Both the tanner and the grocer must know, when they look up and down Wall Street at the great office buildings which tower into the sky on either side of the street, that these are huge hives of expensive bees who, from New Year's to New Year's, do not produce a dollar. They should realize that the hundreds of millions spent each year for the expense of running the "System's" game, and the millions which the game-makers flaunt in their faces, must have been derived from such as they--the men who produce.

It is the phenomenon of the age that millions of people throughout this great country of ours come of their own free will to the shearing pens of the "System" each year, voluntarily chloroform themselves, so that the "System" may go through their pockets, and then depart peacefully home to dig and delve for more money that they may have the debasing operation repeated on them twelve months later.

You may ask if I desire to convey the idea that the great financial inst.i.tutions and trusts of this country, which have their head centre in Wall Street, are all concerned in a conspiracy to rob the people of their savings. You think, doubtless, that so sweeping a statement goes beyond the truth. I desire to go on record right here in declaring that all financial inst.i.tutions which in any way are engaged in taking from the people the money that is their surplus earnings or their capital, for the ostensible purpose of safeguarding it, or putting it in use for them, or exchanging it for stocks, bonds, policies, or other paper evidences of worth, are a part of the machinery for the plundering of the people.

This is a terrible charge, I am well aware, but it is based upon a thorough knowledge of the subject and made with a full appreciation of its gravity. I do not mean to say that all the men who handle and control the different inst.i.tutions I mentioned have guilty knowledge of the bearing of their actions. Many of them are of the purest minds and most honest intentions, and are quite incapable of partic.i.p.ating voluntarily in a conspiracy to wrong any one. They do not know, however, that the relation between their own minor inst.i.tution and the general financial structure const.i.tutes the former an agency for the "System,"

which controls and has organized the general financial structure into an instrument for converting the money of the public to its own purposes.

In fact, the "System" has cunningly possessed itself of the financial mechanism of the country and is running it, not for the object for which the machine was devised, but for the benefit and personal profit of its votaries, and so the vast correlated organization of banks, trust companies, and insurance corporations which were brought into being for the safe handling of the people's savings has become an agency for transferring these savings to the control of unscrupulous manipulators, who take liberal toll of every dollar that pa.s.ses through their hands.

The duty of the American people is to unloosen the thraldom of the "System" on our financial mechanism; to pluck out of their high places the dishonest usurpers who have degraded the purposes of our financial inst.i.tutions, and to restore those inst.i.tutions to their legitimate functions. When the people are fully awakened to the condition I describe, surely they will arise in their wrath and sweep the money-changers from the temple.

CHAPTER II

THE "SYSTEM" AND THE LOUISIANA LOTTERY COMPARED

Years ago one of the greatest evils in this country was the Louisiana Lottery. Through that lottery millions and millions annually were taken from the people and transferred to a few unprincipled schemers, who soon found themselves in possession of enormous fortunes. Wise men called for the abatement of this awful drain on the savings of the nation, but the law-abiding, G.o.d-fearing people of the country met their plaints with "Why should we be bothered about this matter? If fools and knaves elect to gamble in such palpably fraudulent ways, let them gamble, and their losses are no affair of ours. It is none of our business." But presently these honest people had it pounded into their well-meaning heads that the princ.i.p.al instrument by which the swindle was conducted was their own mail service, one of the most important branches of their Government; that, in fact, in each and every city, town, village, and cross-road in all our virtuous land, Government officials were acting as distributing agents for this huge corrupter and robber.

Then the people rose in their irresistible might, and between the rising of one day's sun and its setting this powerful machine went as goes the gum-drop on the red-hot stove cover at a pop-corn soiree. It melted, leaving nothing but a faint odor and a thin stain, both of which disappeared in the next morning's scrubbing, and the Louisiana Lottery was as though it had never been. Yet during its reign its insolent votaries could prove to the absolute satisfaction of all intelligent, patriotic men that it was useless for any man or set of men to attempt the lottery's destruction, because they would be met with the acc.u.mulated resistance of the reckless spending of the vast amounts of festered dollars which had been stolen from the people. The argument of these comparatively petty thieves was: "No men nor sets of men can hope to 'stack up' against us, for their money comes hard, cents and dollars at a time; they are obliged to earn it, while we get ours in chunks by simply taking it. We can buy lawyers and can hire law-makers, and we can lease Government officials, and we can outbid any honest men, who are the only ones who object to our game. In the market for legislative or business talent you cannot get within touching distance of us." Yet the people had but to sneeze and this foul parasite was detached from their free and honest structure and was wafted away with the dead leaves and the dust to bottomless nowhere.

