house in order and just before the session of Congress in which the central bank bill actually was first introduced, in December, 1907? Right after the panic, in November, 1907, and just before Congress convened in December, 1907, a meeting was held in Philadelphia at which prominent Wall Street bankers urged Congress to authorize a great private central bank as the only cure for panics. Was the panic of 1893 also deliberately caused by the same interests to help induce Congress to repeal the Sherman silver purchasing act and adopt a gold standard, as has been charged? Was the panic of 1873 also artificial, caused to compel Congress to pass measures for resumption of specie payments and destruction of the "greenbacks," that they might be replaced by bank note currency yielding regular profits to the banks, as demanded by Wall Street? Was the panic before the Civil War deliberately caused by high finance in its fierce struggle with President Andrew Jackson over the private central bank of that day? As each panic in history was coincident with some great contemplated raid by Wall Street upon Congress to obtain legislative privileges and special advantages of priceless value and limitless power, is not panic, planned panic, the one great, invincible and final instrument of torture applied on great occasions by Wall Street to the country in its continuous campaign of conquest? In a later chapter inside facts about the bank-made panic of 1893 are given. Panics cause privation, poverty, sorrow, suffering, bankruptcy, embezzlement, larceny, suicide and murder. Everybody knows this fact. Therefore, any man deliberately co-operating in acts that he knows will or may cause panic is both morally and legally guilty of causing every crime induced by such panic. If all or any one of past panics was deliberately caused or intensified by Wall Street interests, the most important work ahead for the people of the United States is to either shackle or exterminate the bandits of "high finance." The "Aldrich Plan" would give such bandits power for fifty years to shackle the people and exterminate their business and prosperity. It grants to them by act of Congress a hunger hold over the people, their business and welfare, that in effect will enable the soulless incorporated money power to establish in this country a condition of human slavery as real and more terrible and merciless than the black slavery abolished by Lincoln after the sacrifice of about a million lives; but instead of enslaving a few million negroes, this may plunge permanently into direct or indirect bondage the larger portion of the 94,000,000 inhabitants of the United States, white and black. CHAPTER XIII. MONEY IS THE POWER. Secrets of High Finance Exposed. Steel Trust's $75,000,000 Cash. The Real Money Trust. Heart of the Trust Problem. "We, the United States Steel Corporation, keep about $75,000,000 on deposit in the banks of the country, which we can shift about where it is needed by our business." The above is from the published report of the testimony of Judge Elbert H. Gary, executive head of the Steel Trust before the Senate Committee on Interstate Commerce in Washington on December 7, 1911. Without intending hereby to make any specific charges against Judge Gary or that corporation, we hope to evolve a short, useful hypothetical sermon with the above quotation for a text. Readers may draw their own moral conclusions. At times, say before dividend periods, no doubt this cash fund is much greater, perhaps double, $150,000,000 or more. Remember, this is not "bank credit," or "deposits" merely offsetting "loans." It is cold cash. As such, when deposited, it instantly becomes part of the cash reserves of the favored banks. Such banks under the law, on the average, are permitted to inflate their ordinary loans of "credit" an amount aggregating about ten times such increase in cash reserves. In "reserve cities" banks must keep a cash reserve on hand equal to 25 per cent of their "deposits"; in other places 15 per cent. But three-fifths of the 15 per cent can be kept in reserve city banks and therefore is twice used as the basis of credit loans. This is the reason the volume of loans of all the banks happens to aggregate at least ten times the total money in their cash reserves. Ninety per cent of all bank deposits are mere checks or discounted notes, not actual money. In other words, the Steel Trust, by depositing seventy five million dollars cash in banks, substantially enables such banks immediately to swell their loans of "credit," and to collect interest on about three-quarters of a billion dollars extra without investment by the banks of one additional dollar. Likewise, if the Steel Trust suddenly should withdraw the $75,000,000 from the banks it would force such banks immediately to contract their total "loans" three-fourths of a billion dollars-that is, require borrowers from banks to pay up loans aggregating $750,000,000 and the banks would lose the chance to get 6 per cent per annum, or other going rate on that vast sum. 66 There will be some reduction of these figures (not more than say 25 per cent) if the money should be deposited in banks in reserve cities" where a cash reserve equal to 25 per cent of total deposits is required. These figures in relative proportion and size are substantially correct, but any ultra-captious critic is welcome to reduce the figures 50 per cent and still we will have the same grave dangers modified slightly only in degree. Bank Inflation and Huge Profits. According to the United States comptroller's report of December 4, 1911, the 24,392 reporting national and state banks and trust companies of the United States on June 7, 1911, all combined owned and possessed just $1,554,147,169.28 of money, in round figures a billion and a half in cash. With only this amount of cash in their reserves to use for all purposes the banks and trust companies have piled up liabilities that total the enormous sum of $23,631,083,382.67, more than twenty-three and one-half billions of dollars, the larger portion of which represents loans of credit, on which they get regular interest and which costs the banks relatively nothing. It is similar to getting pay for indorsing another man's note. In other words, they have fifteen times more liabilities than cash. All that a bank really owns net is its capital, surplus and undivided profits. The balance of its assets merely represent and offset its debts or liabilities made in buying such extra assets. So to be fair, we should take the combined capital stock, $1,952,411,085.56, and the combined surplus and undivided profits, $2,065,574,839.70, add them and we find all banks and trust companies have combined net assets amounting to $4,017,985,925.26, a little over four billion |