from five to ten per cent of the circulation. The Government is to guarantee the redemption of the bank notes in gold. Provisions are made for the sale of United States bonds to maintain the redemption in gold by the Government. The issue of bank notes is limited to the amount of the capital of each bank.

These are the substantial features of the three plans now before the public. Without regard to the methods or the details of either plan, the one purpose is to substitute banks for the Government in the regulation of the monetary supply, and to make the Government ultimately responsible for the redemption in gold of the entire note issues of the banks.

The opposition to this new policy is confined to the noteissue power of the bank. There is no objection to the banking system as it exists in the country in the form of State banks, private banks, and trust companies, or to the general powers conferred by the national banking system excepting the power to issue currency.

Mr. Walter Bagehot introduces his noted book entitled "Lombard Street" with the explanation that he does not use the title "Money Market" because he wishes to show that he deals with "concrete realities." "I maintain," he says, "that the money market is as concrete and real as anything else. The briefest and truest way of describing Lombard Street is to say that it is by far the greatest combination of economic power and economic delicacy that the world has ever seen. Of the greatness of the power there will be no doubt; money is economic power."

Had Mr. Bagehot lived to 1896 he would have realized the mightiness, not only of the economic power of the money market, but also of its political power. Since he wrote, the control of the money market over governments themselves has been so developed that it may be safely said that the kings of finance have more control over the war policies of the nations than monarchs and presidents themselves. That this power has regulated the administration of our national Treasury since the Civil War no one seriously denies. Its influence upon Congress has been also controlling. The New York Tribune did not exaggerate when in 1878 it de

clared: "The machinery is now furnished by which in any emergency the financial corporations of the East can act together at a single day's notice with such power that no act of Congress can overcome or resist its power." The circular letter of Mr. Clews issued May 24, 1896, asserted that the count of a two-thirds vote in Congress for the free coinage of silver" would evoke in Wall Street the kind of conditions that no Congress has ever yet dared to disregard, and the cause would be overthrown at the moment when its success seemed most certain. It is this reserve power on which Wall Street is now reposing.'

There is certainly much warrant in our recent history for this definant assertion, for which, however, it would not be just to hold all the moneyed interests of our country responsible. Such utterances, however, tend to remind thoughtful citizens of the danger to our institutions which is involved in the united banking power of the Union. This mighty aggregation secures its ends most easily by controlling legislatures and executives; but in 1896 we felt its iron hand in our elections as never before. It is not denied that systematic levies were made upon financial institutions to defeat the Democratic candidate for the Presidency, and in many instances loans and discounts of banks were manipulated to intimidate and punish voters.

Yet it would be an error to treat this power merely from the standpoint of danger. With the moneyed interests are bound up our whole commercial system and our industrial organization. As they are potent for evil they are potent also for good, and their regulation must remain a supreme question in our politics. It is a sad political error to make wholesale attack upon the financial agents of our land as unpatriotic and destructive, or to deem them in accord with such ill-advised utterances as that above quoted. The operation and safety of our financial institutions are included in the general policy of the Democratic party, which would keep them democratic in character and deems a correction of abuses the best conservator.

It has so long been the practice to teach our voters how helpless they are as against England's banking control, that our

people have lost sight of the mightiness of our influence in the monetary affairs of the world. The consideration of this giant force in our own political and economic affairs is becoming more and more important. Jackson dealt with one national bank; we deal with 3,600. That bank had $28,000,000 of capital; these banks have $630,000,000, or twentythree times as much. The last report of the Secretary of the Treasury shows some 9,000 banking institutions in our country, representing aggregate resources of nearly $8,000,000,000. When the people of the United States deal with their new "money power" they deal with nearly one-third of the world's banking power.

For prudential reasons the industries of to-day are conducted largely upon borrowed capital. The business credits in every city, town, and village of our land depend upon the banks. Should these institutions be encouraged to bring their full force to bear upon our politics their influence would be well-nigh irresistible.

