1 IBRAR.V OP Tin UNIVERSITY OF CALIFORNIA IFT OF Class m .IX ABO EINAMC B0" \ Behold I have set before thee an open door, and no man can shut it : Revelation III : 8. " Thy princes are rebellious, and companions of thieves." PRINCIPALLY ABOUT FINANCE Financers and the People They Finance (With a Few Digressions into Kindred Subjects) BY ONE OF THE RANSOM-PAYERS OF THE UNIVERSITY OF One of the old meanings of " feynaunce," according to the Oxford Dictionary, was " to pay ransom," but we have long lost sight of the original uses not only of words but^of things also, coming to look upon certain things as indispensable to society, just as we thought, until lately, that mosquitoes, flies, fleas,*and other pests should be with us always. GIFT Copyright, 191 I. By Henry Clifford Stuart. Copyright in Great Britain. All rights reserved. PRESS OF JUDD & DETWEILER, INC., WASHINGTON, D. C. THE WRITER'S APOLOGY. I approach the subjects of national finance and of banking in the United States, not as a professor of economics but as an earnest seeker after light, well aware how unqualified I am for the task. I would have liked to devote much more time to investigation, but as certain interests have already begun to agitate for changes in our system, and as I believe I can perceive their reasons for so doing, I feel impelled to give my immature ideas at once for what they may be worth. I realize that my verbiage might be pruned to great advantage and the article coordinated so as to effect a more harmonious continuity of ideas, but I again plead lack of time and give them just as they came to me, with all the digressions. Years of study would not do the subject justice, and I have not studied it at all, such authorities as I have so far glanced at all dealing with the matter from the orthodox and ancient point of view.* And I apologize in advance for any intemper- ance of language, on the ground of not being fitted temperamentally to view injustice with equanimity. HENRY CLIFFORD STUABT. WASHINGTON, D. C., February, 1911. * I have the very voluminous Reports of the National Monetary Com- mission before me, which I hope to find time to read and which I may try to digest for future comment, though there is no doubt, in my mind, that very hard and continued digging will be necessary to arrive at the material requisite for the presentation of a simple balance-sheet such as may be understood by common man. "For I mean not that other men be eased, and ye burdened : But by an equality, that now at this time your abun- dance may be a supply for their want, that their abun- dance also may be a supply for your want ; that there may be equality: As it is written, He that had gathered much had nothing over; and he that had gathered little had no lack." II Corinthians, viii, 13/15. TO MY WIFE Who loves righteousness and hates inequity as much as 1 do, but whose spirit, alas, for me, is far gentler than my own. Speech is of man imperfect. .f OF THE I UNIVERSITY In the beginning God created The heaven and the earth.* We know what happens when any cell of our bodies disregards the rights of other cells and pro- ceeds to develop along independent lines It's prompt elimination by the knife does not always avail to save us from dissolution. Nor can the human mind conceive anything but destruction as the dire result of any member of the solar system, or of this system itself, for that matter, happening to depart from it's prescribed course. God has not chosen to act independently but has made all things interdependent, which is but another way of saying that all things are one. Nature is centrally governed everywhere, her multitudinous centers being themselves centrally gov- erned still. We can contemplate a center with hope, but the thought, or lack of thought, of an infinite leads no- where but to despair. When those angels who thought to be indepen- dent were cast into the outer darkness as yet unil- lumined by God, it must have been done by what we * And he has not parted with the title since. (7) 8 think of as centrifugal force, which may be but the withdrawal of real force by the withdrawal of the centripetal force, through the cohesive and conserving results of which alone, multicellular and communita- tive existence is possible. The centrifugal force, or withdrawal of force, is destructive But Force or power itself is eternal, and as such is to be reverenced. It is only the many errors in it's application by developing man that is to be de- plored. But although it is natural for man to rebel at the misapplication of power by his fellows to their own selfish ends, he should carefully observe that it is not the centralization, which is the only way that power can be applied at all, but the misapplication itself which is at fault and worked against him. It is to be regretted that the founders of this republic failed to make this distinction. They had been so cursed by the ignorantly selfish misapplication of power in other lands, that they sought to harness or destroy power itself by reversing the order of creation and establishing a number of independent states held together by a so-called central government itself with- out a center Eesponsibility had no resting-place any- where. So queer has been our attitude of mind on the question of our nationality, that the government of the nation has no single power that it has not had to fight for and which has not been unwillingly granted. The states all still claim sovereignty. It is but a short while since we beheld the fed- eral health officials in conflict with the health officials of a state as to whether or no plagues should be al- lowed to enter our ports. This fight was on for years and it is only lately that this federal right has been generally recognized. Some day we will rewrite the constitution and rewrite it short but so broad, that no other Hamilton or Marshall will be required to corkscrew out its sup- posedly implied significances. It will not require over five words, and these might be ; We are the American Nation. Then the different legislatures of our many states will no longer go their own sweet way, grinding out bad laws or abolishing good ones, all "for a con- sideration' 7 , with utter disregard for the statutes of their neighbors. As things are at present a man may be married in the south against his consent, and in the north with- out knowingly giving his consent ; may remain married in one state while divorced in another ; be crazy in New York and sane in Virginia ; injuncted by a Judge in one county and disjuncted by his colleague in the next. 10 If he 's got money enough to fetch the right law- yer, he can incorporate and reach the middle ground where no law applies ; And if he happen to be really rich he can even commit murder with perfect impunity. New Orleans can kill the Italians and 'Frisco run the Japs into the Bay, on which occasions it is usual for the President himself to inform his great and good friends, the King of Italy and the Emperor of Japan, by means of a private autograph, that deeply as he regrets the occurrences, there is no remedy therefor, Louisiana and California being SOVER- EIGN STATES, and that where the American gov- ernment dare not put it's foot, it would be indelicate of them to think of so doing. Of course the King of Italy and the Emperor of Japan, not really minding the loss of a few subjects more or less, wish to be gracious and allow the matter to blow over, still, not being Americans themselves, they find the situation beyond their mental grasp. However, if they are strictly up-to-date, and have profited by past experience to add an American Legal-light (furnished by or schooled in the State Department) to their establishment, as a majordomo or counselor, he will inform them that we have to em- ploy our nine wisest men, who do not always give an unanimous opinion, to tell Congress what the Con- stitution really means, and that however we may fight about the matter among ourselves, we have always de- clined to discuss it with outsiders. 11 And if the Emperor happen to have sent the King a copy of Togo's " Quotations from American Statesmen " (private circulation only), he will find that Togo, having evidently been overcome by the mass of conflicting material on this subject, dropped it with just one quote; "Oh lowest heaven, what's the Con- stitution among friends ?!" It will take many a long year yet to get States- Eights foolishness entirely out of our system of malad- ministration and confined to it's proper sphere; For despite the recent attempt to use the word "American" on the shields before our Diplomatic and Consular Offices, we are still the people of the Far- from-United States. The result of this political abortion is that ma- lignant growths have appeared so rapidly that the can- cerous condition of the body-politic is today apparent to all; But it is fortunate that the people now see the danger and, recognizing the utter inefficacy of the nos- trums with which the doctors of "the law" continue to flood them, have themselves begun to apply the knife to the very form of government itself ; For, being a young people, we will undoubtedly survive and wax strong again. But it is not my purpose to speak of government as a whole, but merely of the tap-root which supports the tree Finance ; 12 And American finance begins with Alexander Hamilton ! Hamilton's enemies said that he had no hand in the framing of the Constitntion, which seems to be the only kindly thing they ever said of him; But they were compelled to admit that he alone was responsible for the financial arrangements with- out which our government, such as it was, could not have endured. Now, the real achievement of Hamilton, to my mind, was not his great feat in establishing a financial system which is followed in it's essentials by our gov- ernment to this day ; not in his having created a public credit to fill the void then existing; not in his having augmented the circulating medium and supplied the financial machinery requisite to revive business ; not in his having laid down the lines on which this country has since been developed ; But in his having given vitality to the dry clauses of a paper constitution and succeeding, where others had failed, in giving strength to the central gov- ernment and thus allowing A Nation to come into ex- istence in his having been the first to realize the help- less insignificance of a state. But if this remarkable man was An American at a time when all others were states-righters, if it mat- tered not to him whether the Capitol were north or south, east or west, how much more striking still was 13 Ms attitude compared with that of the "States-man" of today, who always represents private interest, some- times represents local interest (when not conflicting with private special privilege), but who seldom gives a thought to the interests of America at large ! It is idle to speak about the "consent of the governed" the constitution itself provides that the majority shall govern the minority, with or without their consent and for many years now we have pre- sented the curious spectacle of an oligarchy governing a free majority against it's will. Some of us are now approaching a fitness for self-government, but in Hamilton's time we were no more so fit than are many so-called Eepublics in Spanish- America today. We will have an ideal govern- ment when the large majority are fit, and not before man's very nature makes it otherwise impossible. But it is a sad commentary on our people that the more progressive Spanish- American states, all of whom followed our lead in their form of government, should have been the first to find it unfit and to modify it to the needs of the people.* As we are not all fools, we must be long-suffering. A man of Hamilton's transcendent genius must have been as fully alive to the natural rights of man as was his great opponent Jefferson, but he, thinking where the other dreamed, perceived that general government must first be established and order secured before the people could even hope to progress. *The admirable article on the " Causes of Political Corruption," by Prof. Henry Jones Ford, in "Scribner's" Magazine, January, 1911. 