its hand and plucked down the American eagle from his perch. Wall
Street got possession of the government. The _coup_ was accomplished
while the nation was asleep--else it never could have been
accomplished. Wall Street climbed the Tarpeian rock in the night, and
no goose cackled to give the alarm. Columbia had gone to bed. The
keeper of her treasure-house had already given the key to the enemy.
The keeper of the treasury was a _part_ of the enemy. He gave up both
citadel and city. In the morning the walls were placarded with lying
posters which said that the delivery of the government into the hands
of the Hessians had been rendered necessary in order "to preserve the
national honor!" It was done in order to keep faith with those
benevolent patriots who had bought the debt of the nation at less than
fifty cents to the dollar, and who, not satisfied with bringing it to
par, were now engaged in the honorable work of making it worth two
hundred cents to the dollar. The fact that the industries of the
people would be crushed and the people themselves be reduced to
poverty by the transfer of the national sovereignty from the capitol
to the stock exchange was nothing in comparison with the "preservation
of national honor."
The scheme was carried out. The methods by which it was carried out
constitute the subject-matter of the true history of Wall Street
during the past generation. Wall Street, from being a financial
organization, became a political power. It took full possession of the
executive and legislative departments of the government. It controlled
them both. It promptly established and defended its ownership. It
instituted one scheme after another. For the purpose of fortifying its
usurpation, it learned to choose its men and to prepare its measures
in advance. In 1884 it created an administration for its own purposes,
and manned it to the same end. It forced its way into the House of
Representatives and stood with a bludgeon behind the Speaker's chair.
It entered every committee-room and dictated every successful bill.
The people's bills all went one way. If by any chance one of the
people's bills got before the House the subsidized press, owned by
Wall Street, raised against it a chorus of groans and catcalls; _that_
was "an expression of public opinion"!
From that day forth the popular voice was strangled into silence. The
next administration (that of 1888) was prepared in the same manner.
Wall Street has no politics except the politics of the bond; it has no
platform except the platform of cent per cent. It suffices that when a
president is to be elected he shall be one of us. He shall not be a
man of the people; else in that case he would be a demagogue, a
windbag, a _vox et præterea nil_. _Our_ man shall not even know the
despised people. He shall not smell of the filthy ground, but must be
"sound" on questions of finance. If he be not "sound," we will make
him so. We will teach him his paces. If the people conclude to change
their government, we will see to it that the incoming powers are just
like the outgoing. As for the "principles" on which the candidate
shall be chosen, we will attend to that. We will make his principles
for him. We understand principles perfectly. We will fix the platform;
we know the carpenters. If the candidate and his friends have already
fixed a platform before the date of the convention, and if it have
been published everywhere as the decision of the candidate and his
following, we will take that platform from the wires and will
carefully revise it, to the end that the "national honor" shall be
preserved. We will write it over again into new meanings. We will
interpret it so that no harm shall be done to the "national credit."
We will make our candidate into a puppet. When we put our foot on the
treadle his jaw shall drop and he shall utter many mocking words about
the "national honor" and the "prospects of our glorious
country"--signifying nothing.
All this we will do for the public good. We will say that we are
striving for national prosperity. We will proclaim our candidate as
the advance agent of prosperity--until after the election. Then we
will say that prosperity will come with the inauguration. Then we will
say that it will shine out promptly when Congress adjourns and ceases
to menace the national credit. Then we will say that prosperity will
reveal itself when the hot season is over. By this time the hoodwinked
people can be coddled to sleep, or else set to dancing with rumors of
foreign wars. To this end we will have our newspapers carefully
promote our principles and studiously avoid all reference to those
subjects in which the people feel the deepest concern. Finally, we
will omit all these matters from our history of "Wall Street, Past;"
we will proceed to speak of our "Wall Street, Present," and will
explain that it is in a state of "lassitude and expectancy." Indeed
"lassitude and expectancy" is good.
