of
the $hole country stopped operations% 1n many $ays the conditions
have chan"ed%
"Gne of the a!lest !an*ers in this city, havin" char"e of a very
important !an*, recently remar*ed that it $as no lon"er clear to
him that repeal of the silver act $ould accomplish $hat he had
"1ts anticipated effect, he said, $ould have !een lar"ely sentimental,
!ut it $as no lon"er possi!le to restore confidence entirely and
instantly, as he had thou"ht it mi"ht !e restored some months a"o%
"What this !an*er thin*s many other sound !usinessmen are
"1t does not seem to them $ise any lon"er to hold out the idea that
all our fortunes in this "reat country must turn upon an event $hich
is not certain to ta*e place%
"'he repeal !ill is, as $e !elieve, a $ise and hi"hly desira!le
measure% +ut it is hardly $ise or desira!le to sta*e the future of all
!usiness upon the action or inaction of the Senate of the nited
n the meantime# the 9ew Gork bankers were hol"ing meetings#
an" formulating plans to compel the 3enate to act with more
0 9ew Gork special to the Iashington Post# 3eptember 1Bth#
containe" the following remarkable language: -
R9ew Gork#
3eptember 1Bth.
"1n a "roup of !an*ers at the nion Clu! to4day, the sentiment $as
"iven voice that the delay in the passa"e of the repeal !ill had
reached a point that needed e<planation% 3t the /anhattan Clu!,
$here the Aemocratic !an*ers principally "ather, almost the same
idea $as e<pressed, !ut Senator Uoorhees personally $as held
1t $as ar"ued that the Aemocratic caucus had done all it could, !ut
that the 1ndiana Senator had not lived up to the confidence reposed
in him% 'he same assertion is made more !luntly in the open street,
and at the Windsor 5otel9 the !an*in" men $ere tal*in" this
evenin" a!out the difficulty of understandin" $hat Uoorhees $as
tryin" to "ain !y $hat $as considered his too4considerate treatment
of the silver minority%
"(ractically the same opinions are held !y !usiness men $ho have
no !an*in" interests%
"'he feelin" here is that unless in a day or t$o Uoorhees performs
$ithout further delay $hat is considered his duty, of pressin" for a
vote, he must find himself under the necessity of e<plainin" $hat are
his concealed motives%
HCandidly,H said a !an*er of hi"h standin" to the (ost
correspondent,H $e did not e<pect repeal to have !een accomplished
!y this time, !ut the celerity
$ith $hich the 5ouse passed the !ill
"ave us reason to !elieve li*e speed $ould follo$ in the Senate%
"We *no$ the $ays of Senators pretty $ell, and $e can understand
some of the motives that seem to actuate Senator Uoorhees% +ut his
refusal to come to Ne$ )or* and tal* $ith us has su""ested $ron"
motives, and his $ea* stand a"ainst the a""ression of the silver
Senators is more than $e can fathom%
;elerity -meaning spee" or fleetness. :rigin of the wor" is french -cYlYritY
"What does it mean> 1 as* the ;uestion !ecause $e must *no$% We
have a ri"ht to *no$% 1f $e are not "iven satisfactory reasons for the
delay, as $e have not to this hour, $e cannot !e !lamed for
!elievin" that there is somethin" !ehind it all%
"What can !e Senator UoorheesH personal interest in *eepin" !ac*
repeal> 'hatHs $hat $eHd li*e to *no$9 for his political interests are
to our minds not enou"h to e<plain the stran"e delay%H
"'his tal* of other motives than politics !ehind the delay has "ained
currency amon" certain !an*ers, !ut is rejected as un!elieva!le !y
others% "
7rom the language of these bankers# it will be seen that they
regar"e" ;ongress as a mere ser!ant of the money power# an"
that the 3enator# or 1epresentati!e# who woul" not completely
sub>ect himself to their beck an" call was liable to incur their
4he ;learing 6ouse 0ssociation of 9ew Gork ;ity transmitte" a
circular to !arious members of ;ongress# in which was "etaile" a
financial plan concocte" by these financiers.
t propose" that ;ongress enact a law pro!i"ing that# whene!er
the clearing houses of 9ew Gork ;ity# <oston# ;hicago# an" other
great cities# "eci"e that the country is in a state of panic# these
associations coul" "eposit securities with the =o!ernment which
woul" put up money for these great financial rings. 4his is an
example of the arrogant "eman"s of the panic bree"ers# railway
wreckers# trust organizers# stock# an" grain gamblers.
4hat these men presume" that they owne" the fee simple
of the
,nite" 3tates =o!ernment# is e!i"ent from an inter!iew with a
7ee simple - the term "eri!es from 7eu"al $nglan"# when the -ing grante" to a
sub>ect# tenancy of lan" for a ser!ice. 4hese &fiefs& coul" not be sol". 6owe!er o!er
time# this rule was relaxe"# an" the lan" became a &fee simple&
banker# publishe" by a 9ew Gork paper. n substance it is as
follows: -
"1t $as rumored that the (resident and the Secretary of the 'reasury
had a conference $ith reference to removin" the ten per cent ta< on
State !an* notes%
3 reporter re;uested the opinion of /r% Simmons, (resident of a
"reat national !an* of Ne$ )or*, upon the merits of the proposed
Mr. 3immons replie" as follows. 6e sai":-
"Well 1 have not e<amined the proposition very closely, !ut do not
thin* that 1 $ould li*e it% 5o$ever, there need not !e any solicitude,
!ecause the administration $ill not pass any financial le"islation
$ithout consultin" us9 hence there need !e no an<iety on the part of
the pu!lic re"ardin" the su!ject%"
0nother banker# on being inter!iewe" by the reporter# state" that
no financial bill woul" pass which "i" not meet the appro!al of
the bankers. 0fter a long "ebate in the 3enate# the repeal bill was
passe" :ctober A(# 1DEA.
t was sent back to the 6ouse for concurrence# as the 3enate ha"
a""e" a few slight amen"ments to the 6ouse bill. 0fter a short
"ebate the 6ouse concurre" in the 3enate amen"ments# an" the
bill became a law 9o!ember 1st# 1DEA.
4he effects of the panic# which was create" by the national
banking money power to coerce ;ongress into repealing the
purchasing clause of the 3herman law# are beyon" the "escripti!e
powers of language.
4he 9ew Gork Iorl"# of 0ugust# 1DEA# publishe" a list of great
railway companies whose bon"s "ecline" in !alue from ten to
fifty-fi!e percent.
4hese were gol" bon"s. 4he "ecline of prices of agricultural
pro"ucts# since the repeal of the purchasing clause# was greater
than e!er before known.
:n Mune 1st# 1DEA# wheat sol" for DA cents per bushel.
:n :ctober A1st# it brought JE cents# a "ecrease of fourteen
cents. Ie 5uote 9ew Gork prices.
4he total loss on wheat to the farmers for the year 1DEA# was
TB(#(((#(((. ;otton fell two an" one-fourth cents per poun".
:ther agricultural pro"ucts fell at the same ratio.
t is safe to state that the loss on agricultural pro"ucts# resulting
from the repeal of the 3herman law in the ,nite" 3tates an" the
closing "own of the mints of n"ia to the free coinage of sil!er#
amounte" to hun"re"s of millions of "ollars.
0n" yet the passage of that 1epeal 0ct was procure" on the false
pretense that prosperity woul" return to bless the people. t was
further state" that the repeal of the 3herman law was necessary to
pre!ent the exportation of gol" from the ,nite" 3tates.
4his was another hypocritical plea to ai" in the passage of the
repeal# for# in a single year after that act was consummate"# one
hun"re" an" twenty millions of "ollars in gol" were "rawn out of
the 4reasury by that set of kna!es who ha" urge" repeal as a
means to protect the gol" reser!e.
4he number of failures for the year 1DEA loome" up to the
portentous figures of 1H#8C8# with liabilities of TACJ#BBE#DDE.
4he extent of suffering among the working classes cannot be
estimate"# all of which was the "irect result of the conspiracy
organize" by the national banking money power# an" which was
execute" by its minions throughout the length an" brea"th of this
4he 9ew Gork 4ribune estimate" the shrinkage of !alue of all
kin"s of property at ten billions of "ollars "uring this panic#
which it ha" urge" the bankers to inflict upon the people as an
"o!ject4lesson% " :ther competent writers estimate the shrinkage
of !alues# in 1DEA an" 1DEC# at not less than twenty billions.
t was lamentable.
;60P4$1 K.
$77:143 :7 0DM934104:9 4: 7:1;$ ;01/3/$
<// 461:,=6 ;:9=1$33
"When the la$s underta*e to add to these natural and just
advanta"es artificial distinctions9 to "rant titles, "ratuities, and
e<clusive privile"es9 to ma*e the rich richer and the potent more
po$erful, the hum!le mem!ers of society, the farmers, mechanics,
and la!orers, $ho have neither the time nor the means to secure
li*e favors to themselves, have a ri"ht to complain of the injustice of
their Dovernment
.- 0n"rew Mackson.
During the struggle for the repeal of the purchasing clause of the
3herman law# se!eral financial measures were intro"uce" in
0mong these propose" bills was 3enate bill CHA# to permit
national banks to issue circulating notes up to the par !alue of the
bon"s "eposite" for the security of their circulating notes.
4his bill propose" to "onate to these banks an a""itional
T8H#(((#((( of currency.
3enator ;ockrell brought forwar" an amen"ment# by which the
hol"ers of ,nite" 3tates bon"s coul" "eposit them with the
3ecretary of the 4reasury# an" recei!e therefore an amount of
,nite" 3tates legal ten"er notes of the same nature as greenbacks#
e5ual to the par !alue of the bon"s so "eposite".
4his was applying the principle of bon" security for those
propose" notes.
4he national banks imme"iately oppose" this amen"ment# as they
rea"ily percei!e" that this amount of money woul" escape their
4here were many in"i!i"ual hol"ers of these bon"s who woul"
ha!e gla"ly a!aile" themsel!es of the opportunity to obtain these
notes by "eposit of bon"s therefor.
4he banks were powerful enough to "efeat this amen"ment which
woul" ha!e set afloat many millions of legal ten"er currency.
4he national banks an" their allies# the stock gamblers# were so
elate" o!er their success in securing the repeal of the purchasing
clause# that on December H# 1DEC# they ma"e an effort to force a
bill through the 6ouse to permit railway corporations to form
pools# or trusts# to maintain high rates of transportation.
4his bill was in charge of Mr. Patterson# an a"!ocate of the single
gol" stan"ar". 4he measure was so skillfully "rawn that it woul"
ha!e place" the entire country at the absolute mercy of the
t was e!i"ent that the stock gamblers who attempte" to railroa"
this bill through ;ongress# were actuate" with the sole purpose of
enhancing the !alue of railroa" stocks an" bon"s# an" thus
"ispose of them on a rising market.
t was a stock gambling scheme# pure an" simple.
0lthough the ini5uity of this bill was thoroughly expose" by
those who oppose" it# the 6ouse passe" it by a "ecisi!e !ote. t
faile" to go through the 3enate.
During the great panic which was ra!aging the country# more
than se!en hun"re" banks ha" faile" with liabilities of
0 great many of these failures were national banks# an"# in many
instances# they were precipitate" by the con"uct of the officers
an" "irectors s5uan"ering the money of "epositors in speculation.
4o reme"y this e!il# Mr. ;ox# of 4ennessee# intro"uce" 6ouse bill
8#ACC# which rea" as follows:
"'hat no national !an*in" association shall ma*e any loan to its
president, its vice4president, its cashier, or any of its cler*s, tellers,
!oo**eepers, a"ents, servants, or other persons in its employ until
the proposition to ma*e such a loan, statin" the amount, terms, and
security offered therefor, shall have !een su!mitted in $ritin" !y the
person desirin" the same, to a meetin" of the !oard of directors of
such !an*in" association9 or of the e<ecutive committee of such
!oard, if any, and accepted and approved !y a majority of those
present Constitutin" a ;uorum,"
4he pro!isions of this bill woul" impose a most salutary check
upon those officers an" "irectors of national banks who
en"ea!ore" to use the money of their "epositors in stock
gambling an" grain speculations.
4his bill ha" been before the 6ouse for some time# an" Mr.
$ckels# ;omptroller of the ;urrency# oppose" its passage in the
following language:
"1t $ould !e un$ise to for!id an association to loan or to discount
for its several directors, as they are usually selected from amon" the
leadin" men of the various !ranches of !usiness, for the reason that
they possess information of "reat value in passin" upon paper
offered !y those in some line of trade $ith themselves% "
4his remarkable language of the ;omptroller# in a measure#
corroborates the statement# that the officers an" "irectors of
national banks consiste" chiefly of the great speculators# stock
gamblers# railway magnates# organizers of trusts# an"
those who monopolize the !arious lines of business.
:n :ctober 1J# 1DEA# this bill was calle" up by Mr. ;ox# an"
imme"iately e!ery national banker in ;ongress# as well as those
stock gambling members# oppose" its passage.
0mong those who !ehemently attacke" this measure were Mr.
/ockwoo"# of 9ew Gork# Mr. ;annon# a banker of llinois# an"
Mr. <ingham# of Pennsyl!ania.
