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 iCILITY
 
 f LIBRARY 
 
 UHIVCRSITY ^ 
 
 CALIPORNiA 
 
 SAN ciseo 
 
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 AS GOOD AS GOLD!, 
 
 Ttii U;i;..,>3IIY LibrJARY 
 
 l/NIVERSiTY CF CALIFCrNlA, SAN DIEG' 
 
 LA JOLLA. CALIFORNIA 
 
 A National Currency 
 
 ISSUED BY AUTHORITY OF THE PEOPLE; BACKED BY THE WEALTH 
 OF THE nation; BASED ON 
 
 A Constitutional Amendment. 
 
 AND CIRCULATED FOR THE BENEFIT OF THE PEOPLE; UNDER 
 
 A National Money System 
 
 IN AMPLE VOLUME FOR THE BUSINESS OF OUR GROWING CIVILIZATION. 
 
 AN ADDRESS 
 
 Before the Commercial Congress at Kansas City, April i6, 1891, 
 
 By R. M. WaDNEY, LL. D. President 
 
 OF THE UNIVERSITY BANK OF LOS ANGELES, CALIFORNIA 
 
 LOS ANGELES: 
 
 TiMES-MiKROE Priming and Binding House. 
 
 1891.
 
 LIBRARY ^ 
 
 Either our circulating lucdiuui must he increased suf- 
 ficiently to meet the ivants of our groivino- country, or the 
 Imsiness of the country must be kitted off until it is within 
 the compass of our present circulation' 
 
 The following resolution received the unanimous vote of the California 
 Bankers' Association at Los Angeles, March 13, 1891: 
 
 Resolved, That this convention respectfully request Congress at its next 
 session to devise a uniform money system for the people of the United States, 
 with the gold dollar as the standard or unit of value ; using gold, silver and cur- 
 rency for a circulating medium, in a sufficient volume to fully meet and keep pace 
 ■with the growing wants of the business of the country ; founding the issue of cur- 
 rency upon the wealth of the whole nation ; making gold, silver and currency a 
 legal tender, and exchangeable at par on demand, and fixing by a constitutional 
 amendment the legality of such a circulating medium, and preventing the dangers 
 of inflation, contraction, repudiation, or change in the standard of value. 
 
 The most critical period in the historij of the present 
 political parties that has arisen since the luar tjHI occur in 
 the next session of Congress^ and on this question of in- 
 creased volume of money.
 
 H'~ 
 
 AS GOOD AS GOLD, 
 
 Judge E. M. WiDNEY, President of the University Bank, delegate from 
 Los Angeles, Cal, addressed the Commercial Congress, at Kansas City, 
 March 16, 1891 as follows: 
 
 Mr. President and Gentlemen of this Congress. 
 
 The owners of money naturally do not want the volume increased. 
 While it is limited they can control the rate of interest, and the value of 
 all labor and products, and can dictate the price of all property. 
 
 A CORNER ON MONEY. 
 
 A corner on railroad rates is dangerous, so is a corner on wheat, or corn, 
 or cotton, sugar, wool, or on any of the staple products. But of all 
 dangers a corner on money is the worst. A corner on money is a corner 
 on all other corners combined, and can control the social and political, as 
 well as the producing, labor and property interests of the nation. The 
 Rothschilds recently attempted a money corner on Russia to control its 
 internal policy against the Jews. Russia in retaliation is attempting a 
 corner on gold, and it spreads dismay and panic among the nations. 
 
 It is claimed that by two or three men combining in New York they 
 can lock up enough money to close all the banks in that city. The volume 
 of money and the national system for its circulation should be such that 
 no corner on money can ever be possible. 
 
 A POLITICAL FORECAST. 
 
 The most critical period in the history of present political parties that 
 has arisen since the war will occur in the next session of Congress, and 
 on this question of the increased volume of money. 
 
 Next to personal rights, no question afPects the voter more sensitively 
 
 an the rights of property, and of these an increase in the volume of 
 money is most important. 
 
 The political party that offers a safe increase in currency to relieve the 
 wants of the people, and to carry on the business of the nation will be 
 offering a premium for every vote. An increase of $20 per capita on a 
 population of 62,000,000, is a bid of about $100 per vote. 
 
 The laboring classes and those borrowing money constitute about nine- 
 tenths of the voters, and with this as a leading issue they would vote in over- 
 whelming majorities for such a measure in utter disregard of present 
 party lines. It will certainly be made an issue, unless one of the 
 dominant parties shall pass such a law at the next session of Congress.
 
 If the Democrats propose such legislation and the Republicans resist 
 it, the next campaign and Congress will be overwhelmingly Democratic;.- 
 should the Republicans propose the law and the other party oppose it, the 
 results will be in favor of the Republican party. 
 
 But if the present parties show the people '7io?r not to do it,''' by wasting- 
 the time in discussing insufficient, sham and subterfuge plans, to deceive 
 the people, they will certainly pay the penalty of utter political defeat. 
 
 The homes and property of the masses, today, are in jeapardy by 
 reason of an insufificient voluiiie of money. Nine million homes mortgaged 
 at a high rate of interest, annii;il]y eating up the home, means nine 
 million solid votes for more money 
 
 In addition to this the industries of the nation are seriously crippled; 
 the further developments of our productive areas are brought largely to a, 
 stand still ; the laboring classes are out of employment by the hundreds 
 of thousands because employers can not get the money with which to pay 
 for daily labor. 
 
 THE STRINGENCY OF MONEY 
 
 that prevails over the United States, and recently bordered on a panic,, 
 extends to England, Germany, France, Russia, and in fact to all the Europ- 
 ean nations, and to South America. For want of money long established 
 mercantile, manufacturing, commercial and financial institutions, noted 
 for decades of careful, safe business management, went down like graia 
 before the reaper. They went down for want of money. There was not 
 enough money to go around by hundreds of millions of dollars. When 
 the people had it the banks were hard up, and when the banks had it the- 
 people were short. 
 
 THE CRASH CAME FOR WANT OF MORE MONEY. 
 
 The faihireB of 1890 were $ 190,000,000 
 
 Shrinkage of New York stocks and bonds 600,000,000 
 
 Shrinkage of values in United States 10,000,000,000 
 
 The banks called in over 100,^100,000 
 
 The United States Treasury paid out over 200.000,000 
 
 The banks issued panic certificates 30,000,000 
 
 Tlie U. S. Treasury deposited with banks to help tide over 30,047.118 
 
 Total $11,150,047,118 
 
 Millions were shipped from England and California to fill up the want, 
 of more money. After all this effort to overcome the stringency a national 
 bank examiner told me last December that they did not dare to examine- 
 the banks, as they could not show the required reserve. They were sol- 
 vent in assets, but could not command ready money. A few hundred 
 more millions of legal tender paper money in circulation would have 
 avoided the crash.
 
 THE FINANCIAL SITUATION 
 
 of the 8,050 banking institutions in the United States, State, National, 
 private and savings, was last December, as shown by the ofificial reports, 
 as follows: 
 
 Due depositors $4,G0o,844,1.57 
 
 Cash in these banks to meet above deposits: 
 
 Gold coin $ 1)<),811,011 
 
 Silver 28,811,478 
 
 Paper money 3-19,694,405 
 
 $478,316,694 
 That is, the banks had ten cents on the dollar to pay depositors. In 
 gold they had only about two per cent; in gold and silver less than three 
 per cent. At the same time the banks had loaned out §3,893,957,790 among 
 62,000,000 people scattered over an area of 3,400,000 square miles of terri- 
 tory. There were at the same date ^957,746,248 in the hands of the 
 people with which to pay the banks. In fact, after deducting state, city, 
 •couniy and other public funds, there was not 10 cents on the dollar in 
 the hands of the borrowers to make payment with. Yet the wealth of 
 the people was over $71,000,000,000. The people were solvent in property 
 twenty-fold, but could not command available cash. It was not in the 
 country, as shown by the above figures. 
 
 The volume of money in the country could not sustain the volume of 
 business, and over $11,000,000,000, one-seventh of the entire nation's 
 wealth, was killed ofP in the short space of a few months for want of a few 
 hundred millions more of money. 
 
 THE STRINGENCY IS MOKE APPARENT 
 
 from other statistics. The volume of business in the United States last 
 year was over $130,000,000,000. After deducting from the total volume of 
 money in the United States, reserves of banks, and United States Treas- 
 nry, and State, county, city tax money, and other public funds, there 
 would not be left in circulation to exceed $700,000,000, or about one-half 
 of a cent on the dollar of the volume of business with which to do the 
 work. 
 
 If gold and silver alone were used it would only be about one-eighth of 
 a cent. If all the silver mined in the United States were added it would 
 give less than one-quarter of a cent on the dollar of the volume of busin 
 
 The volume of actual money fell so far short of being able to do the 
 work that the commercial world was forced to use 92 to 9 per cent in 
 checks, drafts, certificates, and such evidence of money (as shown by the 
 Comptroller's report for December, 1890.) This represented some $123,- 
 000,000,000 of such paper used for business. This was the worst form of 
 inflation. Back of it was only the shifting and personal responsibility of 
 individuals, firms and corporations, and a fraction of a cent on the dollar. 
 People lost confidence in this vast volume of checks, drafts and paper evi- 
 dence of money. The money was not in existence in volume enough to
 
 6 
 
 sustain it. Tlie same relation exists between the volume of money in the^ 
 country and the credit used, as between a bank reserve and its deposits. 
 The volume of the money must increase as the credit increases. The people 
 are j)aying in interest and profit to foreigners over $50,000,000 per year^ 
 for the use of their money, to increase our volume, to do our business. If 
 the people through the government issue their own circulating medium, 
 they will pay this $50,000,000 annual interest to themselves. AVhy should 
 we be in financial bondage to foreigners and work for them when we can 
 make our own money, and use it for the same purpose, and save this an- 
 nual $50,000,000? We are now paying this tribute to foreign capitalists, 
 because we have not enough of our own. Why should we pay this interest 
 to others, when as a nation we have the resources to issue our own volume 
 of money, 
 
 A GLUT OF $20,000,000! 
 
 Another evidence of the insufficiency of the monev supply is the condi- 
 tion of the New York banks in March, 1891. They claim to have a glut 
 of money — a surplus of $20,000,000 over the required legal reserve. This 
 is the result of calling in loans from the channels of trade. It is not 
 money returned voluntarily by the users of money. It can all be absorbed 
 in a day by the places from which it was called in. 
 
 But the most startling fact disclosed by this boasted glut, is that there 
 is not enough money in all these banks over the legal reserve, to even 
 start one railroad company. The best railroad enterprise with gilt edge 
 security would absorb this boasted $20,000,000, in building its first few 
 miles of track. 
 
 On December 19th, 1890, the secretary called a report from all national 
 banks in the United States. They average less than 2 per cent above a 
 25 per cent reserve. Which leaves in the whole national banking system 
 of the United States only about $50,000,000 for use. Of this sum !t30,000- 
 000, is United States Treasury money deposited in the banks to help them 
 make the December showing and to relieve the financial danger. On April 
 11th this surplus has fallen to $5,600,000. No wonder the business of the 
 nation is paralyzed. It becomes apparent from these results obtained 
 from official reports, that the banks in the United States dare not loan any 
 money on time loans to develop or maintain the industries and business, 
 of the people. 
 
 THE FINANCIAL VACUUM 
 
 thus briefly pictured to you, called a uey stringency, means only one 
 thing. An insufficient supply of money. Of this Secretary Windom said 
 in his last address in New York: '' had it not been for the peculiar condi- 
 tions which enabled the United States Treasury to disburse over 1175,000,- 
 000 in two and one-half months, last fall, the stringency would have re- 
 sulted in wide-spread financial ruin." The market was not just then cry- 
 ing for more of that 95 per cent of checks, drafts, panic certificates, or 
 other evidences of money. It wanted the money and had to have either- 
 the money or "the wide spread financial ruin."
 
 THE DEMAND. 
 
