Sarah Emery

SEVEN FINANCIAL CONSPIRACIES

CHAPTER III.
NATIONAL BANKING SYSTEM.


---[ "a national bank is highly necessary and proper to the establishment and maintenance of a sound currency, and for the cheap and safe collection, keeping, and disbursing of the public revenue." ---Abraham Lincoln, 1843.
"I know of none which promises so certain results and is at the same time so unobjectionable as the organization of banking associations.  To such associations the Government might furnish circulating notes, on the security of United States bonds deposited in the Treasury. These notes, prepared under the supervision of proper officers, being uniform in appearance and security and convertible always into coin" ---Abraham Lincoln, 1862.

Representatives who voted for the National Currency Bank bill:
Messrs. Aldrich, Alley, Ashley, Babbitt, Beaman, Bingham, Jacob B. Blair, Blake, Buffinton, Calvert, Campbell, Casey, Chamberlain, Clements, Colfax, Conway, Covode, Cutler, Davis, Delano, Dunn, Edgerton, Eliot, Ely, Fenton, Samuel C. Fessenden, Thomas A.D. Fessenden, Fisher, Frank, Goodwin, Granger, Hahn, Haight, Hickman, Hooper, Hutchins, Julian, Pig Iron Kelley, Francis W. Kellogg, William Kellogg, Lansing, Leary, Lovejoy, Law, McIndoe, McKean, McPherson, Marston, Maynard, Moorhead, Anson P. Morrill, Noell, Olin, Patton, Timothy G. Phelps, Potter, Alexander H. Rice, John H. Rice, Sargent, Sedgwick, Segar, Shanks, Shellabarger, Sherman, Sloan, Spaulding, Thaddeus Stevens, Trimble, Trowbridge, Van Horn, Van Wyck, Verree, Wall, Wallace, Washburne, Albert S. White, Windom and Worcester.]


THE next scheme for robbing the people was the national bank act, passed in 1863.  Of all the villainous schemes of robbery ever practiced upon any people our national banking system stands preeminent.  By it Shylock was permitted to invest his greenbacks in government bonds at face value ;  upon these bonds he not only drew gold interest in advance but by means of the bank scheme he actually had 90 per cent of their value returned to him.  While drawing interest upon the entire investment in the form of bonds, 90 per cent of it has been returned to him in the form of national bank notes, and it is with these he carries on his banking business, loaning them out upon the most advantageous terms.  On the one hand he draws interest from the government ;  on the other, from the same investment he draws interest from his individual debtors.

For instance, you borrow $100 from your national banker, he graciously loans it to you at ten per cent in advance, which actually leaves you but $90.  With this $90 you supply your family with food and clothing, upon a large part of which, as we have already shown, you pay an import duty, this import duty, please remember, went into the treasury and from thence paid interest on this same banker’s bonds.  Now is it not clear that your banker has been paid two interests upon the same money, one directly upon the bank notes, presented him by the government, which he loaned to you at ten per cent interest, the other indirectly as interest on his bonds, which was paid with the import duty that had been added to the price of your goods ?  Now it is not for me to condemn individuals for taking advantage of this infamous law, but we do in most unqualified terms, denounce such a system of public robbery.  None but the wealthy classes are able to enter upon this profitable banking business.  If it is proper for the government to make the business of the wealthy thus lucrative, is it not equally just to give like advantages to the poorer classes ?

A wise government will look to the interests of its wealth producers who constitute the great toiling masses, and a just government would make the way to prosperity as easy for its humblest as for its most wealthy citizen.  If this system is good for banking it ought to be good for every other legitimate enterprise, and every other law-abiding citizen is entitled to like consideration.