4he following "ebate took place between Mr. ;ox an" Mr.
r. Bingham# "Will the "entleman permit an in;uiry>"
r. Co/# "With pleasure%"
r. Bingham# "What para"raph of this !ill includes directors>"
r. Co/# 1 thin* the ori"inal lan"ua"e of the !ill included them,
!ut they are no$ included !y amendment%"
r. Bingham# "No$, 1 $ant to put this practical proposition to
the "entleman4"
r. Co/# "'hat is ri"ht% 'hat is the *ind of ;uestion 1 li*e%"
r. Bingham# "1 am a director of a !an*%"
r. Co/# "So $as 1, until sent here"%
r. Bingham# "1 do not say that 1 am personally9 !ut 1 am simply
puttin" my proposition in that $ay"%
r. Co/# "Well, 1 $as a director of a !an*"%
r. Bingham# "1 am a director of a !an* and 1 am also a
stoc*!ro*er, doin" a lar"e stoc*!ro*in" !usiness% 'he mar*et is an
active mar*et% 3t & or . oHcloc* in the day my customers come in
and !uy lar"e amounts of stoc*s and sell lar"e amounts of stoc*s%
+et$een . and half4past . oHcloc* 1 have to ta*e the securities that 1
have !ou"ht for my customers on a mar"in ,the universal $ay of
doin" such !usiness and "o to the !an*s and !orro$ 6&88,888,
6.88,888, 6088,888 often lar"er amounts, for $hich 1 "ive the !est
"ilt4ed"ed collateral in the mar*et% No$, ho$ am 1 to do that
!usiness if 1 have to $ait for a ;uorum% 'hree oHcloc* comes and if 1
have not placed my stoc* and secured my customers and covered
my mar"ins, $hat am 1 to do> 1 put that to the "entlemen as a
!usiness proposition."
r. 0oolittle# "Stop stoc* "am!lin"%" [@au"hter%]
r. Bingham# "Gh, it is not stoc* "am!lin"% 1 have descri!ed a
very ordinary transaction in Ne$ )or*, or (hiladelphia, or
Chica"o, or any of the other lar"e cities $here such transactions
often cover millions of dollars%"
r. Co/# "1 am a$are of that% +ut $hat ou"ht that man to do, that
!ro*er $ho $anted the money, and $hat ou"ht the cashier to do in
a "ood, solvent, $ell4re"ulated !an*> When the !ro*er comes and
ma*es his application for a loan to meet the transactions of the day,
they ou"ht to "et the e<ecutive !oard to"ether9 and 1 never sa$ a
!an* in my life, even in the rural districts, $here you could not "et
an e<ecutive !oard of t$o mem!ers to"ether%"
r. Bingham# ")ou cannot do it in the "reat cities"%
r. Co/: "Why not>"
r. Bingham# "+ecause the men are en"a"ed in their re"ular
vocations% 3 directorship in a !an* is not a payin" employment%"
r. Co/# "1s not !an*in" a vocation>"
r. Bingham# "3 director is paid no salary%"
r. Co/# "5e "ets his salary in the $ay of dividends and profits%"
r. Bingham: "'hat is the interest upon his money%"
r. Co/: "Can you tell me of any case $here they could not "et
t$o mem!ers of the !oard to"ether>"
r. Bingham# "1 say they do not do it"%
r. Co/# "Gh, 1 *no$ they do not do it9 !ut could they not do it>"
4his extract from the ;ongressional 1ecor"s bears out the
charge# so often ma"e# that the lea"ing stock gamblers are
officers an" "irectors of national banks# an" that they use their
official position# as such officers# to obtain control of the bank
fun"s to gamble in stocks. Mr. <ingham is an example of that
class of men who represent $astern constituencies in the halls of
Ie 5uote further from this interesting "ebate:
r. Lo'!1ood: "Why do you $ant to le"islate a"ainst these
individual men>"
r. $all% o& i""o(ri# "1 $ill ans$er it% =or the very reason that
it has a tendency to prevent these men from ro!!in" the !an*s, the
very thin" the Comptroller of the Currency, not only this one !ut
every other one, has tried to prevent%"
r. Lo'!1ood# "Ii"ht there 1 $ant to correct you% 'he present
Comptroller of the Currency has never sanctioned this !ill% Gn the
contrary, my information is that he disapproves of this !ill% 3nd 1
$ill say further, that he ou"ht not to commend any such !ill as this%
No$, 1 !e" to complete my statement $ithout !ein" interrupted% 1
say this further, that !y the passa"e of this !ill%"
r. Co/# "Will you yield to me for one moment>"
r. Lo'!1ood# ")es."
r. Co/# "1 "ave you the floor yesterday%"
r. Lo'!1ood# "Certainly"%
r. Co/# "@et me as* you this% )ou stated that your (resident and
your cashier are mem!ers of your =inance Committee, or your
E<ecutive Committee: the name is not important%"
r. Lo'!1ood# ")es%"
r. Co/# "No$, then, the paper is su!mitted to them, as you stated
to the 5ouse a moment a"o%"
r. Lo'!1ood# ")es%"
r. Co/# "Ao you mean that that paper is discounted $ithout
consultation $ith the directors> No$, tell me $hat o!jection there is
to that E<ecutive or =inancial Committee reportin" it !ac* to the
!oard of directors and ma*in" a record on their minutes>"
r. Lo'!1ood# "/y dear sir, $hat $ould !e the use of, after it
had !een discounted, their reportin" it !ac*, $hen they $ill not
have a chance, perhaps, to report it !ac* to the !oard of directors
for one or t$o months after the money has !een !orro$ed> 1t $ould
!e of no !enefit or information to the !oard of directors% 3ny
mem!er of the !oard of directors can loo* at the discount led"ers
and see at any time $hat is "oin" on and $hat discounts there are
recorded in that !oo*"%
r. Co/# "Ao you mean to say that your directors do not meet in
less than t$o or three months>"
r. Lo'!1ood# " state $ith "reat fran*ness that in many of these
lar"e !an*s, the !oard of directors do not meet more than once a
month or t$o months, and there is no la$ re;uirin" them to meet at
any specific time, e<cept t$ice each year%"
r. 0(nph+# "+ut they are at the !an* every day%"
r. Lo'!1ood# "=urthermore, if this !ill is passed, it $ill cause
many of the most active, upri"ht, and !usiness4li*e men of the
country to refuse to act either as officers or directors of national
!an*s% 3ll $ill concede that a national !an*, to !e successful, must
have for its stoc*holders, directors, and officers, active, $ide4a$a*e
"'he stoc*holders select the directors, and the directors in turn
select the officers of the !an*, the most competent and trust$orthy
men they can find%"
"3ll understand full $ell that the value of their stoc* and the
success of the !an* depends upon the confidence of the people in the
jud"ement and $isdom sho$n in the selection of the officers and
directors of the !an*%"
0ccor"ing to the opinion of Mr. /ockwoo"# thus publicly
expresse" in this "ebate# ;omptroller $ckels was on !ery frien"ly
terms with the national banks# for# assuming the wor" of this
prominent supporter of the a"ministration to be true# the
;omptroller was oppose" to any restriction that coul" be thrown
in the way of those bank officials who "i" not hesitate to gamble
in stocks an" bon"s with the money of "epositors.
t was# howe!er# the generally expresse" opinion of the press# an"
of many public men# that ha" ;omptroller $ckels exercise" as
much "iligence in keeping the national banks within the letter an"
spirit of the law# as in atten"ing their ban5uets# where he
showere" fulsome eulogies upon the national banking system# it
woul" ha!e con"ucte" much to the public welfare.
7ollowing in the footsteps of all his pre"ecessors in that office#
Mr. $ckels has gra"uate" from the ;omptrollership of the
;urrency to the hea" of a great national bank. 0nother inference
to be "rawn from Mr. /ockwoo"&s statements is# that the most
upright men in the business communities in which these banks
are situate"# woul" not consent to act as "irectors unless they ha"
free access to the money of "epositors. 4he bill was "efeate".
:n :ctober 8A# 1DEA# 6ouse bill 9o. 1AE# known as the 4orrey
<ill# was brought forwar" in the 6ouse. 4he purpose of this
measure was the creation of a uniform system of bankruptcy
throughout the ,nite" 3tates.
4he passage of this bill woul" be class legislation of the worst
character# as# un"er its stringent pro!isions# any merchant who
was unable to pay a "ebt within thirty "ays after it was "ue# coul"
be force" into ,nite" 3tates courts as a bankrupt.
4his was the "arling scheme of the wholesale associations of the
,nite" 3tates# an" one at which they ha" labore" unceasingly to
force through ;ongress. 4he power which was behin" this bill#
an" which was urging its passage through ;ongress# was that
gigantic trust-the wholesale "ealers& associations of the ,nite"
3tates. 4he measure faile" to pass# notwithstan"ing the
pro"igious efforts of the lobbyists to push it through that bo"y.
During the month of 7ebruary# 1DEC# a bill was intro"uce" in the
6ouse to coin the seigniorage lying in the 4reasury. 4his
seigniorage was the gain between the bullion !alue an" that of the
coinage !alue of the sil!er# purchase" un"er the 3herman law.
t passe" the 6ouse March 1# 1DEC# by a !ote of 1JD yeas to 18E
nays. t then went to the 3enate# where# on March 1Hth# it passe"
by a !ote of CC yeas to A1 nays. 4he bill was "isappro!e" by
Presi"ent ;le!elan"# an" the 6ouse faile" to pass it o!er his !eto
by the necessary two-thir"s !ote.
During this time# gol" coin was offere" in exchange for sil!er
"ollars# an" the action of Presi"ent ;le!elan" in !etoing the bill
is seemingly unaccountable. 4he passage of this measure woul"
ha!e a""e" THH#1HJ#JD1 to the circulating me"ium of the country.
n :ctober# 1DEC# the 9ational <ankers& 0ssociation met at
<altimore. During this meeting 6on. M. ;. 6en"rix# of whom
mention has been ma"e in these pages# "eli!ere" a speech in the
course of which he thus sneeringly referre" to ;ongress:
"/en $ho never had a discount in their lives, and $ould not !e
entitled to one9 $hose hi"hest occupation has !een sittin" on a
!arrel at a corner "rocery, $hittlin" a piece of $ood9 others $ho
have follo$ed the plou"h all day in the hot sun and tried to settle,
!y the rule of thum!, ;uestions of political economy, over $hich
men of scientific attainments have studied and "ro$n "ray 4 such
men come or send their li*e to the halls of Con"ress, and they $ant
to dictate the financial policy of the country% "
4his sarcastic allusion to members of ;ongress was cheere" to
the echo by the hun"re"s of national bankers present "uring its
"eli!ery. 4his cuckoo national bank member of ;ongress# who
spoke so "erisi!ely of his fellow legislators# ha" been# prior to his
election to that bo"y# a citizen of Missouri# an" from thence ha"
migrate" $ast.
6e was appointe" postmaster of <rooklyn "uring the first
a"ministration of Presi"ent ;le!elan"# an" after his term of office
ha" expire"# became Presi"ent of a national bank. 6e was electe"
to ;ongress# where his labors in behalf of banks were
t was "uring this bankers& con!ention that ;harles ;. 6omer#
Presi"ent of a national bank of <altimore# brought forwar" what
is known as the <altimore plan of banking# a scheme which met
the approbation of the associate" banks. 4his plan propose" that
all paper money shoul" be issue" through the me"ium of the
national banks# an" that the re"emption of all such bank notes
shoul" be guarantee" by the =o!ernment.
n the meantime# the banking monopoly was forming plans to
seize upon# an" to appropriate to itself# the complete an"
absolute issue an" control of the currency.
4hese "eeply-lai" schemes "i" not coinci"e in e!ery particular#
but they all concurre" in the principle that the banks shoul" issue
bank notes to circulate as money# an" that the =o!ernment shoul"
bur"en itself with the responsibility of finally re"eeming all such
notes e!entually in gol".
4he banks of issue# howe!er# were to be the sole beneficiaries of
each an" e!ery system so propose". Presi"ent ;le!elan" aligne"
himself in behalf of these "eman"s of the banks.
4his man who persistently exhibite" the suppose" "angers of a
"fiat money,R
an" who wante" the "!est money of the $orld" as a
me"ium of exchange# was really a fiatist of the most extreme
type. 6e concentrate" all his energies an" influence to the en"
that the banks might grasp the fiat of the nation for their profit.
6e was a national bank fiatist.