There is, however, in our banking system an element of safety which offers much hope that careful and calm discus. sion will bring just conclusions. The directors of our banks are numbered by thousands; they are our neighbors and friends, and they share in the feeling of patriotism which animates our republic. They are largely business men themselves, engaged in industrial and productive enterprises. Nine-tenths of them, it may be safely asserted, are opposed to a banking system which will injure business or weaken our institutions. The majority does not even consist of bankers, but of business men who have organized under the name of a bank the local industrial forces of towns and cities. Many of them are Democrats who are eager to carry out reforms affecting the banking system itself. The country banks represent two-thirds of the total banking capital of the land, and it is well known that the country banks feel the pressure of the control which the reserve cities exercise, and they have no disposition to add monopolistic privileges which will put them more under the control of the powerful banking leaders. It is doubtful if the majority of bank directors sympathize with the policy of currency contraction,

or indeed any policy which will injure other business to favor banking, inasmuch as most of them are primarily business men and secondarily bankers.

The economic tendency of the day, whether natural or induced, is certainly toward the centralization of management and the minimizing of the individual's power. The department store has driven the retail dealer to the wall; the trust has assumed control of our staple trades; the monopolized railroads regulate transportation. Our whole industrial system is rapidly attaining a monopolistic character. There is every reason to believe that this tendency will ultimately possess our banking system; already it is hastening, while the banks have only the instrument of credit with which to assert their power. Through the control of credit the business community feels its helplessness under the sway of the banks, but if now our monetary system is to be turned over to a banking trust can there be doubt that the small banks will become helpless servants of the powerful governors in this system? With money and credits in their hands, the business of the country will be at their mercy. Who can control it? Not the Government, for it has already abandoned its functions to them. Not the merchants, for they are dependents of the money-loaners. If the small banks rebel, they will be crushed. The amount of money, rates of interest and discount, privilege of credit, all will be under banking control. It is but another trust greater than all other trusts, a trust of trusts which exists now in comparatively feeble form, because it has not yet brought the Government fully under its control. It has owned Presidents and Secretaries, but Congress has not yet quite succumbed. To control directly the entire monetary system of the greatest nation in the world requires but the execution of the present plan; it offers to our financial rulers one-third of the world's banking power as the greatest stake for which that power has yet played.

When Mr. Carlisle made a contract with a foreign syndicate to protect the Treasury of the United States for a given period, he but faintly outlined the picture of the gold-owners of the world in financial dictation of the destiny of this

republic. With all the money and all the credits in their power, the railroads, the great industrial trusts, the mighty speculators will govern the policy of the whole system. When war comes the banks will control the finances of the Government if the whole system now proposed be not crushed out. The great industrial trusts, the most powerful owners or patrons of the banks, will have at their mercy, as never before, the producers of this land.

The Democratic party insists that the people shall not abandon their right to control the monetary supply upon which they depend. It deems that the very class which should not be entrusted with this great responsibility is the moneylenders, who have purposes of their own which are inconsistent with the interests of the masses of the nation's producers. The moneylenders have repeatedly shown their indifference to the apparent necessity of an increasing supply of money, the lever with which to lift prices and thereby give impetus to our desponding trade.

If the bankers believe that the people of this country are now agreed that the banks are entitled above all other classes to control the monetary supply, they much misunderstand public sentiment. There is a growing feeling in the land that it is the laborer, the producer, the manufacturer, the farmer, for whom the money supply should be regulated, and who have more right to dictate in the matter than have the bankers, whose profit lies in contributions from the other classes. It is fast becoming clear that to leave with the banker the determination of the quantity of money is not only to pervert the government's function, but to deliver over the wealth-producer to the private taxgatherer. As an abstract proposition, it is much more reasonable and certainly more wise to inquire of the producer whether he is getting of the banks at reasonable rates and in the necessary money quantity, and that the Government should supply such money to the producers if the banks fail to do so. The banks have two interests in the country's money, first, to make it pay high rates of interest, and secondly, to make it grow more valuable in their possession. Both these purposes are opposed to the interests of producers, and indeed of the