Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-09-11
Representative Prouty Tells
the House That Measure
Is Unconstitutional.
ANNOUNCES INTENTION
TO OFFER AMENDMENT
Would Not Force Subscription to
Stock of Regional Re
serve Banks.

Your money or your life.' is the cpl
grammatic description of the Glass eur
rency bill by Representative Prouty of
Iowa. who declared today that the meas
ure is entirely unconstitutional, as 1t
violates the principle that the govern
ment cannot contiscate property without
making an adequate return Represent
alive Prouty directed his argument en-
trely to the provision of the measure,
which declares that banks shall give up
a percentage OF their capital to the re-
gional reserve bank. He gave notice
to the House of Representatives that he
would offer an amendment which would
allow all banks to subscribe to the stock
of the regional reserve banks. but which
forced none of them to do so. Repre-
sentative Prouty. former judge and lee
turer upon economic subjects, was heard
with marked attention as he delivered
speech directed entirely toward a con-
stitutional point in the bill.
He said that the principle OF the bill
would allow the government to contis
cate the entire capital of any bank.
cit must be conceded he said that if
the government has the power to compel
the banks to subscribe 20 per cent of their
capital. it has the power to make the
banks subscribe 80 per cent of II, or, for
that matter, all of it. If the government
has the power to take all of the earnings
above per cent. it has the power to take
that = per cent also. In other words, it
has the power to take all the capital of
the banks and convert it to its own use.
challenge the friends of this measure to
point out single provision of the Consti-
tuition which would put any restraint or
limitations upon the government in the
exercise of this right. except the fifth
amendment; and if il can be so construed
as to authorize the government to take
part of ones property without just COM
pensation, there is no reason why it can
not be construed to take all of 1t.
But every court that has passed upon this
question has held that 1t prevents the gov
eminent from taking any of it. except
possibly purely negligible quantity, and
no court has gone further.
| He likened the method to that of hold
up man on the road.
Ordered to Deliver, He Says.
1T does not give the banks the priv
iiege of saying whether or not they de-
sire to enter but the demand is squarely
made to do or die: Deliver what We de-
mand or We will put you out of bust
ness This is the exercise Of the high
wayman's logic: Deliver your valuables
to me or be shot dead -
Representative Prouty cited many
court decisions in his argument along the
lines of the Constitution, and in expiana-
ton of this portion Of his speech said:
Il know the old Constitution is in ill
repute. / know there are plenty of men
who do not consider themselves in the
least bound by its declarations; but l
care not what others may say think.
/ have taken an oath to support the Con-
stitution without any mental reservation
or purpose Of evasion and firmly beliey-
ing as / do that this bill Is unconstitu-
| tional. | feel it my imperative duty to
express my convictions to the House."
The effect of the bill was described by
Representative Prouty as follows:
"The friends of the present bill con-
tend that the legal title to the capital
and deposits subscribed to the reserve
banks still remains in the subscribing
banks. That is true, but the sub
scribing banks, against their will. are
deprived of the use or control of il
and a large part of it's earnings. All
| the accumulated surplus up to 20 per
cent and so per cent OF the net profits
| beyond that go to the federal Treasury
without the government paying to the
| subscribing banks single dollar.