The representative. [volume] (St. Paul, Minn.) 1893-1901, 1896-03-04
THE NATIONAL BANKS.
HOW THEY LIVE ON THE IN
TEREST OF WHAT THEY
OWE THE PEOPLE.

very lew people uuOeTStOou, ~ the
time Of it's passage. the national banking
act, passed few years before silver was
demonetized. Several months before its
passage, at meeting of Eastern bank
ers, held in Boston, the following letter
was formulated and afterwards sent out
to the various banking institutions
throughout the country, viz:
Dear Sir.-It is advisable to do all in
your power to sustain such daily and
prominent weekly newspapers. especially
the agricultural and religious press, as
will oppose the issuing of greenback pa
per money, and that you withhold patron
age or favors from all applicants who are
not willing to oppose the government issue
or money. Let the government issue the
coin and the banks issue the paper money
Of the country; then we can better protect
each other. to repeal the law creating
national banks or restore to circulation
the government issue Of money, will be to
provide the people with money, and will
therefore seriously affect your individual
profits as banker and lender.
''See your member of congress at once,
and engage him to support our interests
that we may control legislation.
(Signed by the Secretary
JAMES BUEL,
No. 147 Broadway Groom ~ N. "
AS result of this circular letter and
others, the next congress Of the United
States. was filled up with bankers, with
the determined purpose Of passing such
acts as would benefit their own interests.
They, occupied seats, notwithstanding a
law in force at that time, declaring that
they were ineligible to be members of the
house. - eflftsf.s
The founders of our government had
a sanitary. dread of the bankers inf1u-
ence making itself felt in shaping nation
al legislation, therefore the third con-
Of Tynif
following resolution on the 23d day Of
December, 1898, viz:
ANY person holding any office or any
stock in any institution in the nature of
bank, for issuing or discounting bills
or notes, payable to bearer or order, can
not be a member of the house whilst he
holds such office or stock.
This resolution was signed by President
George Washington, and was in full force
and effect at the time the national bank
ing law was passed. In substance the
law wasgthis: BY 1t the Wall street and
English money changers were allowed to
invest their greenbackS in government
bonds at their face value notwithstanding
greenbacks were then deprecated in
value). Upon the bonds, the investor
drew gold interest in advance and in ad-
dtion thereto he actually had 80 per cent
of their value returned to him. While he
drew interest upon the investment in
bonds, 80 per cent of it was returned to
him in national bank notes. which he
loaned out on the most advantageous
terms
So it can be seen the investor drew
interest from the government, and also
drew interest from his individual debtors.
Let us just see what a banker worth
5000, 900 could do with it under this law,
before the per cent government bonds
went to a premium. With that amount
of money he could in 80 days have $1,000,-
600 in bonds drawing per cent interest
and also have $4,000 in cash left to loan
at the highest rates Of interest to the peo-
pie. You say it cannot be true. Let me
prove it to you: He has $200,00O, buys
$1O0. 900 of per cent bonds, deposits them
in the treasury and draws $4,000 in ma
tional bank notes, as he is entitled to by
the law. To this $4,000 he adds $4,000,
buys another 500, 900 of per cent bonds,
100000 in national bank notes again. 1t
is very simple. He keeps on repeating
this operation until his cash is limited to
the $4,000 in national bank notes which
he receives the 18th time he takes $780,
600 of bonds to the treasury. Figure 1t
out and see if it is not correct, that he
had 1,1O0,0O Of bonds and $4,000 in
cash. 49,
On the bonds he draws $4,000 a year;
the $4,000, at 10 per cent earns $4,000 a
year; thus he is making 5000 per annum
on an original capital of 100000. Does
the reader wonder that such men as Jay
Gould accumulated fortunes in a few
weeks or months?
The national banking law was one of
the most villainous schemes of robbery
ever practiced upon an innocent and I'M
suspecting people. Secretary Chase (who
afterwards became chief justice Of the
supreme COURT said, my aid in getting
the national banking law passed was NE
greatest financial mistake of my life. 1t
ought to be repealed
In NV next article / will explain WhV it
was the greenback deprecated in value.
PICKWICK.