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some time ago that this Harvester Trust, consolidated by Perkins for Morgan & Co., took farmers' notes running as high as 10 per cent; and he, I understand, is a gentleman who is now in the great uplift business. He is going to improve the conditions of the human family. With a high rate of interest, with our industrial resources mortgaged and stocked for more than they are worth, the promoters of these institutions are destroying the balance of trade that the United States has against Europe. In 1897 we had a balance of trade of $288,000,000 against Europe. The subsequent years, down to three years back, amounted to between five and six hundred million dollars in favor of the United States. This last year it dropped to $188,000,000. Now, as an economic proposition, when you put this $ country in debt to Europe she has lost the fight that has been won by the industry and the energy of the American people—not by the bankers and financiers. For the last five years the American dollar-silver certificate, Treasury note, or greenback-would bring a premium over gold in London. I put $100 in Morgan's bank in London, and the cashier counted me out $100 in gold, and gave me a dollar and fifty cents premium on it. I said That looks good. I suppose you have to look out for the balance of trade you have to pay on the other side, and if you can not get our money to pay it with, you have to send gold over there, and the express and insurance will cost you $1.50." He said, “ Yes, that is what it means.” I went to Belfast, Ireland, and the same thing occurred. The people of this country have won the fight for civilization. Their money to-day brings a premium in every commercial center, and it is because they have the balance of trade against the world.

If the committee would allow me, I could say, of course, a great deal more; but I do not want to tire the committee, which has been in session long enough. But I would like to read a remedy that I have thought out on this proposition.

The CHAIRMAN. Proceed; or you can put it in the record, whichever you prefer.

Mr. DANIEL. It is not long. I thought very probably the National Monetary Commission would get their bill in yesterday or to-day, or some time ahead of this. But I would like to have the committee read and consider this, because I have written a book on the question, and it is a result of 20 years' study, and I can substantiate practically all the features in this bill.

(The paper referred to is printed in the record in full, as follows:)

A BILL To establish a monetary and banking system to conform to the Constitution

of the United States,

Be it enacted by the Senate and House of Representativcs of the United States of America in Congress assembled,

SECTION 1. That there shall be established at Washington, District of Columbia, the capital of the United States, a Government Bank of the United States. The Government of the United States shall deposit its cash balance with the Government Bank of the United States, and thereafter all receipts of the Government shall be deposited with the Government Bank of the United States, except that when necessary the Government may designate other banks for that purpose in cities where there is no branch of the Government Bank of the United States. All disbursements by the Government shall be made through the Government Bank of the United States.

SEC. 2. The Government Bank of the United States and its branches shall pay no interest on deposits.

SEC. 3. The Government Bank of the United States may rediscount for any bank having a deposit with it, notes and bills of exchange arising out of commercial transactions and having two commercial signatures—those of drawer and drawee—with the additional indorsement of the bank. This privilege is also granted to individuals on notes and bills of exchange arising out of commercial transactions having three commercial signatures—those of drawer, drawee, and indorser. In place of one of these signatures, however, stocks or bonds may be deposited as security. This shall apply to all notes and bills of exchange issued or drawn for commercial, agricultural, or industrial purposes, and under no circumstances, for carrying stocks, bonds, or other securities for speculative investments.

Sec. 4. The Government Bank of the United States shall collect checks or bills of exchange payable in foreign countries for banks and individuals in the United States at a minimum cost. These bills of exchange must bear the name of two or more responsible parties. It shall be the duty of the Government Bank of the United States, or any of its branches, upon request, to transfer any part of the deposit balance of any bank having an account with them, without cost.

Sec. 5. The Government Bank of the United States and its branches shall at once, upon application and without charge for transportation, forward its circulating notes to any depositing bank against its credit balance.

NOTE ISSUES.

SEC. 6. There shall be no further issue of circulating notes by any national bank beyond the amount now outstanding. The Government Bank of the United States will offer to purchase at a price not less than par and accrued interest the two per cent bonds held by national banks and deposited to secure their circulating notes. The Government Bank of the United States shall take over these bonds and assume responsibility for their cancellation (upon presentation) of the oftstanding notes secured thereby. The Government Bank of the United States shall issue, on the terms herein provided, its full legal-tender notes, lawful money of the United States, as fast as the outstanding notes secured by such bonds, so held, shall be presented for redemption, and may issue other notes from time to time to meet business requirements, it now being the policy of the United States to retire as rapidly as possible, consistent with the public interests, bond-secured circulation, and to substitute therefor real lawful money of the United States in place of banks of issue promises to paycredit money. All notes issued by the Government Bank of the United States shall be full legal tender and payable for all debts, public and private, and constitute a first lien upon all the assets and services of the people of the United States for their redemption.