14 Generations of serfdom had set the minds of men in narrow molds, many of which are still unbroken. Liberty they had just achieved; Equality (before the law) was their 's for a while; but Brotherhood! "Brotherhood" is but another name for civilization itself, and the sacrifice of the body of Christ has not as yet sufficed for man to attain thereunto. Such were the conditions when it became neces- sary for Hamilton to finance our government. The mass could not perceive then, any more than they can now, that man does not live by Gold alone but by the sweat of his brow; they could not realize that they could dispense with the silver and gold held by the Class, whereas this long uninured minority could not dispense with their labor, but positively counted upon them not only to sweatily wrench from the soil the products indispensable to the continued existence of both, but to produce a surplus which would enable them to swell their capital. So Hamilton supported the government and set the wheels of progress in motion by using the only means then possible that of appealing to the selfish interests of a Class the Bank was a mere expedient. Those who have had an opportunity to get glimpses of history in the making know how often the powers-that-be are themselves unaware of the hidden motives of those who lead them to act as they do ; 15 Thus even when we are fortunate enough to get accounts of events as they really happened, we are not always sure why they happened ; But Hamilton seems to have been open and di- rect both in thought and act Jefferson indirect. Now, when a positive character and a dreamy, vacillating nature come together, one is never in doubt as to the outcome Perhaps Jefferson's greatest claim to distinction is having given Hamilton the aid with- out which he would not have been able to put his financial measures through, though he has robbed him- self of the credit through his posthumous disclaimers. It was fortunate that Hamilton was able to catch Jefferson at the psychological moment, for the views of the latter on contracts were as illogical as Madison's., and his ideas on finance hazier still. But the consequences of his act were too much for Jefferson He could not bear to see the people being robbed by the crafty the Bank was such a "good thing" that it grieved him that the whole people were not "in on it." Despite certain smaller and despicable sides to Jefferson 's character, he was a great man our first Democrat but he forgot what Paul tells us of ex- pediency, and could not realize that his ideas were in advance of the times. He seems to have been positively shocked when Hamilton told him that man could be governed only 16 by force or interest, and yet man had ever been so governed and is so governed still. As a philosopher Jefferson was great, but in the government of the time he was sadly misplaced. The Democrats today point with pride to Lincoln as one of them. It is true that he was a lover of the people what just man is not? But Lincoln was more than a democrat he was a great executive, which no man can be who is afraid of power. Imagine Jefferson in Lincoln's shoes but the diametrically opposite results we would have had are too distressing to contemplate. For many years Hamilton's Bank of the United States prospered for many years it's private stock- holders of the Class waxed fat at the expense of the Mass, but it's expediency was recognized even by such eminent later statesmen as Clay, Webster and Calhoun, though they viewed the close connection of the govern- ment with a privileged moneyed corporation of such enormous means with lively distrust and grave ap- prehension. The people's minds were not then ripe for any- thing else. The question is I Are the people 's minds ready for anything else today, now that the Class is preparing to spring another "United States Bank" on them (privately owned as before) ? It is not my purpose to follow the history of Banking here or elsewhere. Andrew Jackson 'o fight on 17 the Bank and the disastrous record of the State Banks is remembered by men alive today. Now that another "Central Bank" is proposed for us, we should consider things as they are ! The evolution of a utilitarian and equitable Means for Exchange can progress no faster than the Mass itself evolves, and as knowledge has progressed to a point demanding specialization in some one branch thereof, we cannot expect the advanced intellects and the advanced spiritual natures to be often found in the same persons! But even were this not so, the tendency of our democratic republic, save in great crises when general attention chooses the best men to avert disaster, is to entrust the governmental powers either to fools or knaves, and never has this been more so than during the great constructive period following our civil war. And the Class which toils or spins not but which lives on the labor of others, knows this, and knowing that the only way it can continue to so live is by " legalizing " injustice, deliberately undertakes to and has controlled the government by buying elections and having "laws" made to suit it's own ends. But of all the special-privileges with which "law" has afflicted this country, the private monopoly of the Means for Exchange is by all odds the heaviest 18 tax of them all, and the most despicable, because it is not an open highway-robbery like the Tariff, but the hidden onslaught of an organized and wealthy gang of pickpockets on the purses of the public, such as would put any member of the lesser-pickpockets trust to shame on account of the utter lack of danger in the game. Notwithstanding " Black Friday " and the many "Panics" before and since, our people, thanks to the subsidized press, have not been able to make out where the trouble lies. The people have not as yet perceived the great difference between the intrinsic worth of money (what it costs to produce it), it's uses when allowed to cir- culate freely as a means for exchange, and the crimi- nal way it may be cornered by financial highwaymen to rob them of the product of their labor. Our Government has not yet recognized the right of it's people to a means for exchange, and has always disclaimed it's duty to provide such, on the ground that " Banking is a Trade." Now, "Banking," as it prefers to call itself, presumably on account of the odium in which money- lending has always been held is "a Trade" the most contemptible of all a trading upon the necessi- ties of all, and the government may come to find that it has duties in connection herewith of the very highest order For be it remembered that the money-lender deals not with paupers. 19 How striking in contrast was the action of the British Government in riding the last panics in Eng- land by authorizing the Bank of England to print and issue notes as fast as called for and until the demand ceased which was very soon, for people do not want their money when they are satisfied they can get it on demand all they wish to be assured of is a means for exchange. This was the first and I believe the only instance of a government providing it's people with a means for exchange for the Bank did not print those notes for the use of the government, but with the consent if not by the advice of the government, and for issue only in payment of deposits and in loans on good se- curity. Which was quite a different matter from the issue of fiat notes by our States at the time of the revolution, and by our federal government during the civil war, which were for their own uses entirely, the first remaining repudiated to this day. *****#*** Although work and service to one's fellows alone bring happiness, there seems to be a desire on the part of a large class to lead an idle, selfish, rapid, worthless life, which can only be done through the acquisition of great wealth. Now, though thrifty, far-seeing folk, sufficiently intelligent to profit by example, and perhaps favored 20 by hardship in early youth, may store up sufficient of the necessaries of life to provide for their needs when no longer able to labor ; and though such people frequently pass part of their competency on to their descendants, so that in the course of time there has arisen a worthy class in sufficiently easy circumstances to be able to divert part of their time from labor to self -improvement, it is absolutely certain that no great fortune has ever been acquired in any other way than by gross injustice to others, for whatever the condi- tions and however supremely gifted the individual, nature did not fit him, mentally or physically, to do the work of a thousand, one hundred thousand or a million or more of his fellows It is the "Law" which has so far permitted him to rob them of the profits of their labor, either directly or through the monopoly of the natural resources for all. It used to be more dangerous than heresy to pro- test against the "Law", but our minds are beginning to break their fetters and we are actually daring to demand that the unjust "Law" be unmade, recognizing that "Law" and JUSTICE have so far had little to do, the one with the other. This disrespect for the "Law" is growing, as it must for everything that miscarries. "Laws" are multiplying so fast that they are not enforced even when remembered. Now this is a very serious condition of mind for a naturally law-abiding people to get into so serious 21 \ that prompt measures are necessary to remove the cause of the distrust before we pass from disrespect to open disregard before we break all fetters of what Herbert Spencer rightly calls "the great super- stition of law." Our Legislative Halls are filled with Lawyers, the very Class whose interest it is to multiply rather than to reduce and codify the "Law." And with it all we have come to acquire a new standard of Honor by which a "Gentleman" in Office may cease for the time being to be an honest man, commit all manner of ex legal crimes, and step out again with his decayed personal honor so covered by the prestige of having gotten what he was sent after, that he will still be unhesitatingly received in our "most respectable circles." But should he dare to follow the dictates of his own conscience, instead of acting "like a gentleman", the President himself will inform him that our's is a "government by party" and that unless he "stands pat" and votes with "the other gentlemen", he will be "read-out" of the same for how are those who have bought the administration to be repaid if not granted the special privilege of robbing their fellow citizens ? Ostracism is needed very badly in this country, and the demand will sooner or later create the sup- ply but it may be of a different brand than the Presi- dent had in mind. 22 This so-called " First-Class-Power" is afflicted with a government which would put the most benighted to the blush. It has long ceased to be a government for the people and has so fallen as to become the reward of fortune-hunting politicians and the rest- ing-place of an occasional moneyed-ass. But no one can long retard progress. The minds of the people are not as they were, so the government cannot remain where roguely degenerates seek to keep it Progress is "in the air." Now there is one cess which those necessary and most sanitary beings, the * ' Muck-Bakers ", have not sufficiently exposed to light and air, possibly be- cause the Monetary Commission inaugurated by that eminent statesman, the late Senator Aldrich, has publicly taken the matter in hand. But as the chunks of wisdom emanating from the minds of the august thinkers of the upper house have been frequently too heavy for the public's stomach, it would be well before placing ourselves entirely in their hands, as has been our unfortunate custom, to consider the matter somewhat for our- selves. The Question of the Currency and Banking It has afflicted us for an hundred years and more and the greatest reason for alarm is that the "Upper House " should now begin to agitate the matter. When have they ever had the people's interests at heart they were created for no such purpose. 