But there is still another yawning chasm in the history of "Wall
Street, _Past_," and that is Mr. Clews's failure to discuss the
transfer of the Treasury of the United States to the custody of the
Street, and the consequent reduction of the Secretary of the Treasury
to the rank of a clerk. This very thing has been most successfully
accomplished. I believe that the Secretary still has an office at
Washington, but that should be closed in the interest of economy and
reform. To do so, we doubt not, would be a strong factor in the
restoration of confidence. Perhaps the Washington office might be left
in charge of a janitor, for it is understood that some official
correspondence is still directed to the old address! The presence of
the Secretary in New York, however, has become so essential to the
proper discharge of his duties that the removal of his residence
thither can only be deferred by an absurd deference to public opinion!
The results of the transfer of this vital function of the national
government have, in the meantime, been so salutary as fully to
vindicate the change. This was shown in 1893-94 when the Street, with
a strong repugnance to investing money in useful enterprises, and
having a prodigious accumulation of funds on hand, concluded that a
sale of Government bonds was necessary for the "national honor." To
this end the managers began to pull the treasury. In that institution
a large sum of gold was stored, wholly without warrant of law. The
people needed the gold beyond measure--that is, they needed the
_money_; and gold is one form of money. The industries of the people
had been prostrated by an international conspiracy, and the nation was
quivering on the verge of apprehended ruin.
In this crisis the patriotic Street devised the bucket-chain, the
crank of which was in the hand of the Street, while the "chain" ran
through the Treasury of the United States. Every bucket came out
filled with gold. Lazard Frères emptied out the gold and shipped it
abroad to their confederates. This created the necessity for buying it
back with bonds. The people were stunned with the audacity of the
thing--just as the unfortunate owners of a house in flames are stunned
to see gentlemen of the profession rush in and empty the safe. Wall
Street danced and shouted while the work was done. The bonds were
"popular," and the Street got them--got them for one price and sold
them for another.
By this beautiful process the great American nation was literally held
up and _robbed_ of more than nineteen million dollars! No highwayman
ever more successfully clutched the wizen of his victim than did the
Street with its supple fingers around the white larynx of Columbia.
The wheezing of the strangulated Republic could be heard from the St.
Lawrence to the Rio Grande. The nation was thus "saved," and the
robbers took the money and went sailing away on summer cruises to
Norway and Venice and the Cyclades. The "national credit" was
preserved; Wall Street "rescued" us from dishonor! That part of the
proceeds not consumed in yacht races, pyrotechnics, and balls was
passed to the credit of the reform fund, needed for the restoration of
prosperity in the fall of 1896! Certainly a history of "Wall Street,
Past," ought to contain some reference to these crimes.
Mr. Clews, turning to "Wall Street, Present," tells the nation that
now "the great banks have a superabundance of gold to lend on solid
and readily salable collateral at low rates of interest, approximating
the prevalent rates in London and Paris, where similar accumulations
of idle capital exist." This is a true statement of the facts. Mr.
Clews has here spoken by the books. What he says signifies that Wall
Street is now ready to go ahead and issue new mortgages on the
American people. It is now ready to offer inducements to our fourteen
millions of voters to sell themselves into another twenty-year cycle
of bondage. If they will only be gentle and not interrupt us; if they
will give us a true death-grip on themselves, on all they possess, and
all they ever hope to possess, we will lend back to them a part of the
very money which we have sucked up from their wheat fields and
pastures, from their barns and potato patches, from their humble
stores and markets, from their mills and their mines, and we will thus
_expedite_ them on the way to serfdom. Meanwhile we will continue to
bankrupt their railways, to snatch their local stocks, to convert all
shares in all enterprises into bonds, and to put the bonds into our
safes to the end--that confidence may be restored and prosperity come
back like the flowers that bloom in the spring.