 You have seen the negative side of the question, the want of money. 
 Now take the other half of the picture and look at the affirmative demand 
 for money. Over $10,000,000 were used in 18i)0 to start new banks in the 
 South alone as much more in the West. The cotton crop was valued at 
 $400,000,000. Over 17,000 new enterprises started in the South last year, 
 embracing every variety of industry. Over 32.800 miles of railroad were 
 built the last four years, at a cost of $3,000,000,000, New York city used 
 $300,000,000 in new buildings, while the West used money by the millions 
 for its new enterprises, many of which are shut down for want of money. 
 
 This wonderful growth and energy is not to be condemned. It is the 
 preparing of this continent for homes, and for the support of the genera- 
 tions. All of these aids for civilization are to uplift humanity to its high 
 and peerless destiny. 
 
 It furnishes labor, food and clothing for the poor; it furnishes use for 
 raw material, and results in industry, home and happiness for millions. 
 
 GROWTH OF CIVILIZATION. 
 
 The world has been progessing in civilization, in commerce, industries; 
 and in business with wonderful rapidity during the past century and 
 especially during the past fifty years. 
 
 Kussia has broken its lethargy, and is restless with energy. Asia has 
 thrown off its isolation and its population half awakened from a dream of 
 a thousand years is stretching forth its hands. India is contending for its 
 ancient glory. Afiica is showing to the world its rich fertile soil, its 
 rivers, its gold and diamonds, and treasures for commerce and agriculture] 
 All South America is organizing for civilized growth and work with its 
 wealth of soil and mines to tempt the industry of man. 
 
 The islands of the sea from the almost continent of Australia to the 
 little islands are becoming active struggling centers for their part of com- 
 merce. The business area of the United States in less than a century has 
 spread from the small territory east of the Alleghanies, to an empire ex- 
 tending across a continent from some 3,000,000 to 62,000,000 people now 
 scattered over 3,400,000 square miles and overflowing with business, en- 
 ergy and push, eager to develop the resources of their continent, and pre- 
 pare it for the habitation of the coming hundreds of millions. The whole 
 earth is rapidly being prepared for the comfortable occupation of man. 
 
 The world is constantly outgrowing its api^liances for civilization. The 
 circulating medium of exchange is no exception to the rule All hitherto 
 adopted forms of money ha^'e been outgrown in kind and in volume. 
 
 The skins of wild animals at an early age were the money of exchange. 
 This Avas outgrown and they stored the skins, cutting off the ears and 
 passing them as a more convenient form of money, the owner being en- 
 titled at any time to call for the corresponding pelts. This was the first 
 bank of deposit. At a later age stamped pieces of leather were the evi- 
 dences of value, gold and silver not being enough in volume. The Chinese 
 have used paper money for thousands of years past.
 
 Drafts, certificates of deposit, promissory notes and orders for money 
 were used by the ancients to increase the volume of the medium of ex- 
 change. 
 
 INTERNATIONAL DEMAND. 
 
 The following demands for large loans are now on the market of the 
 world: 
 
 Aurtro- Hungary ii^lOO.OOO.OOO 
 
 France 182,000,000 
 
 Mexico 40,000,000 
 
 Argentine Republic 500,000,000 
 
 Other South American States 725,000,000 
 
 African Mines, Trust Companies, etc ■, 350,000,600 
 
 $1,897,000,000 
 
 Other nations want fully as much more, to say nothing of local demands 
 in each nation. 
 
 In the Baring Bros, trouble. Lord Salisbury refused to allow the Bank 
 of England to furnish aid. Thereupon the President of the Bank said to 
 him: "My Lord, I am instructed to tell you, in case you refuse, that un- 
 less the Government comes to the rescue, there is hardly a bank in the 
 United Kingdom that can be relied upon to meet the demand of its cred- 
 itors TWENTY-FOUR HOURS AFTER THE DISASTER WE APPREHEND. The relief 
 
 was quickly ordered. 
 
 It is evident from the facts already cited that there is an insufficient 
 supply in the United States and that other nations have all they can do 
 to take care of themselves. This condition of things drives our bank to a 
 system of 
 
 CALL LOANS, 
 
 or 30 to 90 day paper. They dare not, of course, make time loans. As a 
 result the growth and development of our Southern and Western country 
 is largely at a standstill. 
 
 Who of you can take a call loan or a 30 or 90 day loan and plant an 
 orchard, develop a farm, build a railroad, open a mine, or establish any 
 industry. 
 
 ou well know that all these must have time loans and such loans can 
 never be had in a stringent money market. An abundant volume of 
 money would result in time loans all over the West and South. It would 
 give employment to the idle hundreds of ousands who today in the 
 East, West and South, are anxious to work. This unused labor is a dead 
 loss to the nation. An idle day is gone orever, it can never be used to 
 plant a single hill of corn. The laborer is poorer by every idle day. In 
 the United States wo are daily destroying the labor of over three hundred 
 thousand men, worth say $1.50 per day, equal $450,000 daily or aggregat- 
 ing $135,000,000 per year of 300 days. This labor spent in the South and 
 West (1 weloping their marvelous resources would feed and cloth a 
 hungry million. 
 
 Tais idle labor would in one year levee the Mississippi from St. Paul to
 
 9 
 
 the Gulf. It would construct the Henepin Canal the next year, and 
 "would in a few years complete the Galveston harbor, construct a Ship 
 Canal across the isthmus and another from the Missouri near Chicago to 
 the lakes as well as complete other great national works. Yet this is all 
 lost annually for want of money to pay daily labor. 
 
 It would seem that our government was run on the theory that it must 
 protect the money even if it should starve citizens. 
 
 Letters to this convention from prominent Eastern financiers protest 
 against any charge in this blundering financial chaos. And urge that 
 we do should do nothing. The East has dictated the finances of this 
 nation to the present. The job is not a credit to their ability and it is 
 time we tried a change. The London Times says, "The whole monetary 
 system of the United States is in a muddle. This condition is due to 
 piecemeal legislation." The case grows worse in the hands of these 
 financial doctors and they now say let the patient alone and he will either 
 die or get well in time, and they don't know which. 
 
 Under such circumstances it may be well to try another mode of treat- 
 ment. 
 
 THE VOLUME liEQUIRED 
 
 should be ample in view of the facts . It cannot be accurately deter- 
 mined, but we should not therefore leave it without any solution. Ap- 
 proximation is all that can be attained. 
 
 Generally the volume should e such that the United States treasury 
 could hold a safe reserve of say 25 per cent of the volume issued. So, also, 
 tliat the banks could hold a 25 per cent reserve of deposits, and also the 
 tax money could go into its legal vaults. An estimate might be added for 
 hoarding and loss by accident. In addition to the above reserves there 
 should be a full volume in circulation among the people for the business 
 of the nation. A volume such that time loans could be abundantly 
 supplied. 
 
 More specific figures would be suggested by the following statistics : 
 
 State and National banks have deposits $2,516,179,807 
 
 Take this as the volume of issue and we have, say : 
 
 Twenty- five per cent for United States treasury 629,044,951 
 
 " " Bank reserves 629,044,951 
 
 Eor tax money 114,072,288 
 
 Total reserve 11,372,162,190 
 
 Taking this sum from the proposed volume there would be left 
 $1,144,017,617, for active use. 
 
 If the above reserves were deducted from the present volume of |2,082,- 
 568,942 it would leave only $710,406,734 for daily use. The increase for 
 active circulation under the proposed volume is $433,61i ',883. In other 
 words, the country would hold the last amount named to protect business, 
 instead of the present paltry $50,000,000. From this volume the business 
 requiring time loans could be safely supplied.
 
 10 
 
 This is not an experimental volume. It would represent about $40 per 
 capita for our population, while France uses from §42 to §^44 per capita. 
 We could safely use a larger volume than France does. 
 
 This would give a volume of about $40 per capita, of which about $20 
 would be gold and silver, and $20 in paper money. 
 
 NOT ENOUGH GOLD AND SILVER. 
 
 The total gold and silver coin and bullion in the comercial world is : 
 
 Gold $3,984,256,589 or $3.22 per capita. 
 
 Silver 4,512,754,655 or 3.65 per capita. 
 
 Total $8,497,011,244 or $6.87 per capita. 
 
 The annual product of the world averaged for eight years is: 
 
 Gold $108,276,258 or .08 per capita. 
 
 Silver 121,389,242 or .09 per ca]nta. 
 
 Total $229,665,500 or .17 per capita. 
 
 The business of the world cannot be run on such a small circulating- 
 medium. 
 
 The nation finds the metallic supply wholly insufKcient and supple- 
 ments its use by $2,178,642,376 of unsecured paper money in order to con- 
 duct the world's business. 
 
 The gold in the United States represents only $694,869,680, or $11 per 
 capita. 
 
 The annual increase is about 25 cents per capita. 
 
 The total amount of silver is about $485,870,497, or $8 per capita. The 
 annual increase is about 74 cents per individual. Gold and silver would 
 therefore give only $19 per capita and about 85 cents per capita annual 
 increase. The total volume of gold and silver in the world is only about 
 $5.75 per capita of the world's population. There is no alternative but to- 
 issue paper money to supplement gold and silver. 
 
 WHAT IS THE REMEDY 
 
 Several have been proposed, but they are inadequate, local and partisan. 
 Free coinage of silver cannot accomplish the desired results. The annual 
 increase of our population is such that the coinage of our entire nationaj 
 silver product would only give the per capita for our increase. It will in 
 no manner relieve the standing need. 
 
 The great objection to free coinage is that our annual product is worth 
 in the market $46,000,000. When coined it represents $64,000,000, or $18,- 
 000,000 profit added by the Government agreeing to pay that difference on 
 demand. This makes a present of $18,000,000 annually to the producers 
 of silver. 
 
 The people are now buying all of this silver at about 97 cents per ounce^ 
 Why should they pass an Act of Congress raising the price against them, 
 selves to $1.29.
 
 11 
 
 Some in this convention urge that free coinage will cause this difference 
 to disappear. So it will by permanently adding the difference to the 
 present cost. Free coinage will cause it to disappear, by transferring it 
 from the benefit of the buyer (the people) to the benefit of the seller (the 
 silver owner). That is the free coinage act of congress is worth about 32 
 cents on each ounce, and silver is worth the other 97 cents. The silver 
 belongs to the silver men, and the Act of Congress belongs to the people, 
 and the silver men ask the people to donate to them the Act of Congress, 
 worth 32 cents per ounce of silver, and then let the people pay them for 
 the whole thing. 
 
 Why do the people of the United States want to advance the price of 
 silver on themselves ? 
 
 Let the people buy and store for their use all the silver they want, or 
 that is profitable to them to buy. 
 
 FREE COINAGE IS NOT IN ISSUE 
 
 before the people. The silver owners do not ask free coinage and possibly 
 do not want it. Free coinage means that the silver be coined into dollars, 
 and delivered to the owner. The silver owners set forth their demand in 
 their silver-bill of last Congress. This bill provides that the owners of 
 silver may deposit their bullion in any mint, and may take either the 
 coined silver or paper money therefor, the paper money exchangeable on 
 demand for gold and a full legal tender for all debts. 
 
 The silver bullion is not made a legal tender, only the paper money is- 
 sued therfor. The bill does not even require the silver bullion to be held 
 to redeem the paper money issued. It is simply stored in the United 
 States vault as an asset. The people are responsible to pay in gold the 
 paper money issued and would have to sell silver in the market of the 
 world for whatever it would bring. If we are going to issue paper money, 
 which we should do, let us issue it direct from the people, based on the 
 wealth of the nation. 
 
 This silver deal will cost the people $18,000,000 extra annually, which, 
 with 5 per cent interest would amount in fifty years to some 110,993,695,- 
 800. That is the pcopl 3 would be paying that sum to the money power 
 for the privilege of issuing paper money via the silver route. 
 
