Litchfield enquirer., 1878-09-26
WHOLE NO. 273O
THE MONEY POWER. "
DEMAGoGIsM EXPOSED.

Democratic speakers, has shaped this legisla- ton, and the power is growing richer while yeu are growing poorer. It becomes important, therefore, to inquire who and what constitute the 'noney power" to which reference IS made and second, whether that power is growing richer, or whether, in fact, it has not suffered it's full proportion Of the general shrinkage in values which has taken place throughout the whole country in the past i've years. The Registrar of the Treasury has been making careful investigation for the past three months as to where the bonds of the government are held, and he reports that not exceeding two hundred and fifty millions of the bonds of this government are held to- day in Europe The whole bonded indebted ness of the government is about eighteen hundred millions of dollars So it Will be seen that the greater proportion of iris held by our own people Of this there is about three hum dred and sixty millions held by the national banks and the remainder is held by insurance and trust companies, and by colleges, benevo- lent institutions and private individuals. At the time of the panic in 1873 the average rate of interest paid to the holders of these bends by the government was nearly per cent,
 while today it is but 5 per cent, and all the
 government bonded indebtedness is being funded into per cents, so that the holders of government bonds are actually suffering
 shrinkage of 25 per cent. in their rate of ln- terest.
 But let us look for a moment to the stock of these institutions which have their capital ln- vested in the government bonds They all | made money, or at least thought they were making money until 1873; but since that time one third of all the life insurance companies and One-fOurth of all the savings banks and
 trust companies, which constitute part of the
 ''money power," have failed and gone into
 liquidation, while the remainder which have
 escaped bankruptcy are paying very small | dividends, and there is not one of these insti-
 tutions today, including all the national banks
 in the country, whose stock will readily con-
 mand par value upon the market.
 | There are six hundred and forty savings ! banks in the states east of Pennsylvania. The aggregate amount of money held by them | on deposit is $785, S62, 511. That money be-
 longs to 2,1S8, ,SS4 depostors The average
 amount belonging to each depositor is $35S.
 These are the daily earnings of these two mil lion people, who by industry and frugality | have more than lived ':within their income" | The officers of the banks are merely the trus- | tees of the depositors to whom the money be- l longs They hold over $106, ,000, 900 of gov
 ernment bonds, about 1856, OO0, 900 of bonds
 and mortgages, and real estate largely in the
 vest and over $175, ,00O, 900 in western state, county and city bonds. Now these New Eng | land people who have each accumulated the
 
 and dividends reduced to an average of five
 per cent, and twenty-five per cent. of the
 Repositories have failed to pay either principal l or interest. They are being denounced all | over Indiana by the democratic speakers as Shylocks and bloated bondholders.
 There is another class belonging to the | 'money power' to which reference is frequent l ly made, and that is the eastern capitalists who | are, in the language of Mir. Voorhees,, "taking ! QIItt ONN
 and absorbing the substance of the people"
 This is very popular declaration, and if the people have not the patience and intelligence | to look into the facts, may influence their | votes; but as to whether they are a class be- l longing to the money power who have been | growing richer, let us look into the facts. The leading institutions which have been making
 loans on western property are the Connecticut
 and Massachusetts life and fire insurance and ! trust companies The statutes of New York | prohibit the companies incorporated by the 1 laws of that state from making western loans | Of the companies which have invested the larger portion of their surplus in western loans
 about one half of them have gone into liquid-
 ation and the other half have seriously inn | impaired their capital and are declaring very
 small dividends, if dividends they declare at | all But who constitutes this bloated money l class? These companies are nearly purely | mutual, and the money whichthey are leaning belongs to the policy holders in the companies,
 who are scattered throughout the West The | funds are held in trust for the widows and | orphans of the policy holders, and the men who | are managing them and lOaning them back to l the people are merely trustees of the great | army of policy-holders who constitute Mir. VOorhees's audiences.
 There is yet another class composing this money power, and they are in some instances individuals and in others bond and mortgage companies, who take bonds and mortgages on real estate and resell them throughout the east,
 they acting as trustee merely for the colec- tion and payment of the interest. These bonds are frequently sold throughout New England to persons who have accumulated a thousand dollars, and who make an invest ment with the expectation of living off of the interest. They are sold to guardians and off, cers of savings banks, who have the care and control of the daily earnings of the New England people. In majority of cases the persons who purchase the bonds are more limited in means than the persons securing the loan. They are school-teachers, draymen, clerks, gardeners, mechanics and operatives, and the guardians of those who have the man. agement of their funds and the savings banks in which such funds are deposited. To de- nounce them as bloated bondholders and cap- italists is blank nonsense. If a loan of 5000 is effected through these agencies, the proba-
 bility is that it will be held by not less than eight persons of the class above named. The rate of interest charged on the one hand, and the honor and good faith of the borrower on the other, are the only questions involved, and they are questions that can have no political significance whatever. Yet the men repre- senting the 'tpooled issues" are denouncing the transaction as cut-throat, and the pur- chasers as bloated Shylocks, and people pro- fessing intelligence are being led by such dec larations.
 The men who borrowed the money, in majority of the instances, used it in improve ments which the west had obtained the benefit of. In consequence of an unexpected depre- citation in rentals and in values, they are un- able to meet their obligations, the holders of the mortgages are compelled to make reduc- tion in interesting to enable the borrower to pay, or take the property in discharge of the debt If the reduction is made, which is the general rule, and which is made down to six or seven per cent, then the alleged Shylocx is suffering reduction of about 33a per cent on his rate of interest, and receiving less for his his money than any western democrat is loan- ing his money at If the reduction is not made and the mortgagee elects to take the properly, then, as a rule he suffers loss of from % to 90 per cent. upon both his principal and interest. Now we ask, if one class may be called the money power and the other the poor, wherein are the rich growing richer and poor poorer? This money power, like the fiat money is spook and the men who are railing at it are mere idling babblers. The men who have had it in bank stock, have had their sup posed fortunes swept away like all the balance, and the business history of every town and city in America will prove it. We are all in one boat, some having suffered more and some less but to attempt to classify losses and sec- tionalize burdens is both unmanly and dishon- est These demagogues are trying to persuade the people that there is great tyrannical money power in this country that is endanger- ing the liberties and the permanency of the government. Now we ask the people to call upon them and have them name the men who are. absorbing the wealth of the country. Where are they? Who arc they? How are they doing itP We charge specifically that all classes are suffering from depreciation in