Manchester Democrat. [volume] (Manchester, Iowa) 1875-1930, 1908-03-25
The Power of Speculative Bankers.
lFrom the Telegraph HerA!do

bill on March II. In the morning
of that day the senate committee on
finance, of which Standard .Oil
Aldrich is chairman, AMI Senator
Allison a leading member, reported
an amendment to the bill eliminat.
ing railroad bonds as basis OIL
security for emergency money issues
and retaining the limit of $9,O00,.
OOO put upon the monthly note re-
firing capacity Of national banks
The obvious purpose Of reporting
the amendment at the time it was
reported, was as the Wisconsin sen.
ator himself explained, to take the
wind out of La Eollett,s sails
What can he talk about now2''
they asked snickeringly. Their
doubts were soon settled, for La
Toilette said that 'the dextrous
manner in which certain things
have been pulled out of this bill
has shed a flood of light upon what
is behind the measure" The inter.
ests back of the measure would have
itappear that a great concession had
been made, while the system would
expect to capture votes Tor the other
features of the Legislation wanted
and IN the end get exactly what i,
started out to secure-more re.
sources to meet emergencies in spec.
ulation and promotion.
Senator La Follette's theory OF
the panic is identical with that ex,
pressed BY this paper in the iirs,
days OF the period of financial tur-
moil. In common with this news
paper he regards the principle OF
the Aldrich bill as vicious one,
and the purpose of the measure
simply to enable powerful fnan-
clal group to issus money as specu.
lative and promotion needs require
it. The senator proved to the salts.
faction Of any one with mind open
to convection that two powerful f.
nancial groups-Morgan and Stand
ard Oil-comprising in all about 100
men, are in absolute control of
banking and the industries of the
country. He said:
There are twenty-three directors
Of the National City bank STANDARD
Old and thirty-nine directors of the
National Bank of commerce( Morgan)
Examination of these directorates
shows that these two groups are be-
ing knit together in business associ-
ations, suggesting their full identi-
tication.
Fourteen Of the directors Of the
National City bank are at the head
OF fourteen great combipations. rep
resenting So per cent. of the CAPT
talization ofall the industrial trusts
in the country. The railroad lines
represented onsthe board Of this one
bank cover the country like net
work. These same twenty-three di-
rectors, through their various con
"ections, represent more than $50
other banks, trust companies, rail
roads, and industrial corporations,
with an aggregate capitalization of
more than $l,200.000,00O."
On these interests Senator La Fol
lette put the blame for the panic.
There we're no commercial reasons,
but there were speculative, legisla
tive and political reasons why pan
ic should be precipitated by them.
They had sold stocks to the public
at enormerously inflated prices, and
by producing a panic they could
depress these stocks, forcing loss
upon the people, making it neces-
sary for them to sell, and when the
stocks were at low level themsel.-
es buy them in and feed them out
again at advanced prices. The leg
islatures of the several states which
had been busy enacting laws en-
croaching upon the privileges OF
railroads needed to be frightened.
The popularity of Roosevelt had to
be destroyed and popular confidence
in him shaken. National thought
had to be turned into reactinary
channels in order that the interests
should be able to force the nomina-
tion of sane" men for president by
both parties, and that the senate and
house leaders might be relieved
from the pressure Of public opinion
forcing them to enact laws distaste-
full to themselves and the interests.
There was everything to be gained
and nothing to be lost from panic
for the interests had the millions in
the United States treasury at their
disposal, and Morgan and Rookie
feller had $50O,00O,O00 in cash tc
loan out at 10 to l25 per cent, or tc
sell at a premium. Besides there
were uncounted millions to be made
in the stock market.
Why, not. then, panic? Why
not? So the panic was precipitated
and in flash the interests con-
trolling the clearing house of New
York forced suspension of currency
payments throughout the country
by their refusal to pay depositar,
banks the balances to their credit.
The country was apparently pros
porous. Prices were. high, butlabol
was employed. The crops wer'
good. There was nooverproductiol
Yet between two days; q panic wa
precipitated.
| 1t was easy Of accomplishment
Gradually money had been retiret
from circulation snd boarded by tn
Interests The millions in tn
banks Of the country could not b
secured, but they could be tied uI
and they were tied up. The vo
ume of currency become relatiyel.
too small for the volume Of busi
ness. Banks called their loans an