The governor of the Government Bank of the United States shall be appointed by the President of the United States and confirmed by a two-thirds rote of Congress.

Recognizing the sovereignty and equality of the States, each shall be entitled to a director in the Government Bank of the United States, appointed by the governor of the State and to be confirmed by a two-thirds vote of the legislature thereof.

There shall be a branch of the Government Bank established in every important city in each State, and the rate of interest shall be uniform throughout the United States. To put the people of the United States on the same basis of those in France, England, and Germany the rate should not exceed four per cent. The manager of each branch of the Government Bank of the United States shall be assisted by a local board of directors selected from among the best qualified commercial, agricultural, and industrial representatives in the region. No officer or director of the Government Bank of the United States or its branches shall be allowed to borrow from same, but shall receive a fixed compensation for his services and be a bonded officer.

The Government Bank of the United States shall be restricted in loans on collateral to approved railroad, municipal, telegraph, and telephone bonds. A margin of not less than twenty per cent shall be required on all such securities, upon which the Government Bank of the United States is authorized to lend.

All net profits of the Government Bank and its branches shall be covered into the treasury fund of the United States Treasury, subject to its proper disposition by Congress solely in the interest of the people of the United States.

And be it further enacted, That all the money heretofore issued by the Secretary of the Treasury of the United States, authorized by acts of Congress, shall be substituted by lawful full legal-tender money of the United States, thus de. stroying forever the operation of the endless-chain process upon the United States Treasury.

No banking or financial institution, underwriting industrial stocks or bonds of a speculative character or lending money thereon shall become a depositor, borrower, or rediscount any of its securities, directly or indirectly, with the Government Bank of the United States or its branches.

No banking institution allowing its officers, directors, or stockholders to use the deposits of the bank for private profit, directly or indirectly, or through the cooperation of others for like purpose, shall be allowed to open an account or rediscount any of its paper, directly or indirectly, with the Government Bank of the United States or any of its branches.

It will be the policy of the Government Bank and its branches to discriminate against those banking and financial institutions carrying demand loans against their borrowers.

And whereas, upon the demonetization of gold, which must come to pass, the United States stands now to be the greatest loser, as is shown by the following figures : Gold coin in United States Treasury Dec. 1, 1911 ---

$1,000, 823, 215. 00 Gold bullion in United States Treasury Dec. 1, 1911

183, 332, 234. 00 Gold coin in banks and in circulation.- 613. 465, 602. 00

$1, 797, 621, 051.00 Net exports United States gold coin June 30, 1911, to be redeemed -

787, 837, 314.00

Total.

2, 585, 458, 365. 00 Real value, 50 cents on the dollar, loss to the United States. 1, 292, 729, 182. 50

It is therefore further enacted that no more gold shall be coined into American dollars by the United States.

In order that there may be a steady and normal increase of real money into the money system of the United States to keep pace with the increase of population and national wealth, the Government Bank of the United States is authorized to issue an annual increase of three per centum of lawful money of the United States, same to be used and paid out as is the money now received from the taxes of the people.

The above percentage of annual increase of the money of the United States shall not be changed without six months' notice in the paper having the largest circulation in each city of the United States and by a two-thirds vote of the ensuing Congress.

The Government Bank of the United States shall have the power to issue emergency currency in case of threatened panic only, and shall retire same as soon as justified.

Mr. DANIEL. I contend that under a proper banking system you could not have a trust in the United States. Senator Newlands, I would like to call your attention to a very curious condition that I think needs the attention of a man like yourself, who has studied finances. I have read a great many of your speeches. Silver was demonetized in 1873, and it went down steadily until it dropped below 50 cents on the dollar. In all the international conferences on money, the main apprehension expressed by the representatives of the different foreign Governments was that silver would be demonetized, and they were apprehensive about the amount of it they would have on hand. Germany, as a matter of fact, was the most timid one, and began to let some of it out, and the Latin Union was disturbed about that fact. I can prove, and it is in a section in this book I have written, entitled “ Daniel on Real Money” (“ Correct definition of a standard," p. 230), that there is no such thing as a gold standard. In other words, the standard of value is the amount of money in circulation. That is so plain that it is hardly necessary, I think, to go into it. If you were to withdraw to-day, for instance, the greenbacks out of our circulation, our standard of value would go

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all to pieces, and you know we would have a panic. It is the volume of the money that sustains values.

Gold is not a standard of value for anything in international trade or in domestic commerce. It is simply a pretext to issue credit money on. And England, naturally, was very apprehensive that the socalled gold standard might be disposed of, as it would to a very great extent injure her in her holdings of gold, and the Bank of England directors interested in African gold mines—they get over $230,000,000 a year out of these mines—and as long as the United States keeps its mints open to gold, that enables England to sell her gold at over $130,000,000 profit every year. That is the reason why, in all these international conferences, the delegates from England never had any authority. They said England would not depart from gold as a pecuniary proposition. Very naturally she would not.