:n December A# 1DEC# ;ongress con!ene" in general session#
an" Presi"ent ;le!elan" transmitte" his message to that bo"y.
n the course of this "ocument# he state" that the 3ecretary of the
4reasury ha" prepare" a bill pro!i"ing for an elastic bank
4he Presi"ent sai":
"Ouestions relatin" to our !an*s and currency are closely
connected $ith the su!ject just referred to, and they also present
some unsatisfactory features% (rominent amon" them are the lac* of
elasticity in our currency circulation, and its fre;uent concentration
7iat Money - Money gi!en its !alue by go!ernment "iktat# as oppose" to "eri!ing its
!alue from the !alue gi!en to it by the buyer or tra"er.
in financial centers $hen it is most needed in other parts of the
"'he a!solute divorcement of the Dovernment from the !usiness of
!an*in" is the ideal relationship of the Dovernment to the
circulation of the currency of the country%
"'his condition cannot !e immediately reached9 !ut as a step in that
direction and as a means of securin" a more elastic currency and
o!viatin" other o!jections to the present arran"ement of !an*
circulation, the Secretary of the 'reasury presents, in his report, a
scheme modifyin" present !an*in" la$s and providin" for the issue
of circulatin" notes !y State !an*, free from ta<ation under certain
"'he Secretary e<plains his plan so plainly, and its advanta"es are
developed !y him $ith such remar*a!le clearness, that any effort on
my part to present ar"ument in its support $ould !e superfluous% 1
shall therefore content myself $ith an un;ualified endorsement of
the SecretaryHs proposed chan"es in the la$, and a !rief and
imperfect statement of their prominent features%
"1t is proposed to repeal all la$s providin" for the deposit of nited
States !onds as security for circulation9 to permit national !an*s to
issue circulatin" notes not e<ceedin" in amount :7 per cent, of their
paid4up and unimpaired capital, provided they deposit $ith the
Dovernment, as a "uarantee fund, in nited States le"al tender
notes, includin" treasury notes of &C?8, a sum e;ual in amount to
08 per cent% of the notes they desire to issue, this deposit to !e
maintained at all times, !ut $henever any !an* retires any part of
its circulation, a proportional part of its "uarantee fund shall !e
returned to it9 to permit the Secretary of the 'reasury to prepare and
*eep on hand ready for issue in case an increase in circulation is
desired, !lan* national !an* notes for each !an* havin" circulation,
and to repeal the provisions of the present la$ imposin" limitations
and restrictions upon !an*s desirin" to reduce or increase their
circulation 4 thus permittin" such increase or reduction $ithin the
limit of :7 per cent% of capital to !e ;uic*ly made as emer"encies
4his scheme outline" in the message of Presi"ent ;le!elan" was
one of the most remarkable plans of banking e!er propose" by
the wit of man. t aime" to "ri!e out of circulation e!ery
greenback an" treasury note# an" to totally eliminate sil!er by an
abun"ant supply of bank notes. ,n"er the false an" "elusi!e cry
of "'he a!solute divorcement of the Dovernment from the !usiness of
!an*in", " the Presi"ent sought to throw the business of
go!ernment into the han"s of the banks.
4hese recommen"ations of the Presi"ent "emonstrate" that he
was as fanatical in his belief in the efficacy of a banking
monopoly an" aristocracy as Mohn 3herman.
6e ga!e official notice that the "eman"s of the banking interest
shoul" be grante" if he coul" be successful in swinging ;ongress
into line with his policy.
n a speech of great ability# 6on. 6enry I. ;offeen# of Iyoming#
referre" to these !arious schemes of banking as follows.
6e sai":
" (@3NS 'G 3/ENA (IESEN' S)S'E/%
"Gne is to "ive more po$er to the !an*s !y issuin" to them a
"reater amount of currency $ithout compensation 4 that is, !y
issuin" to them not only ?8 per cent% on their deposits of nited
States !onds at a char"e of & per cent per year, !ut to furnish them
&88 per cent% or possi!ly &&J per cent% $hile the Dovernment !onds
stand at &J per cent% premium, and release them also from payin"
even & per cent% ta< or interest on this currency furnished thus to the
!an*s, and, as in all of these !an* plans, it provides for the issuance
of more !onds paya!le in "old%
" G'5EI +GNAS =GI SECI1')%
"3nother is to allo$ !an*s to deposit other than nited States
!onds for security, and yet ma*e the Dovernment lia!le for ultimate
redemption of all the !an* notes and issue "old !onds in place of
the "reen!ac*s%
"+3@'1/GIE (@3N%
"3nother plan is to allo$ !an*s to have a national form of currency
printed for them that may !e issued and loaned out as notes of the
!an*s !ased nominally on !an* assets, !ut the Dovernment to
"uarantee ultimate redemption% 'his is the +altimore or !an*ersH
o$n plan%
"C3I@1S@E (@3N%
"3nother is to practically turn the entire responsi!ility of supplyin"
currency over to !oth State and national !an*s under a sort of
supervisory provision upon deposit of a 7 per cent% and 08 per cent%
fund in le"al tenders9 !ut relievin" the Dovernment entirely from all
responsi!ility of final redemption of circulatin" !an* notes%
"ECVE@S (@3N%
"3nother is to ta*e 78 per cent, of assets of the !an* on $hich to
determine amount of note issues allo$ed to the !an*s, and an
additional amount may !e allo$ed them under heavy Dovernment
char"e or ta<ation as an emer"ency currency%"
5is summary of the results of these various systems that $ere ur"ed
on Con"ress is a masterpiece% 5e said:4
"W53' '5ESE 3NA G'5EI +3NV (@3NS 1NUG@UE%
"3ll of these plans involve the follo$in":
"&% 'he !an*s to control the volume of currency%
".% 'he !an*s to secure all the profits on currency%
"0% 'he !an*s to !e allo$ed to e<ercise the principle called
elasticity, another name for sudden contraction or e<pansion, as
their o$n profits may dictate, $ithout pu!lic notice and $ithout
re"ard to the ri"hts or needs of the people "enerally%
"J% 'he !an*s to protect one another as note holders ,for they are
the principal holders of !an* notes under the deposit system of our
country-, $hile depositors are left completely unprotected%
"7% 'he !an*s to have to themselves and all creditor classes, all the
!enefits of a hi"hly appreciated "old standard money, possessin"
dou!le the purchasin" po$er that money should have in e<chan"e
for all, other property, $hile the !urden of maintainin" the "old
redemption for a time and the dishonor of an ultimate and certain
!rea*do$n $ill fall on the Dovernment%
"B% 'he !an*s to have all and unrestricted opportunity for poolin"
their interests and to have all limitations that are disa"reea!le to
them removed, under the pretense of removin" o!structions to
":% 'he !an*s and money dealers to have the most a!solute and
fully le"ali2ed control over the prices and values of all property, all
profits, all industries, all e;uities of contract, and throu"h these
channels they $ill have the most complete control over all political
po$er and "overnmental administration that the $orld has ever
seen in any a"e or clime%
"C% 1f% there is anythin" else in si"ht that Con"ress can "ive them,
they $ill, as hum!le conservators of financial inte"rity and $isdom
and as saviors of the country in its time of need, accept that also%"
4his a"mirable analysis of the !ariously propose" schemes of the
banks was ma"e by one of the ablest members of ;ongress. Mr.
;offeen was not only a practical banker but a !ery learne"
stu"ent of political economy. 4he most important an"
"istinguishing feature between the plans of banking enumerate"
in his summary an" that of the <ank of $nglan" is most !ital.
n all the plans put forwar" by the bank monopolists# the
=o!ernment woul" be the sole re"eemer of the bank notes that
woul" be issue" by them.
,n"er the charter of the <ank of $nglan"# the latter was
compelle" to re"eem its own notes in gol". 1eaping the profit# it
bore the bur"en of re"emption.
4he national banking power of the ,nite" 3tates# it will be seen#
was far more !oracious in its gree" than that of $nglan".
n pursuance to the recommen"ation of the Presi"ent# the
currency problem was taken up by the 6ouse at once# an" on
December 1(# 1DEC# the ;ommittee on <anking an" ;urrency
began a series of hearings upon this 5uestion.
3ecretary ;arlisle presente" his plan to the committee# an" he
was followe" by ;omptroller $ckels. 0 number of lea"ing
bankers also appeare" before this committee an" ga!e their !iews
upon this sub>ect.
During the hearings before the committee# Mr. 3t. Mohn# Presi"ent
of the Mercantile 9ational <ank of 9ew Gork ;ity# appeare"
before that bo"y# an" the following 5uestion was propoun"e" to
him by Mr. ;obb:
"3re you opposed to the use of the "reen!ac*s> 1f so, state $hy9 and
if you are not, state $hy not%"
4o which 5uestion Mr. 3t. Mohn ma"e the following reply:
"1 am opposed to as*in" any sacrifice of the people at lar"e in order
to provide profit to !an*s% 1 do not dare as* any such thin"% 1 never
did and 1 never $ill% 1 $ould not so sacrifice the popularity that the
national !an*s of the nited States have le"itimately earned%"
"'he "reat popularity to $hich they are entitled is !ein" sacrificed
!y $ell4meanin" doctrinaires, outsiders, $ho *no$ little a!out
!an*in"% 'hin* of it, the nited States issues 6&88,888,888 of
!onds, on $hich interest is to !e paid for ten years at 7 per cent% per
"3t the same time it is proposed that 60JB,888,888 "reen!ac*s, a
de!t $hich does not !ear interest, and therefore is savin" ,at 7 per
cent% per annum- 6&:,088,888 a year to the people at lar"e, shall !e
retired% /ore interest4!earin" de!t to issue to retire them%"
"3nd as a feature of the proposal is that !an* notes, yieldin" profit
to !an*s as the first essential of their e<istence, shall supersede
"1t is preposterous W"
:f all the financiers who appeare" before this committee to gi!e
their !iews# Mr. 3t. Mohn was the sole banker who oppose" the
retirement of the greenbacks# the issue of bon"s# an" an
enlargement of the powers of the national banks#
<y a !ote of E to D# the committee a"opte" the plan of 3ecretary
;arlisle# an" "eci"e" to report it to the 6ouse without any
change# with a recommen"ation that four "ays be allowe" for
"ebate# an" then a !ote be taken on the bill. 4he bill was reporte"
to the 6ouse# December 1Bth# an" a spirite" "ebate at once
sprung up regar"ing the merits of the ;arlisle plan.
4he main features of this plan of banking propose" that national
an" other banks coul" issue circulating notes up to se!enty-fi!e
per cent. of their pai"-up capital.
4hese notes were to be secure" by a guarantee fun"# consisting of
treasury notes# inclu"ing notes issue" un"er the act of Muly 1C#
1DE( e5ual to thirty per cent. of the circulating notes applie" for
by the banks. 4hus# a bank by "epositing TA(#((( of greenbacks#
or treasury notes# with the 3ecretary of the 4reasury# woul"
recei!e T1((#((( in bank notes - a clear gratuity of TB(#((( of
loanable capital.
0t this time# there were in circulation greenbacks an" treasury
notes to the amount of TCED#8DB#8DA.
4he treasury notes an" greenbacks were locke" up in the !aults of
the banks# an"# therefore# by "epositing this currency with the
4reasury# as a guaranty fun"# the banks woul" ha!e been entitle"
to recei!e T1#JJ(#(((#((( which coul" ha!e been loane" out by
them# netting them an annual income excee"ing T1((#(((#(((.
being a profit of twenty per cent. upon the greenbacks an"
treasury notes so "eposite" by them.
4his plan pro!i"e" for a safety fun"# whose maximum shoul" be
fi!e per cent. upon the total amount of national bank notes so
outstan"ing. 4his safety fun" was to be raise" by a small semi-
annual tax upon the circulating notes of the banks. 4he
re"emption of these notes woul" rest upon the 4reasury of the
,nite" 3tates.
:ne section of bill propose" to repeal section E of the act of Muly
18# 1DD8# renewing the charters of the national banks# which
section prohibite" those banks from surren"ering more than
TA#(((#((( of their circulating notes per month.
4his section of the act of 1DD8# Ihich took away from the banks
the absolute power of su""enly prostrating business by
contracting the !olume of money# was engrafte" on that act by
the energy an" elo5uence of Mr. ;arlisle.
t was "uring the "ebate on this section of the ;rapo resolution
that he electrifie" the 6ouse an" the country by that mar!elous
logic# which place" him in the forefront of those who antagonize"
the national banking power.
6e now propose" to re!erse his former position# by placing the
great power of expan"ing an" contracting the !olume of money
in the ban"s of the banks.
Iho can tell what influence prompte" 3ecretary ;arlisle to burn
all the bri"ges behin" him in this remarkable change of front
since 1DD8L
3uch was the ini5uitous scheme suggeste" by Presi"ent
;le!elan"# put into the form of a bill by 3ecretary ;arlisle# an"
coache" in the 6ouse of 1epresentati!es by Mr. 3pringer# of
4his measure was shrew"ly "esigne" to still the "eman" for free
coinage of sil!er by the substitution of a bank currency therefor.
4he Iestern an" 3outhern members of ;ongress imme"iately
percei!e" the intent an" scope of this bill# while the a"!ocates of
the national banks asserte" that the a"option of the ;arlisle bill#
or the <altimore plan# woul" be the "death *nell of silver%"
4he 9ew Gork $!ening Post# December 1Eth# sai":
"Whatever may !e the fate of the Carlisle !ill, the movement for
currency reform throu"h !etter !an*in" methods $ill "o on, and it
$ill dra$ more and more of /r% +landHs cohorts%
"3lready the ne$spapers of the minin" States have ta*en the alarm%
Some of them say that either the Carlisle !ill or the +altimore plan,
if adopted, $ill !e the Ldeath *nell of silver%H
H)es, "entlemen, the death *nell of silver, in the sense that you mean,
is already sounded% 1t $as sounded $hen the attention of the pu!lic
$as dra$n to a cheaper and speedier $ay of supplyin" the pu!lic
$ith the instruments of e<chan"e needed to transact their daily
!usiness% "
4he opponents of national banks an" the single stan"ar" of gol"
knew# as well as the 9ew Gork $!ening Post# that the ;arlisle bill
was inten"e" to soun" the " death *nell of silver%"
4herefore on December 1Eth# Mr. <lan" propose" to substitute a
bill pro!i"ing for the free coinage of sil!er.