For the time being we, the Street, are able to toss "two hundred
thousand shares a day" on the horns of our bull, and to put the same
amount of securities under the custody of our bear. "This conclusion
takes it for granted that the profits should be equally divided among
the membership." Such are Mr. Clews's very words. By the bond of my
faith! there is nothing else so beautiful and magnificent as this
among the arts invented by mankind! As for the people, one of your own
kings, Messieurs of the Street, has very properly indicated your wish
and purpose with regard to _them_.
Mr. Clews tells us that the "Future" of Wall Street is a sealed book;
and yet we may allow that "there is such a thing as an accurate
prevision of events." Of this kind are eclipses, occultations, and
tides of the sea. If the capital of Wall Street has, since the
institution was founded, increased more than sixtyfold, as Mr. Clews
declares, then we may expect it, according to his philosophy, to
increase full sixty times sixty, until the world shall be swallowed
up. Then, when Threadneedle and Lombard Streets shall have lost their
sceptre; then, when Seneca's forecast of the time to come shall have
been fulfilled; then, when Macaulay's New Zealander shall have made
his sketch, not only of St. Paul's, but also of the bank of England;
then, when _all_ the wealth, and _all_ the power, and _all_ the
functions of civil society in the United States shall have been
transferred to Wall Street; then, when nothing shall remain to the
American people except their squalid huts and the sorrowful
reminiscences of a great republic; then, when Wall Street in very
truth shall have possessed itself of the earth and consumed
mankind,--I suppose that the benevolent owners of the world will found
a few libraries, build a few marble mausoleums for themselves, and
sally forth to establish a stock exchange in Mars! That done,
interplanetary wars may be engendered, bonds on the solar system may
be issued and bought at half price, a gold standard of values may be
fixed on the basis of the pound sterling good from the sun out to
Neptune, and the inhabitants of the worlds, either by arms or by
journalism, may become the helots of consolidated wealth enthroned as
the governing power of the universe.
THE REFORM CLUB'S FEAST OF UNREASON.
BY HON. CHARLES A. TOWNE,
_Chairman Provisional National Committee Silver Republican Party._
On Saturday evening, April 24, 1897, at the Waldorf Hotel, New York,
there was held a political banquet intended as a most impressive
function, but which has passed into history as a very ridiculous one.
Big with self-complacence and puffed with pride, as it appeared in the
brilliant lights and gorgeous appointments of the palatial
supper-hall, within twenty-four hours the lacerating indignation of
Mr. Watterson and the trenchant raillery of Mr. Bryan had let the
tumid pretentiousness all out of it, and it had collapsed into a
flaccid and "innocuous desuetude." The "star-eyed goddess" turned her
back upon it, the "wild-orbed anarch" snapped his fingers at it, and
even everyday Mrs. Grundy laughed it to scorn. Projected with the most
alluring and satisfying expectations, the feast has dwindled to the
memory of a sad mistake in the mind of every man that assisted at it.
Planned as a sort of coronation ceremony, its completed performance
unaccountably wore the complexion of belated obsequies irreverently
disturbed by the guffaws of the multitude.
But the aspect of this banquet as a piece of ill-conceived political
strategy that never was formidable, or as a rite in the ceremonial of
a hero-worship that is as inexplicable as inopportune, does not now so
much concern me as does its office as a dispenser of misinformation
and unsound philosophy, which are always dangerous. Many who condemn
the folly of it as a move in practical politics nevertheless loudly
commend the economic doctrines it contributed to spread. But inasmuch
as, in my opinion, the science it taught is as bad as the politics it
practised, I propose to call attention to a few of the arrogant
assumptions and mischievous theories that found emphatic and repeated
expression at this feast.
Did the purpose of this article permit, it would be interesting to
make Mr. Cleveland's speech the text of some examination into the
ex-President's peculiarities of style. It was Clevelandesque to the
core. All his protuberant characteristics are there: the leviathanic
egotism, the profound and tenebrous ponderosity, the labored intricacy
of the commonplace, the pedagogic moralizing, the oracular
inconsequence. How absurdly obvious it all is now, and how
inexplicable that the glamour of high place should ever have clothed
such matter as his with the seeming of philosophy and statesmanship!