 Tou people who are using money and paying for it read again the above 
 elucidation, and then take a firm stand for a sufficient volume of safe 
 paper money. You should refuse to support any bill extending the use 
 of silver unless the same bill secures you a full volume of pajjer money. 
 Unless you do you will never get any relief beyond the limited amount of 
 silver. You may then have to fight a combined gold and silver monopoly. 
 Nothing but a constitutional amendment will save you. 
 
 That our government should buy our silver product and hold it as a 
 reserve for such time as may be advisaljle, would seem to be good as far as 
 it goes, but it can not meet the demand for a full circulating medium. 
 Another remedy suggested is the
 
 12 
 
 50 YEAK 2 PEE CENT. BONDS. 
 
 This is simply a scheme to aid banks at the expense of the people, and 
 seems to have had its origin and backing in the secret councils of those 
 who wish to monopolize the money system of the United States. 
 
 Look at it! Its advocates say, issue these bonds and sell them, and re- 
 deem the 4 per cent bonds, and let the national banks buy the 2 per cent 
 bonds as a basis of circulation. How will it work? "Will the owner of 4 
 per cent bonds exchange even for 2 per cent bonds ? Certainly not. Then 
 if you sell the 2 per cent bonds at par and pay a premium on the 4 per 
 cent bonds you will have to pay all the 4 per cent ones will earn up to 
 maturity. We will then be paying G per cent instead of 4 per cent as now, 
 and that does not increase our circulating medium a dollar. The people 
 are simply saddled with more interest. 
 
 The sale of 2 per cent bonds to banks as a basis of circulation is a rob- 
 bery of the people. ' To illustrate: The United States issues say §100,000, 
 in 2 per cent bonds, you wishing to open a bank take $100,000 cash, now in 
 circulation, and pass it over to the United States for the $100,000 in 
 bonds. Next, you hand back your bonds, as a deposit, to the United 
 States, and get back your $100,000 cash for a bank capital, and for fifty 
 years the tax payers through the government pay you 2 per cent per year, 
 $100,000 interest on the bonds for doing a banking business on your orig- 
 inal $100,000. If you use the semi-annual interest to buy more bonds, so 
 as to make it compound, you will at the maturity of the bonds have your 
 original $100,000 plus $100,000 interest, plus about 870.895 bonds bought 
 with interest on interest, making a total profit of $170,895 for doing busi- 
 ness on your own money. But during this fifty years your original $100,- 
 000 will be loaned out to the same tax payers who are i^aying 2 per cent 
 interest on the bonds to you. This loaned out capital will bring in ruling 
 rates which by the scarcity of money will be high. This with the profits 
 arising from the periodical wrecking of the people ought to satisfy the 
 owners of money. It will, however, engender the thought among the 
 masses that the banks should be killed off. Our present banking capital 
 is some $700,000,000. At the end of fifty years operating under this bond 
 scheme the banks would own their capital stock $700,000,000 plus $1,196,- 
 265,000 interest on bonds, plus over $3,000,000,000 interest on the capital 
 stock for fifty years. That is the banks will own all the money in the 
 United States and have the people in debt to them nearly $3,000,000,000. 
 You perceive at once that this scheme will not increase our circulating 
 medium. This, hower, is not as costly to the people as the proposed 
 silver bill, which in fifty years costs over $10,000,000,000 extra. 
 
 Another proposed scheme to place the money power in the hands of a 
 few as a monopoly is the 
 
 CLEA.RING-HOUSE PLAN. 
 
 It is embodied in a proposed national clearing-house system to J6 in- 
 corporated under an Act of Congress, by which a confederation of banks 
 can put up approved collateral with the clearing-house and receive clear-
 
 13 
 
 ing-house notes, to be legal tender, the combined clearing-house being 
 responsible for redemption in case the individual bank fails to redeem. 
 This system is put forth by a prominent eastern banker who asserts that 
 we need no more money. Yet this whole scheme is to increase the circu- 
 lating medium, but giving the banks a monopoly of issuing and controlling 
 it. Its weak point is in placing baqk of our currency no greater responsi- 
 bility than the banks and their property. It also gives the banks the right 
 to obtain money without interest and loan it on interest. 
 
 Better let the government issue the money with the resources and wealth 
 of the whole people of the United States, valued at $71,000,000,000 back of 
 it for redemption. If the property of a combination of banks back of a 
 money issue is good, then the wealth of the nation back of the issue is 
 better. 
 
 As a nation we want no money for the people which is only backed by 
 the responsibity of a small part of the people having absolute control of it 
 for selfish ends. 
 
 FAEMEhS' ALLIANCE SCHEME. 
 
 This scheme has some sound points in it. Land can be safely used as a 
 security in the national bank system as well as bonds. Allowing the title 
 to land at a valuation of, say, its averaged assessed value for the preceding 
 five years, and not to exceed one-half of its cash value, to be pledged to 
 the government under the form of a national bank incorporation, would 
 give relief to the farming communities. 
 
 It would substitute a national bank for a sub-treasury ; a set of bank 
 officers elected by the farmers for their banks to manage the loans for a 
 set of sub-treasury agents ; a responsibility to the government for large 
 aggregate sums under the bank laws, instead of the inspection of thous- 
 ands of small changing loans. The supervisions of the Bank Examiners 
 under present laws as to the solvency of the bank would be all that was re- 
 quired, while the bank officers would supervise all detail business and loans 
 to individuals. 
 
 The great objection to the sub-treasury scheme is that it is local and 
 partisan, and only helps one class instead of all classes. 
 
 The circulating medium should be issued by authority of the whole 
 popidation and should be backed by the entire wealth of the nation, and 
 should be controlled for the common benefit of all. The 2 per cent bond 
 system — the fi'ee coinage system — the national bank clearing house issue 
 and sub-treasury plans fail because they are in the interest of localities and 
 minorities. If temporarily successful they would soon be destroyed by 
 the majority as unjust. Justice and equity to all must be at the founda- 
 tion of any system adopted by our nation. 
 
 At present the United States Treasury throws its reserve power to sup- 
 port Eastern banks. It is very probable that the West would be denied 
 any such relief in an emergency. Over $30,000,000 of United States 
 money is in banks without interest and largely without security. The re- 
 cent panic demonstrated both in the United States and in England that at
 
 14 
 
 "times the power of the nation must come to the tinancial relief of the peo- 
 ple. This then should be put in a legislative sj-stem on safe business 
 pi'inciples within the reach of all parts of the country for the common 
 good. 
 
 SUGGESTED LEGISLATION. 
 
 In preparing the scheme which is submitted for your consideration I 
 have retained the safeguards existing in the money systems of the United 
 States, England. France and Germany, and have added such measures as 
 will give a uniform, practicable, elastic system, free from inflation, con- 
 traction, repudiation or a change of the abstract standand of value. A 
 system based on the authority of the people, backed by the wealth of the 
 people, and administered for the benefit of the whole population. Using 
 all of our gold and silver, and supplementing their use by a legal tender 
 of $20 to $25 per capita, which represents 2 cents on the dollar of our 
 national wealth. 
 
 A CONSTITUTIONAL AMENDMENT 
 
 is placed at the foundation of the proposed system. 
 
 One of the greatest dangers in our present law is the doubt as to the 
 constitutional power of Congress to make paper money a legal tender. 
 The United States Supreme Court first decided by five Justices to three 
 that Congress had no power to make paper money a legal tender, Chief 
 Justice Chase rendering the opinion. 
 
 One of the five resigned. Congress increased the number of Justices 
 from eight to nine; the two vacancies were filled by men who joining the 
 opinion of the minority held that as a war measure Congress had power 
 to make paper money a legal tender. 
 
 This decision stood five Justices to four. Three more of the four have 
 died, and their places have been filled by those who believe in this power, 
 and in its latest decision our United States Supreme Court holds by eight 
 to one that Congress can make anything, in any quantity, a legal tender. 
 In other words, the doors are thrown wide open to inflation of the worst 
 form. Even now, are proposed measures that have no limit to currency 
 issue. A future administration and Supreme Court could overrule the 
 above decision and hold that the whole currency issued was unconstitu- 
 tional and void, and was not even a claim against the nation. Such a de- 
 cision would leave a gold and silver money in absolute control. And 
 where would the people find relief. 
 
 Three dangers are at the very root of our financial laws, ruinous infla- 
 ticm, constitutional repudiation and a threatened change of the gold dollar 
 as a measure of values. 
 
 A safe monetary system is one of the essential elements of the prosperity 
 of this nation. It must stand before the people of this and other nations, 
 founded upon, and guarded by constitutional power, protecting it from 
 the dangers of inflation, contraction, repudiation, or change of the 
 standard of values, and pledging the faith, and resources of the nation as
 
 ]5 
 
 the power and will of the nation to exchange gold, silver and currency at 
 par on demand. 
 
 An amendment worded about as follows would cover the ground: 
 
 PR jposed constitutional amendnent. 
 
 Article XVI. Sectiov 1. A national currency circulating medium 
 shall be issued to the amount of twenty dollars per capita, as shown by the 
 census of 1890 and by each succeeding census, for the proper redemption 
 of which when required, the resources, the property and the faith of the 
 nation are pledged; for which redemption. Congress, by a two-thirds vote 
 of each House, may provide for the collection of Government revenues and 
 taxes, in gold or silver coin. 
 
 Sec 2. Said currency, with gold and silver coin of the United States of 
 present weight and fiaeness, the gold dollar being the standard or unit of 
 values, and such notes as may be issued in lieu of gold or silver coin and 
 bullion, held exclusively for the redemption thereof, shall constitute the 
 only legal money of these United States, and shall be received at par in 
 satisfaction of all obligations for the payment of money within the 
 jurisdiction of the United States. Said gold and silver coin and currency 
 shall be exchangeable at par value. 
 
 Sec. 3. Congress shall have power to enforce this Article by appropri- 
 ate legislation, but shall have no power to increase or decrease said issue; 
 provided that after the issue of 1900, Congress may, by a two-third vote 
 of each House, reduce the rate of any further issue per capita from time 
 to time. ' 
 
 This amendent, underlying our national system of finances would give 
 us the best foundation and safeguards ever yet adopted by any nation. 
 
 The volume is protected against inflation, contraction or repudiation. 
 It represents about two cents on the dollar of our national wealth of some 
 3,400,000 square miles of land and national wealth of $71,000,000,000. 
 This is in legal efPect a first mortgage given by the nation to secure redemp- 
 tion. With such security the national currency would be considered gilt- 
 edge paper in any market in the world. It would be received with greater 
 confidence than Bank of England notes. 
 
 The gold dollar is today the standard by which all values in the United 
 States are rated or measured, and as an abstract standard of values, this 
 amendment removes fi'om controversy or doubt thatdi turbing element by 
 fixing the gold dollar as the standard of measure. It at the same time 
 does full justice to silver, by making it and paper money a legal tender, 
 with gold at the par value. In this way the whole people make the 
 difference, if any, between the market value and the coined value, and 
 when exchanged for gold, repay the difference. The double standard is 
 not really required. The use of two metals, the government standing re- 
 sponsible for any difference in value in all that can be obtained. The 
 Government buying the silver and coining or holding it makes the differ- 
 ence between the market value and the money value ; and repays that 
 difference when it gives gold for the silver. This is the same thing that
 
 16 
 
 occurs when a paper dollar is issued. The United Sates makes a gold 
 dollar net at time of issue, and when the paper dollar is taken back by the 
 United States it returns the gold dollar. As a commercial or scientific- 
 fact nothing other than the above has ever been done, and as that is a 
 plain law of nature nothing else can ever be done. You may cover that 
 simple idea under volumes of words, sophistries or legislative enactments 
 and that simple little law of nature will always appear at the settlement 
 and adjust the difference and no one can prevent t. 
 
 This amendment would protect the currency against the dangers of the 
 John law, or Argentine Ee^^ablic scheme, and from the dangers that beset 
 the Continental money. It is a greater safeguard than is thrown around 
 the Bank of England notes. 
 