4hose members of ;ongress# who were urging the passage of the
;arlisle bill# saw that there was no possibility of its passage by
the 6ouse# an"# therefore# the bill was with"rawn an" a substitute
brought in by Mr. 3pringer. 4his propose" substitute more nearly
followe" the <altimore plan.
4he substitute measure also met the approbation of Mr. ;arlisle.
4he most "angerous feature of this substitute also repeale" the
ninth section of the >oint resolution of 1DD8# which took away
from the national banks the power to contract their circulating
notes in any sum excee"ing TA#(((#((( per month.
"1t must !e !orne in mind, that it $as throu"h the po$erful lo"ic
and elo;uence of /r% Carlisle that the po$er of suddenly
contractin" and e<pandin" the national !an* currency $as ta*en
a$ay from the !an*s in &CC."%
Get such was the apostasy of this man to his former principles#
that he now stoo" forth bol"ly an" he unreser!e"ly a"!ocate" a
system that woul" gi!e banks of issue the unlimite" power to
contract an" expan" the !olume of money at their own
unrestraine" will# an" thus place all in"ustry an" all property at
the complete mercy of those financiers# who ha" repeate"ly
attacke" the go!ernment cre"it# brought on e!ery panic# an"
!iolate" the laws of the country.
Mr. 3pringer# who ha" intro"uce" the ;arlisle bill# an" who also
brought in this substitute# ha" ser!e" in the 6ouse of
1epresentati!es for twenty years# "uring which time he ha"
signalize" his public career as a stur"y an" consistent a"!ocate of
the free coinage of sil!er# an" ha" always oppose" the
aggressions of the national banking monopoly.
Ie now ascertain that his con!ersion to the 4ory system of
finance# was as su""en as that of 3aul of 4arsus when he
renounce" the Mewish faith to accept the "octrines of ;hristianity.
4here the parallel en"s.
Mr. 3pringer became the accre"ite" agent of the a"ministration in
its efforts to force this banking bill through ;ongress. 4he
Iashington $!ening 3tar of Manuary C# 1DEH# "escribe" his
tactics in the following language.
t sai":-
"5is plan of canvass is to have one man of each dele"ation sound
the sentiment of his collea"ues%"
"1f this canvass is not satisfactory, he $ill pro!a!ly still further
postpone a caucus, so as to "ive an opportunity for administration
influence to !e !rou"ht to !ear upon those mem!ers, $ho are
ascertained to !e not set in their purposes as to the measure%"
Mr. 3pringer&s efforts to ascertain the !iews of the 6ouse on this
bill were anything but encouraging# an" hence the a"ministration
repeate" those tactics which were so influential in securing the
repeal of the purchasing clause of the 3herman law.
0gain the se"ucti!e power of patronage was brought into
re5uisition to such a "egree as to anger many of the members of
the 6ouse.
Moreo!er# the !eto of the seigniorage bill was won"erfully
effecti!e in opening the eyes of those 1epresentati!es who ha"
!ote" for the repeal of the purchasing clause# an" they saw the pit
which the a"ministration ha" "ug for them.
4his attempt of the a"ministration to influence the 6ouse arouse"
the latent manhoo" of its members# an" this un"emocratic policy
of Presi"ent ;le!elan" recei!e" some well "eser!e" rebukes
from those members of the 6ouse# who ha" once been reckone"
among the staunchest a"mirers of the Presi"ent.
:n Manuary D# 1DEH# that noble tribune of Democracy# 6on. M. ;.
3ibley# bol"ly assaile" the coerci!e measures of the
a"ministration for its attempts to push this bill through un"er
whip an" spur# an" the speaker inci"entally expose" the "astar"ly
means by which the repeal of the purchasing clause was secure"
in 0ugust# 1DEA.
r. Sible+ "aid#
"5ave 3mericans !ecome so spiritless that they have no re!u*e for
the imperiousness of a $ould4!e autocrat>
No ans$er to the attempted usurpation of le"islative ri"hts>
Ao men tell me that the po$er of the administration $as not used to
force the repeal of the Sherman !ill>"
"Why, /r% Chairman, there are mem!ers of this 5ouse $ho told me
$ith their o$n lips that they $ere a"ainst the repeal of this !ill, and
four days after$ard they came for$ard and voted for it, and $hen a
fe$ months after$ard 1 as*ed them $hy, they told me that their
!ati*s as*ed it and that they had !een promised positions for
constituents if they supported the repealW,
3re the offices, are the positions of trust of the country to !e
!esto$ed upon those persons, and those persons only, $ho support
the $ill of the Chief /a"istrate>"
r. Coomb"#
"'he "entleman from (ennsylvania ma*es a !road assertion a"ainst
the administration% No$, is he $illin" to "ive the names of any
mem!ers in relation to that statement>"
r. Sible+#
"1 $ill say to the "entleman from Ne$ )or* that 1 $ent t$o or three
days a"o and as*ed a mem!er for the privile"e of ma*in" the
statement to $hich 1 have just referred $hen the matter came up for
consideration in the 5ouse, and he said, L/r% Si!ley, it $ould place
me in a very !ad position $ith my constituents, and 1 am un$illin"
to do it%H"
A ember#
"1 should thin* it $ould"%
r. Coomb"#
"1 as* you if you thin* it fair to ma*e so !road a char"e a"ainst the
administration of helpin" to !ri!e a mem!er of the 5ouse, $ithout
!ein" $illin" to "ive the name> 1n all fairness it is only ri"ht, as you
have made the statement, to "ive the name of the party"%
r. Sible+#
"/r% Chairman, on the ;uestion of fairness and honor, 1 shall leave
each man to !e the jud"e for himself% 'he "entleman from Ne$ )or*
must permit me to e<ercise that privile"e% 1 am attemptin" to e<press
my o$n opinion and endeavorin" to sho$ the influences $hich have
prompted certain action in this 5ouse, and 1 have no hesitancy in
sayin" that if you ta*e the "olden padloc* off the lips of the
mem!ers of this !ody, t$o out of three men in this L 5ouse, 1
!elieve, $ould corro!orate my statement, at least as to the justice of
r. Coomb"# "+ut the "entleman ma*es a statement $hich "ives a
ri"ht to every mem!er on this floor to as* that he Shall name the
r. Sible+ 2'ontin(ing3# "'hat E<ecutive influence shall not !e
used% /r% Chairman, 1 am "oin" to Ltal* outH this time% 1 am not
"oin" to !e silent any lon"er% 1 have had a padloc* on my lips as
lon" as 1 propose to $ear it% Why, you remem!er $hen old
r. O(th1aite# "What $as it put the padloc* on your lips>"
r. Sible+# "+ecause, sir, 1 did not $ant to re!u*e an
administration that 1 hoped, !efore the close of the year &C?J,
$ould see the error of its $ays and *eep $ith the 3merican people
the pled"es $hich had !een made !y the Aemocratic party%"
r. O(th1aite#
"+ut $hat $as it put the padloc* on your lips>"
r. Sible+#
"When Aionysius, the tyrant of Syracuse %%%"
r. O(th1aite#
"Was it Aionysius that put the padloc* on your lips>"
r. Sible+#
"/r% Chairman, if 1 had an hourHs time $ith my friend from Ghio 1
$ould li*e to have it out $ith him% 1 $ant to tell him that 1 am not
tal*in" here for the !enefit of men $ho $ould rather ride to hell in a
handcart than to $al* to heaven supported !y the staff of honest
industry, as it has !een said%" [@au"hter%]
"1 am not tal*in" for the !enefit of those people $ho place more
value upon a !o!tail flush than they do upon a contrite heart%"
Dionysius - =reek go" of agriculture# wine an" fertility. 0lso known by his 1oman
name of <acchus.
1epresentati!e&s ;oombs an" :uthwaite# who ha" interrupte" the
speech of Mr. 3ibley# were two of the most prominent cuckoos of
the 6ouse.
4he last name" member was well taken care of by the
a"ministration# by recei!ing an appointment as a member on the
:r"inance <oar"# at a salary of TD#((( per annum.
During the time the 3pringer bill was up for consi"eration before
the 6ouse# an amen"ment was offere" to 3ection C in the
following language:-
"Section J% 'hat from and after July &, &C?7, ten per cent, of the
cash reserve re;uired !y la$ shall !e *ept in coin or coin
certificates, and not less than one half of such coin or coin
certificates shall !e in "old coin or "old certificates, and that such
cash reserve re;uired !y la$ shall !e *ept in coin or coin
certificates in amounts increased !y ten per cent% of the $hole cash
reserve re;uired to !e *ept !y la$, on and after the first day of each
;uarter of the calendar year, until the $hole cash reserve shall !e in
coin or coin certificates9 and not less than one half of such cash
reserve shall !e it all times in "old coin or "old certificates%"
4he ob>ect of this amen"ment to the 3pringer bill sought to
compel the banks to maintain a reser!e of gol" an" sil!er coin#
an" thus bear the bur"en of re"emption which ha" heretofore
been borne by the =o!ernment.
4he propose" reser!e of gol" an" sil!er coin was "esigne" as a
substitute to take the place of the lawful money reser!e# re5uire"
by law to be kept by the banks. t was from the bank reser!es of
lawful money that these institutions furnishe" the greenbacks an"
treasury notes to rai" the gol" reser!e.
:n 7ebruary J# 1DEH# this amen"ment was sharply attacke" by
Mr. 6en"rix# on the groun" that it woul" create a new "eman" for
gol"# an" therefore woul" start a fresh rai" upon the 4reasury.
4his statement of Mr. 6en"rix was ma"e after Mr. 3pringer ha"
state" that the national banks# on the 8n" of :ctober# 1DEC# hel"
gol" coin to the amount of T1BH#(((#(((# an" that besi"es this
amount of gol" coin# these banks hel" T1DH#(((#((( in legal
ten"er notes.
