Gilpin observer., 1914-10-22
REPUBLICAN lNSlNCERITY
UNMASkED IN THE HOUSE

Ill speech upon tne war TAX Dill
last week, Representative Swagar
Sherley, of Kentucky, dealt a crush
ing blow to the Republican argument
that additional taxes need not be
levied if the government funds now
deposited in national banks were
withdrawn and used for current eX-
penes of the treasury. On this point
he said:
administration because it has depos.
tied $75,000,00O with the national
banks. Now, the only difference be-
tween the Democratic party's action
in that regard and the Republican
party's action in the past has been
that you deposited money free of any
interest and we have deposited mon
ey and asked 2 per cent interest on
it.
Now the fact is this, also known
OF and admitted by all thinking men
who are not talking simply for the
sake of party advantage: We have
lived under a currency system that
has been tie worst currency system
of any civilized nation on the globe.
Under it your discount rate upon
speculative leans was always less
than 1t was upon commercial loans,
because there was no medium where
paper, and, therefore, the New York
banks having reserves deposited with
them by the interior banks had to
loan money upon such character or
collateral as would enable them in
ordinary times to imm ediately get it
| back when money was called for by
the interior banks that had loaned to
them; and hence loans were made
upon stock and bond collateral a
collateral that is readily convertible
in ordinary times, but which in times
OF great distress becomes the most
difficult and in many ways the worst
collateral that a bank could have.
Here were the banks of America with
a great mass OF this collateral Here
We're more than a thousand millions
OF dollars of American securities own
ed abroad, every government in Eur
ope wanting gold, and gold only, to
finance the war. and every one of the
peoples of those countries struck by
the blighting effect of this war. with
the need to Immediately use every
| possible resource for cash. The, nee
! bn i'm ~ a MT of
ing to America of vast quantities of
these American securities held abroad
with consequent destruction of their
market value. II the banks Lad not
been in a position. or had refused to
protect in some degree those offer
ings, they would have destroyed much
of their own collateral, their own Sc
cur.ties would have dwindled, credits
would have vanished, many would
have faced bankruptcy, although in
point of fact more than solvent, amp
ly able ordinarily to take care of all
demands.
IF the government with that sitr-
alton had let the country understand
| thuN II was SolbE W duu 10 TIE DuT-
dens of the banks instead of taking
from the burdens of the banks as
far as they could, you would have
had panic in this country, and then
the very men who are here railing
against us because we do not go to
the banks now and draw out this
money, would have been loudest in
their staten ent that 1t was refusal
of the government to help business
and financial institutions that had
forced the>panic on us.
81 say to you that 1t takes courage
and craftsmanship of the highest or.
der to face disagreeable tasks, to
face them knowing that criticisms
will be made, which, to the casual
thinker will carry weight, and to dc
II without regard to political fortunes
because 1t is in the true interests
of your country. ! do not believe
there is a man within the sol nd OF
my voice, acquainted with real finam
cial transactions, with world currents
hut that in his heart of hearts ap
proves of the action that the gov
ernment has taken in Strengthening
the banks throughout the country al
this time instead of undertaking tc
weaken them"