 No nation can place back of its issues such security as this would give 
 to American money. England cannot place back of an issue the resources 
 of Canada, Australia, India or her African possessions, for at any time 
 they might leave England and set up for themselves, leaving only the little 
 island to redeem the currency issued. France and Germany are to small. 
 r^r.ssia is too insecure in her form of government. But the United States, 
 with its vast area, its peaceful and stable form of government, and its 
 citizens, each an owner in the currency, is in position to issue a currency 
 that would be received at once by any nation as a medium of exchange — a. 
 representative of gold at par, and 
 
 AS GOOD AS GOLD. 
 
 Such a legal tender note is, in money effect, the clearing-house certifi- 
 cate of the nation, backed by the national wealth, good in any clearing 
 house in the United States, instead of a certificate backed by any number 
 of banks, and only good where they wish to accept it by courtesy. It is a 
 check signed by authority of the people of the United States, backed by 
 over $71,000,000,000 of the people's wealth, good at any counter of any. 
 bank, instead of an individual's check, only good at his own bank and ia 
 his own locality. It is the promissory note of the nation, secured by a 
 constitutional mortgage on over 2,500,000,000 acres of land and the cities, 
 railroads and civilization thereon, payable to bearer and good from any 
 debtor to any creditor, instead of the private note of a citizen, secured by 
 a mortgage on a few aci'es of land, and only good at a discount to those 
 who wish to buy it. It is a representative of value for exchange purposes, 
 mutually agreed upon by 62,000,000 of people for their joint benefit, 
 backed by their constitutional bond to secure redemption when required, 
 on which bond the people pay no interest. 
 
 Such a currency circulating medium possesses all the elements of safety 
 offered in all other proposed systems combined, and many others that 
 cannot be introduced into any other system, and is as good as gold. 
 
 Confidence would never be lost in this medium, for the amendment 
 •would prevent Congress or politicians or political parties from disturbing 
 the foundations, as at present.
 
 17 
 
 GOLD AND SILVKR BASIS. 
 
 An issuance of paper money based on gold and silver, dollar for dollar; 
 gives no increase in volume. Every dollar of paper issued locks up a 
 dollar of coin for redemption. 
 
 Again, an issue of say two billions paper money, based on one billion 
 coin reserve represents the other billion of the paper money secured only 
 by the wealth of the nation. The true plan is, put all the gold, silver, real- 
 estate, cities, railroads, improvements, personal property", etc., of the value 
 of $71,0OO,0O0,U00 solid l^ack of the issue of say $2,500,000,000, holding the 
 coin for such occassional use thereof as may be required. The whole 
 wealth of the nation back of an issue is better than any part of the wealth. 
 The coin basis of any issue is a plan in the interest of the owners of the 
 coin, and gives no increase in volume. 
 
 ^ AN ACT or CONGRESS 
 
 to put in operation this plan would be substantially as the present law of 
 June 3, 18G4. The department of the controller of currency, the buieauof 
 printing and engraving would remain the same. 
 
 The system adopted should be complete in itself, it should be as broad 
 as the United States in its effects, it should be planned to extend through, 
 the centuries. 
 
 While by one depatment it gathered in the money annually by taxation 
 and revenues, it should annually return the money to the people equitably 
 in all parts of the nation, seeking to collect taxes and revenues from the 
 rich, and largely returning it, through the laboring classes, to circulation. 
 
 This would be a system whereas it is now cnaos. 
 
 THE BILL. 
 
 It is a principle in law that legislative enactments should use as much of 
 existing laws and machinery as possible in order to produce new results. 
 For the reason that we are familiar with what has been in use and know 
 how to use it. 
 
 Operating under this rule I have taken existing laws as shown by the^ 
 Act of June 3, 18G4 as the frame work of a new or complete system of 
 finances of the United States and have added to it such sections and parts 
 of a section as will produce a comprehensive uniform system easily under- 
 stood and easily operated by those familiar with existing laws. 
 
 The system embraces the use of all of our American out-put of gold and 
 silver and a supplemental volume of paper money sufficient in quantity to 
 safely do the business of the nation. 
 
 The abstract gold standard of value now in operation is retained. 
 Silver is to be bought by the United States at its market value and use 
 either by coining or held as bullion and paper money issued for it. 
 
 Any difference between the value of a silver dollar and a gold dollar to 
 be paid on demand by the United States by receiving silver dollars at par 
 for gold as is now done.
 
 18 
 
 The paper money to be issued by autlioritj'' of all the people, backed by 
 the wealth of all the people, and circulated for the benefit of the jieople. 
 
 All present forms of paper money to be taken up by the new issue, uniform 
 in aj^iDearance, thus getting rid of the seven or eight difPerent kinds of 
 paper money in circulation. 
 
 A brief comment on each section of the bill better shows what can and 
 w^hat can not be done under is provisions. 
 
 Section. 1. This is the same as the present law of June 3, 1864. It 
 provides for the office and appointment of a comptroller of finances, 
 who is the same as our present comptroller of currency. 
 
 Sec. 2. Is the same as the present law. It provides for making the 
 seal of office and for certified copies of documents in the office. 
 
 Sec 3. Is the unchanged present law and provides for office room, 
 vaults, safes, engraving and other conveniences for the transaction of the 
 business of the department. 
 
 Sec 4. This in addition to the present law provides for the issue of $20 
 (or any other sum) per capita on the census of 1890. 
 
 This with gold and silver would give about |40 per capita. France 
 uses from $42 to $44. It is a small country, with facilities for quick tran- 
 sit and can ship money from one point to another in a few hours, to meet 
 sudden demands. 
 
 Whereas with us the area is so great that money can not be readily sent 
 from one point to any other to meet sudden large demands. In my 
 oi^inion a paper issue of $25 per capita would be a safer amount. 
 
 This would represent only about 2 cents on the dollar of our national 
 wealth of some 3,400,000 square miles of the richest land in the world, 
 which with the wealth of the people is estimated at $7] ,000,000,000. 
 
 This would be safe and conservative financering. This section provides 
 for a system of numbering the notes issued and for retaining a duplicate, 
 canceled copy of each denomination, for detection of counterfeit. There 
 is also required to be printed on the face of each note a statement that it 
 must be surrendered in the year of redemption for a new note as provided 
 in section 6. 
 
 This section 4 also makes gold and silver coin of the United States and 
 these notes a legal tender in payment of all public and private obligations 
 for the payment of money in the United States, and also makes them 
 mutually exchangeable at par as at present in such manner as shall best 
 subserve the public interest. 
 
 Sec 5. The same as the present law. It provides for taking up muti- 
 lated notes and the issue of the new ones in place thereof; and that notice 
 thereof be published for the i)ub]ic benefit in the Bulletin of Finances, a 
 monthly to be published by the Comptroller, constantly informing the 
 the public on finances, as provided in section 33. 
 
 Sec G. Is mostly a new section. Every twenty years it requires the 
 whole issue of paper money to be called in and destroyed and also that
 
 19 
 
 "the plates and dies used to prodnce it shall be destroyed, and that a new 
 issue, from new plates and designs, shall be put into circulation. The ob- 
 ject of this is to ascertain how much of the old issue is lost or destroyed 
 and replace it by a new issue to keep up the volume. It is also designed 
 to destroy the circulation of all counterfeit money, and to render useless 
 any appliance of counterfeiters for counterfeiting the old issue. Under 
 this section the money is only,a legal tender for twenty years, after that 
 it must be surrendered and canceled by the new issue. 
 
 Sec. 7. Is entirely new. After the money is prepared the United States 
 can not give it away, and section 7 provides for putting it in circulation 
 The new issue would represent from ^1,240,000,000 to $1,550,000,000. 
 
 Of this sum $534,088,802 would be used to take up the present paper 
 money of the United States and national bank notes, not including gold 
 or silver certificates. This will leave from 1705,9)1,198 to $1,015,911,198, 
 as the issue shall be |20 or $25 per capita. 
 
 What shall be done with this vast sum ? Section 7 further provides that 
 the United States may buy legally issued bonds of states, counties and in 
 corporated cities of over 5000 inhabitants. Such bonds to be issued 
 for not to exceed 5 per cent of the averaged assessed value of the 
 property for the preceding five years, deducting the par value of any 
 outstanding bonds. These bonds to be issued for public improve- 
 ments, to run twenty years at 2 per cent, the interest j^ayable an- 
 nually, or quarterly, to the Comptroller of Finance at AVashington, or any 
 sub-treasury, a proper sinking fund to be provided. The public issuance 
 of these bonds and receipt of the money therefor to be conclusive evidence 
 of their legal issue, and a bar to any contest of their validity. These bonds 
 to be a lien on the property until paid in full. Such bonds are as good as 
 any United States bonds ever issued. The section also provides that the 
 United States may summarily collect the principal and interest if any de- 
 fault is made in payment thereof. 
 
 These bonds may also be sold by the Compi'oller to banks, and by the 
 banks may be left on deposit with the Comptroller of Finances, as a basis 
 on which the banks can draw at any time money to use in their business as 
 provided in section 12. As the bonds can at any time be deposited with 
 the United States and the par value drawn, it makes a practical guarantee 
 by the United States of the bonds. 
 
 This would enable l^anks to have an elastic currency in all parts of the 
 United States perfectly secured. 
 
 Most of such bonds are now bearing 6 per cent interest. This plan will 
 save 4 per cent, and the taxpayers would have that much less taxes to raise. 
 
 When the present United States bonds are taken up it will save tax- 
 payers 4 per cent per year on the United States bonds. In addition to this 
 the states, counties and cities paying 2 per cent interest to the United 
 States would be a further reduction of national taxation. This depart- 
 ment of the bill will save millions annually to the taxpayers, and alone is 
 abundant reason for the passage of the bill.
 
 20 
 
 Under this section of the bill some ^00,000,000 would probably be used. 
 Not all of the indebtedness of states, counties and cities would be taken up 
 under this section, because many of their bonds are not yet due. Under 
 this plan the government ceases to be a borrower of money but through it 
 the people issue their own money as a whole, and thus loan it to localities 
 of their fellow citizens who must borrow. 
 
 This will save paying millions of interest money annually to foreigners 
 for the use of their money. 
 
 Of course such a bill will receive the opposition of foreign influence. 
 
 This would place the banks where a stringency of the money market 
 could never occur, as from any part of the United States banks could draw 
 on their reserves with the United States Treasury. This would also equal- 
 ize interest all over the United States. 
 
 There would be still left from 1300,000,000 to $600,000,000, not used 
 under this section, which would be placed in circulation under section 34,. 
 which will be commented upon under that section. 
 
 Sections 8, 9, 10, 11, 12, provide that the owners of real estate may in- 
 corporate a bank and place the title in fee simple absolute, free of 
 encumberance with the United States based on its averaged assessed 
 value for the preceeding five years. The lien of the United States being 
 paramount, during the continuance of the bank. The bank can use this 
 real estate as a reserve security with the same effect as in case of bonds, 
 under section 7, up to its averaged assessed value for the preceeding five 
 years, but not to exceed one-half of its actual value. 
 
 Under this section farmers and land owners can receive the use of money. 
 They elect their own officers, form a bank and use or reloan the money and 
 when not needing it return it to the United States Treasury, to be re- 
 di'awn and used when required during the 20 years of the bank's exis- 
 tence. This plan is of more value than the sub-treasury plan, and avoids 
 all of its complications. 
 
 If the real estate advances or depreciates in value it is adjusted under 
 sections 17 and 18, or may be entirely released. 
 
 Sections 13, 14, 15, 16, provide the present mode of managing such 
 banks. Under section 19 National Banks may loan on real estate. 
 
 Sec. 22. Has new matter in it. The danger of a low rate of interest is 
 to over-borrow, and thus produce speculation and cause inflation of 
 business. 
 
 To avoid this section 22 provides that the first $100,000 drawn by any 
 bank shall bear 2 per cent per year interest. 
 