23 We all know something's the matter What is it? Disinterested people have never been able to bring the matter up for public discussion without the real issue being immediately and intentionally con- fused and obscured by the subsidized press. Before considering the question, let us see what our present " currency " consists of; Without referring at all to the origins of "money", which have been fully set forth by many writers, or examining the original provisions of and .amendments to our own constitution providing there- for, let us try to tabulate our money and currency as they exist today. First Our "standard", Gold, which when coined, forms our only real "dollars" the sole legal tender* coined in five, ten and twenty-dollar pieces, smaller pieces having fallen into disfavor and ceased *The description the government gives of our money is confusing; It calls the silver dollars "standard", whereas gold is now our sole standard; Silver dollars are legal tender and they are not legal tender; Greenbacks, now called by the more dignified name of United States notes, are legal tender but they have a string tied to them; And the other currency is very much mixed indeed ; Still no one can blame the poor government for keeping up a tree, for there is a very fierce dog at the bottom. But if anyone really wishes to know what is what it is not, I refer him to page 24 of Circular No. 52 of the United States Treasury Department, July \V 1 10. For the purposes of this little leaflet however, we will refer to gold as the sole legal tender, reminding all hair splitters that all they can say to the contrary will affect the argument only in degree, and in very small degree ,at that. 24 to be coined long since. Demand for those named falling-off rapidly; Second Silver "dollars", which are heavily debased tokens, now seldom seen save on the vanish- ing frontier where the habits of the people have not as yet fully accustomed them to the use of paper ; Third Copper coins debased, Nickel coins debased and Small silver coins debased, all mere tokens used as " dollar-splits", convenience-coins or "change;" Fourth Semi-civilized currency, as follows ; ' ' Greenbacks ' ', or government fiat-notes ; Gold-Notes, or government warehouse-receipts for gold ; Silver-Notes, or government warehouse-receipts for a metal which can still be sold for a trifle over half the face-value of the receipt ; "National" Bank-Notes, or subsidiary-notes which private banks are permitted to traffic with upon hypothecating with the government the government's own bonds as "security" for their issue. These notes are also purely fiat notes of not so good (misleading) a grade as the "greenbacks", for there is nothing more behind them than there is behind the greenbacks, the government having spent and not holding in it's vaults, the gold borrowed upon the bonds. Eailroad-notes, lately authorized to the extent of. five hundred millions, for a starter, and supposed to 25 b x e used when the private banks have a greater de- mand for money at interest than they can supply, when they will be issued to them by our government upon putting up railroad bonds as " collateral". This is "asset-currency", pure and simple, to which one only of the main objections, is the special privilege conferred ; Clearing-House-Certificates a very modern but highly artificial way of patching cracks in our cur- rency "system" when strained to the breaking-point. They "increase the currency;" Checks, or private orders for currency* - more important than all the others put together, for without this device the rottenness of the system would be apparent and all business would come to a stand-still ; Check-Kiting the promise of small financiers to liquidate and provide the funds ordered before the orders reach their destination. The big financiers dis- courage this practice as much as possible, but it cannot be denied that it "increases the volume of the cur- rency", which is the end all have in view; Drafts an old means for exchange, no longer in such general use here as in Europe ; Overdrafts or orders on banks for other peo- ple 's money a rather careless way into which the banks have fallen of lending our money to favorites; Loans must, in my opinion, be included under this head, for they are not advances to irresponsible * Unknown before the year 1781. 8-G 26 parties but a partial and temporary " liquidation " by the borrower, of Wealth previously accumulated by him. (With " unsecured " loans the bank assumes that the borrower is "good" and takes the responsi- bility.) They "increase the circulation" just as checks increase it, and although there is no "money" behind them (the labor having been turned into "money" and this in turn into "wealth"), the possessor of "ac- cumulated wealth" is, to my mind, entitled to the prior right if there be choice of right to the use of the Means for Exchange ; Term-Deposits should be included here, as they are nothing but loans to the banks at lower rates than these lend at They materially "assist circulation". Certified-Checks, Certificates of Deposit, and Certificates of Special-Deposits-in-Kind do not "in- crease the currency" but decidedly restrict it, and are therefore mentioned only to be excluded. Having done our best to tabulate our "cur- rency", let us consider whether it be still expedient to permit a Class-System, using such robbing make- shifts, to endure? This is the age of collective effort Semi-Civi- lized man no longer lives of or for himself alone. But as yet we have done nothing collectively to- wards providing ourselves with an equitable means for the exchange of such individual proportion of our col- lective product as we have as yet been able to secure unto ourselves. 27 \ We established our government intending to pro- mote the welfare of all, and we permit it to pledge the general welfare by occasionally borrowing money for all on bonds. But the government which we established does not permit us to supply the money directly our- selves, as in done elsewhere when same is required for general need, for the Special Interests which have monopolized the money "Trade" insist that these bonds be executed in large denominations only and issued in such large allotments as to be inaccessible to the people direct and SOLD only through themselves. And the really amusing part of it is that they don't put up a dollar themselves to buy them with but "effect the purchase " (and they certainly have a very strong purchase) with the money which we, having nowhere 's else to put it, have been compelled to deposit with them, after which they allow us to take the bonds off their hands at an increased price. Such is one of the many special privileges of the banking "trade", though this particular one is usually limited to the "Big Ones" (those who have fattened faster than their fellows) who name the Secretary of the Public Treasury. But issuing bonds is not providing a means for exchange. Where does our "currency" come from, and who provides it? 28 The "Guinea's stamp " adds nothing to the value of the gold it contains this passed in exchange generations before the coin was thought of ; The government in stamping the gold taken to it, does not provide a means for exchange ; The government in issuing a warehouse-receipt, in the form of a treasury-note, for the gold left with it, has not provided a means for exchange ; The government has provided nothing; The individual himself has, at great la,bor pro- vided something which hitherto his fellows have been willing to accept in exchange for food and other things which they have provided by their labor. But as gold is not only cumbrous but dangerous to carry round, lest he be robbed directly by the smaller, manlier thieves, he takes it to his govern- ment and asks a receipt for it. Is man not yet civilized enough to provide some means of exchange more easily and safely handled and less wasteful of human labor? Individually we have so far failed, and individ- ually we always must fail, for this is not an individual question but one where common understanding must precede common consent and not alone consent but a positive fight against privilege long entrenched and which knows just what to expect but the common understanding must be thorough or the fight will be of no avail. 29 Even in France, the country which seems always able to supply others with gold when wanted, the small manufacturer gets along well enough in lean years, but in the prosperous years he is compelled to go to the small money-lenders or to the government pawn- shop to get "capital" wherewith to execute his in- creased orders ; And the greater the "prosperity" the greater the number of orders the better for the money- lenders and the pawnbroker. Is there anything the matter with their currency system? A plentitude of gold in the country seems of no avail, for the non-producer holds-up the pro- ducer and takes his "rake-off" just the same ! If Gold be the SOLE "Legal" tender, then we are all doing business ILLEGALLY for we are not doing it with gold but on CREDIT, which is a very dangerous thing to all but the money-lending class, for in our country none but the rich may hope to escape the consequences of the "law." Our Treasury reports as "money in circulation" all but that in it's own vaults Nothing could be more misleading. The Banks speak of "money in circulation" when they have put all but the "legal" reserve (and by circumventing the "law", they use this also) out at interest when they have put the money of all of us to a good use for a purely selfish end. 30 The larger banks however, notably those in New York City, prefer to lend the money for gambling purposes, having had a special counter "law" nulli- fying the usury "law", passed for the purpose, which permits them to let the money out not at usurious but at much more exorbitant rates of interest, such as gamblers and thieves only can pay, and money is thus withdrawn from it's legitimate channels, to the great distress of business, not only in New York City but in every town in the State and indeed throughout the whole country. They speak in New York of "the tightness" caused by having to send money West "to handle the crops ' '. When the crops are paid for why does not the money remain where it belongs ? Who sends it to New York again it's owners or the local banks where they have been foolish enough to place it? It is thus that the users of money for legitimate purposes suffer, and the limited powers of our pri- vately controlled and very poor "medium" are stretched to the utmost. Now, let any demand be made which cannot be met, such as any number of the temporary owners of the money happening to demand it from the banks at the same time let confidence (and it is truly a "con- fidence game") suffer any sudden chill, and the money really in circulation (such part as the people are fortunate enough to have in their own pockets) sud- denly "hides itself" (Anglice is not again entrusted 31 to the banks) and demand is made on all banks for the balance of the money, which ought to be but is not there. Our currency ' 'system' 7 being absolutely rigid (the banks having prohibited the government from in- terfering with their " trade " by furnishing a means for exchange), the demand can not be met and "Panic" and DISASTEE ensue. The banks which have been backing the stock and produce exchanges and other gambling houses ruin the gamblers by selling the "readily-convertible" "collateral securities" which on account of the very dangerous nature of the trade they have demanded, for whatever price they will bring, which serves only to heighten the fears of those who see "gilt-edged" "securities" being sacrificed. What happens to the legitimate users of money at these times to the man who has liquidated or who needs to liquidate temporarily, part of his accumu- lated wealth? His " credit" is as good as ever, perhaps better than ever he is entitled to a means for exchange. Does he get it? Not a bit of it. This government pro- tects none who have made the unfortunate mistake of putting labor into permanent form. He is "squeezed" to "the limit", and is lucky indeed if he be not sacri- ficed outright with the gamblers. 