7rom the "ebate upon this amen"ment we 5uote as follows:
r. $endri/#
"/r% Chairman, 1 rise to oppose this amendment, !ecause it is
impractica!le and unintelli"ent% 1t see*s to defeat the very purpose
for $hich this le"islation is presented to the 5ouse%
)ou propose to attempt to stop the raid upon the 'reasury for "old,
and you turn around and compel J,888 national !an*s of this
country to immediately start a fresh raid upon the 'reasury for the
purpose of "ettin" "old to comply $ith this la$%"
"No$, the !an*s are already char"ed $ith hoardin" too much "old%
We are doin" our !est to try to undo the tendency $hich is a!road
to hoard the precious metal%
)ou pass this clause of the !ill and it !ecomes mandatory $here it is
no$ simply a matter of commercial option%
)ou $ould compel the !an*s to send to the nine su!4treasuries $ith
their treasury notes, and to the one su!4treasury at San =rancisco
and the one at Ne$ )or* $ith their nited States le"al tender notes
to "et "old coin%"
"1 $ant to call the attention of the "entleman from /assachusetts
,/r% Wal*er- to somethin" that $ill impress him at once%
)ou have already provided in section J of this !ill that all silver
certificates no$ outstandin" shall, $hen received in the 'reasury of
the nited States, !e retired and cancelled, and silver certificates in
denominations less than 6&8 shall !e issued in their stead%
1 $ill as* the "entleman ho$ he e<pects a !an* in the city of +oston,
or in the city of Worcester, to say nothin" of the !an*s in Ne$ )or*,
to settle their !alances at the clearin" houses on the days of heavy
e<chan"es $hen they are dra$n upon, as they fre;uently are, for
6J,888,888 or 67,888,888, in silver certificates, if they are of
denominations of less than 6&8>
Why, sir, $e $ould all have to "o to the clearin" house in a coach
and four in order to settle under the operation of this clause%"
r. Li4ing"ton#
"With all the other paper of lar"er denominations than 6&8, $hy
should there !e any difficulty>"
r. $endri/#
"+ut you propose !y this !ill to retire the other paper money%"
r. Li4ing"ton#
"Not at all%"
r. $endri/#
"'hat is the essence of the proposition% 1nstead of lettin" the !an*s
hold on to the "reen!ac* certificates, $hich they have no$, and
*eep them in their reserve, you are "oin" to destroy the value of
those certificates as reserve money, and compel the !an*s to
su!stitute for them one of t$o thin"s, silver or "old% No$, if you
$ere a !an*er, $hich $ould you choose> Every !an*er in the
country, $hen o!li"ed to ma*e the choice, $ill choose the one that
is the more precious in his opinion%"
r. Li4ing"ton#
"'he "entleman for"ets that the same section provides for the
national !an*s issuin" nothin" less than ten dollar notes%"
r. $endri/#
"'hat is all ri"ht, !ut national !an*s cannot *eep national !an*
notes as a reserve% 3 national !an* is not authori2ed to count
national !an* notes as reserve% 'he point is that you destroy the
practica!ility of ma*in" settlements at the clearin" houses% 3 man
comes in and $ants le"al tender, and under this clause you $ill
have to cart him out a lot of silver or "old%
"'hen he has to "et a vehicle to ta*e it to the place $here he is to
pay his le"al tender% 1f you are "oin" to destroy the value of the "old
certificates as a reserve and compel the !an*s to *eep "old, you are
simply imposin" a "reat !urden upon them and upon the pu!lic in
the transaction of their !usiness%
"1t is impossi!le to settle the clearin" house !alances in that $ay%
'he clearin" house in Ne$ )or* has provided for the difficulty !y
issuin" "old clearin" house certificates, !ased upon coin, placed in
the vaults !y the Clearin" 5ouse Committee9 !ut this !ill $ould
destroy the use of those certificates as a part of the reserve, and
$ould compel the !an*s to *eep their reserve in the t$o coins or in
the Dovernment certificates therefor% 1t is simply impractica!le to
carry out this plan in the ordinary transaction of the !an*in"
"'he !an*s no$ are sho$in" too "reat a tendency to hoard up "old,
and 1 do not $ant to see anythin" put in this !ill that is "oin" to
se;uestrate "old% 1 $ant it made so free that the "reat deposit in the
nited States of 3merica of the yello$ metal $ill not !e in the
!an*s, !ut !y the reason of the operation of this la$, $ill !e
transferred to the 'reasury of the nited States, so that the pu!lic
statements of the 'reasury $ill "ive notice to the $hole $orld that
$e have lots of "old, that $e are on a "old !asis, and that $e are
"oin" to remain there%" [3pplause, ]
r. .al!er#
"/r% Chairman, in the first place, as to the clearin" house
certificates, they are e<actly $hat the clearin" house chooses to
ma*e them, as to form and su!stance%"
r. $endri/#
"/r% Chairman, 1 am surprised that a "entleman $ho has stood
upon this floor as the "reat commercial apostle, should ma*e such a
r. .al!er#
"1 $ant to state to the "entleman that the clearin" houses of Ne$
)or* and in other cities, can ma*e the clearin" house certificates
just $hat they choose9 therefore $e need not !other a!out them%"
"'hey are not $ithin the la$9 they are outside of it, and their
certificates are entirely $ithin the control of the clearin" houses%
"No$ the !an*s have "ot 6&:7, 888,888 in "old today, and if "old
"oes to a premium the !an*s $ill "et the premium on it, and the
"entleman from Ne$ )or* *no$s, and every!ody else *no$s, that
that is $hy they are hoardin" the "old%
"+ut if $e compel them !y la$ to hold the "old as a part of their
reserve, $e destroy the interest the !ad !an*ers have in puttin" "old
to a premium% 1s not that so> [Cries of ")es, yes," and lau"hter%]
")ou have one silver man here, the "entleman from /ontana ,/r%
5artman-, offerin" an amendment to cut out half of the use of silver
at the custom house, and you have had another man, an enemy of
silver, thou"h he thin*s himself its friend, tryin" to prevent it from
!ein" used in denominations a!ove 6&8% No$, 1 stand here as a true
friend of silver% [@au"hter%]
"'he "entleman from Ne$ )or* ,/r% 5endri<- stands here as a
!an*er% "/r% Chairman, the !an*ers, not one of them in the $hole
country, from /aine to Deor"ia, from the 3tlantic to the (acific, has
offered a sin"le su""estion in a practical !ill to relieve the 'reasury%
"'hey have all !een for !an*s%
"'hey meet at +altimore9 they meet at +oston9 they pass resolutions
adoptin" proposed amendments to the la$ to increase their o$n
profits, and they tell us on the floor of this 5ouse that it is none of
their !usiness $hat !ecomes of the 6&:7,888,888 of "old%
"'hey $ill hold on to it as lon" as they can, and $hen it "oes to a
premium they $ill "et the premium upon it% No$, 1 $ant a la$ to
compel them to use that "old to redeem their o$n notes over their
o$n counter, and thus relieve the nited States 'reasury, and also
in that $ay ta*e a$ay any inducement they may have to put "old to
a premium%"
r. $endri/#
"Will the "entleman permit an interruption>"
r. .al!er#
"1 $ill yield for a ;uestion%"
r. $endri/#
"1f you provide that the note redemption fund at the 'reasury
Aepartment shall !e *ept in "old, $ill not that meet your desire to
have the !an*s redeem their notes in "old>"
r. .al!er#
"Not at all, or only partially% [@au"hter%] 5o$ much time have 1
remainin", /r% Chairman>"
"'he "entleman has one minute%"
r. Br+an#
"/r% Chairman, 1 as* unanimous consent that the "entleman !e
allo$ed to proceed for five minutes lon"er%"
4here was no ob>ection.
r. .al!er#
"No$, /r% Chairman, 1 $ill as* the "entleman from Ne$ )or* to
repeat his ;uestion%"
r. $endri/#
"/y ;uestion is this: Would you not !e satisfied $ith havin" the
note redemption fund $hich the national !an*s are o!li"ed to
provide, *ept in "old at the 'reasury, $here the !an*s are re;uired
!y la$ to redeem>"
r. .al!er#
"Ao you mean the 7 per cent% redemption fund>"
r. $endri/#
"'he 7 per cent% redemption fund%"
r. .al!er#
"No, sir% 1 $ant to say to the "entleman and to the 5ouse and to the
country that the people of the nited States propose to *eep all their
dollars of e;ual value% 'he people of the nited States have made a
lon" step in advance in discoverin" that it is costin" them millions
upon millions for the nited States Dovernment to do this4
redeemin" of paper money at the nited States 'reasury, not
maintainin" the 7 per cent% redemption, !ut redemption in lar"e
'herefore they are upon the eve of ma*in" the !an*s do it at their
o$n ris* and at their o$n cost and over their o$n counters, thus
relievin" the people of the ta< of t$enty or thirty million dollars a
year $hich they no$ pay for this service to !an*s, and that the
!an*s themselves ou"ht to do%
"5ere in this section of this !ill is the first step in that direction4nine
tenths of & per cent% to !e *ept in !oth *inds of coin4four and a half
tenths of 1 per cent% to !e *ept in "old coin% 'he !an*s no$ hold
6&:7,888,888 in their vaults%
"When these !an*ers "o to !ed at ni"ht and say their prayers, they
say, L8 @ord, $e !eseech 'hee to *eep "old from "oin" to a premium
tomorro$% +ut they *no$ if it does "o to a premium they $ill ma*e .
or 0 or J per cent% profit on the "old in their vaults%
"When they "et up in the mornin" they say 4 follo$in" the fashion
of some prayers $hich $e hear at the Spea*erHs des* and else$here,
informin" the @ord $hat has !een done 4 LG @ord, $e than* 'hee
that "old has not "one to a premium,H !ut it is no more than human
for them to remem!er, as the ni"ht !efore, the profit if it should "o
to a premium%
'he ;uestion is, shall the !an*ers of this country protect every
dollar of their o$n paper circulation at their o$n e<pense and their
o$n ris* and not compel the people to !e ta<ed to do it for them at
the nited States 'reasury>"
r. Coomb"#
"Will the "entleman allo$ me an in;uiry>"
r. .al!er#
")es, if it is short%"
r. Coomb"#
"Aoes not the "entleman !y this provision put it in the po$er of the
!an*s and ma*e it their duty to hoard "old, there!y holdin" a lar"er
$hip over the community than they other$ise $ould>
"1 su!mit that this amendment $ould force the !an*s to !ecome
hoarders of "old, instead of leavin" it in the channels of trade and
in the hands of the people%"
r. .al!er#
"No$, the "entleman is ma*in" an ar"ument%"
"1f he $ishes to do that, let him "et his o$n five minutes%
"1t isH in the channels of tradeH $hen it is in !an* reserves, as the
"entleman $ell *no$s%"/r% Chairman, 1 $ant to say another thin",
$hich 1 re"ret to say% 1 have the very hi"hest respect for !an*s and
"1 remem!er the record of Deor"e (ea!ody, and of Corcoran of this
city, and hundreds of other !an*ers% No!le menW /any men of this
class have !een the most "enerous, no!le4hearted, pu!lic4spirited
men outside of their !usiness there ever have !een in this $orld%
"+ut 1 remem!er also that never in any country, under any
circumstances $hatever, did the !an*ers ever improve the !an*in"
and currency la$s or the financial conditions of their country
e<cept at the point of the financial !ayonet, held !y the Dovernment
of the country in $hich the !an*s $ere located, namely, !y the force
of la$ devised in parliament%
"We have "ot to adopt that policy in this country%
"No$, 1 challen"e 5enry W% Cannon of Ne$ )or*, 1 challen"e
@yman +% Da"e of Chica"o, 1 challen"e Deor"e E% @ei"hton of St%
@ouis4three as honora!le men as live and as s*illed in finance, men
$ho in financial matters stand the peers, if not a!ove, any other
three men in this country4to dra$ a !ill that $ill do $hat they are
sayin" ou"ht to !e done, and lecturin" us for not doin"%
"+an*ers are condemnin" mem!ers of Con"ress as clo$ns and fools
!ecause $e do not accomplish $hat they $ant us to do9 yet they
themselves could not dra$ a !ill $hich $ould do it that $ould "et
t$o votes in five in this 5ouse in this "eneration or the ne<t%
"1 say $e ou"ht not to heed here and no$ the protests of the !an*ers
a"ainst their !ein" !rou"ht into line $ith the !an*s of every first4
class nation of the $orld% " [3pplause%]
4hese extracts# taken from the ;ongressional 1ecor"# exhibit
se!eral remarkable facts.
4hey show that the national banks# while "eman"ing that the
,nite" 3tates shoul" re"eem all its obligations in gol"# an" issue
bon"s to maintain a gol" reser!e for that purpose# were utterly
oppose" to being compelle" to maintain a gol" reser!e for the
re"emption of their notes.
4he extreme selfishness of these financial institutions is expose"
by Mr. Ialker# a staunch frien" of the national banking system#
wherein he states that the re"emption features of the national
banking system ha" cost the people from T8(#(((#((( to
TA(#(((#((( per annum.
6e shows that the cost of this system of re"emption was thrown
on the =o!ernment.
:n 7ebruary B# 1DEH# Mr. 3pringer brought up a motion to
engross the bill an" pass it to a thir" rea"ing. 4his was "efeate"
by a !ote of 1J8 nays to 1AH yeas.
6e then mo!e" to reconsi"er this !ote# but# on motion of Mr.
6atch# it was lai" upon the table by a !ote of 1AH yeas to 18C
4he "efeat of the 3pringer bill was "ecisi!e.
4herefore this measure# which the gol" stan"ar" fanatics openly
boaste" woul" be the "death *nell" of sil!er# fell at the han"s of
the public executioner.
4he grip of this 4ory-1epublican a"ministration was loosene" for
all time to come.
;60P4$1 KF.
904:90/ <09-3 09D 46$ 0DM934104:9
;:M<9$ 4: 33,$ <:9D3 9 4M$ :7 P$0;$.
"3void the accumulation of de!t, not only !y shunnin" occasions of
e<pense, !ut !y, vi"orous e<ertions in time of peace to dischar"e the
de!ts $hich unavoida!le $ars may have occasioned, not
un"enerously thro$in" upon posterity the !urdens $hich
$e ourselves ou"ht to !ear% "
$!er since the special session of ;ongress# beginning on the
Bth of 0ugust# 1DEA# the national banks of 9ew Gork ;ity
continuously bent all their energies towar" "epleting the gol"
reser!e of the 4reasury an" forcing an issue of bon"s.
Iithout the acti!e co-operation of these associate" banks# it
woul" ha!e been impossible for the gol" speculators to ha!e
obtaine" the greenbacks an" treasury notes to present to the
4reasurer for obtaining the gol" for exportation to $urope.
0s the national banks of 9ew Gork ;ity perse!ere" in the policy
of hoar"ing up all greenbacks an" treasury notes# that foun" their
way o!er their counters in the or"inary transactions of business#
the means of exhausting the gol" reser!e were practically
n fact# more gol" was actually shippe" abroa" than was nee"e"
in $urope.
t was asserte" by un5uestione" authority# that these banks
exporte" tens of millions of gol" to $urope# an" that it was
returne" without the packages containing it e!er ha!ing been
opene"+ an" that this policy was carrie" on by the banks# with the
a!owe" intention of compelling ;ongress to fun" the greenbacks
an" treasury notes into bon"s.
:ne of the reasons state" by the Presi"ent in his message of
0ugust D# 1DEA# was# that the purchasing clause of the 3herman
law must be repeale"# as the only reme"y to check the
exportation of gol".
4his was the sum an" substance of all the arguments# a"!ance" in
both 6ouses of ;ongress# by those who urge" the repeal of the
3herman law.
4hese reasons an" arguments were the merest subterfuges of
those public men who were "etermine"# at all hazar"s# to manacle
the 0merican people to a single stan"ar" of gol"# an" to make all
business pay toll at the counters of national banks.
0s heretofore state"# the gol" gamblers perse!ere" in "raining the
4reasury of its gol" "uring the time that the repeal bill was
pen"ing in ;ongress# a policy which was uphel" by the
subsi"ize" press.
$!ery with"rawal of gol" was gi!en prominence# in these
>ournals# as a means of frightening the timi".
