The Southern Mercury. (Dallas, Tex.), Vol. 13, No. 3, Ed. 1 Thursday, January 18, 1894 Page: 1 of 16
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I
"Organittép Mdueate, Co-Operate.*'
Official Journal of the Farmers State Alliance of Texas.
"JLtberty, Jut tice, Equality.*
Vol. XHI, No. 3.
DALLAS, TEXAS JANUARY 18, 1894.
Whole No. 626
THE NATIONAL BANKING SYSTEM,
HUGO PREYER.
Dear reader, let us to-day exam-
ine the national banking system,
so called, and ascertain if it is, as
claimed by many, the best mone-
tary system in the world. I will
give, in my statement, nothing but
facts, and for analysis we will use
only common sense. Let us not
be led off by political speakers and
old party editors. Let us exam-
ine these institutions as business
men, as patriots, as American citi-
zens who have a right to know
the ins and outs of every institu-
tion established for them. I say
"for them," for I believe but very
few persons ol this land, if they un-
derstand the national banking sys-
tem, will endorse, and they did
not, by their votes, create it; it
was created for them.
Let us begin at the bottom and
see what led up to the establish-
ing of these banks.
Before our civil war in 1861 we
had state banks. Any number of
citizens could start a bank and is-
sue bills which of course were to
be redeemable in gold and silver.
The different state laws prescribed
the amount of coin which was to
be held in reserve at all times, but
these laws were of little use and
soon one bank after another failed.
Sundry counterfeit notes came in-
to circulation, and it required a
note detector to ascertain what
notes in circulation were good or
bad.
The present national bank note
"is certainly a great improve-
ment'* over the state bank money
so called. Of course the reader
who has read my article on money
will understand that state bank
notes were not money. They were
only promises to pay money. To-
day the law recognizes only gold
and greenbacks as money, and sil-
ver only in limited quantity.
1st. The "national bank note"
is not money. Not so recognized
or declared by our government.
2nd. The word "national" is
misleading. The note is not a
note of our government, but a pri-
vate note, the private property of
five or more individuals.
3rd. It is like the state bank
were, simply a promise to pay
money, gold, silver or greenbacks.
The only advantage this note
has, compared with the state bank
promises, is that the government
holds securities sufficient in its
hands to enable it to redeem the
notes that may be in your or my
hands if the bank does not. Re-
member now that the national
bank notes is not money. It is
not legal tender, and only legal
tender is money.
Having thus given you a con
cise, but comprehensible idea of
this money, let us see how it came
into existence, and if it is just what
we want.
As above stated, when the civil
war broke out we had these state
banks, pltnty of them, all with
plenty of bills in circulation. The
government presumed that these
bankers also had the coin back of
them, and not only that, but more
on hand. Consequently when our
general government needed coin to
carry on the war it issued bonds
and asked the bankers of the coun-
try to come forward and buy them.
Did they come? Oh no. The fact
developed that our own bankers,
with but few exceptions, had no
coin at all back of their notes, let
alone any on hand to loan to the
government. Even those few who
volunteered to, and did loan the
government some, demanded from
8 to 35 per cent. In the emer-
gency, Abraham Lincoln and Sec-
retary Chase decided, that as the
constitution of the United States
gave congress the power to issue
money they would ask congress to
do so. This was done, and the
greenback was the result. The
greenback was declared a legal ten-
der for all purposes but two, and
was therefore United States mon-
ey, and not a promise to pay mon-
ey, but absolutely money. This
money was paid to the soldier, the
farmer, the mechanic and to every
one. It paid debt and táxes, and
for all purposes, with the two ex
ceptions, was as good as gold and
silver, and equally as valuable.
Another important fact comes in
right here. It was the people's
money. It was truly a national
money, and it was issued by the
nation, and circulated directly
among the people.
Of course the issuing of this
money was a death blow to those
banks.which had some coin on hand
and expected to make something
out ot it. It was also a death blow
to the foreign iponey sharks who
had expected to reap a harvest by
our coin stringency; so when our
government began to issue the
greenback money the foreign mon-
ey sharks sent an agent here from
London who worked hand in hand
with our money speculators, and
they had the law so changed as to
create the two exceptions in the
greenback law. "This shall be a
legal tender formal 1 debts, both pub-
lic and private, except for duties on
imports and interest on the public
debt." This clause furnished them
a market for the coin as duties on
imports and the interest on public
debt could then only be paid in
coin. Pretty sharp trick, wasn't
it?