32 It is the DUTY of our government, no matter what unfaithful representatives may say to the con- trary, to protect "Accumulated Wealth", which is nothing but the product of labor in it's most enduring form, and any class which for purely selfish ends, de- feats justice by witholding the government from the performance of its duty, becomes entirely responsible for the consequences and will surely answer in time to the people therefor. There are other forms of wealth than gold, which is but one of our minor products, and a not indis- pensable one at that, and the people are even now seek- ing a way to prevent it's continued concentration into the hands of a few. *##***#*** The changes in man's body and animal nature are slow and hard to be perceived, but we can easily see, any time we stop to look, that he has developed more in his understanding in the last generation alone than in all previous ones put together, and that he is progressing today faster than ever. It is not necessary to look back upon even medieval times to realize this ; I myself have been caught abroad in a Spanish American Capital as the host was carried by Mary in the latest dress from Paris and Joseph in a fine top-hat and have gone down on my knees with the 33 rest of them, in the rock-paved streets, to avoid being stoned to death. I have witnessed scenes on Feast Days that would fit any feast described in the dictionaries of the bible. It is no effort for me to recall the time when wo- man waited on her master at table, taking her own meal in snatches or afterwards with the children and servants ; When shoes could be worn without disgrace only by those who were known to have the money to pay for the luxury; When " coal-oil " lamps had not come in, and people went to bed with the sun ; when the streets were unlighted save for the lantern of the watchman on the corner who sleepily called-out the hours of the night ; When if urgency caused one to be so discourteous as to call upon anyone before retiring one's-self, one would, after a vigorous and lengthy use of the huge iron knocker on the heavily-barred and only entrance door, have the grated wicket thereof opened, and if one's errand were thought of import one might be received within by the gentleman of the house, in shirt and cap and tallow-dip in hand. It is not necessary to refer to the " savages " whom we have not yet exterminated Many people were primitive until most recently, and the most nu- 34 merous race on earth is quite primitive still And the customs of these peoples were and are yet, in many respects, just as they were in the time of Christ. I remember cattle being paid for by the drop- ping of gold coins into a hat as they were driven by. In my time the Dons would give sixteen-dollar gold onzas for fourteen dollars in small silver so that they might pay the laborers in their fields, whose daily wage at the time was a silver real, worth 12% cents in their money, and that of their wives and children far less. Coin was buried in the ground there then, when not out at interest, and it was far safer there than it has sometimes been since in the banks, for "the gov- ernment" had a way when he discovered that a man had laid aside too much above taxes and living (and he easily finds out how bank-accounts stand) of "borrowing it" from him. But the laborer did not work every day in the week or so long then as now. Though compelled, not by nature but by man, to work for others, he was allowed to work also for himself, and given ample time for play. He had not then been compelled to work all the time for the sole benefit of others. His wages have been raised, time and time again, until now he gets a nominal wage which would have supported a country gentleman then but he gets no 35 more if as much to eat, no more nor as good clothing, and has been robbed of the greater part of his time. He has been deceived, just as the " intelligent " American laborer, be he hod-carrier, factory or rail- road employee or sweat-shop slave, has been de- ceived For what matters it what wage they give if they raise the price of living faster still? It is the constantly increasing cost of living that the people should investigate the reasons why, that labor as they will, some of them find it so hard to keep body and soul together. We are all aware that the entire wealth of the country is being concentrated into the hands of a few Is it not high time that we investigated and tried to stop the many different ways in which it is done? The Japanese paid fabulous prices for rabbits, pigs and other animals when our vessels first began to reach their ports, but it is to be hoped that the buyers bred them and * ' realized ' ' somewhat before the foreign supply exceeded the home demand. Sycee silver and Mexican dollars, both stamped and restamped with the chop of the different mercantile houses through whose hands they go, until only Chinese contadores can knowingly handle them, still pass in exchange in the interior of China, where gold would be quite useless. I have seen a Tartar on the Isthmus of Panama give more of his wares for the imposing Jamaica 36 penny than he would for an American silver quarter dollar, and try as I would, I could not enlighten him before he lost his entire stock in trade. And yet, had that unsophisticated Tartar been possessed of the means to return to his home, where others of his kind might have in turn received those pennies from him in exchange for as much or more than he gave for them, there would have been nothing pitiable in the transactions. Ignorance is a mighty factor in exchange just as weighty as knowledge. Without ignorance on our part, and the tacit connivance of our government, false and adulterated foods, drinks and drugs could not be sold to us here at home in such a perfectly " legal" manner. Our wholesome food and drink we send abroad to lands where government will not permit the people to be swindled, but that we import in exchange is marked "for export", meaning that much of it is not fit nor permitted to be sold for consumption where manufactured ; So let us not despise the Tartar. In slavery days we were at least honest in rob- bing the black openly of the product of his labor but progressing greatly in intelligent trickery since those times, and with the highly-paid aid of those who study the "law" for the purpose of circumventing or defeat- ing it, we no longer steal openly but in the dark. 37 finding that in this way we can rob black and white alike with impunity And the industrial slavery of today is perhaps even more severe than the human slavery of our last generation. Now let me close this digression by stating that; Mother sits now at the table, Everybody's wearing shoes; Father flies about in autos, And they've changed their Constituge. Japs no longer buy our rabbits, China's Sycee's got to go; No Persian owns the Telegraph, Or the Posts in Jericho. We look down upon these others, Burying deep our heads in sand ; But we're mentally the rear-guard, While our Brothers lead the Band. I am not a writer, still less a man of parts, so I will not apologize for the doggerel by which I attempt to illustrate change by focusing it's contrasts. Man is developing very rapidly it has begun to be notice- able, even among ourselves. But, to get back to Finance ; The old Mexican dollars contained more silver than our own dollar, and used to be worth in China and 38 Japan, if I remember arightly, from 5% to 12% more than even our gold dollars, which last were 6% under the Mexican silver dollars even in California, so that in our early trade with the East, the bills of lading of American bottoms called for Mexican instead of American currency. The East found silver more useful than gold as a medium for exchange, and indeed there are many places in the interior of China today where the " com- mon people ' ' use nothing but copper. We sought to overcome the disadvantage by creating and coining a silver "Trade-Dollar" for special use in the trade with the East, and we put as much silver in it as was contained in the Mexican dol- lar and more than was contained in the dollar which we continued to use at home ; But it did not "go" the Japanese and Chinese had become accustomed to considering the "Mexs" a superior dollar, so our " Trade-Dollar " had to be called in and reduced again to bullion. Our delay in establishing the parity had cost us the Eastern market for the surplus product of our silver mines in coined form, and as just about this time the Powers, who were not interested as much as we were in silver mines, began to follow England's prior lead in demonetizing that metal, we were con- fronted with the necessity of consuming too great a part ourselves ; 39 Thus the cumbrousness of silver as a means for exchange for an advancing people became too ap- parent, and we felt compelled to follow suit and demonetize it ourselves It reverted to it's primeval uses in so far as we were concerned. The selfishness of the banking-class, who per- ceived that they could not easily corner it, was doubt- lessly the immediate cause of it's demonetization, but it was bound to be demonetized by us sooner or later, as it must be, in time, even by the "Silver Countries." Now, when silver was demonetized, we were given nothing in it's place, making greater room for gold, the production of which has increased by leaps and bounds in the very states where silver-mining was formerly the main industry. But there is not likely to be too much gold until it's cost of production still further decreases, for the majority of us are informed, and believe, that "more gold has gone into the ground than has ever come out." The as yet not clearly visible fact is that the pro- duction of gold involves a quite unnecessary loss of labor, but of this more anon. People are beginning to be told that ' ' there is too much gold" and that it is constantly "shrinking" (as if a "Standard" could ever shrink) in value, owing to "over-production", and that it's "purchasing- power" is "not what it was." 40 . How do those who advance this fallacious argu- ment explain the panics which occur periodically owing to the " shortage of money", which " shortage" may be artificially occasioned at any time and in more than one way? Three men caused a terrible shortage in the last generation One man can do so today whenever he will. Does ' l over-production ' ' make shortage ? Or is it that they fear that production may overtake shortage? If the Class which so argues would come out frankly and tell us that they propose to demonetize gold, as they did silver, the people would begin to see the light which no thinking man can doubt has already been quite clearly perceived by the Class It would be an immense step forward. But "Big Business" never takes a step until it has first quietly paved the way And this they have already started to do ; They are even now preparing to pass through Congress an Act for another United States Bank r though they modestly call it in their propaganda, a "Central Bank", which they propose to control privately, and which will place all the financial power of the government behind them, and secure to them the special privilege of alone handling the assets on which the future currency of this nation has already begun to be based. 41 i\ This special privilege once secured, they will, after a safe interval, be the first to assure the people of the benefits to be secured by the DEMONETIZATION OF GOLD. For we are today going back to the ancient cus- tom of employing gold as gold in exchange, but in the form of bars of bullion instead of coin or dust, and we are destined to degrade it further still, just as we did silver, to it's primeval and only apparent real use, in the Arts. The sooner gold is demonetized the better for the people, but it is to be hoped that this may be accom- plished without parting with our birth-right. A few more words on gold ; Gold, not long since, was made the SOLE " Standard " by which all worths or values should be measured. Now, in the Bureau of Standards here at Wash- ington there is a " Yard-Stick", which was pains- takingly made and which is most carefully guarded both from man and Nature. It is a duplicate made from the original ' * Stand- ard" erected by the English (in 1120, after the length of the arm of Henry 1),* who, losing their's by fire, made in turn a replica of our's. They made no replica from any of the number- less copies of their own original, for none had been con- * Francis E. Leupp, in Scribner's Magazine, Oct /10. 