0s shown by a report of the ;omptroller of the ;urrency# the
national banks of 9ew Gork ;ity# on the 8n" of :ctober# 1DEC#
hel" gol" coin to the amount of T1BH#(((#(((# in a""ition to legal
ten"er notes or greenbacks to the amount of T1DH#(((#(((.
:n the 1Eth of December# of the same year# the bank hol"ings of
legal ten"ers ha" "ecrease" to T11E#H1A#(((.
4hese figures "emonstrate that# while the banks hel"
T1BH#(((#((( in gol"# they ha" use" their legal ten"er notes# or
greenbacks# in looting the gol" reser!e to obtain gol" to buy these
n speaking of this course of the bankers in thus forcing an issue
of bon"s# the 9ew Gork Iorl" e"itorially sai":
"'he !an*s have no apparent use for "old%
"'hey have a!solutely no o!li"ations of any *ind, near or remote,
$hich are paya!le in "old%
" Nevertheless these !an*s are hoardin" "old in lar"e ;uantities, at
a time $hen to do so is to su!ject the Dovernment to heavy and
needless e<pense%
"'hus the clearin" house !an*s of Ne$ )or* alone, hold over
6C&,888,888 in "old for $hich they have no use, "
n referring to the immense hol"ings of gol" by the 9ew Gork
banks# the Iorl" further sai":
"1f they should turn it into the 'reasury and ta*e "reen!ac*s
instead, they $ould !e in every respect as $ell e;uipped as no$ to
meet their o!li"ations, $hile the Dovernment $ould not have to
issue another 6&88,888,888 of !onds, $hich it $ill cost the country
6..8,888,888 to pay, principal and interest%
"3re they seriously e<pectin" "old to "o to a premium>
"Gr are they and the !an*s all over the country in a tacit "com!ine"
to compel repeated !ond issues for their speculative profit> 'hese
!an*s ou"ht to ans$er these ;uestions% "
:n the following "ay# the Iorl"# in speaking of the answers of
the 9ew Gork bankers to this accusation# e"itorially sai":
"'heir replies are evasive, shifty, insincere%
"'hey have no o!li"ations paya!le in "old%
"'here is no possi!le reason for them to hoard "old, e<cept that they
e<pect a premium upon it, or that they $ish to force the Dovernment
to !orro$ money $hich it does not need%
0lthough the Iorl" was an a"!ocate of the gol" stan"ar"# yet it
"i" not hesitate to censure the banks of 9ew Gork ;ity for their
traitorous attempts to cripple the ,nite" 3tates. Iith renewe"
energy# the banks perse!ere" in their attack upon the gol" reser!e#
an" from the 1Bth "ay of Manuary# 1DEH# to 7ebruary 1Ath# they
"rew gol" out of the 4reasury to the amount of TAD#8J8#HC(.
n a single "ay# Manuary 8Hth# they "rew out TB#1HJ#(CJ# although
at that time these i"entical banks hel" a stock of gol" excee"ing
4he influential >ournal of ;ommerce# charge" that the 9ew Gork
banks# owing to their combine" policy to cripple the =o!ernment#
ha" purposely cause" a nee"less an" artificial scarcity of gol" to
the amount of TH(A#(((#(((.
:n 7ebruary C# 1DEH# it e"itorially sai":
RI6G M,34 I$ <:11:IL
"&% +ecause, $hile up to &C?. the !an*s supplied all "old re;uired
for e<port, since July &, &C?., they have dra$n for that purpose
from the 'reasury, t$o hundred and thirty millions%
".% +ecause, $ithin the same period, the !an*s have $ithheld "old
from customs, payments $hich, under their former usa"e, $ould
have "iven the 'reasury a "old income amountin" to t$o hundred
and seventy4three millions%
"0% +ecause, $ithin the last thirty4one months, the 'reasury has
suffered from this policy of the !an*s, a direct and indirect artificial
"old depletion of five hundred and three millions%
"5ere, in a nutshell, is the e<planation of the condition of the
'reasury and of the causes compellin" its virtually needless loans%"
:n the other han"# the 9ew Gork 4imes# with its accustome"
loyalty to the money power# urge" these banks to coerce
;ongress to "o their bi""ing.
t sai":-
"+ut $e close, as $e !e"an, $ith the un;ualified statement that
Con"ress $ill not do this4that it $ill not do anythin", unless it !e
forced to action !y the over$helmin" pressure of pu!lic opinion% 1t
is sheer folly to rely on anythin" else%
'his force or"ani2ed, directed, and concentrated upon Con"ress, as
it $as in the sprin" of &C?&, $hen the free coina"e !ill $as *illed,
as it $as in &C?0, $hen the repeal !ill $as enacted, $ill do the
$or*% Nothin" else $ill%"
3ince the repeal of the purchasing clause of the 3herman law up
to this time# gol" to the amount of T1B8#(((#((( was with"rawn
from the 4reasury# "espite the fact that Presi"ent ;le!elan"# in his
message of 0ugust D# 1DEA# gra!ely "eclare" that the repeal of the
purchasing clause of the 3herman law woul" stop the "epletion of
the gol" reser!e.
:n the 1Bth "ay of Manuary# 1DEC# the 3ecretary of the 4reasury
in!ite" bi"s for the sale of bon"s to strengthen the gol" reser!e.
4he amount offere" was fifty millions for sale# an" "eli!ery was
to be ma"e 7ebruary Ar".
0t the time of this sale of bon"s# the banks of 9ew Gork ;ity
hel" many millions of gol"# but# instea" of using their hol"ings to
pay for these bon"s# they presente" treasury notes# an" "rew out
of the 4reasury T8(#811# ((( in gol" to take up these bon"s.
4herefore# while these banks were "eman"ing issues of bon"s to
maintain the public cre"it+ they utilize" this !ery issue as a means
to further "eplete the 4reasury of its gol".
4he 3ecretary claime" that# un"er the pro!isions of the
1esumption 0ct# he ha" full authority to issue bon"s for the
re"emption of the greenbacks.
4he gol" reser!e# thus expan"e" beyon" the one hun"re" million
"ollar mark# was again attacke" by these conspirators with the
e!i"ent purpose of forcing gol" to a premium# an" to compel an
a""itional issue of bon"s.
4he gol" reser!e again began to melt away# an"# on 9o!ember
1A# 1DEC# the 3ecretary of the 4reasury a"!ertise" for bi"s for the
sale of an a""itional TH(#(((#((( of 1(-year H per cent. bon"s.
7our hun"re" an" eighty-se!en bi"s were recei!e" for these
bon"s so offere".
4o pay for these new bon"s# immense 5uantities of gol" were
again with"rawn from the 4reasury.
,nite" 3tates 3enator =ray# a gol" stan"ar" champion# a"mitte"
this fact in a speech in which he state" that# from December 1#
1DEC# to 7ebruary 1A# 1DEH# TD(#BDH#((( was exchange" for
treasury notes# of which only TAJ#DH8#ADE was exporte".
0s a matter of fact# a large amount of this was hoar"e" for future
purchases of bon"s.
:n December Hth the reser!e ha" been expan"e" to
T111#1C8#(81# an" imme"iately this gol" reser!e# thus freshly
built up by this secon" sale of bon"s# was again attacke" by the
9ew Gork bankers# by exchanging greenbacks for gol" at the sub-
treasury in 9ew Gork ;ity.
n the beginning of 7ebruary# 1DEH# the with"rawal of gol"
became greater than e!er before known# an" the banks openly
a!owe" their intentions to force a thir" issue of bon"s.
Meanwhile# it was rumore" in Iall street# that the 3ecretary of
the 4reasury ha" secretly negotiate" a sale of bon"s to Messrs.
<elmont an" Morgan.
n speaking of both of these facts# the 9ew Gork Press# of
7ebruary Bth# sai":--
"Dold 'o +uy +onds4Wall Street Ieady 'o Io! 'reasurer (eter to
(ay (aul%
"=ully 6:88,888 in "old coin $as $ithdra$n from the su!4treasury
While this is not a lar"e amount as compared $ith other days, it is
si"nificant and su""estive%
1t means nothin" more or less than that the !an*s and trust
companies in the city are preparin" to ta*e up a considera!le
portion of the prospective !ond issue%
"+ut it is more than li*ely that the !an*s $ill "et even $ith the
Dovernment after all% 'he ;uiet "old hoardin" that is "oin" on just
no$ means that this money is to !e used to !uy the ne$ !onds, and
after they are once o!tained, it $ill !e a comparatively easy matter
for the purchasers to replenish their vaults and safes, $ith
practically the same coin a"ain !y means of le"al tenders%
1n short, it is only another instance of (eter !ein" ro!!ed to pay
9: 33,$ 04 P1$3$94.
"+oth /r% /or"an and /r% +elmont $ere at their offices yesterday,
$hich "ave color to the report that everythin" $as "fi<ed" so far as
the ne$ issue is concerned% /r% +elmont declined to !e intervie$ed,
and /r% /or"an had only this to say for pu!lication:
L1 am satisfied that no announcement of a !ond issue $ill !e made
until after a vote in the 5ouse on the Sprin"er !ill% 1 am also
satisfied that (resident Cleveland and Secretary Carlisle are *eenly
alive to the situation%"
:n 7ebruary D# 1DEH# the 3ecretary of the 4reasury negotiate" a
secret contract with two great banking houses of /on"on#
$nglan"# for the sale of TJ8#(((#((( of C per cent.# thirty-year
4he text of the infamous contract is as follows:
"'his a"reement entered into, this Cth day of =e!ruary, &C?7,
!et$een the Secretary of the 'reasury of the nited States, of the
first part, and /essrs% 3u"ust +elmont K Co%, of Ne$ )or*, on
!ehalf of /essrs% N% /% Iothschild K Sons, of @ondon, En"land,
and themselves, and /essrs% J% (% /or"an K Co%, of Ne$ )or*, on
!ehalf of /essrs% J% S% /or"an K Co%, of @ondon, and themselves,
parties of the second part%
"Witnesseth: Whereas it is provided !y the Ievised Statutes of the
nited States ,section 0,:88- that the Secretary of the 'reasury may
purchase coin $ith any of the !onds or notes of the nited States
authori2ed !y la$, at such rates and upon such terms as he may
deem most advanta"eous to the pu!lic interests, and the Secretary
of the 'reasury no$ deems that an emer"ency e<ists in $hich the
pu!lic interests re;uire that, as hereinafter provided9 coin shall !e
purchased $ith the !onds of the nited States, of the description
hereinafter mentioned, authori2ed to !e issued under the act entitled
L3n act to provide for the resumption of specie paymentsH, approved
January &Jth, &C:7, !ein" !onds of the nited States descri!ed in
an act of Con"ress approved July &Jth, &C:8, entitled
L3n act to authori2e the refundin" of the national de!t%H
"No$, therefore, the said parties of the second part here!y a"ree to
sell and deliver to the nited States 0,788,888 ounces of standard
"old coin of the nited States, at the rate of 6&:%C8JJ& per ounce,
paya!le in nited States J per cent%, thirty4year coupon or
re"istered !onds, said !onds to !e dated =e!ruary &st, &C?7, and
paya!le at the pleasure of the nited States after thirty years from
date, issued under the acts of Con"ress of July &J, &C:8, January
.8, &C:& and January &J, &C:7, !earin" interest at the rate of J per
cent%, per annum, paya!le ;uarterly%
"=irst, Such purchase and sale of "old coin !ein" made on the
follo$in" conditions:
"&% 3t least one half of all coin delivera!le herein under shall !e
o!tained in and shipped from Europe, !ut the shipments shall
not !e re;uired to e<ceed 088,888 ounces per month, unless the
parties of the second part shall consent thereto%
".% 3ll deliveries shall !e made at any of the su!4treasuries or at
any other le"al depository of the nited States%
"0% 3ll "old coins delivered, shall !e received on the !asis of .7%C
"rains of standard "old per dollar, if $ithin limit of tolerance%
"J% +onds delivered under this contract are to !e delivered free of
accrued interest, $hich is to !e assumed and paid !y the parties
of the second part at the time of their delivery to them%
"Second, Should the Secretary of the 'reasury desire to offer or sell
any !onds of the nited States, on or !efore the &st day of Gcto!er,
&C?7, he shall first offer the same to the parties of the second part9
!ut thereafter he shall !e free from every such o!li"ation to the
parties of the second part%
"'hird, 'he Secretary of the 'reasury here!y reserves the ri"ht,
$ithin ten days from the date hereof, in case he shall receive
authority from Con"ress therefor, to su!stitute any !onds of the
nited States, !earin" 0 per cent% interest, of $hich the principal
and interest shall !e specifically paya!le in nited States "old coin
of the present $ei"ht and fineness for the !onds herein alluded to9
such 0 per cent% !onds to !e accepted !y the parties of the second
part at par, i%e%, at 6&C%B8JB7 per ounce of standard "old%
"=ourth, No !onds shall !e delivered to the parties of the second
part, or either of them, e<cept in payment for coin from time to time
received hereunder9 $hereupon the Secretary of the 'reasury of the
nited States shall and $ill deliver the !onds as herein provided, at
such places as shall !e desi"nated !y the parties of the second part
3ny e<pense of delivery out of the nited States, shall !e assumed
and paid !y the parties of the second part%
"=ifth, 1n consideration of the purchase of such coin, the parties of
the second part, and their associates hereunder, assume and $ill
!ear all the e<pense and inevita!le loss of !rin"in" "old from
Europe hereunder9 and, as far as lies in their po$er, $ill e<ert all
financial influence and $ill ma*e all le"itimate efforts to protect the
'reasury of the nited States a"ainst $ithdra$als of "old pendin"
the complete performance of this contract%
"1n $itness $hereof, the parties hereto have here unto set their
hands in five parts, this Cth day of =e!ruary, &C?7%
J% D% C3I@1S@E,
Secretary of the 'reasury%
3u"ust +elmont K CG%,
Gn !ehalf of /essrs% N% /% Iothschild K Son,
@ondon, and themselves% %
J% (% /GID3N K CG%,
Gn !ehalf of /essrs% J% S% /or"an K Co%, @ondon,
and themselves%
W% E% Curtis%
=rancis @ynde Stetson%"
f any citizen of the ,nite" 3tates "oubts that there is a great
international gol" an" bon" trust# seeking to bin" the worl" to its
gol"en chariot# let him rea" this notorious contract an" be
con!ince" of his error.
