The Washington times., 1901-11-13
Banks and the National Finnnces.


The New York World" publishes a
rather sensational statement purporting
to have been made by very prominent
business man to the effect that six
closely allied interests actually control
l-eighty-five per cent of the deposits in
the New York City banks. The inter
ests referred TO are the Standard OIL
Company, j p. Morgan & Co, Rocke-
feIler, the New York Life, the Mutual
Life, and the Equitable Life Insurance
Companies. 1t is further stated that
these same interests also control the
larger banks and trust companies in
Boston, Providence, Philadelphia, Chi
cago. Cleveland, St Louis, Denver, New
Orleans, and elsewhere which give them
almost complete command of the
finances. of the United States.
1t has frequently been said that they
who control the purse strings of ma
ton have the people at their mercy, and
up TO a certain point there is a vast
amount of truth in the statement
Money is the agency by which all mod
! ern business is transacted. The great
and potential insrumentality of credit
rests primarily upon money, and both
the primary and secondary forms of the
| agency are controlled mainly by the
banking interests.
The panic of 1893 was, perhaps, the
I most striking example furnished by the
history of this or any other country of
the extent to which a few great banks
can. by a concerted effort, almost para
I'VE business In order to force a GER
tain monetary policy, the New York
Bank ring, in conjunction with the
! Cleveland Administration, concluded to
! give the country an object lesson. %
| Accordingly, il suddenly shut of credit.
! announcing that it was driven to the
| necessity Of doing so by the prospective
dangers Of the Sherman law, and that il
| could not safely extend credits further
| until that law was repealed. The claim
| was absurdly false, as anyone having
! even an elementary knowledge Of finan-
| ciaI economy could see at the time. The
/ continued issue OF Sherman notes was
! source Of no danger 10 the banks,
/ even in the improbable contingency of
! its sending a large part Of our gold
I abroad The banks would have con-
| tinued To do business with paper money
/ just as they did in greenback days prior
to the resumption OF specie payments.
| But the banks wanted the law repealed
| as a step toward the full establishment
! of the gold standard. To this end they
| stopped the extension of credits, partic-
! ularly in the West. with the result that
! six hundred banks and thousands of
! business houses went down with a
| crash ia the course of a few weeks
But it is Il great deal easier to start a
panic than it is 10 stop one-easier by
| far to create distrust than il is to re
| store confidence. The repeal of the
| Sherman law brought no relief 1t was
| Impossible that It should Whoever
| heard Of a money famine being relieved
| by reducing the money supply? Then
| it was said that we must have a bond
| issue. That would be the financial
| panacea We had issue after issue of
bonds, in all two hundred and sixty
| two million dollars worth. and still not
| a sign of Improvement until four long
years had passed. IThen when the bust
| ness revival struck Europe. ii naturally
rolled across the Atlantic and reached
US a little later.
But apart from all sinister motives
| the power OF great banks over the
finances of a country is perfectly OBJ