 This with the ordinary money in circulation will conduct all proper 
 enterprises. The next $100,000, will draw 3 per cent and the next 4 per 
 cent, and so on. These higher rates will furnish money to prevent any 
 stringency, but will make business less profitable, forcing the curtailing 
 of business gradually without destroying it as at present. This schedule 
 of increasing interest rate is one that the best judgment of the people can:
 
 21 
 
 fix. It can be altered at any time when experimenting shows the need 
 -of it. 
 
 This is the natural law of business on the subject. Germany has 
 recently adopted it. All banks apply the same rule. 
 
 Sections 28 to 32 are the same as the present bank law and need no 
 comments. 
 
 Sec. 33. This is a new section. It provides for the monthly pviblica- 
 tion of a " Bulletin of Finances, " containing concise information showing 
 the monthly issue of currency, showing as nearly as may be the volume of 
 gold, silver and currency in each state or territory; also showing the 
 expenditures of the government in each, also showing the essential fact 
 relating to the condition of each bank. It also provides for the proper 
 distribution of these bulletins. 
 
 The object of this is to complete the efficiency of the money system of 
 the United States and furnish to the people correct knowledge on current 
 finances. It furnishes the foundation knowledge on which to j)roperly 
 execute section 34. 
 
 Sec, 34. Is of very great importance. Our nation today has no 
 organized method for redistributing the money that accumulates in the 
 United States Treasury from revenue and taxes. At times vast sums are 
 stored to the detriment of business; and the cry is raised "what shall we 
 do with the surplus. " 
 
 This section provides that in addition to the ways provided in section 
 7, this money shall be spent for the usual expenses of the government. 
 And that the government shall purchase suitable grounds and erect 
 thereon buildings for ^post-offices and other public use, and that the 
 expenditure shall be made annually in each state or territory in proportion 
 to its population. Under this a system of national piiblic improvements, 
 such as on the Mississippi Eiver or Nicuaragua Canal, or irrigation may 
 be carried out. 
 
 As our laws now are.it is very difficult to get any government building 
 erected except in certain political localities. The money is drawn in 
 from the jjeople in every part of the country and should be re-expended 
 proportionately among them, as it came from them. It is not a charity 
 for the government to spend money in each community. That is where it 
 should be spent. Every city and village should have a respectable and 
 commodious postoffice building erected and owned hj the government. 
 
 This section further provides that this public work shall be done by 
 day's labor at say $1.50 per day, for common labox\ The object is this: 
 First-class laborers always command higher wages from private capital, 
 and the next grade of labor is left unemployed. It is in this class that the 
 sufPering mostly occur. If the United States in its public work gives em- 
 ployment to this class of people it will be aiding citizens who should re- 
 ceive the care of the stronger. Such laborers can not for various reasons 
 perform as much work per day as the best laborers. Public buildings 
 "would cost just as much, or even more, by employing this class than by
 
 22 
 
 employing the best class. But the object of any government shonld not 
 be to get the cheapest results in a specific case, but should be for the gen- 
 eral good. This class of labor must live. If labor is not furnished they 
 must beg or steal. In either of these cases the public must bear the ex- 
 pense. It is far better to keep up the tone of respectability among oiir 
 people by furnishing employment and paying what the work is worth. 
 Thus instead of the laboring class feeling that an ever widening gap ex- 
 isted between them and the form of government, they would feel it to be 
 their friend and would be interested in maintaining its existence. 
 
 And here in protection of our own laborers would it not be well for 
 our own government to close its doors to the inllooding of foreign labor. 
 Why shoTild we pay foreigners for labor and let our own citizens go idle ? 
 It is a noted fact that where colonies of foreigners get control of local 
 labor that the American laborer finds it too hot for him to remain. 
 
 We should be genei'ous, but we should not be so generous that we give 
 our employment to strangers, and drive our own sons and daughters of 
 America into idleness, shame and want. If our legislative halls are dom- 
 inated by such a foreign sentiment it is time they should be cleared of the 
 un-American element, and men representing the American idea sent to 
 make our laws. 
 
 In conclusion let me say that .the people should demand only such a 
 money system as will do justice and equity to all the people and all classes. 
 While you complain of being overreached, you must not in return over- 
 reach, or do injustice to others. I would impress upon you that all 
 schemes for a national system of finances, that are based on the idea of 
 giving a class of persons or banks power to issue or control the issue of 
 money, are dangerous and sooner or later will be abused. Demand a con- 
 stitutional Amendment, and a law that issues the money by authority of 
 the xteople, hacked by the pledged wealth of the whole nation, and circu- 
 lated for the benefit of all, with no special privilege for any class, and in. 
 volume sufficient to fully transact the business of our growing country.
 
 23 
 
 Hereto is attached a copy of the proposed Bill, which of course will re- 
 ceive such amendments as may be best. 
 
 The parts in brackets show where this Bill differs from present Act of 
 June 3, 18G4. 
 
 A BILL 
 
 TO PROVIDE A NATIONAL CIRCULATING MEDIUM, AUD TO PROVIDE FOR THE" 
 
 CIRCULATION THEREOF. 
 
 Be it enacted by the Senate and House of Representatives of the United 
 States of America in Congress assembled : 
 
 That there shall be established in the Treasury Department a separate 
 bureau which shall be charged with the execution of this and all other 
 laws that may be passed by Congress respecting the issue and circulatiou 
 of a national circulating medium. The chief officer of said bureau shall 
 be denominated the Comptroller of Finance, and shall be under the 
 general direction of the Secretary of the Treasury. He shall be appointed 
 by the President of the United States, with the approval of the Secretary 
 of the Treasury, by and with the consent of Congress, and shall hold his 
 office for the term of ten years unless sooner removed by the President 
 with the consent of Congress. He shall receive an annual salary of eight 
 thousand dollars; he shall have a competent deputy appointed by the 
 Secretary, whose salary shall be three thousand live hundred dollars 
 per year, who shall possess the power and perform the duties of the Comp- 
 troller during a vacancy in said ofHce or during the absence or inability of 
 the Comptroller. The Comptroller shall employ, from time to, time the 
 necessary clerks to discharge such duties as he shall direct. Such clerks 
 shall be classified by the Comptroller, subject to the direction of the Secre- 
 tary of the Treasury, which clerks shall be classified in the manner now pre- 
 scribed by law. ' Within fifteen days after notice of his appointment "'le shall 
 take and subscribe the oath of office prescribed by the Constitution and the 
 laws of the United States, and shall give to the United States a bond in the 
 penal sum of one hundred thousand dollars, with not less than four responsi- 
 ble sureties, to be approved by the Secretary of the Treasury, conditional for 
 the faithful discharge of the duties of his office. The Deputy Comptroller 
 shall also take oath of office, and give a similar bond in the simi of fifty 
 thousand dollars. The Comptroller or Deputy Comptroller shall not, 
 either directly or indirectly, be interested in any association doing a 
 banking business under this act. 
 
 Sec. 2. And be it further enacted : 
 
 That the Comptroller of Finance, with the approval of the Secretary of 
 the Treasury, shall devise a seal, with suitable inscriptions, for his ottice 
 •ft description of which, with the certificate of approval by the Secretary
 
 24 
 
 of the Treasury, shall be tiled in the office of the Secretary of State, with 
 an impression thereof, which shall thereupon become the seal of office of 
 the Comptroller of Finance, and the same may be renewed when neces- 
 sary. Every document executed by the Comptroller, in pursuance of any 
 authority conferred on him by law, and sealed with his seal of office, shall 
 be received in evidence in all places and courts whatsoever; and all copies 
 of papers in the office of the Comptroller, certified by him to be correct 
 copies of the originals in his office, shall in all cases be evidence equally 
 and in like manner as the originals. An impression of such seal directly 
 on the paper shall be as valid as if made on wax or wafer. 
 
 Sec. 3. And be it further enacted: 
 
 That there shall be assigned to the Comptroller of Finance, by the 
 Secretary of the Treasury, suitable rooms in the Treasury Building for 
 conducting the business of the Bureau of Finance, in which shall be safe 
 and secure tire-proof and burglar-proof vaults in which it shall be the 
 duty of the Comptroller to deposit and safely keep all plates not neces- 
 sarily in the possession of engravers and printers, and other valuable 
 things belonging to his department; and the Comptroller shall fi'om time 
 to time furnish the necessary furniture, stationery, fuel, light and other 
 proper conveniences for the transaction of said business. 
 
 Sec 4. And be it further enacted: 
 
 That the Comptroller of Finance, under the direction of the Secretary 
 of the Treasury, is hereby authorized and directed to issue a circulating 
 medium in the name of the United States of America [to the amount of 
 f 20, in addition to gold and silver coin, per capita of the population of 
 the censiis of 1890. Upon ascertaining each following census the issue 
 shall be increased to said |20 j^er capita]. In order to furnish suitable 
 notes for circulation the Comptroller of Finance is hereby authorized 
 and required, under the direction of the Secretary of the Treasury, to 
 cause plates and dies to be engraved, in the best manner to guard against 
 counterfeitimg and fraudulent alterations, and to have printed therefrom, 
 on paper or similar material best adapted therefor, and numbered, the 
 quantity of circulating notes, of the denominations of one dollar, two dol- 
 lars, five dollars, ten dollars, twenty dollars, fifty dollars, one hundred 
 dollars and five hundred dollars, as may l^e required to supply the issue 
 hereia called for. [The number of each denomination in use shall be such 
 that the needs of the people shall be best subserved thereby. The notes 
 of each denomination shall be consecutively numbered. That a 
 duplicate of each denomination and from each successive plate used 
 shall be perforated with the word " duplicate," and carefully pre- 
 served for use in the identification of the originals, and for the detection 
 of counterfeits, l)y comparison therewith. Said notes shall express on 
 their face that they are issued by the (government of the United States of 
 America as the circulating medium of the people of the United States. 
 They shall have the wi'itten or engraved signatures of the Secretary of 
 the Treasury, and of the CoJiiptroller of Finance, and the imprint of the 
 seal of the Treasury, and shall bear such other statements and devices as 
 the Secretary of the Treasury shall direct, and shall contain a statement 
 that "This note must be surrended to the Comptroller of Finance in. 
 ■exchange for a new note of similar denomination during the year" (stating
 
 25 
 
 the year for retiring the same). Said notes, and gold and silver coin of 
 the United States, shall be received at par, in payment of all obligations 
 within the jurisdiction of the United States for the payment of money. 
 The monetary nse of gold and silver coin of the United States nnder 
 existing laws is not hereby interfered with, and said notes, gold and silver 
 coin shall be exchangeable at their par value, in such manner as shall best 
 subserve the interests of the people.] 
 
 Sec 5. And be it further enacted: 
 
 That it shall be the duty of the Comptroller of Finance to receive worn 
 out and nnitilated circulating notes issued hereunder, and with the 
 Secretary of the Treasury the Comptroller of Finance shall compare said 
 notes with the duplicates thereof on tile, and when satisfied that the 
 same are the originals issued under this act, they shall be destroyed by 
 "being burned to ashes in the presence of the Secretary of the Treasury 
 and the Comptroller of Finance and such other person as the President 
 shall designate. A permanent book of record of the destruction of such 
 notes, with sufficient descriptions thereof, shall be kept by the Comp- 
 troller of Finance and published in the Bulletin of Finance. After said 
 destructions of said notes, new notes of the same denominations and 
 number shall be issued to the owners of the destroyed notes, of which 
 duplicates shall be kept as hereinbefore provided. Such new notes shall 
 ^be marked second series or third series as the case may be. 
 