'Tis the very frippery and trumpery of the stage after the lights are
out and the audience has departed.
In his opening Mr. Cleveland says: "On every side we are confronted
with popular depression and complaint." This language stirs an echo of
the long ago. In his special message to the extra session of the
Fifty-third Congress in August, 1893, he thus announced a similar
condition: "Suddenly financial distrust and fear have sprung up on
every side." But he accounts differently for these two identical
phenomena. The situation to-day he largely attributes to "the work of
agitators and demagogues." In 1893 he declared: "I believe these
things are principally chargeable to Congressional legislation
touching the purchase and coinage of silver by the general
government."
The ex-President's explanations are both wrong, and nobody ought to
know it so well as himself. His relations with the great gold bankers
were exceedingly intimate in 1892 and 1893, and have been so ever
since. It is notorious that the panic of 1893 was a bankers' panic
deliberately brought about by these men to frighten public sentiment
into supplementing their demand for the repeal of the purchasing
clause of the Sherman law of 1890. The agitation against that law was
a whooped-up and manufactured agitation. No legitimate interest had
suffered from its operation. On the contrary, the access of standard
silver dollars coined under the laws of 1878 and 1890 had been of
incalculable advantage to the country. In his annual message of
December 2, 1890, President Harrison had thus referred to this fact:
"The general tendency of the markets was upward from influences wholly
apart from the recent tariff legislation. The enlargement of our
currency by the silver bill undoubtedly gave an upward tendency to
trade and had a marked effect on prices." And again: "It is gratifying
to know that the increased circulation secured by the act has
exerted, and will continue to exert a most beneficial influence upon
business and upon general values."
Such an influence that circulation did indeed continue to exert. The
comparative prosperity of the two following years, which, in contrast
with the conditions of the subsequent period, causes 1892 to wear to
wistful eyes so beautiful a hue in these unhappy days, would have been
an absolute impossibility but for the silver legislation.
Nor was the credit of the government menaced. It was a malicious
afterthought that represented the silver dollar as a charge upon the
credit of the nation. That dollar was a standard dollar. It was never
"redeemed" in anything but the money-work it did. There was no law for
its redemption, and there was as yet no attempt, such as Mr. Carlisle
in 1896 declared himself ready to make, to commit the crime of an
administrative degradation of the circulating silver dollars into
promises for the payment of gold. The Treasury Notes, issued in
payment for silver bullion under the law of 1890, were redeemable in
either gold or silver at the discretion of the Secretary of the
Treasury; and inasmuch as there was silver behind every one of them,
they could become a menace to the credit of the government only in
case of the betrayal of his duty by that official.
But the contractionists looked with alarm upon the improving
conditions of the country. Something must be done to discredit silver,
or by and by there might arise such a demand for the full restoration
of its mint privileges and money powers as could not be balked, as
every similar demand had been balked since 1873; and in that event the
slow villany of many years would have been fruitless and the
contractionists' occupation would be gone. Then was formed the deep
design to compel the repeal of the purchasing clause of the Sherman
law. The gigantic forces that had been behind Mr. Cleveland in the
memorable campaign of 1892 had not lost their cunning or their power.
They knew their implements, and they had had much experience. Their
strategy was customary and it was effective. To-day Mr. Cleveland
complains because the Republican party, having won the contest of last
November on the money question, should have hurried into the current
extra session on the tariff question. Let him recall his own course
when, having carried the country in 1892 on the tariff question, he
summoned the extra session of 1893 to consider the money question.
Such a reflection might possibly assist him in fathoming the present
motives of the men who won in 1892 to achieve the gold standard and in
1896 to preserve it.