42 structed with sufficient pains, or sufficiently guarded, to be thought worthy. This Yard-Stick this "standard" measure of extension of our's is protected against climatic influ- ences, so far as man is capable, in the endeavor to ap- proach FIXITY and all other yard-sticks must cor- respond thereto to be "legally" correct. Now though the Class frequently "fixes" the "purchasing-power" of gold, it does not do so in ex- actly the sense we have in mind, and in fact it is not upon our sense but upon our lack of sense that they count whenever they prepare to "fix" us. As a matter of fact, the purchasing or exchange power of gold never has been stable and never can be It fluctuates constantly and there is nothing fixed about it, hence it is not "Standard" no, not even in it 's fineness. If this were not so, gold would not be bought and sold as a commodity, as it frequently is, for the idea of speculating for a rise or fall in price of any- thing, the value of which is fixed, is ridiculous. It is impossible to fix a "standard" measure of value, as the exchange worth of all things is regu- lated entirely by the supply thereof and the demand therefor, which in turn depend absolutely upon that tremendous but non-measurable entity Mind. Men, through special privilege and monopoly, have interfered with the freedom of supply, and 43 *> through misrepresentative advertisement often create an artificial and sometimes harmful demand, but these are matters for penal legislation and need not be dis- cussed here. Now the mind is just as gregarious in it's habits as it's more visible earthly animal comple- ment ; Minds herd together in groups, each with it's own thought-receiver And occasionally some great,, lone, original thinker will appear and force the groups- into larger herds ; And then again some fool, who does not think at all, will stampede the whole herd to it's partial de- struction, despite the bellowing of all leaders. This is the reason we have had crazes about Tulips, Mississippi Bubbles, and South Sea Bubbles, and are still chasing after the gaudy-hued soap bub- bles which they continue to blow for us on Wall Street. This is the reason farmers all plant the same crops at the same time, and apples are so high-priced today simply because we follow the other fellow's, lead instead of thinking for ourselves. We send people to Congress to relieve us of the trouble of thinking, and Congress has given us a fifty- year object-lesson of the folly of this habit, which we are now awakening to and which it is to be hoped may be so impressed upon the minds of the unborn genera- 44 tion (beings once born seldom profit by example) that they may avoid the pitfalls of their fathers. But the most general, and by far the craziest craze of all, is the White Man's love for gold, the clearest light on which is thrown by what happened to the Aztecs and the Incas, who upon first meeting the savage animals which subsequently exterminated them, were first astonished and then disgusted by their, to them, incomprehensible lust for gold. Those peoples had not lost their proper appre- ciation of gold as a pretty metal, suitable for orna- mental purposes, but gold in no way affected their living, and they were far more thoughtful, provident and democratic in their ways than the White Man has yet learned to be, as witness their public granaries. Nowadays we put those who do not think as we do in Asylums, but those who are really the most dan- gerous to Society we leave at large. There was a time, before the craze, when we also wanted gold and silver only for themselves, but those now most advanced no longer require either, either for adornment or utensils. But races learn slowly, and as it took many a century before silver and gold became so generally prized as to be used for a means for exchange, so it may take some time yet, though not so long, before the people realize that the general demand, which alone gave them their value, ceased some time since with our savagery. 45 It is a waste of labor, which might be much more profitably engaged otherwise, to continue to em- ploy it in the production of gold, as we cannot, for lack of early record, foresee the extent of the flood of this metal which, in coined and other forms, will pour in upon us when the burial-pots of India and else- where are dug up, as they surely will be, the moment their owners begin to realize, as we are now begin- ning to realize, that that which they had thought was to be prized of all men forever is not the true God but only another molten image the metal which can be the most easily spared. It should not be forgotten that although we all have a general idea about what " money " ought to be, we have had little to say about it. Nor must we for- get that the " orthodox " doctrine is that of the non- producing class, who have made their teaching " ortho- dox " through misrepresentation and force. The people were persuaded at the time of our civil war, that the paper currency issued by our gov- ernment was worthless, because forsooth it had no gold behind it. Now gold, being the form in which it was for- merly the custom to store-up our surplus products, we naturally, after four years of the most destructive war of record, consumed the surplus stored, and the only way we could get any more was to again go about it as we had in colonial days, when coin of any kind was seldom seen, i. e., to go to work again and produce 46 more of the necessaries of life than we required for ourselves ; and this is just what we did do at the close of the war, when Labor was restored to it's proper fields. But meanwhile the government had been com- pelled to issue treasury-notes to pay it's expenses with (having borrowed all the gold it could on bonds) and made the mistake of being itself the first to refuse them, by demanding gold in payment of the heavy import duties it had imposed as a war-measure, which caused it's notes to fall into such immediate dis- favor that no one would receive them at face-value; and they came to be known, on account of their color, under the then odious name of "greenbacks." They fell as low as 40c. on the dollar and were -quietly bought-up by foreign bankers whose vision was not jaundiced by their color, who clearly per- ceived that though different in form they were just as binding on the property of every man in the country us any bond-issue of the government, and who realized that debts are not paid with gold but by the surplus produce which alone gold represents ; The government has since taken-up a few of them but the bulk* have been allowed to remain in circulation owing to the need for " currency" in *The Statistical Abstract for 1909, of the Department of Commerce and Labor, page 603, gives the "United States notes" in existence as $346,681 ,016.00, all but six and one-half millions of which are in circula- tion. 47 other words, they were and are required as a means for exchange. Stopping to think how unjust many of the prin- cipal things which are "legal" are, and of the posi- tively crooked manner in which our "laws" are made, I hope I may not be misunderstood when I say that the people were swindled when someone persuaded their government to refuse to receive it's own notes;- In times of war we look for brainy men to serve us, and no man of brains could have failed to foresee what happened to the "greenbacks" when the govern- ment acted as it did. The people lost a very large sum of money and there can be no loss of this kind with- out someone's gain. Even so learned a man as the late Goldwin Smith thought that the proper business of the govern- ment was only to stamp the coin, and that it had no concern in the banking "trade" (sic), and was not en- titled to the profits on the paper it allowed to circu- late ; s He had absolutely no vision of the duty of the government to see fair-play among it's people in the matter of exchange. Now one of the objects the government had in view in reserving to itself the exclusive privilege of stamping the coin, was to guarantee that it contained 48 a given number of grains of metal of a certain degree of fineness, thereby greatly facilitating trade by elim- inating the necessity which had previously existed, of constant testing and weighing. This was a great step in advance but it was only a step. Still it was the only step that could be taken at tjie time, for even where government has accidentally been in advance of the people, which our government never has been, it must always wait for the understanding of the people to ripen before it can hope to accomplish anything. All peoples know that it is their province to labor and produce, but the peoples until now have had so little to do with their government, that none have dared suggest that the government itself furnish the means for exchange and see that all are provided there- with so that no man may be robbed of part of that which by his labor he may produce. Coinage was made a government monopoly, not for gain (though unwise governments have temporar- ily profited thereby) but of general necessity, and the confidence thus established is carefully preserved by calling in the coin when it's abrasion from use threat- ens to become a matter of import. It should be remarked here however, in paren- thesis, that during our civil war, our government, not satisfied with discrediting it's notes, discredited it's seal also, for it received it 'sown coins not by tale but by weight, seeking to throw any loss from abrasion on the 49 temporary holder, and special scales for the purpose were furnished to all custom houses. The government continues to receive gold from individuals as formerly, but nowadays the individual seldom asks the government to stamp it into coin, but prefers, in lieu thereof, a warehouse-receipt, in the form of a government note, which the government gives him, keeping the metal in it's vaults in bullion form until coin is asked for for gold-bullion is com- ing to be used more and more for government and bank reserves and for shipment in settlement of balances of trade. Gold has already fallen to be a security and is doomed to fall again and become, like silver, a mere commodity. Having disposed of the metals on which our cur- rency is based, let us pass to the consideration of our system of handling this " currency. " Banks, or money-distributing centers, are of very modern development (16th century),* and might be likened (in their ideal functions) to the Heart, which must constantly pump-out the blood which as constantly flows to it. This keeping of the blood in circulation is a function only for the heart does not create the blood, nor should it grow fat on it at the expense of other members of the body for the blood is the life of the body. *The Encyclopaedia Britannica calls the Banco di Rialto, established by the acts of the Venetian senate of 1584 and 3587, the first public bank in that city and in Europe. 50 So if we are to avoid the starvation of and death of the body, we must prevent fatty degeneration of the heart. Banks were organized at first to serve their patrons for a consideration, for all service should be rewarded; But they have so degenerated that they now exist for the sole purpose of having their patrons serve them. The best way to get credit at a bank nowadays is to first borrow or steal enough to buy the controlling interest in it's stock, after which you can help yourself to it's deposits and repay your loans or thefts or buy still other banks if you intend to " operate " on a large scale. It is true that the " Credits " which you thus get away with do not belong to the bank or banks, but to their depositors, but this is a mere detail and if you are a good " operator " will not be found out, for the interests of the depositors or even of the other stock- holders do not count for much once you control. Most large public deposits of moneys are used in this way, whether in banks or insurance compa- nies the men with the controlling-interest in the stock make the profits the loss, if they be so unfor- tunate, is invariably suffered by the depositors or premium-payers. 