Let us see how this system would affect, that great industrial class, the farmer.  To illustrate :  Mr. Jones is a farmer in easy circumstances ;  the markets are favorable and he concludes to sell his wheat crop ;  accordingly he hauls 1,000 bushels to market ;  having no immediate use for the money, he agrees with the buyer to sell at $1 per bushel and take in payment this $1,000 note.  It is a long-time note, fully secured, bears a good rate of interest, payable in gold semi-annually in advance.  Mr. Jones being well secured, feels that he has made a good exchange, in place of property idle and subject to loss in his granary, it is now safe and yielding a handsome income.  He is congratulating himself upon his ability as a financier, when he is accosted by the dealer, who informs him that he —the dealer—has on hand another variety of wheat equally good as that he had just purchased, and since he had found Mr. Jones a keen, thrifty business man, he would present him with 900 bushels of it.  The only expense to Mr. Jones would be the cost of handling, which would be one per cent of the value of the wheat, or $9.  The wheat should be taken to Mr. Jones’ granary, where he could loan it to his neighbors upon the most advantageous terms.  Nothing would be required of him for twenty years ;  at the end of that time, unless they could enter into a new contract, it would be necessary for him to return the 900 bushels of wheat ;  nothing would be required of him for the use of it, although by judiciously loaning to his neighbors twenty fold had been returned to him.

Words could scarcely express the surprise of Mr. Jones upon hearing this irrational proposition.  We may imagine him taking the $1,000 note from his pocket, and scrutinizing it with the gravest suspicions, or inspecting the shining gold pieces—his advance interest—to satisfy himself that they are not spurious.  But being reassured, he hastens home to carry the news of his good fortune to the partner of his joys.  He playfully drops the shining gold pieces into her lap, with the assurance that they are partial proceeds of the wheat, and that they are hers to invest in the new silk she had so long desired.  Mrs. Jones expresses great surprise, for she had been previously informed that a $1,000 interest bearing note would be the return for the wheat.  Mr. Jones complacently taking the note from his pocket, informs her that the gold pieces are simply the advance interest on his note ;  he then expatiates upon the beauties and advantages of such a system, declaring that hereafter his notes must be drawn with interest payable in advance.  Then with an air of haughty indifference, he informs her that besides the gold interest and $1,000 note, 900 bushels of wheat were being returned to him, and that the very men who hauled away the 1,000 bushels in the morning were returning with 900 to be replaced in his granary.

This announcement was too startling for truth-loving Mrs. Jones.  She threw up her hands in horror ;  for twenty-eight years she had been the wife of Darius Jones, and for the first time in all these years she had occasion to doubt his veracity.  But the unwelcome thought was checked as a shudder of fear ran through her frame.  “ Poor Darius,” thought she, “ must be insane.”  Great sobs of grief began to choke her utterance, when casually glancing out of the window, she saw a train of loaded wagons coming up the lane.  She stood for a moment dazed, great beads of perspiration appeared on her forhead.  She looked at Darius, at the approaching train, then nervously scanning the $1,000 note, she pushed it with the gold from her, and burst into a flood of agonizing tears.  It was long before Darius could reconcile his wife to this mysterious proceeding, but there was a vein of ambition in her nature which dominated at times, and when she saw the benefits that must accrue from such a transaction, she not only became reconciled but regarded with pride the acumen that had so increased their material prosperity.  From that time the Joneses moved in the most aristocratic circles, and were accounted among the “best” people of the community.

To many of my readers, no doubt, this little story appears like a most exaggerated fiction, but truth is stranger than fiction, and this truth is not only strange but startling.  He who doubts its authenticity has only to read the laws which govern our national banking institutions, and in proof of the rapacity of the system let me add that there is today a bill pending in congress, whereby it is proposed to make the bank circulation, not 90 but 100 per cent, the full face value of the bond ;  in other words, Mr. Jones proposes the return of a full 1,000 bushels of wheat in addition to his $1,000 bond and advanced gold interest.  But the clear-headed, vigilant Weaver is on guard, and to him the people may safely entrust this momentous question.  Further, the national banks, as depositories for the U.S. Treasury, today hold $59,000,000 of the people’s money upon which they are not paying one cent interest, but are and have been for the last 20 years loaning it at from 8 to 10 per cent, or using it for effecting corners on the necessaries of life.  At one time the First National Bank of New York—John Sherman’s bank—had the free use of $43,000,000 of the people’s money, at a time when its own capital stock was less than a quarter of a million.  It was thus that honest John Sherman “east anchor to windward” when he was the people’s servant.

