The daily banner. (Cambridge, Md.) 1897-2008, 1914-10-21
IISNCERIIY EXPOSED.

~he,ley, of kentucky. Riddles Argu-
mentS Against The Emerge hey
Revenue Bill - Administration :
Course Required Courage -a.nd
Craftsmanship of Highest OrCer.'
In speech upon the war tax bill
last week. Representative Swagar
/ Sherley. of Kentucky, dealt a crush
ing blow to the Republican argument
that additional taxes need not be lev
led if the Government funds now de
posted in national banks were with
drawn and used for the current ex-
, penses of the Treasury. On this
point he said:
members rail at the Democratic
administration because it has deposi-
/ ted $75,000,000 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 peen
that you deposited money free of any
interest and we have deposited mo-
ney and asked per cent. 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 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; ana hence loans were made
upon stock and bond coliateral,9 q col
lateral that is readily convertible in
ordinary times, but which in times OF
great distress becomes the most diff
ficult and in many ways the worst
collateral that a bank could have.
Here were the banks of America with
a great mass of this callateral. Here
were more than a thousand miuions
of dollars of American securities
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 eV-
cry possible resource for cash. The
necessary result was the instaGt Of
fering to America of vast quantities
of these American secur aiIiSS \iiss4d
abroad, with a conseque lSec-
tion of their market va the
banks had refused to pl \oms
deg~gf Just-2lse 1
have daSeoyed much Of ting
collateral, own securitf -
have dwincl fdits wouiN I've
vanished, many would have faced
bankruptcy, although in point of fact
more than solvent, amply able ordi-
narily to take care of all dema nds.
If the Government with that sit
uation had let the country I'll Inder-
stand that it was going to aaI soSthe
burdens of the bank instead of TAX
ng 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 railingT
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
forced the panic on us.
Il say to you that it takes courage
and craftsmanship of the highest
order 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 inter-
ests of your country. l do not be-
lieye there is a man within the sound
of my voice, acquainted with real fl
nancial transactions, with world cur
rents, but that in his heart of hearts
approves of the action that the Gov
ernment has taken in Strengthening
the banks throughout the country
at this time instead of undertaking
| to weaken them. Speech of Repre-
sentative Swagar Sherley, of Ken
| lucky, in the House of Representa-
tives, Sept. 25.