51 Only it is no longer as safe as formerly to rob them of their principal else you may not be allowed to " operate " long. But the "commissions" and other " rake-off s" are sufficient to satisfy any really con- servative "operator." If you are not lucky enough to get into an ' ' un- limited game", you can buy a savings bank, but the profits here are not so great because their former misappropriations were so outrageous that our not over- sensitive government felt compelled to apply special "laws" to them, limiting their investments; But even with this restriction, the business of employing other people's money for one's own uses seems still pretty good, as witness the assault on the Postal Savings Bank Bill. Why should banks and other moneyed-institu- tions absorb all the profits on paper issues, commis- sions, discounts, interest, fees and imposition of all kinds ? Have we no right to share in the profits on the moneys which we ourselves provide? This matter is even more important than the Tariff question which now agitates us, for this indirect and unsuspected tax for Tax it is if collected by the government itself, as it should be, instead of being abandoned or worse to special interest, would equalize our burdens to a very great extent ; 52 For it can be demonstrated that the fifteen bil- lions and over* of dollars, principally in credits, with which the people have supplied the banks, earn quite enough to provide for the army and navy (which when we are more enlightened economically we will not stand for at allf) and the pension list (which, after the many frauds are eliminated is quite a proper institu- tion though it will be out of date in another genera- tion) in fact it will more than cover the entire sup- posedly necessary expenses of the federal govern- ment, seventy-two per cent of whose total income goes at present, to the expense of wars, past or future.t Then again, if the government entered the banking business made the people's business it's business if it could be brought to realize it's duty to provide a means for honest exchange, just as it has been compelled to guarantee the contents of a coin, it need not trade on the necessities of the people, con- stantly seeking to get the better of them, but by enab- ling each of it's subjects (we are far from being free- men) to get his full due, would put them in a position to cheerfully pay their share of the expense of gov- erning a great nation. * Report of the Controller of the Currency, 1910, Document No. 2589, p. 65 Insurance Companies not included. f I was present at a banquet of a Military Order when one of the first speakers, the late Justice Brewer of the Supreme Court, endeavored to enlighten the veteran fighters present by giving them his ideas about a great Navy. Not a man in the hall seemed to understand his advanced views, and I myself have since rejoiced that I was not among the large number who none too covertly hissed their distinguished guest. JSan Francisco Argonaut, Jan'y/21/11 Unconfirmed. 53 ^ The Mass is paying far more than "it's share at present, and it feels and knows it, and is trying to find out how the burden has been kept on- them. And furthermore, if the people had their money on deposit in government banks, they could get it when they wanted it, and not be told, as they are now told periodically; "We are very sorry, but having " placed your money out to earn more money, not for * l you but for ourselves, we cannot let you have it just " now or indeed until after the general demand * ' ceases no, not even the 25c. on the dollar which 46 the 'law' is supposed to allow the Governor has " suspended the 'law' for us." There are, here and there, exceptions to this rule, but few know how to avail themselves of them. When these times come round and you know from ex- perience or hearsay that your bank will refuse to give you your own money, never ask for it but go instead to your broker and, telling him you know when to "throw up your hands," state just how badly you want your money ; The successful broker seldom makes mistakes and if your's is one of this kind and sees that you really want the money bad enough, he will promise to and will get it for you for he knows exactly what it is going to cost. He will get you your own money, a thing quite impossible for you yourself to do ; And when he goes to see your banker, he will not tell him that he wants your money, nor ask what 54 the charge will be he would be thrown out of the bank if he did but will go in to pass the time o ' day, and, in the course of conversation, remark to the banker that "a client of his" (names are never men- tioned between gentlemen) has made such a bid for money and he wonders where he can get it; And if he knows his business and has made the proper bid, the banker, after remarking upon the hardness of the times, will remember that "a friend of his" who happens to have a little money on the side, has left an order for bonds or something else at such and such a rate, but that as he would really like to enable the broker to oblige a client, he will call his friend's attention to the fact that the offer for cur- rency will yield him about as much as the bonds or other things at price ordered. If your broker is "a live one", with the proper connections at the bank, you always get the money not your money of course, but the money of "the friend" of the banker. This knowing how to get your money reminds me of the lower officials and other unfortunate serv- ants of a certain country, who were always paid in warrants but whose warrants were never paid that is, not directly ; The Secretary of the Treasury was a man of such high degree that he never saw these poor people, and when they called at his offices they were always told that the treasury was empty, and would they 55 ti please take the trouble to come another day to be exact, they were always asked to call " tomorrow"; After the poor wretches finally exhausted their credit everywhere it usually took about six months, for they were frugal and resisted to the verge of star- vation they cast about them to try to sell their war- rants, only to find that no merchant wanted them for they would have been quite worthless to them ; How the first one found the right place I never learned, but they soon got to know that there was one philanthropist in town who could and would do what no one else could or would a broker of another race and nationality, who never took more than fifty per cent and who never turned anyone away who was willing to pay the price. Curiously enough, the back door of the broker's office was not far from the back door of the treasury, and as the broker never asked the United States Gov- ernment to help him collect the warrants which he ap- peared to so philanthropically continue to accumulate, it must be presumed that he was successful where all others failed. It is highly important in life to have " proper connections. ' ' Now, the Governor suspends the "law" when- ever the Class in whose interests it was enacted, want it suspended And, indeed, it must be suspended there is simply nothing else to do ! 56 For instance, when, for political purposes, the panic of 1907 was brought about, the people the workers or producers, had over thirteen billions of dollars** to their "credit" (let us avoid employing that slippery phrase "on deposit", which people have found so deceptive) in the "reporting banks" of the country, and probably a couple of billions more in the non-reporting banks and Insurance Companies, all but the last supposedly subject to payment in gold upon demand. Now though from lack of early record, we have no idea of the total supply of gold*, other than the be- lief that the greater part has been reburied in the Far East and other places where despotic rule is more ap- parent than at home, statistics tell us that the entire visible supply available to modern trade and com- merce today is less than eight billion dollars t, of which we had, in 1907, a trifle less \ and now have a ** Report of the Controller of the Currency, 1910, Document No. 2589, page 65. * Statistical abstracts of the Department of Commerce and Labor, as yet unpublished, give the production of the world since the discovery of America in 1493, to 1909, as : Gold Value $13,392,328,200.00 Silver Coining value 13,488, 125,500.00 t World Almanac of 1911 to Jan. / 1 /09, plus accepted estimates of pro- duction since. J and Statistical Abstract for 1909 of the Department of Commerce and Labor, p. 602, quoting Report of the Secretary of the Treasury. 57 trifle more on hand than one billion and one-half || - say about ten cents to the dollar of credit ; So when the people, becoming panic-stricken, as intended, all began to demand their money, the "law" had to be suspended for the simple reason that pay- ment could not be made ; Nor was payment ever intended to be made! The sooner the American people realize that the " credits " which they continue to pile-up (and of which they are largely despoiled from time to time) can never be paid, the sooner they realize that there is not gold enough in the world to do so the better for the American people. The "Law", when not suspended, counts upon their not wanting their money all at once ; Also they never deposited those fifteen bil- lions of "dollars" -in Gold. What they did do was to deposit that one billion and one half a little more than ten times over ; || The U. S. Treasury Department's Circular No. 52, July / 1 / 10, p. 25, gives the total coinage of gold by the Mints of the United States, from 1792 to June/ 30/10, as $3,149,207,670.50 of which it is estimated that there is now in existence as coin in the United States 1,531,074,997.00 while the remainder 1,618,132,673.50 is represented as "an excess of exports over imports and the amount con- sumed in the arts." The best and, as 1 now remember, the only explanation I have found anywhere for the " excess of exports over imports" of gold, is in the "Public", of Chicago, Jan. / 6 / 11, a paper supported mainly by the Joseph Fels fund, where a very strong case is made for the excess of out- go as "tribute to absentee landlords." I earnestly recommend this virile little weekly to those who may object, as I do, to having their news sup- pressed. I am not in sympathy with some of its views but it does have IDEAS and presents them in an unsensational manner. 5-G 58 And their "credit" (do not forget that they had been doing business on credit and necessarily were paid in credit) on the books of the banks and other institutions, if these had been honest, should have been ; Labor nine-tenths; Legal-tender gold one- tenth. It is not necessary to my argument to discuss here the many forms of special privilege which claim their slices of the nine- tenths I have credited to Labor I attempt only to isolate and make obvious the fact that the legal-tender gold credit can under no circum- stances be more than one-tenth. But the banks, who admit they are working a system, do not show things on their books as they really are (this would not do at all from the stand- point of their interest) ; and they continue to uphold gold as the sole "legal" tender, though they know that gold barely suffices to settle the mere balances of trade ; And at the same time, they pretend that gold is being "over-produced" (unwittingly admitting it's unfitness, though on wrong grounds) when as a matter of fact it's relative production has so fallen behind the enormous increase in the volume of trade, that it is now seldom seen at all, save only in settlement of balances and in the smallest personal transactions. 