Volume Vi Part 17 (1/2)
Some contended for an issue of paper money and after a long discussion by the officials of the Treasury, it was decided to sell $50,000,000 worth of Panama two per cent bonds and $100,000,000 worth of three per cent notes in the hope of calling from its hiding-place the money which was being h.o.a.rded. The result of the venture was not satisfactory and the loan operations soon ceased.
Gradually financial affairs righted themselves. The emergency currency was redeemed, the runs on banks ceased, confidence slowly returned, and business picked up, although by the middle of 1908 the volume was scarcely half of what it had been a year before. The number of bank failures had been comparatively small. Only twenty-one banks were obliged to suspend payment, while in 1893 the number was 160.
[Ill.u.s.tration: Hundreds of people in the street.]
The panic of 1907. Wall Street, in front of the Sub-Treasury Building, when the run on the Trust Company of America was at its height.
Naturally there was much discussion concerning the defects of our financial system, of the needs of elastic currency, of a central bank, etc., when the Sixtieth Congress met in December, 1907. Several bills were offered for the establishment of a central bank; some for the issue of a special currency by the government; others for the legalization of certificates and currency created by clearing-house a.s.sociations. The aversion of the people to the centralization of the banking business in the hands of a few of the great money powers made the establishment of a central bank out of the question.
The bills which were discussed at any length were the Fowler Bill, the Vreeland Bill, and the Aldrich Bill. The first was discarded, although it had merits, and the two branches of Congress were unable to agree upon either of the others. The result was a compromise measure which became the Aldrich-Vreeland Act.
The important provisions of this act are as follows: (1) Ten or more national banking a.s.sociations, each with an unimpaired capital and surplus of not less than twenty per cent and an aggregate capital and surplus of not less than $5,000,000, may form national currency a.s.sociations. These a.s.sociations are to have power to render available, for the basis of additional circulation, ”any securities, including commercial paper, held by a national banking a.s.sociation.”
(2) To obtain this additional circulation, any bank belonging to a national currency a.s.sociation having circulating notes outstanding secured by United States bonds to an amount not less than forty per cent of its capital stock, and having the required unimpaired capital and surplus, may deposit approved securities with the currency a.s.sociation and be empowered by the Secretary of the Treasury to issue additional circulating notes to an amount not to exceed seventy-five per cent of the cash value of the securities. If the securities are State or munic.i.p.al bonds the issue must not exceed ninety per cent of the market value of the bonds.
(3) The banks and a.s.sets of all banks belonging to the currency a.s.sociation are liable to the United States for the redemption of this additional currency, and the a.s.sociation may at any time require that additional securities be deposited. All banks are held liable to make good the securities of any bank in the a.s.sociation.
[Ill.u.s.tration: Hundreds of people in the street.]
The panic of 1907, Run on the State Bank, Grand Street, New York.
(4) The total amount of circulating notes outstanding for any bank shall not at any time exceed the amount of its unimpaired capital and surplus, neither shall the amount of such notes in the United States exceed $500,000,000 at any time. The amount issued in each State shall bear the same relation to the total amount issued in the United States as the unimpaired capital and surplus of the banks of that State bear to the unimpaired capital and surplus of the banks of the United States.
(5) The tax on circulating notes secured by United States bonds bearing two per cent or less shall be one-half of one per cent; if secured by United States bonds bearing more than two per cent, the tax shall be one per cent. If the securities are other than United States bonds, the tax shall be at a rate of five per cent per annum for the first month and afterward an additional tax of one per cent per annum for each month until a tax of ten per cent per annum is reached.
(6) The redemption of the notes may take place by the banks depositing with the Treasurer of the United States lawful money to replace the securities deposited.
(7) The formation of a national monetary commission to inquire into and report to Congress necessary or desirable changes in the banking and currency laws was provided for.
CHAPTER XI
IMMIGRATION AND EMIGRATION
[1907]
Since the organization of our government nearly 29,000,000 foreigners have come to the United States. The flow of immigration first a.s.sumed large proportions during the decade 1831-1840 and since that time one wave after another has reached our sh.o.r.es. The last one, and the one which has caused the greatest alarm, gathered force about 1897 and reached its full tide in the first decade of the twentieth century, when over 8,000,000 aliens landed at our ports.
During this period (1820-1910) the character of immigration has changed.
Prior to 1880 the greater part of it came from northern Europe, but since that time the number has constantly fallen off, and the flow from southern Europe has greatly increased. During the decade 1871-1880 Austria-Hungary, Italy, and Russia sent only 181,000 of 2,262,000 aliens who landed in the United States--about eight per cent. During the decade 1901-1910, 8,130,000 immigrants came to our sh.o.r.es, and of these 5,800,000, or over 70 per cent, were from these three countries. In 1901 Austria-Hungary sent, 113,400; in 1907 about 338,500, but owing to the pa.s.sage of the immigration law in 1907 the number fell abruptly, but by 1910 had again increased to 260,000. The same is true of Italy. In 1901 about 136,000 came; in 1907 nearly 286,000, and in 1910 about 215,500.
Russia sent 85,000 in 1901, some 260,000 in 1907, and 187,000 in 1910.
The numbers from northern Europe do not approach these. The immigration from the British Isles does not reach the 100,000 mark; from Germany only 30,000 come yearly.
Causes for this influx are varied. Many come desirous of owning homes, a pleasure out of reach in their home country on account of high prices.
Free inst.i.tutions attract others. A land which offers free schools to all regardless of race or creed, religious freedom, and the opportunity to play some part in the political life of the state is naturally attractive. Some come to escape military service, others with the idea of making money and returning to their native land. Density of population and the accompanying excessive compet.i.tion in the struggle for existence also play a part.
Hundreds of letters telling of the general prosperity in America and contrasting this with the condition at home, do their work with the disheartened peasants. It is said that half of our immigrants come on tickets paid for by friends in America. The large employers of labor, and even the States themselves, are constantly calling for laborers.