 Sec. 6. And bp it further enacted: 
 
 [That in the year following each second census, beginning with the cen- 
 sus of 1910, the entire issue of circulating notes shall be retired and 
 •destroyed as provided in section 5 herein. And iinder the provisions of 
 this act a new issue shall be made from new dies and plates and with new 
 •designs, and shall be substituted for the retired notes, and during the 
 year for retiring said notes each banking institiition doing business here 
 under, shall during the months of January, February, March and 
 April forward to the Comptroller of Finance at least 25 per cent each month 
 of said notes in its possession, and in exchange therefor the Comptroller 
 of Finance shall issue the new notes of the same denomination. During 
 the remaining months of the year each of said banking institutions shall 
 monthly forward all of the old issue of notes it may have or receive to the 
 Comptroller of Finance for destruction and exchange. During said 
 remaining months of said year for retiring said old issue any person or 
 corporation may forward notes of the old issue for destruction and 
 exchange to the Comptroller of Finance. After the expiration of the 
 said year for the retiring said old issue of notes, the said old issue shall 
 ' cease to be lawful money of the United States, and shall only be received 
 by the Comptroller of Finance for destruction and exchange, and shall be 
 so received until the outstanding old issue is entirely retired and 
 destroyed.] The dies and plates used in producing the old issue of notes 
 shall be destroyed by fusing in fire in January of each year of retiring, in 
 the presence of the Secretary of the Treasury, the Comptroller of Finance, 
 and some person appointed by the President. A record of the destruction 
 .of said plates shall be kept in the office of the Comptroller of Finance. 
 
 Sec. 7. And be it further enacted : 
 
 [That for the purpose of putting said notes in circulation the Comp- 
 troller of Finance shall be authorized to retire all outstanding: notes or
 
 26 
 
 currency of the United States, and to buy and legally issued bonds of the 
 states, counties, and incorporated cities of over 5.000 inhabitants, as 
 he deems proper, said bonds ^o be issued by said states, counties and 
 cities, for a valuation not to exceed five per cent of the average 
 assessed value of the real estate in said state, county, or city, for 
 the five years preceding the issuance of said bonds, deducting from the 
 the said issue of bonds the par value of any other outstanding bonds 
 issued by said state, county or city. ' Said bonds shall be a lien on 
 all real estate in said state, county or city, and shall bear interest 
 at the rate of two per cent per year, and shall not run to exceed twenty 
 years. The interest shall be payable annually to the Comptroller of 
 Finance at V\ ashington, and a sinking fund shall be provided in each 
 case sufficient to liquidate said bonds at or before maturity. The public 
 issuance of such bonds, their delivery to the Comptroller of Finance, and the 
 receipt of the circulating notes therefor shall be deemed conclusive evidence 
 of the legal issuance and validity of said bonds, and thereafter no defense 
 shall be set up to the payment of principal or interest, or to the levying 
 and collecting of taxes therefor. All objections or defense to the issue of 
 said bonds must be made by the parties interested prior to the delivery 
 thereof to the Comptroller of Finance, otherwise they are forever waived 
 and barred as a defense. Said bonds may be sold by the Comptroller, and 
 such bonds or any United States bonds may be deposited at par as reserve 
 security by banks in the same manner as provided for real estate herein. 
 If said state, county, or city shall fail or neglect at any time to 
 levy and collect a sntficient tax to meet the obligations of said bonds, there 
 shall be immediately due and payable to the Comptroller of Finance a 
 tax on the real and personal property in said state, county, or city 
 in default on its last assessment roll suificient to meet said pay- 
 ments and costs of collecting the same; and the same shall be collected 
 by any person or persons appointed therefor by the Comptroller of 
 Finance, who shall have power where said tax is not paid within thirty 
 days after it is levied to collect the same by seizure and sale iipon war- 
 rant issued by any judge ex parte of any court of original jurisdiction, 
 State or national having jurisdiction of the property. The United States 
 may become the purchaser of such property. Redemption may be 
 made within one year after sale by paying the amount due on the sale,^ 
 costs and interest thereon at ten per cent. Provided that no bonds shall 
 be purchased hereunder except such as by state laws are made subject to 
 the terms of this act.] 
 
 Sec. 8. And be it further enacted: 
 
 That associations for carrying on the business of banking may be 
 formed by any number of persons, not less in any case than five, who shall 
 enter into articles of association, which shall specify in general terms the 
 proposed name of the association, the object for which the association ia 
 formed, and the proposed capital stock ; and may contain any other 
 provisions not inconsistent with the provisions of this act, which the 
 association may see fit to adopt for the regulation of the business of the 
 association and the conduct of its afl'airs, which said articles shall be ■ 
 signed by the persons uniting to form the association, and a copy of them 
 forwarded to the Comptroller of Finance, to be filed and preserved in his. 
 oflfice. Attached to said articles of association shall be a schedule [of the 
 bonds or real estate offered and known as "the reserve security" as herein 
 provided for, which schedule shall accurately describe said bonds, and 
 real estate and the improvements thereon, stating in whom the title is;
 
 27 
 
 vested in fee simple absolute, free of all incumbrances or liens, and giving 
 the yearly assessed value of said real estate for each separate year for state 
 and county purposes for the live preceding years, which schedule shall be 
 certified to as correct by the proper keeper of the records of title of said 
 property. Upon receipt of said articles and schedule, the Comptroller of 
 Finance shall proceed in whatever manner he deems best to verify the 
 facts set out in said schediile; and when satisfied that the average assessed 
 value for said live years next preceding is not in excess of half of the actual 
 valiie of said real estate,] and that the schedule is otherwise correct as to 
 its statements, he shall notify said persons of that fact of the name 
 approved by him for the association. 
 
 Sec. 9. And be it further enacted: 
 
 That the person^ uniting to form such an association shall make a 
 certificate of organization, which shall specify: 
 
 First. — The name assumed by the association. 
 
 Second. — The place where its operations of discount and deposit are to 
 be carried on, designating the state, territory or district, and also the 
 particular county and city, town or village. 
 
 Third. — Its capital stock, and the number of shares into which it shall 
 be divided. 
 
 Fourth. — The names and places of residence of the shareholders, and 
 the number of shares held by each. 
 
 Fifth. — An accurate copy of the schedule of [bonds or real estate 
 attached] to the articles of association provided for in section 8. 
 
 Sixth. ^A declaration that said certificate is made to enable such 
 persons to avail themselves of the advantages of this act, and that said 
 [real estate is for security as required in this act.] 
 
 The said certificate shall be duly signed and acknowledged by each of 
 said persons, in the manner required by the law of the place for 
 acknowledging conveyances of real estate, to entitle them to be recorded. 
 [When duly certified therefor said certificate shall be recorded in the 
 properbook of record of the county or district m which the real estate is 
 situated; thereafter no lien or claim shall attach to any of said real estate, 
 except such as shall be wholly subordinate to the prior claim under said 
 certificate against said real estate for the purposes of this act.] When 
 duly recorded the said certificate shall be transmitted to the Comptroller 
 of Finance, who shall record and carefully preserve the same in his office. 
 Copies of said certificate, duly certified by the Comptroller of Finance and 
 authenticated by his seal of office, shall be legal and sufficient evidence in 
 all courts and places within the jurisdiction of the Government of the 
 United States of the existence of said association and of every other mat- 
 ter that could be proved by the production of the original certificate. 
 
 Sec. 10. And be it further enacted: 
 
 [That no association shall be organized hereunder with a "reserve 
 security " greater than one million dollars, or with a less " reserve security" 
 than twenty-five thousand dollars, nor with a capital stock of less than 
 fifty thousand dollars.] 
 
 Sec. 11. And be it further enacted: 
 
 That whenever a certificate of organization has been received and filed
 
 28 
 
 by the Comptroller of Finance, and is found by him to fully comply with 
 the requirements of this act, the Comptroller of Finance shall proceed to 
 investigate in the manner deemed best, the personal standing, financial 
 condition and record of the persons seeking to form the association, [also 
 the object of the association, the location and value, present and pros- 
 pective, of the real estate described in said certificate of organization, and 
 any other facts that may aid him in determining the desirability of such 
 an association and the probable safety of its business affairs and manage' 
 ment. The Comptroller of Finance may use such special means as he 
 deems best to safely ascertain the facts above refered to. When it shall 
 appear to the satisfaction of the Comptroller of Finance that the association 
 is lawfully entitled to commence the business of banking with safety to 
 the government and to the people, he shall issue to such association a 
 certificate under his hand and official seal that such association has com- 
 plied with all the provisions of this act required to be complied with, and 
 that such association is authorized to commence the business of banking, 
 designating the place of business, fully naming the directors and officers 
 thereof for the first year and its capital stock. The said certificate shall 
 be published in such local newspaj^er for sixty days, as the Comptroller 
 of Finance shall designate. From the date of said certificate said asso- 
 ciation shall be deemed a body corporate to transact the business of 
 banking hereunder, with the usual rights, powers and duties of banking 
 corporations, and shall exist for the period of twenty years. An impress 
 of its corporate seal shall be tiled with the Comptroller of Finance and 
 with the Secretary of the Treasury. 
 
 Sec. 12. And be it further enacted : 
 
 [That thereafter, upon the demand of said association, the Comptroller of 
 Finance shall issue to said association a warrant on the Treasury of the 
 United States, for circulating notes of the Government to the amount of 
 the said average assessed value of real estate, or the par value of said 
 bonds deposited by said bank, or for any part thereof, as demanded from 
 time to time, which warrants, upon presentment duly endorsed, shall be 
 paid out of the Treasury in the notes issued hereunder. Said sum or any 
 part thereof may, on the first of any quarter of the year, be returned to 
 the Treasury.] 
 
 Sec. 13. And be it further enacted: 
 
 That the affairs of all associations for banking purposes formed here- 
 under shall be managed by its board of directors, which may be in legal 
 session on any Monday from 10 a. m. wherein a quorum is present, and on 
 any other day where, after notice, a quorum may be present, or to which 
 a regular session may be adjourned, a quorum being present. 
 
 Every director shall be a citizen of the United States during his whole 
 term of service; and at least three-fourths of the directors shall have re- 
 sided in the state or territory or district in which such association is 
 located one year next preceding their election or appointment as directors, 
 and shall be residents thereof during their term of office. Each director 
 shall own in his own right at least ten shares of the capital stock of the 
 . association. Each director, when elected or appointed, shall take an oath
 
 29 
 
 that he will, so far as the duty devolves upon him, diligently and honestly 
 administer the affairs of such association, and will not knowingly violate, 
 or willingly permit to be violated, any of the provisions of this act, and 
 that he is the bona tide owner in his own right of ten shares of the capital 
 stock of the association, standing in his own name on the books of the 
 association, and that the same is not hypothecated or in any way pledged 
 as security for any loan, debt or obligation; which oath subscribed by 
 him and duly certified, as required by law, shall be immediately trans- 
 mitted to the Comptroller of Finance and by him filed and preserved in 
 his office. 
 
 Sec. 14 And be it further enacted: 
 
 That the directors of any association first appointed shall hold office 
 until their successors shall be elected and qualified. All elections shall ibe 
 held on the second [Tuesday of January of each year,] and the directors as 
 elected shall hold their places until their successors are elected and 
 qualified. Any vacancy occuring by reason of a director ceasing to own 
 the required amount of stock, or from any other cause, shall be filled by 
 appointment by the board. If from any cause an election shall not be 
 held at the time designated, it may he held on any subsequent day by 
 publishing thirty days' notice thereof in a local daily paper. 
 
 Sec. 15. And be it further enacted: 
 
 That in all meetings of the stockholders each shax'e of stock shall be 
 entitled to one vote on all questions. Shareholders may vote by proxies 
 duly authorized in writing. None but shareholders can use or hold a 
 a proxy, 
 
 Sec. 16. And be it further enacted: 
 
 That the shares of stock may be transferred on the books of the associa- 
 tion in such manner as may be prescribed in the by-laws of the association. 
 No transfer shall be made of stock where the holder is indebted to the 
 association in any manner; but the association has a lien on all of its 
 stock for such indebtedness. Every person becoming a shareholder by 
 transfer, or otherwise, shall, in proportion to his shares, succeed to all the 
 rights and liabilities of the prior holder of such shares, and no change 
 shall be made in the articles of association by which the rights, remedies 
 and securities of the existing creditors of the association shall be impaired. 
 The shareholders of each association formed under the provisions of this 
 act, and of each exisiting bank or banking association that may accept the 
 provisions of this act, shall be held individually responsible, equally and 
 ratably, and not one for the other, for all contracts, debts and engagements 
 of such associations to the extent of the amount of their stock therein, at 
 par thereof, in addition to the amount invested in such shares. 
 