Now, the European countries—England particularly—have been unloading gold on this country. When gold is demonetized this country is going to be the main loser. In other words, I figure out here that in the demonetization of silver England lost practically nothing, whereas we lost over $360,000,000. I have this statement from the Director of the Mint: Gold coin in United States Treasury Dec. 1, 1911

$1,000, 823, 215 Gold bullion in United States Treasury Dec. 1, 1911.

183, 332, 234 Gold coin in banks and in circulation.

613, 365, 602. Total.

1, 797, 621, 051 If gold is demonetized—as I believe absolutely it is going to be as it has been the foundation upon which the banks of issue of European countries have been exploiting people-credit money-we will stand to lose, when it is demonetized, as it goes down like silver; and I believe it will, for this reason, that the demand for it in the arts is only one-third of the supply, and there are two-thirds surplus. That alone would drop it just like an overstock of wheat, or any. thing else. It certainly will go down to 50 cents. Then, if you take into consideration the fact that there is over seven billion of it embedded away in the different currency systems of the world that may come on the market, where on God's earth will it go? The greatest economic loss I know of that the world has ever been subjected to is in going down into the bowels of the earth and getting out the precious metals and storing them in vaults, where they never see the light of day. The only justification of it is the fallacy that it is the standard of value.

The Bank of England has one hundred and seventy-four millions and will lose but $87,000,000. England is a gold-standard country, “the head and front of the offense." Take all in the United King. dom, and it is about three hundred and fifty million; loss would be one hundred and seventy-five million. This country would stand to lose very near a billion three hundred million, if gold is demonetized, and it is just as certain to be as I am a living man. Under that condition I think it is high time for the United States to stop coining bullion into gold dollars.

We can take care of these foreign obligations that are payable specifically in gold; but, as a matter of fact, they would not want gold as soon as it is demonetized, but they would want the American dollar. I notice we have gone so far as to recoin, out of foreign coins, $550,000,000 of money that has come here from European countries.

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This is a condition that needs the attention of our statesmen. Of course, when you speak of a Government bank of the United States, you are going to hear a great deal of opposition.

To remedy a disease, you must get the right remedy. I do not think regulating corporations by a commission will ever be a success in this country. For instance, the Interstate Commerce Commission has been in existence for a long while, but it has not yet succeeded in getting through Congress an appropriation to make the physical valuation of railroads, which is absolutely necessary, first of all, in order that the commission can act intelligently to fix the freight rates for the American people. Just about the time the Interstate Commerce Commission, composed for the time being of unusually good men, make their best effort, with the limited authority they have, to do something in the interest of the people, we have a Court of Commerce that is put above them, and their hands are tied.

The very report of that Interstate Commerce Commission, recently made to Congress, contains the admission that if that Court of Commerce is upheld, they are practically made useless—and the 90,000,000 people on the outside can not give their attention to six or seven men on a commission that would offset the efforts of a great organization of capital that is “instant in season and out of season. We know that the construction of commissions themselves is dangerous. Many of them have false ideas of political economy and industrial conditions, and after the people waited for 20 years for one decision on this law, which they passed through their representatives in Congress, to regulate trusts -as good a law as the English language can frame—they watched the journey of that law, and when it got to the Supreme Court of the United States they inserted a little English word, " unreasonable," and the whole thing fell to pieces. Now, we know this. Judge Gary stated, for instance, that he would like to have the decision of this proposed commission referred to the Court of Commerce, and the Court of Commerce should have the power to mandamus the commission, forcing then to allow the incorporation of these big industrial enterprises that would come before the proposed commission for national incorporation with all their inHated bond and stock issues. With my knowledge of human nature and my knowledge of the workings of the commissions already appointed by Congress, I do not believe this committee can frame any bill delegating to a commission the powers that would give the people relief from the oppressions of these great combinations.

I think the Sherman antitrust law is all right, and, as a matter of fact, it has been decided by the Supreme Court that the Standard Oil Co. and the Tobacco Trust are conspiracies in restraint of trade. They have settled that part of it. Now it is up to Congress, and I think, Senator Cummins, you are doing the most valuable thing at this time, in putting the tobacco case again up to the Supreme Court of the United States, and I would like to see it get there.

Senator CUMMINS. So would I.

Mr. DANIEL. Put the responsibility where it belongs. It is an awful condition, that 90,000,000 people can have representatives in Congress pass a law that is plain English, but which is absolutely futile. I tell you the people in this country will not stand for it.

I do not know that there is anything more for me to say. I am simply opposed to a commission form of government. In other words, the American people have not voted that their Representatives

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