In the height of its prosperity the Louisiana Lottery took from the people only a paltry ten or twenty million dollars a year, while to-day there are single groups of banks, trust companies, corporations, and trusts which take from the people by might, by trick, and by theft hundreds of millions each year; and there are scores of such groups. The Sugar trust has been the instrument of gathering, in one year, a hundred millions of the people's savings, and the Steel trust alone has robbed the people of over five hundred millions of dollars in a single twelve months.

To-day the "System" and its methods are as clearly and as sharply defined in the tangibility of their relation to the people as was ever the Louisiana Lottery. On certain days the Louisiana Lottery sold its tickets, which the people bought with their savings. On a certain day the drawing took place, at which all those who had parted with their dollars expected to receive them back together with immense profits, and upon that day disappointment was spread broadcast among the many and unhealthy joy among the few. So with the "System." On certain days the public is sold their stock, bond, and insurance policy certificates.

Upon other days they look for their savings and profits. On the contrary, they learn that their savings have decreased in value or have been wiped out, and that there never was any chance of profit. My critics will say that such a comparison cannot hold, for in the lottery nothing was dealt in but gambling tickets, whereas the stock or bond certificate represents an ownership in the material things of the country. This is the fallacy the "System" spends millions every year to foster and disseminate. Between the two the difference is in favor of the Louisiana Lottery, for both are gambles and the lottery game was square. Those who ran it had for their trouble a fixed percentage of the profits, an enormous percentage, it is true, but the general fund was never encroached upon by the controllers. Who is to say what percentage the votaries of the "System" take in their game? It depends on how much their victims have to lose. The public have been persuaded, too, that in purchasing stocks they do not gamble, but only invest, or, at the worst, speculate, so they are deceived as well as plundered. A few millions each year satisfied the lottery owners; the votaries of the "System,"

among whom the "swag" must be divided, demand millions upon millions each. The tickets of the lottery had a definite value at all times until the drawing took place. The stocks and bonds of the "System" have no rigid or unalterable value when issued or at any other time, and do not represent a fixed ownership in all the savings of the people which have been paid for them.

Morally, legally, or ethically, the Louisiana Lottery, with all its attendant curses, was a far better inst.i.tution for the people to b.u.mp up against every month than is the "System" against which the whole people are now directly or indirectly dealing every working day of the year.

Startling this statement may be, but not more startling than the facts.

The records of the lottery company will show how many dollars it took in from the public; how many were returned in prizes and expenses; and how many went into the pockets of the owners. The records of the banks, corporations, trusts, and stock-exchanges will exhibit how many dollars were paid into the "System" by the people; how much they received back in return therefor; how much the expense of conducting the business was; and how much profit went to the votaries of the "System." Compare the two and it will be found that there is annually taken by the "System"

from the people a hundred, yes, a thousand times more than the Louisiana Lottery ever obtained in the same period.

This being the fact, for how long will the people allow such a monstrous wrong to be done? How long will they suffer a few men to siphon automatically the money of the many into their own pockets?

It is only a matter of simple mathematics to ascertain the day, and that only a few years away, when ten men will be as absolutely and completely the legal owners of the entire United States and all there is of value in it, as John D. Rockefeller is the absolute legal owner of the large section of it of which he is to-day possessed.

_When that day is here, the people will legally be the slaves of these ten men._

If this is so--and it is as surely so as it is that the Const.i.tution of the United States of America guarantees to every man, woman, and child who is a part of it perpetual freedom--it is so because the legal interest alone to which the ten men will be ent.i.tled and which they must receive (or our entire structure will fall) will of itself bring to their coffers all the wealth in existence within a given time. If this is so, then why have the American people allowed themselves to reach this condition? Why are they to-day not only resting peacefully under this worse than death-bringing yoke, but a.s.sisting in the further riveting of this badge of dishonor and degradation?