The founders of our government had a salutary dread of the bankers’ influence making itself felt in shaping the national legislation.  They anticipated the evils that we have seen in our days to result from allowing the banking interest to become dominant in the halls of Congress.  We find, therefore, the Third Congress of the United States Senate passing the following resolution on the 23d of December, 1793:

“ Any person holding any office or any stock in any institution in the nature of a bank for issuing or discounting bills or notes payable to bearer or order, cannot be a member of the House whilst he holds such office or stock.”

The resolution was signed by the President, George Washington.

At that time there were only three banks in the whole country.  Yet even then Congress thought that the bank influence was such a standing danger to the maintenance of legislative purity that it deemed it necessary to provide against it by special legislation.

The three banks of 1793 have grown to over 3,000, and the banking interest as we have seen at one time had 189 representatives in Congress, the next largest representation being that of the legal profession, while the industrial classes were comparatively without any representation.

It is hardly necessary to point out the results of the large preponderance of bankers in Congress.  It has for years been seen in the whole tenor of Congressional legislation.  The interests of the industrial classes have been constantly and systematically sacrificed, while the interests of the moneyed classes have been persistently pushed to the front.  Now has the law of 1793 been repealed ?  If not, are there not enough honest men in Congress to see that it is put into effect ?  Unless something be speedily done to revive this law, our government will soon be openly, as it already is secretly, a bankers’ government.

If anyone doubts that the national banking system was not deliberately planned for the purpose of robbing the people, he may be undeceived by a careful perusal of the following private circular, sent out to the bankers of the country by their secretary, James Buell.  Here is the circular :


DEAR SIR—It is advisable to do all in your power to sustain such daily and prominent weekly newspapers, especially the agricultural and religious press, as will oppose the issuing of greenback paper money, and that you withhold patronage or favors from all applicants who are not willing to oppose the government issue of money.  Let the government issue the coin and the banks issue the paper money of the country, for then we can better protect each other.  To repeal the law creating national banks, or to restore to circulation the government issue of money, will be to provide the people with money, and will therefore seriously affect your individual profits as banker and lender.  See your member of Congress at once, and engage him to support our interest, that we may control legislation.
(Signed by the Secretary.)
JAS. BUEL,
No. 147 Broadway (Room 4), New York.

Mark you it is especially the agricultural and religious press through which the secretary designs working upon the prejudices of the people.  Surely not a very tame reflection upon the intelligence of these classes, but when we hear the so-called Christian minister upholding such a system of class legislation, it is evident that at least so far as such religionists are concerned, Mr. Buell did not “ reckon without his host.”

Now we have no more right to condemn the men who have taken advantage of our banking laws than we have to condemn the liquor seller who complies with the requirements of the liquor law.  They are both law-abiding citizens, both doing a legitimate business.  The trouble is not with the individuals, but with the law.  Comparatively few men will be better than the law makes them.  So long as robbery is legalized, we must be afflicted with robbers.  This morning the country is horrified with the news of a shocking railroad disaster, and the horror is magnified by the rumor that ghouls in human form perpetrated the most fiendish robberies upon the dead and dying ;  indeed it is even asserted that these fiends planned the disaster for the sole purpose of robbing the victims.  But we have another picture.  The life of our nation is trembling in the balance.  A million of armed men face each other on the battlefield, the roar of artillery and the thunderous note of the cannon send desolation to thousands of stricken households ;  our country is one vast graveyard, and the land is red with fratricidal blood.  In our nation’s capitol are assembled the law makers of the land ;  among them are those who encouraged and urged on the war, who declared that “ a nation is not worth a curse without blood-letting.”  These are they who sat in our congressional halls and speculated upon the most effectual means of robbing the widows and orphans of these dead and dying soldiers, who instituted laws by which the children and children’s children of these helpless soldiers should henceforth become their wage-slaves, and the bondmen of their children through all generations.  Laws which, unless repealed, are destined soon to crush out the liberties of the people and the life of our Republic.  Theirs was legalized robbery—the railroad bandits wrecked only a train—but these a nation.