0 construction of this contract "iscloses the following remarkable
7irst# that two 0merican banking companies of 9ew Gork ;ity
represente" two great banking houses of /on"on# $nglan"# an"
3ecretary ;arlisle presumably the ,nite" 3tates.
3econ"# the gol" coin so purchase" shoul" be pai" into the
4reasury at the rate of A((#((( ounces per month# except these
foreign firms shoul" agree to make larger monthly payments.
:ne half of this gol" was to be obtaine" in $urope.
4hir"# the 3ecretary of the 4reasury boun" himself not to offer or
sell any bon"s of the ,nite" 3tates to any other parties# on or
before the 1st "ay of :ctober# 1DEH# without first offering all such
bon"s to this foreign syn"icate.
4his place" the =o!ernment at the absolute mercy of alien
bankers# an" was a most cowar"ly surren"er of the interests of
the people to a foreign gol" trust.
7ourth# the 3ecretary of the 4reasury reser!e" the right to
substitute bon"s specifically payable in ,nite" 3tates gol" coin#
pro!i"e" ;ongress shoul" confer authority upon him to make
such substitution.
4he purpose of this clause in the contract was# shoul" ;ongress
consent thereto# to issue bon"s specifically payable in gol" coin#
an" thus commit the country to an issue of gol" bon"s. 4herefore#
shoul" the ,nite" 3tates issue an obligation specifically payable
in gol"# this example woul" be followe" by e!ery cre"itor# an"
e!ery mortgage# bon"# note# or other security or e!i"ence of "ebt#
woul" become a gol" obligation# an" the nation an" its citizens
woul" be boun" han" an" foot# an" "eli!ere" o!er to the ten"er
mercies of the national banking money power an" the
international gol" trust.
s there an international gol" trustL
;lause fi!e of paragraph four of this contract is an explicit
acknowle"gment on the part of the ,nite" 3tates# that there is
such an institution.
4hat clause is as follows:
"1n consideration of the purchase of such coin, the parties of the
second part, and their associates hereunder, assume and $ill !ear
all the e<pense and inevita!le loss of !rin"in" "old from Europe
hereunder9 and as far as lies in their po$er, $ill e<ert all financial
influence, and $ill ma*e all le"itimate efforts to protect the
'reasury of the nited States a"ainst the $ithdra$als of "old,
pendin" the complete performance of this contract%"
4hink of itS
4his great nation ha!ing resources far excee"ing the whole of
those of $urope# with a population of se!enty millions of
energetic people# ascertaining that its 3ecretary of the 4reasury
ha" bought the protection of a foreign bon" syn"icateS
/et them further pon"er# that this syn"icate consi"ere" itself so
powerful# that it coul" protect the 4reasury of the ,nite" 3tates
against the with"rawals of gol" therefrom.
n speaking of this transaction# the 9ew Gork 4ribune asserte"
that this syn"icate coul" control the money of the worl".
t sai":
"No plan that did not provide for "ettin" "old from Europe, and that
did not also provide a means to chec* shipments of "old to Europe,
could "ive the 'reasury one dollar of permanent relief% 'his
underta*in" to chan"e the $hole course of e<chan"e, must
necessarily !e e<pensive, !ut the syndicate can do it, and the
'reasury is accordin"ly !enefited%"
0s a result thus far of Presi"ent ;le!elan"&s warfare upon sil!er#
we fin" that this high public officer# who wante" the purchasing
clause repeale" to check the with"rawal of gol" from the
4reasury# ma"e an uncon"itional surren"er to the international
gol" trust.
6e sought to buy its protection.
4he bon"s so issue" un"er this secret contract were sol" at a
premium of only four an" one-half cents on the "ollar.
0t that time# the same class of bon"s ha!ing but twel!e years to
run# sol" at a premium of ten an" one-half cents.
n the meantime# it was rumore" that the a"ministration ha"
entere" into a secret negotiation with this syn"icate# an" on the
Dth of 7ebruary# 1DEH# Presi"ent ;le!elan" transmitte" this
contract to ;ongress# accompanie" by a message# in which he
re5ueste" permission of ;ongress to substitute a A per cent.# gol"
bon" in lieu of the bon"s so sol" to this syn"icate.
mme"iately upon the appearance of this message in the 6ouse#
Mr. Iilson# of Iest Firginia# reporte" a >oint resolution
authorizing the 3ecretary of the 4reasury to issue gol" bon"s to
the amount of TJH#11J#8BH.
0t the same time# a similar bill was intro"uce" in the 3enate by
Mr. Filas# of Iisconsin.
During the "ebate on these measures# it was pointe" out by the
sil!er a"!ocates that the C per cent. bon"s sol" to this syn"icate
were worth T1.1EU# although they ha" been sol" at T1.(CU#
netting the syn"icate a profit of not less than T1(#(((#((( by this
t was also charge" that the a"ministration ha" sol" these bon"s
to the banking houses of 1othschil" an" Morgan at this low
figure# with the express purpose of "epreciating the national
cre"it with a !iew of forcing an issue of gol" bon"s.
4he attempt to force the Iilson resolution through the 6ouse
faile" by the "ecisi!e !ote of 1JB nays to 18( yeas.
4he absur" pretense put forth by Presi"ent ;le!elan" an" his
a"herents# that the national cre"it must be strengthene" by
substituting the term gol"# for that of coin in its obligations# was
fully expose" by subse5uent e!ents.
4en "ays after the issue of the original bon"s# nearly thirty
millions of them were sent to /on"on to be sol" by the syn"icate.
n twenty-two minutes after these bon"s were place" on the
market# the subscriptions for them amounte" to ten times the sum
total of the bon"s.
4o-"ay# these bon"s that were thus "ispose" of by this nefarious
contract to a foreign syn"icate at T1.(CU# are now worth T1.8EU#
- being an a"!ance of twenty-fi!e cents on the "ollarS 0gain the
bol" attempt of Presi"ent ;le!elan" to fasten the gol" stan"ar"
on the country ignominiously faile".
:n 7ebruary B# 1DEH# one "ay pre!ious to the communication of
the bon" contract# 6ouse bill D#B(H was brought forwar" in the
6ouse of 1epresentati!es.
4his measure propose" to authorize the 3ecretary of the 4reasury
to issue TH((#(((#((( of bon"s to maintain a sufficient gol"
reser!e# an" to re"eem an" retire ,nite" 3tates notes.
4hese repeate" attempts of the a"ministration# an" its satellites in
;ongress# to bur"en the people with an enormous bon"e"
in"ebte"ness# is one of the most remarkable phenomena in all
t seeme" that the whole energy of Presi"ent ;le!elan" was
"irecte" with an eye single to loa"ing "own the country with a
!ast perpetual "ebt# e!en though it woul" ruin the party which
ha" honore" him so fre5uently.
6e unscrupulously use" the immense patronage of his office to
force his measures through ;ongress# but beyon" securing the
repealing of the purchasing clause# he faile" in e!ery instance to
coerce ;ongress into submission to his will.
6e likewise faile" in this propose" bon" measure# for# on a
motion to engross the bill an" pass it to a thir" rea"ing# it was
"efeate" by a !ote of 1J8 nays to 1AH yeas.
n a few months after the secret bon" contract with the Morgan
1othschil" syn"icate# the attack upon the gol" reser!e began
anew# as the bank of $nglan" bi" TC.E1 for gol"# being e5ui!alent
to a premium of one per cent on the "ollar.
Ihene!er the bank of $nglan" "esire" to increase its stock of
gol"# it raise" the price at its counter# an" this policy attracte"
gol" from all o!er the worl".
4he usual exchange !alue of a <ritish so!ereign in gol" is TC.DJ#
therefore# by raising the price to TC.E1# it ga!e notice to all the
worl" that it was offering a premium for gol".
n 0ugust# 1DEH# while the rate of exchange stoo" at TC.E1# the
9ew Gork bankers rai"e" the reser!e to obtain gol" to ship to
/on"on for this premium.
n that month# T1H#(((#((( was with"rawn from the 4reasury an"
exporte" to that country.
n the following month# the high rate of exchange still continue"#
an" the gol" gamblers of Iall street "rew T1J#(((#((( out of the
4reasury for exportation. 4his process still continue"# an"# in the
meantime# the a"ministration opene" negotiations with the
banking house of M. P. Morgan 2 ;o.# for the "isposal of
T8((#(((#((( of thirty-year C per cent# bon"s at pri!ate sale#
4his brazen attempt of the a"ministration to again sell bon"s at
pri!ate sale to this syn"icate# at a figure way below the market
price# brought forth such a storm of in"ignation an" protest that
e!en Presi"ent ;le!elan" 5uaile" before it.
4herefore# on Manuary J# 1DEJ# 3ecretary ;arlisle issue" a
circular# in!iting proposals for the sale of C per cent. thirty-year
4he bi"s recei!e" for this propose" series of bon"s aggregate"
THJD#8HE#DH( - more than fi!e times the amount of the bon"s
4he Morgan syn"icate offere" to take the whole issue at T1.1(JE.
4his bi" was six per cent. higher than the syn"icate woul" ha!e
pai" at pri!ate sale# ha" it been consummate".
t was a little o!er six per cent. more than the syn"icate pai" for
the issue of the TJ8#(((#((( of 7ebruary D# 1DEH.
4here were BD( bi"s at prices higher than that offere" by the
Morgan syn"icate.
t will be borne in min" that this bi" of the syn"icate for these
bon"s# at an a"!ance of six per cent.# o!er that of the same
Morgan-1othschil" syn"icate for the issue of 7ebruary D# 1DEH#
was for coin bon"s of the same kin" as this latter issue.
4he fact that this syn"icate was willing to pay se!eral million
"ollars more for the same class of bon"s# as those negotiate"
un"er the secret contract of 7ebruary Dth# is e!i"ence that the
ob>ections of Presi"ent ;le!elan" to coin bon"s# reste" upon the
flimsiest pretense.
t must be remembere" that this increase" price was offere" many
months after ;ongress refuse" to authorize the 3ecretary of the
4reasury to issue bon"s specifically payable in gol" coin# an" that
the Matthews resolution a"opte" by ;ongress# Manuary 8H# 1DBD#
"eclaring that the bon"s of the ,nite" 3tates coul" be legally pai"
in stan"ar" sil!er "ollars of C18U grains# was unrepeale"# an"
was in full force an" effect as "eclaratory of the financial policy
of the ,nite" 3tates.
4he continue" efforts of Presi"ent ;le!elan" to retire the
greenbacks an" treasury notes# an" to issue bon"s in lieu thereof#
seeme" to ha!e taken possession of his min" with a zeal
approaching that of mania.
6is "etermine" attitu"e on these public 5uestions# exercise" great
influence upon the opinions of many Democratic members of
6ence# many of the lea"ers of that party# who# prior to 1DE8# were
the most consistent a"!ocates of free coinage of sil!er# su""enly
change" their positions upon these important 5uestions# an" "i"
the bi""ing of Presi"ent ;le!elan"# in his attempt to fasten a gol"
stan"ar" an" a national banking system upon the people# with a
zeal that was remarkable.
Many of these ;ongressmen were "efeate" in the election of
1DEC# an" Presi"ent ;le!elan" manifeste" his fatherly care for his
new-born protYgYs by appointing them to 7e"eral offices+
>u"geships# postmasterships# an" !arious other appointments#
were han"e" aroun" to these apostates to Meffersonian principles#
as a rewar" for their treachery to the people# an" their fi"elity to
that man who ha" sought to "isrupt that great an" historic party#
which ha" taken him from obscurity an" ele!ate" him to the
highest position in the gift of the people.
4he total amount of bon"s issue" "uring his a"ministration was
n the meantime# 3ecretary ;arlisle announce" that he woul"
re"eem sil!er "ollars in gol"# shoul" it become necessary to
maintain the parity of the metals.
4he scheme of the national banking money power was now
consummate"# as far as it lay in the power of the 3ecretary# in as
much as he e!i"ence" a purpose to treat more than H((#(((#(((
stan"ar" sil!er "ollars as mere cre"it money# re"eemable in gol".
4his pa!e" the way for a "eman" of the national banks# that the
=o!ernment issue sufficient bon"s to take up an" retire this
3il!er money from circulation.