The reason is simple: They have been lulled to sleep by the "System" and its cunning votaries until they have but a dull appreciation not only of existing conditions but of their coming consequences. It is almost incredible that a people as intelligent as the American people, and as alert to that individual and national honor which they have bought with so much of their blood and their peace of body and mind, can be so deceived and juggled with. When one looks about, however, and notes happenings of which one personally knows, and the degradation and dishonor to which public opinion is seemingly indifferent, nothing is incredible.

One sees a certain man openly displaying five hundred millions of dollars, a sum which represents the life earnings of 150,000 of our population, and knows that this man has secured this incredible amount during forty years of his life. One sees the second highest and most honorable office in the nation, a United States Senatorship, openly bought for a few stolen dollars by a man who up to the very day of its purchase was a watch repairer in a small country town, and who had never done a single meritorious deed or been possessed of worldly goods to the extent of $5,000. One sees a wily adventuress secure from the banks, which exist only to safeguard the people's deposited savings, hundreds of thousands of dollars on her bare story that she was the possessor of some mysterious doc.u.ments. One sees a $6-a-week office-boy of one of the "System's" votaries able to borrow for the "System," on his bare note, four millions of dollars from a New York inst.i.tution which only exists to safeguard the people's savings--although the law says that such inst.i.tutions shall not loan to any man on any kind of collateral, even Government bonds, one-tenth that sum. One sees two men, drunk with their success, gouging and tearing at each other's hearts in Wall Street, and sees their gouging and tearing bring about a panic which takes from the people in an hour over a billion dollars and drives scores to suicide, murder, and defalcation--the two men continuing meanwhile as ornamental pillars of society instead of wearing prison stripes. One sees a great railroad corporation, in which are millions of the trust funds of widows, orphans, and charitable inst.i.tutions, caught "short" (having sold something it did not own) in the stock-gambling game and held up to the tune of ten million dollars by a reckless stock gambler, who says "If you don't settle to-night it will be twenty millions to-morrow"; and the toll is paid, while the great banker who conducts the release of the hold-up charges the further tribute of twelve million dollars for his services. And then one sees this twenty-two millions of "commission"

tacked on to the capital stock of the great railroad which is subsequently capitalized into a "bond" and sold to great life-insurance companies as a first-cla.s.s investment for their trust funds.

When one sees these things and a hundred other as rankly fraudulent, one should not wonder at anything American connected with dollars.

Such things occur because the "System" has so far been able to keep the public in ignorance of its doings. On the surface there is nothing to suggest that a set of vampires have captured the high places of finance and are sucking away the life-blood of the nation. Our banks and trust companies all present a fair exterior and apparently are the same safe and honorable inst.i.tutions they were before the canker fastened on them.

Only its votaries know what the "System" is, and their way is the way of silence and darkness. A tie, stronger and more effective than the oath of the Mafia, binds them to its service, and woe be to him who dares divulge its methods. He who is bold enough to enter upon a recital of these secrets must be strong indeed to withstand the bribes to silence which would be placed in his hands. The "System" can well afford to pay any price rather than be brought face to face with its past, with an enraged people for referee. And even if the being be found who will venture an expose of the conspiracy, he will find it strangely difficult to get his story past the traps and pitfalls which will be placed between it and the people for whose enlightenment it is intended.

CHAPTER III

THE FUNDAMENTALS OF FINANCE

Finance is easy enough to comprehend if it be explained, but so long as an explanation is deadly to the interests of the men who control it, one can be sure none will be offered. There is no term more common to-day than "trusts," and we are surrounded by "trusts," inst.i.tutions whose workings during the past twenty years have awakened intense public curiosity to know what a "trust" is. Yet there is not extant a definition of a "trust" which conveys to the rank and file of the people any real idea of what a "trust" is. So vague is the general understanding of the "trust's" functions and purposes that the most intelligent and honest statesmen struggle and hopelessly flounder when they attempt to define them, and we have at the present time the able chief of our nation talking of regulating them by law, when, as a matter of fact, a "trust" is, top, sides, bottom, outsides, and insides, an absolutely illegal inst.i.tution, created outside the law, existing outside the law, and having for its purpose the performance of those things and only those things which the law says cannot be performed legally. Imagine our law-makers gravely meeting to make laws for the control and regulation of the pick-pocket or burglar or counterfeiting industry, or endeavoring to prescribe legally the times, places, and amounts of national bank defalcations, or the kind of ink, paper, and pens which must be used by forgers in the pursuit of their profession--imagine it!

In entering upon an explanation of the workings of the "System," it is necessary to set forth plainly the fundamentals of finance, the few rules and inventions by and through which humanity regulates its affairs. In the beginning, of course, might was right and men supplied their wants by force, trickery, or cunning. In time the disadvantages of this became obvious, for while the stronger could overcome the weaker and satisfy desire, a combination of the weaker units acting together could always wrest the prize from the individual. To equalize things, the people got together and made for themselves rules and regulations governing the conduct of their lives and their relations with one another. This was invention No. 1: _Law_. Presently it developed that the physical barter of the commodities of labor was not a satisfactory basis of exchange; so to the statutes already in existence a new one was added providing an interchangeable token of value. This was invention No. 2: _Money_. The statute insisted that the money be of a fair and just standard, by which all the people should receive the equivalent of their labor, and no more. As conditions became more settled, there grew up a realization of the value of a man's life to those dependent on him, and of the fact that when he died his wife and his children were deprived of the livelihood his labor won for them. A new regulation was added to the code, providing that men contributing to a fund during their lifetime should be ent.i.tled at death to leave to their heirs a sum in proportion to the amount of their contribution to the fund, less the actual expense of caring therefor. This was _Life Insurance_--invention No. 3. But there were other calamities less distant than death to be guarded against, and a common fund, also based on the contributions of individuals, to aid and relieve in case of fire and kindred calamities, was organized. Hence invention No. 4: _Fire Insurance_.

And thus the fabric of civilization grew, each addition to the structure being made to cover a want which experience developed. As time went on, some of the people acc.u.mulated the fruits of labor, money, in greater quant.i.ty than was requisite for their own needs, but which less thrifty or less fortunate brethren could so profitably employ in their own affairs as to be able to pay for its use a fair proportion of what it could be made to earn. Thereupon provision was made for a common place of safety for this surplus money, a place where experts in the handling and putting to use of money could employ their talents, first, safeguarding it and, then, loaning it to others. And the law was made to say that all money put into this common place should be so guarded as to be ready for its owner when he demanded it; that its owner should receive all it earned less the necessary expense of holding it, and that the amount it earned should be only such as those who borrowed it could fairly make it earn. This was invention No. 5: _The Bank_.

As the years followed one another, "the bank" became one of the most important of the people's inst.i.tutions and grew in number and variety.

There came to be many different forms of banks. For instance, _national banks_, which, under the control and regulation of the Government, became depositories for the circulation of the Government's money and were privileged to lend money to individuals or corporations with or without collateral. Funds confided by the people to these national banks had always to be ready for their owners. A second form was the _savings-bank_, which grew out of the requirements of small depositors and was governed by the laws of its community. The savings-bank used and safeguarded money confided to it in small sums, and these amounts could be withdrawn only by their owners in person, after an agreed term of notice. The savings-bank was allowed to lend only on real estate or certain other securities, the character of which was rigidly regulated by the law. In consequence, it could use its funds for long-time loans and mortgages, so it earned larger rates of interest than the national banks. The _trust company_ was a third variation, coming somewhere between the national and the savings-bank, and was regulated, as was the latter, by the laws of the community in which it existed. The trust company, too, received deposits from the people, but was allowed a broader lat.i.tude in employing them. It was also authorized to engage in certain other business--for example, to act as manager for a deceased person's estate and even to buy and sell securities. Because of the extra-hazardous business in which it engaged and from which the other two inst.i.tutions were legally debarred, the trust company earned and paid larger rates of interest to its depositors, and the men who handled its funds were allowed to take for their own remuneration profits in excess of those derived by the custodians of national and savings-banks.

Another deficiency in the business structure growing out of the increasing prosperity of the people was next provided for. When an enterprise became so large as to necessitate several owners for its conduct, the prescribing and defining of the relation of these owners to each other and to the common property became a task of increasing difficulty. So the idea arose of welding the enterprise itself into a separate ent.i.ty which could do all the things the individual might, and yet exist apart from the individual and independent of his personal dealings and comings and goings. His ownership should be an undivided interest in the whole represented by certificates of stock or bonds, which could pa.s.s from him to another without interfering with the enterprise. This was invention No. 6: _The Corporation_. The law then provided regulations for the creation and conduct of these corporations which compelled them to keep their affairs in such shape that all could ascertain of what each consisted.

When these six organizations had been founded, the machinery for the conduct of the business of a civilized people was almost complete. But still one other want developed: with the multiplication of the corporation tokens of property, it became necessary that there should be some place where the worth of these might be ascertained either by purchase, sale, or loan under the regulation of experts. So there was created a common market-place, to which came all those who had corporation tokens of property to sell and those who desired to purchase them; and the prices these brought were announced to the world and became the measure of the value of the inst.i.tution they represented.

Rules for the regulation of the business of the market-place were gradually formulated, and invention No. 7--the _Stock Exchange_--came into existence.

With this addition, the people's organism for safeguarding and economically handling the funds of their labor to the best advantage of all concerned and without interfering with the rights and privileges of individuals was fully equipped. Each separate inst.i.tution had grown out of an actual necessity and had its own legal organic function, fully understood and defined. And there was no branch of human industry which could not be safeguarded, handled, and perpetuated through this organism, nor could evil come from the existence of any one of these seven components. The robber, the thief, and the pirate, as defences against whom they had been erected, could not seize any of them or the people's savings which they were created to safeguard, because the const.i.tution of each provided adequate penalties for such a seizure. As long as the members of the organism performed their ordained functions the fabric of the people's fortunes was safe from plunder.

CHAPTER IV

THE MAGIC "JIMMY"

It was at this stage that the cla.s.s which is now the "System"--of which the mighty robber of barbaric days was the prototype--began to cast envious eyes at the acc.u.mulated earnings of a prosperous people locked up and safeguarded against depredation, while the owners (the public) rested easy in the conviction that they had fully protected themselves against the spoilsman. The "System" reasoned: "If only a way could be devised to win control of the seven inst.i.tutions so that all the benefits the people intend for themselves may revert to me and yet I be exempt from the punishment provided for those who attempt unfairly and dishonestly to secure such benefits, I can get a much easier and surer possession of the results of the labor of the people than I was wont to when I took them by might."

A need defined is half relieved. Outside the treasure-house was the robber enviously surveying its strong walls and iron doors, its locks and bolts, specially designed to defy the felonious intentions of such as he. How safely to win his way in and possess himself of the piled-up gold was his problem. And as he waited and watched, the lawyer, at his solicitation, invented for him a magic "jimmy"--an instrument with which he could not only break through the outside door, but as easily force his way past the complex locks of the chambers inside. What was still better, this magic "jimmy" was also a license to enter upon and take possession of others' properties and use them for his own benefit. It conferred on its owner a legal privilege to steal. The robber was satisfied. The "jimmy" which the lawyer had brought him was the "trust."

All this sounds very hyperbolical and far-fetched, perhaps, but it is exactly what a "trust" is. The "trust" may also be defined as a master key to the people's financial structure, which enables its owner to enter any or all of the separate inst.i.tutions I have mentioned, and combine any or all of them, without affecting their respective organisms, into a new organization which possesses the potencies and the privileges of each, but is unhampered by the legal restrictions of any one of them. Like electricity, the exact nature of a "trust" does not admit of rigid definition, but it is a force which can be exerted only in conjunction with financial organisms, which it joins and yet releases, adds power to, and exempts from consequences. Let us suppose that two men are made into a "trust"--this human combine becomes at once free from the bondage of matter and the senses, sees out of the back of its head and pa.s.ses in and out through solid walls. It has all the combined strength and more that the two men had and all their human privileges and possessions, but it evades nature's laws as to individuals, and the laws of man both as to individuals and other material things.