59 ;f The people do not realize that the volume of trade has so outgrown the gold-measure that it has Through their crooked way of keeping book* and the great ease with which they have heretofore obtained money under false pretences, they have ex- posed themselves; For they have bound themselves to pay the people twelve to fifteen billions of dollars in gold upon demand, and by declining to allow their governors ta continue to suspend the "law", they can be wiped out^ for, as has been stated, the visible supply of this metal in the entire world is less than eight billion dollars, of which but an insignificant proportion remains in this country. No!, the chances are the money-lenders would not, when they saw the people really determined, let matters get to any such pass. Foreseeing that this flexible, reaZ-property- asset Land-Note system would soon drive what little gold there is outstanding into the government vaults^ where it would remain with the silver until sent to- countries still in their infancy or were ordered cast into statues commemorating our present financiers^ these gentry would be the first to quietly, for they are very quiet in their ways, change their gold, and re- ceipts for gold and silver, into government bonds. For the government would have to be prepared to redeem not only the gold but our entire present rotten currency, and as the only way it could do this would be by the issuance of interest-paying bonds for the metals, the loss would fall, as usual, not on the class but on the mass ; 86 But it will have no difficulty in so doing if it issue them in small denominations and make them directly accessible to the people, on whom the heavy charge must fall, for the people will mortgage their unencumbered lands and take them up on account of the profit in the transaction, for the government, in this instance, must necessarily pay a higher rate than it demands ; Though it is highly probable that the difference in rate will not amount to as much as the government has been accustomed to grant heretofore in " rake- offs" to specially-privileged individuals. The turning in for redemption of that funny part of our present currency which is based upon gov- ernment bonds, will not increase the debit balance of the government at all, but it will make a decided change in the holding of the creditor, who will have the bond itself as security instead of second-hand notes as at present. The only apparent loss will be in the redemp- tion of the gold and silver, which childhood's toys our governmental parent must take off our hands; For, strange as it may seem, this will be no real loss at all, for the labor employed in their production is lost already, and is a small price to pay for our edu- cation if we can but arrive at a better understanding of the real requirements of exchange. But we must not lose sight of that large part of the people's credits in the present banks, amounting 87 x to about nine-tenths of the total " deposits ", which the banks cannot pay for the simple reason that they never have had and never will have, under the present * * sys- tem ", the " currency " to pay it with. The people cannot avail themselves at once of the nine-tenths part of their supposed "deposits" as these nine-tenths were, as we have shown, not deposits at all but mere book-credits which have themselves been passed-on by the banks to third parties. Such as have been put out at interest by Sav- ings Banks, Trust and Insurance Companies and such, are probably secured by mortgage, in one form or other, on real property, though as the credit lent is not theirs but your's, the loans are probably far in excess of any advance the government would make as the base for a safe currency; But the "national" banks pass the larger part of your credits on to third parties on mere notes of hand ("commercial paper") without other security than the hoped-for continued solvency of the borrow- ers, which, as we have seen, may be wrecked at any time. They also lend a large part on stocks and bonds, and these are good while a market for them lasts. Listen to what the "Literary Digest" says on this point in it's issue of the 2.1" ultimo, quoting the "Toronto Globe" ;- i < The richest country in the world ; the Mis- sississipi Valley, the greatest storehouse on all the globe: cotton, wheat, sugar, live-stock, 88 corn, everything. The most enterprising peo pie of history. Marvelous industrial devel- opment. A wealth of capital. And yet one cardinal sin, overcapitalization. Such over- capitalization that the foreign investor has turned against it all. He has sent back to the United States (at a profit) most of their securities that he bought some years ago, and he wants no more until the water is squeezed out. The savings of the people of the United States as represented by the banks, trust companies, trust funds of all kinds, even many bonds of first-class rank nearly all the sav- ings of the United States have been tied up to this watered stock that was bought by Americans or sold back to them by the for- eigners. But not only is this watered stock tied up to the nation's savings, but the in- vestors who borrowed the money to carry this watered stock have dropt it and the stock is now the property, out and out, of those who lent money on it trust companies, bankers and banks, trust funds, capitalists, and the like. The shareholders in the trust compa- nies and banks and the beneficiaries of trust funds, many of them do not yet know of this state of affairs! They are all of them risking your credits for their own benefit; So you cannot hope to get nine-tenths of what belongs to you until the "law" is applied which it never yet has been in your favor. I never was good at story telling, as my desire for information runs in other directions, but I have a 89 dim recollection of one about three artists being given a commission to make a drawing of a camel : The Ger- man went to study him at the Zoo and the Englishman sought him at first hand in the desert, but the French- man sat in his studio and drew one from "the depths of his imagination " And it was said that the French- man's drawing was the best of the lot; So as I do not care to bother the Treasury De- partment, and might be asked whether my intentions were honorable if I went to Wall Street, I will follow the Frenchman's example, and try to draw a balance sheet, showing the situation of the Banks today, viz ; The Banks of the Country (Insurance Companies not Included) in Account with The People. Dr. Capital $1,880,000,000.00 Surplus and undivided profits. . . . 1,952,600,000.00 Deposits of the people, subject to repayment to them on demand, in gold 15,283,400,000.00 $19,116,000,000.00 Gr. Loans $12,521,800,000.00 U. S. Bonds 773,400,000.00 All other bonds and securities. . . . 3,950,000,000.00 Cash (including national bank notes "cfc?.") 1,423,800,000.00 Unimagined 447,000,000.00 $19,116,000,000.00 90 I find the foregoing figures on page 46 of the Treasury Department Document No. 2589 of Dec/ 5" 710, where they are given as of June 30", 1910. You can turn to other pages of the same docu- ment and get entirely different figures, but these will do ; It will be seen that although the bankers have drawn out all that they have required for their living and for investment elsewhere, their "undi- vided profits", after paying all the heavy charges of conducting the business, still exceed their entire nominal capital. The Controller does not tell us how much of this capital was paid-in in the first place, or how same was paid. I have called the "trade" a TAX on the people Is it or is it not? But observe my statement carefully, gentlemen. I have arranged the figures in a different manner than that in which the government publishes them ; Manifestly if the banks take credit, as they have done, for national bank notes, they cannot also take credit for the U. S. Bonds behind them, hence whence do the seven hundred and seventy-three millions TJ. S. Bonds come from that they do take credit for? The banks could not have bought them willingly because they pay always as much and sometimes more interest on deposits than the bonds bear ! Were their controlling stockholders hard-up and compelled to dump these on them temporarily? 91 I have passed four hundred and forty-seven millions, which I could not find (though I do not doubt it is there somewhere) as an item too insignificant to be considered and have put it down as "unimagined" ; But what of the three billions, nine hundred and fifty millions an amount which exceeds the combined capitals and surpluses of the banks which they do report but cannot put down as a loan ? Can it be possible that the Editor of the "To- ronto Globe " is a man of imagination also, and can it be that this entry covers the "securities" (they would naturally send their stocks first, though a few bonds may have been included to permit of the wording of the entry) which he believes to have been sent back to us ! And have our moneys been taken, without our knowledge or consent, in the vain attempt "to support the market" I But if this be so, then most of the gambling banks of the country are insolvent ! But the Bank Examiners must have known this. Were their reports suppressed also ? This would explain many things, gentlemen, but I have let my imagination run far enough. Now when any servant borrows the money from the particular concern you are bossing in person, it does not make much difference to you how well he in- vests it or how soon he promises to pay it back ; If you can catch him you stop his career then and there ; 92 But when it comes to the greater part of yonr funds and savings, which they tell you you may have back whenever you want, you are so ignorant of the workings of and so hypnotized by the very name of " high- finance " and become so mentally paralyzed when they speak of millions, that you quite lose sight of the fact that it is far more important that you should boss or carefully look after those who boss and use your capital than to stand guard over the smaller till at home. You would not even know what they were doing if they stole the United States Treasury from under your very nose. A glance at the foregoing table will show you that you cannot have your money back whenever you demand it, and that your credit is being used for pri- vate ends. But it would be wise to begin to apply the brakes slowly, and as these mortgages, notes or other evidences of debt mature, have the people to whom your credits (Labor) has been lent, go to the govern- ment for credit, and where they have real property on which to obtain Land-Notes let them get same, and where they have not then let them mortgage that which they have at higher rates to those who can obtain Land-Notes, and let you be repaid that which is your 's ; And where they have nothing on which they can obtain Land-Notes, either from government or private individual, then let those who have lent your credits without proper security make those credits good ; 93 And if there is to be a loss and there surely will be great loss then let us suffer that loss at once and, getting back what is left us, start afresh on a sound basis, so that others may no longer fatten on our labor. Now, though the people will eventually do their banking entirely through the central government, it would not be wise to even think of driving the present banks out of business Beneficent growths are neces- sarily slow. We have seen that it is not proposed that the government should pay interest on deposits. Interest is hire paid for the use of money, and as the govern- ment cannot and will not use the deposits, it will not pay interest on this account; But the private banks do use other people's money and can therefore afford to pay interest on de- posits and it is proper that they should pay interest on such deposits; Only, the person who hires his money out for use has no right to expect same to be returned to him on demand, nor should these banks continue to lead their depositors to believe that they can have their money back when asked for. The most that can be done is to stipulate, before depositing the money in a private bank, that same must be returned on a certain date, and this then becomes a private contract ; 94 But if the money be lost (taken from it's owner without return to him) and hire for speculative purposes always involves risk it becomes a matter between these individuals and the contracting banker, with which the rest of the community, and the govern- ment have nothing to do. There will be room enough for some time to come, for these private banks, for aside from the end- less legitimate needs of agriculture, manufacture and trade, there will always be, as at present, a demand for gambling purposes or at least until our human na- tures are far more advanced than at present until we cease to seek to get something for nothing until we learn that the only way to grow rich is to give ; But until this time comes, it is very much better for gambling to be conducted openly than behind closed doors for it is idle to think of controlling human passion through human "law", as inclination must too frequently dominate reason. I claim no patent to these ideas, which must have occurred to many men, and which will thrust themselves upon any mind that lays itself open to thought. Let us try to perceive and give an outline of the probable effects of the remedy proposed ; 1" Our present makeshift currency would be wiped out. 2" We would have a stable, available and flex- ible medium for exchange in it's place, with real assets behind it instead of debts. 