 Sec. 17. And be it further enacted : 
 
 That the capital stock or the reserve security of any association formed 
 hereunder may be increased or decreased within the limits fixed for the 
 capital stock or [the reserve security] by this act by a two-thirds vote of 
 its shareholders at any annual meeting in January. The increase or de
 
 30 
 
 crease of capital stock or the [reserve seeuritj'] shall be made by complying 
 with the requirements of this act as to the formation of such associations 
 in the first instance, and by complying with such additional requirements 
 as the Comptroller of Finance may deem best to secure the interests of 
 all parties concerned, provided | that in the decrease of the reserve security 
 the association so decreasing its reserve security shall surrender to the 
 Comptroller of Finance circiilating notes received thereon to the amount 
 of the decrease. In such cases the Comptroller of Finance may, in his 
 discretion, release from the effect of this act a pro rata of the bonds or 
 real estate described in the certificate of organization, but this shall only 
 be done in cases where the Comptroller of Finance shall find the asso- 
 ciation to be solvent. The maximum or minimum of such increase or 
 decrease shall be determined by the Comptroller of Finance.] 
 
 Any association organized hereunder may close up its business and dis- 
 solve its organization by a Vote of its stockholders had at the annual 
 meeting in January. In such cases the association must first settle all 
 of its outstanding obligations and return to the Comptroller of Finance 
 the circulating notes received on its reserve security. The Comptroller of 
 Finance, upon receipt of a statement of the foregoing facts duly authen- 
 ticated by the directors of said association udder oath, shall fully inves- 
 tigate the matters pertaining thereto; and upon being satisfied that all 
 obligations of said association are fully satisfied and discharged, shall 
 cause said statement to be published for at least sixty days in a local 
 newspaper, and shall also cause a notice thereof to be inserted in the 
 [United States Bulletin of Finance] for the same period. If any objections 
 to the dissolution are filed with the Comptroller of Finance before the 
 expiration of said sixty days, he shall determine and adjust any matters 
 therein objected to; when so adjusted, or if no objections are filed with 
 him, he shall issue a certificate dissolving said association and releasing 
 the bonds or real estate described in the certificate of organization from 
 any further claim or demand thereon. Said certificate of dissolution 
 shall be by him duly signed, sealed and acknowledged so as to entitle the 
 same to record in the office whett'e the certificate of organization was 
 recorded. The Comptroller of Finance shall duly record said certificate 
 of dissolution in his office, and thereafter shall transmit the same to said 
 association upon the same being duly recorded in the office where the 
 certificate of organization was recorded. The association will thereby be 
 completely dissolved. 
 
 Sec. 18. And be it further enacted: 
 
 [That if at any time the value of the real estate described in the certifi- 
 cate of organization shall depreciate in value, to be decided by the Comp- 
 troller of Finance, he may require any portion of the circulating notes of 
 the association's reserve security to be surrendered to the Comptroller of 
 Finance, or he may require further real estate security as in the original 
 formation of the association.] Should the Comptroller of Finance at any 
 time deem the afPair of said association unsafe from any cause, he may 
 appoint a special agent or agents under his hand and seal of office, who 
 shall have power to inspect all afPairs of said association and to close up its 
 affairs to the best possible advantage to all parties interested. To this end
 
 31 
 
 be sliall have power to bring or defend any siiit in the name of the association, 
 and to sell at public or private sale any or all of the real estate described 
 in the certificate of organization, and to execute proper conveyances 
 thereof, and use the proceeds to close up the affairs of the association. 
 He shall also have power to collect from the stockholders the amount for 
 which they are responsible under this act, and to use the same to close up 
 the accounts. He shall give such bonds for faithful performance of his 
 duties hereunder as the Comptroller of Finance may require. His certifi- 
 cate of appointment shall be duly acknowledged and recorded as the 
 other certificates are required to be. The Government shall be a preferred 
 creditor in all such cases as are provided for in this section. 
 
 Sec. 19. And be it further enacted: 
 
 That the directors may semi-annually declare dividends from the net 
 profits of the association, but such association before it shall declare a 
 dividend shall cairy at least ten per cent of its net profits to a reserve 
 fund until said reserve fund shall equal the capital stock of said association. 
 
 Sec. 20. And be it further enacted: 
 
 That it shall be lawful for any association hereunder to purchase, hold 
 and convey real estate as follows : 
 
 First. — Such as shall be necessary for its immediate accommodation in 
 the transaction of its business and [for its reserve security.] 
 
 Second. — Such as shall be mortgaged to it in good faith by way of 
 security for debts previously contracted or [for loans made thereon.] 
 
 Third. — Such as shall be conveyed to it in satisfaction of debts pre- 
 viously incurred in the course of its dealings. 
 
 Fourth. — Such as it shall purchase at sales under judgments, decrees, 
 or mortgages held by the association, or shall purchase to secure debts 
 due to said association 
 
 Such association shall not i^urchase or hold real estate for any other 
 purpose than as herein specified. Provided that all such real estate ac- 
 quired other than for the purpose of the business of the association shall 
 be sold within five years after it is obtained by the association 
 
 Sec 21. And be it further enacted: 
 
 That each association may charge such rates of interest as may be 
 allowed by local laws where the association is situated. Each association 
 shall keep on hand in cash an amount equal to at least twenty-five per 
 cent of the amount of its deposits, when the reserve amount shall fall 
 below said percentage. No more dividends or loans shall be made until 
 the amounts called in shall restore the said percentage. 
 
 Sec. 22. And be it further enacted: 
 
 That every association hereunder shall make to the Comptroller of 
 Finance a report, according to the form which may be prescribed by him, 
 verified by the oath or affirmation of the president or cashier of such as- 
 sociation, which report shall, among other things, exhibit in detail, and 
 under appropriate heads, the resources and liabilities of the association, 
 and [the last assessment valuation of its real estate,] before the com-
 
 32 
 
 mencement of business on the morning of the first Monday of the months 
 of January, April, July and October of each year, and shall transmit the 
 same to the Comptroller of Finance within five days thereafter. And any 
 bank failing to transmit such report shall be subject to a penalty of one 
 thousand dollars for each day after said five days that said report is dela3"ed 
 beyond that time. The Comptroller shall cause abstracts of said reports to 
 be published in the United States Bulletin of Finance, and the separate re- 
 port of each association shall be published by the association in a local daily 
 newspaper for at least one week. [Said association shall forward, with 
 each quarterly report, one-half C|) of one per cent, of the cash used on its 
 reserve security, during the preceding quarter, as interest thereon, on 
 sums not to exceed S10u,000, and three-fourths of one per cent, per quarter 
 on sums in excess of iplOO,OOU and less than $200,000; thereafter tlie rate 
 shall increase one-fourth of one per cent, per quarter additional on each 
 additional $100,000 used or on any part thereof;] and in case of default in 
 the payment thereof, by any associatiou, said interest may be collected 
 in the manner provided for the collection of United States duties of other 
 corporations. In addition to the quarterly reports required herein, every 
 association shall, on the first Tuesday of each month, make to the Comp- 
 troller of Finance a statement under oath of the president, or the cashier, 
 showing the condition of the association making such statement, ia 
 respect to the average amount loans and discounts, specie and circulating 
 notes on hand belonging to the association, Clearing House certificates,, 
 deposits, and such other matters as the Comptroller of Finance may 
 require. 
 
 Sec. 23. And be it further enacted: 
 
 That no association shall make loans or discount on the security of the 
 shares of its own capital stock, nor be the purchaser or holder of any such 
 shares unless such security or purchase shall be necessary to prevent loss 
 upon a debt previously contracted in good faith ; and stock so purchased 
 or acquired shall be sold within six months from the time of its purchase- 
 But no such purchase or sale shall relieve the former owner thereof from 
 his pro rata of responsibility for all debts incurred by the association 
 prior to sale and transfer to a new purchaser in good faith. 
 
 Sec. 24. And be it further enacted: 
 
 That no association, or any member thereof, shall, during the time it 
 shall continue its banking operations, withdraw, or permit to be with- 
 drawn, either in the form of dividends or otherwise, any portion of its 
 capital or reserve fund. And if any losses shall at any time have been 
 sustained by any such association, equal to or exceeding its undivided 
 profits then on hand in cash, no dividend shall be made; and no dividend 
 shall ever be made by any association, while it shall continue its banking 
 operations, to an amount greater than its net profits then on hand, de- 
 ducting therefrom its losses and bad debts and ten per cent for the 
 reserve fund. And all debts due any association, on which the interest is 
 past due and unpaid for a period of six months, unless the same shall be 
 well secured and shall be in process of collection, shall be considered bad 
 debts within the meaning of this act.
 
 33 
 
 Sec. 25. And be it further enacted : 
 
 That the president and cashier of every such association shall cause tcr 
 be kept at all times a full and correct list of the names and residences of 
 all the shareholders in the association, and the number of shares held by- 
 each, in the ofHce where its business is transacted ; and such list shall be 
 subject to public inspection during business hours of each day in which 
 business may be legally transacted. A copy of said list shall be sent with 
 each quarterly report to the Comptroller of Finance. 
 
 Sec. 26. And be it further enacted : 
 
 [That the directors of any bank incorporated under any national or 
 state law may, upon the authorization of the owners of two-thirds the cap- 
 ital stock, in writing, duly signed and acknowledged, avail themselves of 
 the provisions of this act and become a national association under their 
 corporate name by complying with the provisions of this act.] The said 
 directors being by said vote authorized to execute all papers relating 
 thereto. Any matters not herein provided for in such cases shall be ad- 
 justed by the Comptroller of Finance in accordance with the spirit and 
 intention of this act. 
 
 Sec. 27. And be it further enacted: 
 
 That all associations under this act, when designated for that purpose 
 by the Secretary of the Treasury, shall be depositaries of public money, 
 except receipts from customs, under such regulations as may be prescribed 
 by the Secretary; and they may also be employed as financial agents of 
 the Government; and they shall perform all such reasonable duties, as 
 depositaries of public moneys and financial agents of the Government, as 
 may be required of them. And the Secretary of the Treasury shall re- 
 quire of the association thus designated, satisfactory security for the 
 safe keeping and prompt payment of public funds deposited with them, 
 and for the faithful performance of their duties as financial agents of 
 the Government. 
 
 Sec. 28. And be it further enacted : 
 
 That all transfers of the assets or any part thereof, of any association 
 doing business hereunder, made after the commission of an act of insol- 
 vency, or in comtemplation thereof, with a view to prevent the application 
 of it as assets in the manner prescribed in this act, or with a view to the 
 preference of one creditor to another, shall be utterly null and void. 
 
 Sec. 29. And be it further enacted: 
 
 That any director, ofiicer or employee, of any association organized 
 hereunder, who shall knowingly violate, or permit any of such persons to 
 violate the provisions of this act, shall be removed forthwith from his 
 position, by the proper authority of the association, or by order of the 
 Comptroller of Finance. And any director, ofiicer or employee of such 
 association who shall so transact the business of such association, or any 
 part of it, as to intentionally defraud the association or any one else, or 
 with the intention to deceive or mislead any officer of the association, or 
 any agent appointed to examine the affairs of such association, shall be
 
 34 
 
 deemed guilty of a misdemeanor, and upon conviction thereof shall be 
 punished by imprisonment for nor more than ten years. 
 
 Sec. 30. And be it further inacted: 
 
 That all suits and proceedings arising out of the provisions of this act, 
 in which the United States or its agents or officers shall be parties, shall 
 be conducted by the district attorneys of the several districts, under the 
 direction and supervision of the Solicitor of the Treasury, And that all 
 suits or actions arising under the provisions of this act, may be had in 
 any circuit, district or territorial court of the United States held vs^ithin 
 the district in which the association may be established, or in any state, 
 county or municipal court in the jurisdiction of which said association is 
 established, which has jurisdiction in similar cases. 
 