Ihile Presi"ent ;le!elan" was "$or*in" in Con"ress" by means
of his patronage# the money power was working through its
!arious associations an" through the press to train the people to
accept the absur" principle# that the 5uestion of money "i" not
fall within the pro!ince of laws an" legislation# but that its
solution reste" solely with commerce - that is the banking power.
n a letter written by =eorge 3. ;oe# Presi"ent of the 0merican
$xchange 9ational <ank# one of the most powerful in the
country# to MosY 7. De 9a!arro# the former exhibite" his supreme
contempt for the powers of ;ongress.
4he closing sentences of this letter# "ate" 0pril 1(# 1DEA# are as
"Commerce is lar"er than "overnments and $ill certainly prevail
over them all% When once this conviction prevails, $e shall all !e
surprised to see ho$ easily natural la$s $ill con;uer local
prejudice and le"islation%"
4his writer who ma"e his wealth an" secure" his fame out of the
law-making power of the =o!ernment# now spurns that
constitutional authority# as inferior to the unlimite" gree" of that
class of which he is a shining light.
n a speech "eli!ere" before the ;hicago <ankers& ;lub# 0pril B#
1DEH# Iilliam ;. ;ornwall# a lea"ing banker of <uffalo# sai":
"Gn this silver ;uestion the 3merican people are !e"innin" to
discard the old delusion that la$ can re"ulate the value of coin%"
4he 9ew Gork 3un# 0pril# 1DEH# sai":
"'he issue is !et$een "old and silver as the standard of currency,
the value of each metal $ith respect to each other and to other
commodities, !ein" totally !eyond the po$er of any financial
le"islator or convention to chan"e%"
4his was the gist of the specious argument of the gol" stan"ar"
press an" national banking power throughout the country.
4he money power became so elate" at its success in ha!ing sil!er
stricken "own# that it grew so bol" as to threaten the political
future of any public man who "i" not align himself with that
t was ab>ect submission or political "eath.
n the speech of <anker ;ornwall# 0pril B# 1DEH# from which we
ha!e 5uote"# he sai":
"'he politician, hi"h or lo$, $ho to day turns from the strai"ht
course of sound money and the "old standard, sta!s dead once and
for all every chance of political success, especially if he $ants to !e
4his bol" threat was greete" with the tumultuous cheers of the
bankers before whom this speech was "eli!ere". 4he gol"
stan"ar" press en"orse" these sentiments of the money power.
During the remain"er of the ;le!elan" a"ministration# the
Presi"ent was wholly unable to carry any of his financial pro>ects
through ;ongress.
6e became a lea"er without a party. $!en the 1epublicans# whose
financial policies he ha" so strenuously en"ea!ore" to force upon
the Democracy# seize" upon e!ery opportunity to se!erely
"enounce his management of public affairs# "espite the fact that
their notable lea"ers ha" warmly "efen"e" his course in
repeate"ly issuing bon"s to maintain the "parity of the metals%"
:utsi"e of the cli5ue of national bank presi"ents# trust magnates#
stock speculators# bon" syn"icates# an" sycophantic office
hol"ers# the Presi"ent ha" no following worthy of the name of
4he facts "etaile" in the foregoing pages exhibit the won"erful
prescience an" the consummate plans of the national banking
money power# as follows:
1. t secure" the partial "emonetization of go!ernment legal
ten"er currency in 1DJ8-A+
8. 4he payment of interest upon a !ast bon"e" "ebt in coin# an"#
therefore# it obtaine" absolute control of the gol" of the country+
A. 4he establishment of national banks to issue paper money#
which coul" only be put into circulation by buil"ing up a cre"itor
an" a "ebtor class+
C. 4he control of the entire !olume of money in the country# as a
means of securing possession of the great railway properties# an"
to organize those mighty trusts which now monopolize all
pro"uction an" "istribution.
H. 4he "emonetization of sil!er as a means of hol"ing the Iest
an" 3outh in sub>ection to its will+
J. 4he consoli"ation of all great moneye" corporations# with the
!iew of sub>ecting the pro"ucti!e energies of the nation to its
B. t has >oine" han"s with the money power of $nglan" in its
efforts to control 7e"eral legislation+
D. t ha"# time an" again# use" its immense power to thwart the
will of the people as expresse" through ;ongress+
E. t has asserte" a superiority abo!e all law an" the ;onstitution#
an" has "eclare" that its fiat is more powerful than the authority
of this nation+
1(. t has robbe" the =o!ernment of its highest so!ereign power-
that of issuing an" controlling the me"ium of exchange.

46$ 1$M$DG.
1. 4he restoration to the =o!ernment of the power of issuing an"
coining money.
8. 4he permanent "estruction of the national banking system.
A. 4he application of the principles of Mefferson to the
a"ministration of go!ernment.
"Gh, !e$are my fello$4citi2ens, of stoc* jo!!ers or !an*in"
associations $ho have an interest as distinct from that of the
community, as that of drones from that of !ees%
Gh, !e$are, ye le"islators, ho$ you create a moneyed aristocracy, as
dan"erous to "overnment as (raetorian Duards
in Iome, or
in 'ur*ey%
"@et me repeat that: 1 !ehold this country as the asylum of the
afflicted, the sanctuary of the oppressed, oil $hich the eyes of
philanthropists are every$here fi<ed $ith affection and an<iety%
/oral feelin"s, common interests, and "eneral principles unite as a
!and of !rothers%
Whatever appertains to the "eneral $elfare should emanate from
the "eneral Dovernment%
"'his is the spirit of our Constitution4this is the central a<is upon
$hich the nion must revolve, and any important deviation must
ma*e all return to chaos% 1f 1 am assailed for this interference 1 shall
reply, "5omo sum et nihil humani a me alienum puto%
-4homas Mefferson.
Praetorian =uar"s - a force of bo"yguar"s foun"e" by the 1oman $mperor aroun"
8BH<; to protect him# but also a threat because of their knowle"ge of warfare. $mperor
;onstantine "issol!e" them in AAB0D.
Manissaries were chosen by the :ttomans as chil"ren from the christian community to
protect the :ttoman $mperor.
/atin for - am a man# an" nothing that is human is foreign to me.
;60P4$1 KF.
;0MP0=9 :7 1DEJ
")ou shall not crucify man*ind upon a cross of "old% "
-Iilliam M. <ryan.
"1t is to the property of the citi2en, not to the demand of the creditor
of the State, that the ori"inal faith of society is pled"ed% 'he claim
of the citi2en is prior in time, paramount in title, and superior in
- $"mun" <urke.
4he course of Presi"ent ;le!elan"# in his continue" an" energetic
efforts to re!olutionize the principles of the Democracy an" to
commit that party to the espousal of the national banking money
power was "isastrous in the extreme. 0s state"# the congressional
elections of 1DEC went o!erwhelmingly in fa!or of the
1epublicans# an" they carrie" the 6ouse of 1epresentati!es by a
tremen"ous ma>ority.
9otwithstan"ing this great re!erse# he perse!ere" in his financial
policy to the last# an" he bol"ly an" unscrupulously prostitute"
the immense official patronage at his "isposal# to force his !iews
upon the millions of the rank an" file of that party which he ha"
practically "isrupte".
3trenuous efforts were put forth by the national banking# stock
-gambling# gol" stan"ar"# an" office-hol"ing element# to elect a
sufficient number of "elegates to the coming national con!ention#
an" thus "ictate the platform# an" align the party in compliance
with the !iews of the a"ministration.
Ihile the a"ministration an" its satellites were ben"ing their
whole energies to accomplish this "esign# the associate" banks#
particularly of the $ast# as heretofore# lai" their plans to
manipulate the con!entions of both the lea"ing political parties.
n the early part of 1DEJ# a large number of bankers met at the
Murray 6otel in 9ew Gork ;ity# an" after a"opting a series of
resolutions "enouncing the free coinage of sil!er# announce" their
plan in the following language:
"Iesolved, 'hat $e ur"e upon the dele"ates to the national
conventions of !oth of the political parties, the necessity of insistin"
on such action as $ill secure a plain and une;uivocal declaration
on the maintenance of the present "old standard%"
:n March 8Ar"# the 0merican <ankers& 0ssociation issue" the
following instructions to the bankers of the country:
4he 0merican <ankers& 0ssociation#
8 Iall 3treet an" E(-EC <roa"way#
9ew Gork# March 8A# 1DEJ.
"'o the +an*ers of the nited States:4
"3t a meetin" of the E<ecutive Council of the 3merican +an*ersH
3ssociation, held in this city, on /arch &&, &C?B, the follo$in"
declaration $as made !y a unanimous vote:4
"'he E<ecutive Council of the 3merican +an*ersH 3ssociation,
declare une;uivocally in favor of the maintenance of the e<istin"
"old standard of value, and recommend to all !an*ers, and to the
customers of all !an*s, the e<ercise of all their influence as citi2ens
in their various states, to select dele"ates to the political
conventions of !oth "reat parties $ho $ill declare une;uivocally in
favor of the maintenance of the e<istin" "old standard of value%
")our influence is earnestly re;uested to "ive practical effect to this
Eu"ene 5% (ullen, (resident%
James I% +ranch,
Joseph C% 5endri<,
Chairman E<ecutive Council%"
Pursuant to these instructions# the associate" banks acti!ely
began operations to secure a sufficient number of "elegates who
woul" embo"y the "eman"s of the bankers in the platforms of
both great political parties.
Ihile the national bankers an" their allie" interests were thus
acti!ely engage" in manipulating the selection of "elegates to the
two great con!entions# the Democratic rank an" file were e!en
more !igilant to checkmate these schemes# an" they finally
succee"e" in "efeating the machinations of this 6essian money
# which ha" hitherto thrown its strength to the party that
ga!e them the greatest pecuniary benefits. :n the 1Jth of Mune#
the 1epublican 9ational ;on!ention met in 3t. /ouis to select its
stan"ar" bearers.
6on. ;. I. 7airbanks# of n"iana# a !ery wealthy railroa" lawyer#
from which fact he recei!e" great consi"eration as a coming
lea"er of his party# was chosen 4emporary ;hairman of the
con!ention. 6on. Mohn M. 4hurston# of 9ebraska# was honore"
with the Permanent ;hairmanship.
4he significance of Mr. 4hurston&s selection to presi"e o!er this
con!ention will be appreciate"# from the fact# that he was the
general legal counsellor of the ,nion Pacific 1ailway ;ompany -
a corporation whose corrupt practices ha!e "one more to "ebauch
Iestern courts an" legislatures than any other agency in the lan".
3uffice it to say that this great corporation# built by the
6essian - a large component of paper use" in the manufacture of currencies.
of ;ongress# ga!e birth to that gigantic scan"al of
the age# the ;re"it Mobilier# which caught in its meshes a Fice-
Presi"ent of the ,nite" 3tates# an" many "istinguishe" 3enators
an" 1epresentati!es of ;ongress.
0 great number of the Iestern 1epublicans# le" by 3enator
4eller# ma"e a "esperate struggle to obtain recognition for the free
coinage of sil!er. 4hey were o!erwhelmingly "efeate" an"
therefore with"rew from the con!ention.
4he financial plank of the platform "eclare" against the free
coinage of sil!er# unless it coul" be secure" by an international
agreement with the lea"ing commercial nations of the worl"# an"#
in case of failure to obtain such agreement# the existing gol"
stan"ar" shoul" be maintaine".
4his expression in fa!or of an international agreement# was the
merest subterfuge on the part of the gol" stan"ar" element# to
obtain the !otes of those 1epublicans who fa!ore" free coinage.
6. 6. -ohlsaat# of the ;hicago 4imes-6eral"# was influential in
securing the a"option of the money plank.
n speaking of the language of this plank# the correspon"ent of
that paper# who was present "uring the 3t. /ouis con!ention# use"
the following language with reference to the labors of Mr.
-ohlsaat in securing its a"option.
6e sai":
"'he ;ualifyin" $ords used !y the committee, pled"in" the party to
endeavor to promote an international a"reement, are intended to
stren"then the platform from the political point of vie$ $ithout in
any $ay $ea*enin" it as a fran* and fearless declaration for the
"old standard%
Munificent - 0rchaic term to mean: generous# bountiful or liberal - so means:
3s it is and has !een, the Iepu!lican policy to promote
international !i4metallism, and as such !i4imetallism is earnestly
desired !y almost every one in the country of !oth parties, nothin"
is lost and somethin" is "ained !y "ivin" the Western Iepu!licans a
ray of hope in the future%"
:n the Jth of Mune prece"ing# this man -ohlsaat# who ha" written
the 1epublican platform# ma"e the following e"itorial reference
to international bimetallism.
6e sai":
"3ny reference to an international a"reement is shifty and futile% 1t
deceives no!ody !ecause every!ody *no$s, first, that there is not
the sli"htest possi!ility of an international a"reement at any ratio9
and, second, that if such an a"reement $ere formally entered into,
no Dovernment could !e !ound to a!ide !y it a day lon"er than its
o$n industrial and commercial interests $ould appear to $arrant%"
t will be seen that Mr. -ohlsaat# on the Jth of Mune# "eclare" an
international agreement as "shifty and futile%"
:n the 1Jth of Mune he embo"ie" this "shifty and futile" scheme
into the form of a solemn "eclaration of party principlesS