95 3" The first hire of the medium for exchange would go to the federal government, which is properly entitled thereto. 4" The super-hire would be paid by those hav- ing no permanent stake (Land) in the community; though even this would be held in check, naturally and as no human "law" has ever held it. 5" Agriculture, manufacture and trade could never be "held-up" and exploited, for they could get the moneys required on their own lands, or from other owners of lands, the moment private bankers de- manded more than' the service or risk was worth. 6" Accumulated landed wealth would be abso- lutely protected and not left at the mercy of financial pirates as at present. 7" There would be no more "commissions" for "finding" the medium for exchange, for all en- titled to it 's use would know where to get it, and when they went for it they would no longer be sent to "straw-men" in the basement. 8" Titles would no longer be examined an hundred times over, with full charges therefor on each occasion as the private perquisites or remuneration of men retained to keep the money-lenders on the safe side of the "law." 9" Gambling on the Stock and Produce Ex- changes would not be stopped, but it would be more difficult to wipe the other fellow out as money could not be cornered and rates would never again reach 300 %. 96 10" The sane people and the workers of the nation could deposit their moneys with the govern- ment, perfectly secure of getting it back the moment they wanted it for their own needs or for conversion into wealth in fixed form. 11" And finally, no proper demand could be made which could not be met, for we could put bil- lions more into circulation than we have ever yet had, and still the out-go and the come-back could be as easily managed as the Bank of England now manages it's gold through the interest rate, which the Secre- tary of the Treasury should be empowered to change at will, without the intervention of a corrupt and un- manageable Congress, after a ' ' recall " string had been tied to his leg to discourage malfeasance in office. According to the twelfth census, the true value of the real property and improvements in the Continental United States, was, in 1900 $52,537,628,164.00 and in 1904. 62,341,492,134.00 so we will estimate 1910 at 77,000,000,000.00 and take off one-third for improve- ments 25,666,666,666.00 51,333,333,334.00 and another third off this 17,111,111,111.00 to arrive at a conservative esti- mate of the assessed valuation of the land alone $34,222,222,223 . 00 97 At 60 % of the assessed valuation of the land $34,222,222,223.00 as a base for the issue of Land- Notes, there would be available, in kind 20,533,333,334.00 as against the miserably insuffi- cient and dangerous mixture *. . 3,419,500,000.00 (less than half of which is gold, remember) with which we are now struggling to effect ex- changes, the clearings alone of which amount annually to t 169,025,172,600.00 (which accounts for the " velocity " being put at 60 t ) and to protect wealth amounting to 125,000,000,000.00 Something must be done and that quickly, to improve the situation, for to allow further concentra- tion of control of what little "currency" there is into the hands of a private Trust, and to permit them to continue to milk us through the mere book-keeping de- vice of "credit", is to confirm our bondage. As things are at present, the Secretary of the Treasury is most carefully restricted to lending the public moneys, without interest, to those who have him appointed, which may account for the way the post has come to be eagerly sought after as a stepping-stone to the high-paid sinecures in the gift of special-privilege. * Controller of the Currency, Document No. 2589, Dec. /5/10, p. 62. fThe World Almanac for 1911, p. 258. {"The Independent", N. Yk., Sep./ 8/10, quoting the "Wall Street Journal ' ' and Professor Jevons. The World Almanac for 1911, p. 251. 98 With Finance the Secretary has, at present, no more to do than the clerk in a country store, the very word having come to suggest paper companies and unjust (the word "illegal" does not fit) combinations of all kinds. We have also a Department of Commerce and Labor, the statistical branches of which may, in time, be made very valuable, but the Science of Statistics, like other Sciences, is quite useless until applied. If the Secretary would invite his assistants to invite the men who do the work, down to the lowest clerk, to make suggestions as to how their work might be ap- plied and, in special cases, allow freedom in research and confrontation, he might learn what it really is that disturbs commerce and distresses labor ; But it is very doubtful whether the Secretary has the power, even had he the desire, to do so. The chances are he is put where he is to discourage re- search, or at least io hold it within limits. Hamilton remarked to Jefferson that the people could be governed only by force or interest, which was undoubtedly quite true at the time. The question is, are the people sufficiently ad- vanced, mentally, today, to take their government out of the hands of the Interests, and are they capable of using force judiciously, through the ballot-box, to gov- ern themselves f 99 Voltaire, Hamilton, Carlyle and Buskin lived in other times, and the great body of men of whom they spoke as not being competent to govern themselves, were most certainly incompetent so to do, but this was because the Church, pagan and Christian, throughout the ages, had purposely kept them mental-dwarfs so that the class might fatten off the mass. But today, the Church, though parasitic still, is senile and has lost it's teeth It begs where formerly it despoiled and it's slaves are breaking their mental fetters, but hankering after the flesh-pots still, it yet clings to the skirts of the "upper classes/' I do not expect to see self-government come in my time But it is coming We will have it when we are fit for it. Boston thinks a good deal of itself, yet Garrison was dragged through it's streets with a rope round his neck and Phillips cast off by his family as an execrated social outcast, because they dared raise their voices against property in human flesh. Were the people of Boston fit, at that time, to govern anybody ? Is that branch of the great labor party which continues to deal in murder and sudden death, fit to govern anybody f The President of the Colonial Dames of Colo- rado very lately remarked* that many of the women of her State had proven unfit to exercise the franchise *"Ladies' Home Journal", Jan'y/1" / 11. 100 granted them, and that scores who had worked for the Eepublican Party one year had worked for the Demo- crats the next and had told her frankly that "the Democrats gave them more money." If woman, on whom the moral tone of the race depends, sells her birthright for a mess of pottage, what can be expected of her sons ! But when the point of view of these mentally deficient persons changes; when they realize that no one can afford to buy their votes unless he gets some- thing in return ; when they realize that they would not trouble to buy the votes if they could only get back what they paid for them; When they realize that for every couple of dol- lars or so that pass into their pockets on these occa- sions, the people who are responsible for and hire those professionals who do the passing, intend to and always have gotten an hundredfold back; And when it finally begins to penetrate into their benighted understandings that this great profit, this hundred for one, does not come out of the pocket of "the other fellow", but that the power to tax thus periodically purchased takes every dollar of it out of their very own pockets, they will suddenly awaken to the fact that they are not the wise ones but the fools. The mentality of our people is a bit slow, but there are great hopes for its ultimate development. Self-interest will strike them first Eighteousness will come later. 101 The recent and contimiedly successful attempts of the progressives of all parties to change the form of government by introducing the initiative, the referen- dum and the recall and the scheme to govern cities by commission, shows that some of the people are awak- ening to a desire to govern themselves, and where they have succeeded they are starting well, for they are centralizing or fixing the responsibility so that they may hold their servants to account, a thing heretofore absolutely impossible. And when their time comes to select the national executive, it is to be hoped they will add virility, mental-potentiality and singleness of purpose to the necessary qualifications of the individual who shall hereafter occupy this great post, and take away the second term from before his eyes so that he may eschew politics and not be tempted to dishonor. Any man who believes in God, and feels his God in himself, must believe in the God in his fellow-man, and however he himself may fall and fall again, must hold to that faith in the people as a whole which was held by Abraham Lincoln and other servants of God. And this is the base for my belief that the people will soon be able to govern not only others, but themselves. But the degenerates will last while the world endures for God himself has told us that all shall not be received. 102 Well !, the Democrats, thanks to the plutocrats, are in. Whether they will "stay bought " or heed the "handwriting on the wall" remains to be seen. ********** Since writing the above I see that the author or sponsor of "the best tariff bill we ever had", in his desire to further assist the public, this time in the better handling of their money, has abandoned the name "Central Bank" for the measure which he is pushing so actively.* But a lien by any other name will hold as fast A lien's a lien for a* that. * For account of a well-known gentleman, who seems to control the Associated Press as easily as he is beginning to control pretty much every- thing else. With whose money does he do this, gentlemen his own or your's? Why is this gentleman apologizing through every Press in the land before his actions have even been impugned ? It reminds one of the enormous sums squandered by the old Canamd Canal Company on the Press of France 103 EPILOGUE. Upper-Class man by birth and preference; Union-Bepublican (son of a Northern Officer) by de- scent; Land-Lord through marriage; Gold miner by mistake; Debtor by necessity; And respecter of the honest beliefs of all men; I, Henry Clifford Stuart, iconoclast, write this article as a sacrifice to the cause of Truth and Justice ; God have mercy on me, a Fool. 1 ' Lives of great men all remind us We can make our lives sublime, And departing, leave behind us, Foot-prints on the sands of time." Longfellow. "And one of the sublimest things in the world is plain Truth." Bulwer. But; "Truth will ever be unpalatable to those who are determined not to relinquish error." E. W. Montagu. 104 But have renounced the hidden things of dishon- esty, not walking in craftiness nor handling the word of God deceitfully ; but by manifestation of the truth, commending ourselves to every man's conscience in the sight of God. II Corinthians, IV, 2. For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the dark- ness of this world, against spiritual wickedness in high places. Ephesians VI : 12. Note. If I had not been discouraged from attending both Sunday school and church by a wise father who had himself been sickened by a lot of bigots and who refused to allow my mind to be stunted, I might not think as much of the Bible as I do. It has no monopoly of the Truth by any means, for Truth may be found everywhere by those who seek it, but I prefer it because it is the book of my people. H. C. S. THIS BOOK IS DUE ON THE LAST DATE STAMPED BELOW AN INITIAL FINE OF 25 CENTS WILL BE ASSESSED FOR FAILURE TO RETURN THIS BOOK ON THE DATE DUE. THE PENALTY WILL INCREASE TO 5O CENTS ON THE FOURTH DAY AND TO $1.OO ON THE SEVENTH DAY OVERDUE. APR II : 15. LD 21-50m-l,'33