Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1907-03-07
FRENzIED FINANCE.
How the Wall Street Stock oambiess
Play With the Peopjee Money.

Play With the Peoples Money.
Tho director of the United States
mint in his recent review Of monetary
expansion and its effect upon prices
and industry brings out the fact that
the last statement Of the national
banks shows that the cash reserve
averages only about 81 to each $40 of
deposits. That Is very startling fact,
for it shows that If depositors were to
withdraw One-tenth of their balances
1t would take all the money the banks
have and at once produce disastrous
panic. He therefore concludes that
credit is expanded to the limit" and
believes that to save the country from
financial disaster Il contraction Of spec
ulatvc activity is necessary. The his
tory of other such periods Of specula-
ton indicates that the boomers will
not let up until crash forces them to.
But Mr.. Roberts also tells us that the
worlds production of gold for the past
year exceeds $40O,O00,O0O and Is in
year and the annual production has
more than doubled during the past ten
years. AS long as this gold expansion
continues prices will continue to rise,
and unless our spectators greatly
overrun their credit there should be no
''smashup," though there will I'M
doubtedly occur periods of depression.
due to overactlvity.
A London Economist writer takes
most pessimistic view of the danger of
the Increase In prices and declares:
UNLESS the prices of commodities
cease to rise it is to be feared that the
present crisis will not pass away, and
If the rise continues the position may
easily become so acute that all the
chief banks Of the world may find it
necessary to take yet more sternly de-
fensive measures to avoid very seri-
GUS and worldwide calamity"
There is no doubt that the enormous
ly increased cost Of commodities-56
per cent on the average-requires much
more money to carry on the business
Of the country and keeps much lar
ger amount Of cash in circulation in
the hands Of the people. This increase
IN prices has been accentuated by the
advance in the market price Of securi-
ties on the Wall street Stock Exchange
and elsewhere, mainly due to the clique
control Of railroads and other corpora
lions and the frenZied financing by the
Wall street spectators. We have a
glimpse Of this In the evidence given
before the interstate commerce COM
mission Of the Hartman stock deal
ings with the surplus Of the Union Pa
cific and other railroads controlled by
the same interests. We now know
that hundreds Of millions of dollars
that have been wrung from the people
through unreasonable railroad rates
have been tied up in vast Stock Ex-
change deals in which Hartman, Rock
efeller and others are interested in
stead of the money finding it's way in
to the channels Of legitimate business.
The operations Of the United States
treasury under Shaw and approved by
President Roosevelt have been help
ing these frenzied financiers by de-
posting in national banks all the avail
able money in the treasury without
even charging them interest. And the
enormity Of these transactions Is made
worse by the fact that the interest
rate on money in Wall street has av-
eraged over Is per cent during the
past three months.