No one can, I think, deny the power of the Group after a fair consideration of these incidents. Let us see how this power was exercised as regards the city of New York.
The Comptroller in a report published in November, 1907 (pages 5 and 6) showed that the city had not only voted, but appropriated over $195,000,000 for, public works, much of which was urgently needed by the city and some of which ought to have been completed four years before. Yet this city of four million inhabitants, whose property is underassessed at $7,000,000,000, was not able to employ its thousands of unemployed at this urgently needed public work because, as Comptroller Metz stated at a crowded meeting, Mr. J. Pierpont Morgan would not give the money to do it with, and the city could get it from no one else.[126]
Morgan allowed the city in October to issue $30,000,000 of its bonds at 6 per cent, but refused to permit any further issue until the last day of January. On January 29th, according to the New York Sun,[127] Mr. Morgan relented, and the Mayor of the city, the Comptroller, the Deputy Comptroller, the Corporation Counsel, and the City Chamberlain were summoned to Mr. Morgan's library. There at last the imperial consent was given; the richest city in America was allowed by Mr. Morgan to issue its own bonds, but not in an amount large enough to permit of any public works. So the unemployed were left to tramp sleeplessly through our streets.
The Wall Street Group found another important element of profit in the fall of securities during the panic. It has been said that securities fell on an average 40 points when the Group sold securities between January and March, 1907. Mr. James H. Brookmire estimates that they fell another 16 points during the panic. The Group seemed informed as to the exact moment at which securities had reached the bottom price; that is, they knew the moment when the panic was intended to come to an end. I was fortunate enough to be informed by a member of the Group at the right moment. I purchased Northern Pacific stock upon the advice given and, in the course of the year, made 50 per cent profit thereupon. The Group that sold between January and March, 1907, was in a position to buy back stock at less than one-half what they sold it for and, if they chose to realize at the present time, it would make an additional 50 per cent. In other words, it was in a position to make over 100 per cent upon the whole transaction. When we keep in mind the enormous figures which the operations of the Group attain, the amount of profit realized upon this amount alone can be imagined.
I do not wish to be understood as pretending that the facts marshalled in the foregoing pages constitute conclusive proofs that the Group either made money by the panic, or withheld cash and credit for the purpose of making money. It is possible that the sales of stock between January and March and the repurchase of stock in November were effected solely with a view to the public welfare; it is possible that the Knickerbocker Trust Company was allowed to go to the wall solely through error in judgment; it is possible that the Steel Trust reluctantly purchased the Tennessee Coal and Iron Company as Messrs. Gary and Frick explained to the President—solely for the purpose of "stopping the panic." But practical business men are not accustomed to concluding in this fashion. When the keenest appetites of humanity are whetted to the utmost and opportunities are extended for the satisfaction of these appetites, we generally conclude that these opportunities are not refused through pure asceticism; at least not by the Wall Street Group.
When Mrs. Forrest brought action against her husband, Edwin Forrest, the actor, it was proved that the defendant had been seen visiting a house of ill fame; after he entered, a third story front room was lit; the room remained lit for about an hour; the light was extinguished at the end of this period, and a few moments thereafter Mr. Forrest was seen leaving the house. His counsel maintained that this was not conclusive evidence against him; that his profession obliged him to study human nature in every rank of life at close quarters, and that it had not been proved that he visited this house for any other purpose. Charles O'Conor in responding to this part of the defendant's argument, said: "I can see the defendant walking up the steps of this house of ill fame; I can see him enter and ushered into a room full of human nature exclusively of the female sex ready and willing to be studied at close quarters; I can see him select the one which he believed to be able to furnish the best opportunities for this purpose; I can see the two mount the stairs to the third story front and light the gas; and I can see them together there devote an hour to meditation and prayer." The jury was satisfied with the evidence and rendered a verdict for divorce in favor of Mrs. Forrest.
Whatever be the opinion, however, as to whether or not the Wall Street Group withheld funds to effect its purpose during the panic; or whether it made money out of the panic, one thing is perfectly certain—it was in a position where it could have withheld money; it was in a position where it could have made money out of the panic. The question the community has to decide is whether it is willing to leave this power and this temptation to any group of bankers—either to the saints now in control of Wall Street, or possibly to their less worthy successors.
In one of the standard English works on Money,[128] George Clare points out the exorbitant power of the Secretary of our Treasury:
"The New York Market is in fact at the mercy of an autocrat who, having full power to loose or bind large masses of currency at his absolute discretion, decides for himself whether and when money shall be cheap, and whether and when it shall be dear."
This autocratic power is to-day at the disposal of the Wall Street Group—not owing to any improper influence of the Group; not through any improper conduct of the Treasury; but as a necessary result of existing conditions. And if Mr. Clare is right in criticising the wisdom of granting to the Treasury the autocratic power it now enjoys, how much more dangerous is it to grant this autocratic power not to an official who can be removed, but to a group of financiers who cannot be removed? For the power exerted by the Wall Street Group includes not only all the resources of the Treasury, but all the resources of the entire country. It holds the life blood of our economic system in its hands and, because it controls this life blood, it controls politics, education, morals, and religion. And this group of men was not elected to the position it now enjoys by the majority of our citizens; it has usurped the position by virtue of its control over silver and gold.