For the election of Mr. Cleveland was a carefully executed move in an
elaborate and merciless programme. The president of a national bank in
North Dakota, a man of character and thorough reliability, has
recently made public a conversation between himself and a prominent
New York bank president, held not long after that election, in which
the latter, whose institution was a member of the Associated National
Banks, declared in substance as follows: "We have just elected Grover
Cleveland President of the United States upon the express
understanding with us that the policy of the administration shall be
to uphold and advance the gold standard"; and he foretold, with
startlingly faithful prevision, the repeal of the Sherman purchase
law, the successive bond-issues, and the general and ruinous fall of
prices, which seem to have evidenced the strict performance of the
agreement by the party of the second part.
How persistently the power of the executive was used, and how
carefully the offices were dispensed, to influence Senators and
members of Congress against the Sherman law, were matters of ordinary
comment at the time. Meanwhile the banks were putting in motion their
peculiar and enormous persuasions. For months no man could go into any
bank in any State of the Union for any purpose without having thrust
under his nose, with a more or less pointed request for his signature,
a petition demanding the repeal of the obnoxious statute. Then, in the
latter days of April, 1893, on the stock exchange, there began that
concerted onslaught upon stocks and values, vaunted as an
"object-lesson" to the people, as a result of which within eight
months six hundred of the relatively smaller banking institutions of
the country went down, dragging with them fifteen thousand industrial
and business enterprises, involving a total loss of seven hundred and
fifty millions of dollars.
The object-lesson served its purpose. With the business world
shattered into fragments, enterprise stifled, and credit dead, a
terror seized upon the people. The opportunity for which the big
bankers had been coolly waiting had come. Cunningly and in many places
at once they started the cry that the Sherman law had caused all this
havoc, and that the only hope for a return of prosperity lay in the
immediate repeal of the feature providing for the purchase of new
silver bullion. The clamor was eagerly repeated, and fear eagerly
believed it. At precisely the right moment the President himself made
official proclamation that the rumor was true, and summoned Congress
in extra session to obey the mandate of the bankers. Under this spell
Congress acted and the law was repealed. Thus was the country made
dependent upon gold alone for its new supplies of full-power money,
and thus, aided by similar action elsewhere, was inaugurated an era of
accelerated fall of prices more pronounced than the world has known
since the middle ages, and a precipitate decline of values more
ruinous than any other chronicled in history.
"Agitators and demagogues" indeed! Is it not monstrous that any
intelligent man should believe the present frightful condition of the
country to be due to the work of agitators and demagogues? Mr.
Cleveland of course knows better; but many people have actually been
convinced that some millions of our citizens would rather agitate than
work; that thousands of them have deliberately and by preference
forsworn business and become demagogues by trade. The thoughtful man
knows that agitation is first a result and afterward a cause. It is a
cruel as well as an ignorant thing for Mr. Cleveland and his disciples
to cast into the faces of the suffering producers and workers of the
United States, as a reproach, the fact of their discontent and
complaining. Of course our people are in distress. Of course they are
crying out against it. Of course they will endeavor to learn what
occasions it. And of course when they have ascertained what the matter
is they will agitate for relief. Substantially all men prefer to be
busy about the ordinary and interdependent offices of social life.
This is especially true of the great middle classes in the United
States. Under just and rational laws they will be so. The absence of
such a temper is ground for suspicion against the laws. Existing
conditions confess their weakness and injustice when they revile
admitted discontent. I would rather the cause I believe in sprang from
suffering than that suffering should follow my cause.
The full magnitude of this achievement for the gold standard in the
repeal of the law of 1890, will not be grasped unless we bear in mind
that it occurred at a time when the indications were unusually
favorable that an international bimetallic agreement, which the world
had been trying to accomplish for nearly twenty years, might soon be
secured on an acceptable basis. It has long been suspected that the
strongest discouragement of this hope, and probably the determining
factor in its failure, was the attitude of President Cleveland as
quietly caused to be understood abroad. Very recently this
well-grounded suspicion has been turned into certainty by the
distinguished English bimetallist, Mr. Moreton Frewen, who, in a
letter to the Washington _Post_, says: