Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1914-10-16
REPUBLICAN
INSINCERITY
Congressman Sherley, Of
Kentucky Shows 1t in
Speech on War Tax Bill
POLICIES CONTRASTED
Administrations Course Re-
quired Courage and State
manship Of High Order

III d SpCCCu upOA IAc tdA JILL
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withdrawn and used for the current
expenses of the Treasury. On this
point he said
Members rail at the Democratic
administration because it has depos-
tied $75,OOO,OOO 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 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 currency system that
has been the worst currency system
of any civilized nation on the globe.
Under it your discount rate upon
speculative loans was always less
than it was upon commercial loans,
because there was no medium where
by you could rediscount commercial
paper, and, therefore, the New York
banks having reserves deposited with
them by the interior banks had to
loan money upon such character of
collateral as would enable them in
ordinary times to Immediately 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, col
lateral 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 were more than a thousand mil
lions of dollars of American securi-
ties owned abroad. every government
in Europe 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 necessary result was the instant
Offering to America of vast quantities
of these American securities held
abroad, with consequent destruc-
tion of their market value. If the
banks had not been in a position, or
had refused to protect in some de-
destroyed much of their own colat-
eral, their own securities would have
dwindled, credits would have vanish
ed, many would have faced bankrupt
cy, although in point of fact more
than solvent, amply able ordinarily
to take care of all demands.
"If the government with that sit
uation had let the country understand
that it was going to add to the bur
dens of the banks instead of taking
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
statement that it was refusal of
the government to help business and
financial institutions that had fore
ed the panic on us.
Il say to you that it 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 do
it without regard to political for
tunes, because it is in the true in
terests of your country. l do not
believe there is a man within the
sound of my voice, acquainted with
real financial transactions, with
world currents, but that in his heart
of hearts approves of the action that
the government has taken in strength
ening the banks throughout the coun-
try at this time instead Of undertak-
ing to weaken them."-Speech OF
Representative Swagar Sherley, Of
Kentucky, in the House Of Represent
atives. Sept. rs. -