These money gamblers now hac
another idea. They were willing
that ,the government should issue
plenty of paper money, and when
the war was about over these gen-
tlemen had a law passed which
gave them the opportunity of ex-
changing this paper money for
bonds, thus destroying our nation-
al money which did not take a dol-
lar of interest from us, destroying
that which gave us our union, our
general prosperity and happiness,
and giving us interest bearing debt,
for which these money gamblers
had given the government noth-
ing whatsoever.
Now of course as the greenbacks
were being destroyed and interest-
bearing bonds being substituted in
their place money became scarce,
and now came the next trick, that
of creating a money gamblers'
money, and here is a point where
the ''national bank money'* comes
in, which we will examine more
fnlly in our next article. It is
necessary that we start at the bot
torn and lead up to these points,
as few persons have any intelli
gent idea how and why these things
were done. Nothing occurs in this
world without some cause back of
it, and we must always seek the
cause.
In the above I have made some
statement?, for instance, that na-
tional bank notes were not money;
That the government received
no help from bankers;
That 'England ^sent an agent
over here;
That the money power had the
legal tender law changed;
That the greenbacks were legal
tender money,
That the greenbacks were de-
stroyed and bonds issued in their
place; and
That the national banking sys-
tem is the outgrowth of the money
lords of Europe and America.
All of which statements are facts
which I stand prepared to prove in
every detail by unquestionable
historical and official authorities.
Above I state that the nation-
al(?) banking system of this coun-
try was the handiwork of Eng-
land's money sharks. To prove
this it is first, but necessary, to
state that Hugh McCullough, who
was our secretary of the treasury
while the money was issued, re-
commended the system in his re-
ports. Hugh McCullough was a
banker in England, and after his
term of office expired here he again
went to England where he is yet in
the banking business. We had to
import a foreigner to run our treas-
ury department!
John Sherman of Ohio introduc-
ed the national banking act in
1803. The banks, however, did
not take up the full amount allow-
ed to be issued under the law un-
til 1866. ,The original law, author-
ized an issue of $354,000,000. In
1864 the bankers issued only $31,-
214,420. In 1865. $146,336,030.
In 1865, the law stipulating the
the amount was repealed and the
amount of paper now issued by
them is only limited by the amount
they can get to give as security.
Now permit me to explain to
you how the national banks get
their money.
The bankers by having the ex-
ception clause enacted in the green-
back legal tender bill had an op-
portunity to ask what they pleas-
ed for their gold and silver when-
ever an importer needed it for im-
port duties, or our government for
interest on our debt, and they thus
procured nearly all the paper
money in the country in course of
time, by paying, on an average,
about 40 cents of gold or silver for
a dollar of greenback. These
greenbacks they now, under the
new law, exchanged for govern-
ment bonds, which we, the people,
or our representatives, for us, is-
sued for them, and for which we
agreed to pay them 5, 6 and 7 per
cent coin—gold and silver—inter-
est. If they now desired to organ-
ize a bank they would take these
bonds to the comptroller of the
currency, If they desired to start
a bank with $50,000 capital they
would deposit with the comptroller
bonds to that amount. If a $100,-
000 bank they would deposit bonds
to that amount, etc. For a deposit
of $50,000 the government—we,
the people, would print for them
national bank notes, with the name
of the bank thereon, to the amount
of $45,000. For this we would
charge the banker 1 per cent. If
we had deposited $100,000 in bonds
we would issue to him $90,000 in
bank notes at 1 per cent, which is
just about sufficient to pay the ex-
pense of printing, etc. Now how
do we, the people, stand? The
money thus issued in place of our
national greenbacks was no longer
¡government money, but the private
property of these banks, and if we
wanted money with which to do
business we were obliged to bor-
row it from these gentlemen.
The bonds deposited with the
government weie continuing to
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Park, Milton. The Southern Mercury. (Dallas, Tex.), Vol. 13, No. 3, Ed. 1 Thursday, January 18, 1894, newspaper, January 18, 1894; Dallas, Texas. (https://texashistory.unt.edu/ark:/67531/metapth185545/m1/1/: accessed April 25, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; .