To put the description in still another way, a "trust" is an inst.i.tution which endows itself with the right to use any or all of the seven inst.i.tutions of the people as the people use them, but so made that its user derives from the inst.i.tutions the benefits the people intended for themselves, and yet is immune from the legal consequences of appropriating such benefits. Two or more men make a "trust" by combining--acquiring the control of--an insurance company, a trust company, and a savings-bank. The new organization _is_ all of these inst.i.tutions, performs the functions of all of them, yet can legally do with their incomes, capital, and surpluses things which, from the very nature of each, none of the inst.i.tutions is allowed to do--the new organization is all of these inst.i.tutions until the law attempts to bring it to book; then it evades being any one of them. The trust company is empowered to lend money on speculative ventures which the insurance company and savings-bank may not do, so the "trust" lends the insurance company's vast acc.u.mulations and the savings-bank's h.o.a.rd through the trust company with great profit or tremendous loss and enjoys immunity from the consequences which should follow such disobedience of the law. Moreover, when the trust company shows a profit the "trust" appropriates it, and when a tremendous loss is sustained the insurance company or the savings-bank must bear it.

An ill.u.s.tration: A, B, and C form a "trust." A and B are president and controller of a savings-bank and an insurance company respectively. They organize a trust company with $1,000,000 capital, of which the insurance company furnishes the majority; they then elect C president and controller of the trust company, and make him their a.s.sociate or a dummy. The trust company receives $5,000,000 of the people's money on deposit. The insurance company deposits $5,000,000 of its surplus funds, and the savings-bank $5,000,000 more. The trust company now has $15,000,000 of the people's savings in its control with which by law it is allowed to do certain things; but what it does with the $5,000,000 of the savings-bank and the $5,000,000 of the insurance company the law specifically says neither one of the inst.i.tutions can do itself. The "trust" then purchases for $5,000,000 the stock of an industrial corporation. It borrows the $5,000,000 and an additional $5,000,000, which represents its own first profit, from the trust company through irresponsible dummies, depositing the industrial stock as collateral.

The "trust" next causes the trust company to issue bonds for $15,000,000. These bonds are based upon and secured by nothing of worth but the stock. The trust company offers these bonds for sale. The insurance company buys $7,500,000 of the bonds, and the trust company, through dummies, the other $7,500,000. By the operation so far the "trust" shows a profit of $10,000,000. After making this profit and the true worth of the bonds becoming known, these decline back to the original worth of the stock upon which they are based, $5,000,000, and there is the tremendous loss of $10,000,000 made. The trust company "busts," and there is a loss to its depositors of $10,000,000. This loss is divided as follows: $3,333,000 to the savings-bank, $3,333,000 to the insurance company, and $3,333,000 directly to the people, less the small amount which will be recovered from the stockholders. (These losses will be affected in an unimportant way by the $1,000,000 original capital.)

In this case the "trust" has done nothing for which those responsible for it can be held civilly or criminally liable. Neither has the insurance company, the savings-bank, nor the trust company, and yet, if there had been no "Trust" and any one of the three inst.i.tutions had made the loss directly through its own actions, the officers of that inst.i.tution would have been civilly and perhaps criminally held responsible.

The utility and convenience of the "trust" having been demonstrated, it became a popular instrument for financiers desiring to accomplish all manner of illegal purposes. Especially was it an apt tool for the "System," which in the meantime was perfecting its control of the people's inst.i.tutions. The owners of railroads running through the same territory, finding c.u.mbersome and hampering the restrictions with which the community they served had safeguarded its interests, formed "trusts." Straightway there were valuable results--the combination was emanc.i.p.ated from the regulations which had bound its individual members; compet.i.tion was eliminated and rates were raised.