 Sec. 31. And be it further enacted: 
 
 That if any person shall falsely make, forge or counterfeit, or cause or 
 procure to be made, forged or counterfeited, or willing aids or assists in 
 forging or counterfeiting any note in imitation of, or purporting to be in 
 imitation of the circulating notes issued under the provisions of this act, 
 or shall pass, utter or publish, or attempt to pass, utter or publish, any 
 false, forged or counterfeited note purporting to be issued under the pro- 
 visions of this act, knowing the same to be falsely made, forged or counter- 
 feited, or shall falsely alter, or cause or procure to be falsely altered, or 
 willingly aids or assists in falsely altering any such circulating notes 
 issued under the provisions of this act, or shall pass, utter or publish, or 
 attempt to pass utter or publish as true, any falsely altered or spurious 
 circulating notes issued, or purporting to have been issued under the pro- 
 visions of this act, knowing the same to be falsely altered or spurious, 
 every such person shall be deemed and adjudged guilty of a felony, and 
 being thereof convicted shall be sentenced to be imprisoned and kept at 
 hard labor for a period of not less than five years nor more than twenty 
 years, and fined in a sum not exceeding one thousand dollars. 
 
 Sec. 32. And be it further enacted: 
 
 That if any person shall make or engrave, or cause or procure to be made 
 or engraved, or shall have in his custody or possession any plate, die or 
 block after the similitude of any plate, die or block from which any circu- 
 lating notes issued as aforesaid shall have been prepared or printed, with 
 intent to use such plate, die or block, or cause or suffer the same to be 
 used in forging or counterfeiting any of the notes issued as aforesaid, or 
 shall have in his custody or possession any blank note or notes engraved 
 and printed after the similitude of any notes issued as aforesaid with 
 intent to use such blanks, or cause or suffer the same to be used in forging 
 or counterfeiting any of the notes issued as aforesaid, or shall have in his 
 custody or possession any paper adapted to the making of such notes, and 
 similar to the paper upon which any such notes shall have been issued, 
 with intent to use such paper, or cause, or suffer the same to be used in 
 forging or counterfeiting any of the notes issued as aforesaid, every such 
 person, being thereof convicted by due course of law, shall be sentenced to
 
 35 
 
 be imprisoned and kept at hard labor for a terra not less than iive or more 
 than twenty years, and lined in a sum not exceeding one thousand dollars. 
 
 Sec. 88. And be it further enacted: 
 
 I That the Comptroller of Finance shall cause to be prepared each 
 month concise information showing the amount of circulating notes issued 
 during the preceding month, and the approximate amount of circulating 
 notes, gold and silver coin, in each state, territory, district, and in the prin- 
 cipal cities of the United States, and also the amount in the various vaults 
 or Treasuries of the United States. Also the amounts expended by the 
 Government in each state, territory or district. It shall also contain the 
 name of each bank, the amount of its capital stock, its reserve fund, and 
 its lossfes for the preceding month, and such other information as shall be 
 deemed of sufficient value to the financial interest of the people to be 
 published. Such information shall be published monthly by the Depart- 
 ment of Printing in pamphlet form, of convenient size for permanent 
 binding in book form. One copy of each issue shall be sent monthly to 
 each of the following parties: To each association doing business here- 
 under, to the President and each member of his Cabinet, to each member 
 of Congress, and to such other officers of the Government as the Comp- 
 troller of Finance may direct. Also to the Governor of each state, terri- 
 tory or district, and to each public library, university or college applying 
 therefor. Any person may have a copy forwarded to his address for one 
 year by first forwarding to the Comptroller of Finance the sum of one 
 dollar. All subscriptions shall end with the December number of each 
 year. Subscriptions made during the year shall be at the rate of ten cents 
 per copy for the remaining months of the year.] 
 
 Sec. 84. And be it further enacted: 
 
 [That as the circulating medium shall accumulate in the Treasury of the 
 Government from revenue or otherwise, it shall be returned to circulation 
 among the people in addition to the ways hereinbefore specified, by pay- 
 ing the current expenses of the Government; by the purchase of suitable 
 grounds and the erection thereon of suitable buildings for post offices and 
 other uses of the Government; by the construction of such other works as 
 shall be deemed by Congress for the best interests of the public. The 
 expenditures shall be made annually, in each state, territory or district as 
 nearly as may be, in proportion to the number of its inhabitants, provided 
 that states already supplied with public buildings shall not receive addi- 
 tional expenditures until the other states, territories or districts shall 
 have had their equal proportions. All public work shall be done by day's 
 labor, at the rate of one dollar and fifty cents per day for eight hours work 
 for common labor. A less rate shall be paid where the laborer is not able to 
 perform a reasonable day's work. The expenditures hereunder shall be 
 as directed from time to time by Congress.] 
 
 Sec. 35. And be it further enacted : 
 
 That all notes issu.ed hereunder and all moneys received by the Comp- 
 troller of Finance hereunder shall be deposited in the Treasury of the 
 United States. And the Comptroller of Finance shall keep an itemized 
 account of the sources from which received, with the dates thereof. 
 
 Sec. 36. And be it further enacted: 
 
 [That all improvements on property described in the certificate of 
 organization shall be kept insured by the association to the full amount of 
 its assessed value, payable to the Comptroller of Finance, and all insur- 
 ances on such property, in whatever name insured, shall, in case of loss,
 
 36 
 
 be paid by the insurance company to the Comptroller of Finance, to be by 
 hi_a disposed of, with the consent of the Secretary of the Treasury, as 
 they may deem best in the interest of the various parties concerned.] 
 
 Sec. 37. And be it further enacted: 
 
 That it shall be unlawful for any officer acting under the provisions of 
 this act to countersign or deliver to any association, or to any other com- 
 pany or person, any circulating notes contemplated by this act, except 
 as herein provided, and in accordance with the true intent and meaning 
 of this act. A.nd any officer who shall violate the provisions of this section 
 shall be deemed guilty of a high misdemeanor, and on conviction thereof 
 shall be punished by a fine not exceeding double the amount so counter- 
 signed and delivered, and imprisoned for not less than one year and for 
 not exceeding fifteen years. 
 
 Sec. 38. And be it further enacted: 
 
 That if the directors of any association shall knowingly violate, or 
 knowingly permit any of the officers, agents or servants of the association 
 to violate any of the provisions of this act, all the rights, privileges and 
 franchises of the association derived from this act shall be thereby for- 
 feited. Such violation shall be first determined and adjudged by a proper 
 circuit, district, or territorial court of the United States, in a suit brought 
 for that purpose in the name of the Comptroller of Finance, which decree 
 shall adjudge the association dissolved. Thereupon the afPairs of the 
 association shall be closed up by the Comptroller of Finance, and in case 
 of such violation, every director who participated in or assented to the 
 same shall be held liable in his personal and individual capacity for all 
 damages which the association, its shareholders, or any other person shall 
 have sustained in consequence of such violation. Such directors shall 
 thereafter be disqualified for the office of director in any association 
 formed hereunder ; and any president, director, cashier, teller, clerk or 
 agent of any association who shall embezzle, abstract or wilfully misapply 
 any of the moneys, funds or credits of the association, or shall, without 
 authority from the directors, issue or put forth any certificate of deposit, 
 draw any order or bill of exchange, make any acceptance, assign any note 
 bond or draft, bill of exchange, mortgage, judgment or decree, or shall 
 make any false entry in any book, report or statement of the association, 
 with intent in either case to injure or defraud the association, or anv other 
 company, body politic or corporate, or any individual person, or to deceive 
 any officer of the association, or any agent apointed to examine the affairs 
 of any such association, shall be deemed guilty of a misdemeanor, and 
 upon conviction thereof shall be punished by imprisonment not less than 
 one and not more than ten years. 
 
 Sec. 39. And be it further enacted : 
 
 That the Comptroller of Finance, with the approbation of the Secretary 
 of the Treasury, as often as shall be deemed necessary or proper, shall 
 appoint a suitable person or persons to make an examination of the affairs 
 of very banking association formed hereunder, which person or peions
 
 37 
 
 shall not be a director or other officer or employee in any association 
 whose affairs he shall be appointed to examine, and who shall have 
 power to make a thorough examination into all the affairs of the 
 association, and, in doing so, to examine any of the officers 
 and agents thereof on oath, and shall make a full detailed 
 report of the condition of the association to the Comptroller. 
 And the association shall not be subject to any other visitorial powers 
 than such as are authorized by this act, except such as are vested in the 
 several courts of law and chancery. And every person appointed to make 
 such examination shall receive for his services at the rate of five dollars 
 for each day employed by him in such examination, and two dollars for 
 each twenty-five miles he shall necessarily travel in the performance of 
 his duty. 
 
 Sec. 40. And be it further enacted : 
 
 That persons holding stock as executors, guardians, administrators or 
 trustees shall not be personally subject to any liabilities as stockholders, 
 but the estates and funds in their hands shall be liable in like manner 
 and to the same extent as the testator, intestate, ward, or person interested 
 in said trust funds would be if they were respectively living and competent 
 to act and hold the stock in their own names. 
 
 Sec. 41. And be it further enacted : 
 
 [That hereafter no national associations for the purpose of banking 
 shall be formed except under the provisions of this act, and all banking in- 
 stitutions now under the provisions of prior acts of Congress shall be 
 allowed to continue under such acts until their proper term of existence 
 has expired.] 
 
 Sec. 42. And be it further enacted : 
 
 [That the present Comptroller of Currency shall hereafter be known as 
 the Comptroller of Finance, under this act, and under such name, shall 
 with the bureau now established, perform all duties required under the 
 various acts of Congress relating to currency or a circulating medium ] 
 
 Sec. 43. And be it further enacted: 
 
 That all acts or parts of an act in conflict with the provisions of this 
 act ai^e hereby repealed, and Congress may at any time amend, alter or 
 repeal this act.
 
 39 
 
 INDEX 
 
 A Corner on Money 3 
 
 A Political Forecast 3 
 
 The Stringency of Money : 4 
 
 The Crash for Want of Money 4 
 
 The Financial Situation ... 5 
 
 Stringency More Apparent 5 
 
 A Glut of $20,000,000 6 
 
 The Financial Vacuum 6 
 
 The Demand 7 
 
 Growth of Civilization 7 
 
 International Demand 8 
 
 Call Loans 8 
 
 Volume Required 9 
 
 Not Enough Gold and Silver 10 
 
 What is the Remedy 10 
 
 Not Free Coinage 10 
 
 Free Coinage not an Issue 11 
 
 Fifty Year 2 per cent Bonds 12 
 
 Clearing House Plan 12 
 
 Farmers' Aliance Scheme 13 
 
 Suggested Legislature 14 
 
 A Constitutional Amendment Needed 14 
 
 Proposed Amendment 15 
 
 As Good as Gold 16 
 
 Gold and Silver Basis 17 
 
 An Act of Congress 17 
 
 Proposed Legislation 17 
 
 Copy of Proposed Bill 23
 
 40 
 
 Los Angeles, June, 1891 
 The actual volume of money in the United States is: 
 
 Gold $694,869,680 
 
 Silver 485,370,397 
 
 Legal tender paper renewed 420,272,225 
 
 $1,600,512,402 
 
 Senator Stewart says in the June Forum, "The addition to our circu- 
 lating medium up to the present time which free coinage would have 
 caused could not have exceeded fifteen million dollars;" and "The most 
 serious objection to metallic money is the want of a sufficient supply." 
 
 Free coinage is only a drop in the bucket, and can never replace the 
 necessity of a vast volume of paper money, which is now over $420,000,000 
 unsecured. 
 
 The only sufficient and safe system is to place all of the above gold and 
 silver, and all other real and personal property in the United States 
 (pledged by a constitutional amendment) back to an issue of say $2,500,- 
 000,000, interchangeable legal tender money, issued under a uniform 
 system for the benefit of all, and free from the monopoly of any set of 
 men or corporations. 
 
 The need of the hour is courageous statesmen who will give the United 
 States the best money system possible, free from all rings, large or small.
 
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