CHAPTER VI
HOW WALL STREET'S MANIPULATIONS AFFECT THE COUNTRY
What is the connection between the "System" and the minor financial institutions throughout the country which are owned and controlled by groups of sturdy men who know not Wall Street and its frenzied votaries, and who are ignorant of "made dollars"? Let us see. We will take five national banks in different parts of the country, each having a capital of $200,000 and deposits of $2,000,000. One is in the farming district of Kansas; another is in Louisiana in a cotton district; a third is in the orange groves of California; in the mining district of Montana is a fourth; the fifth in the logging and lumber country of Maine. These $10,000,000 of deposits represent savings earned by the type of men who have made America what it is, and who laugh when they read in their local papers: "Panic in Wall Street; stocks shrink a billion dollars in a day." "Fools and their money are easily parted," they say, "but Wall Street gets none of our honestly earned money." Now the officers of these five banks are honest men and they know nothing of the "System," yet the day of the panic they each telegraph to their Illinois correspondent, the big Chicago bank, "Loan our balance, $200,000, at best rate." That day the Chicago bank with similar telegrams from forty-five other correspondents in various parts of the country, wires its New York correspondent, the big Wall Street bank, "Loan our balance, $2,000,000, at best rates."
Thereupon the great New York bank sends its brokers out upon "the Street" to loan on inflated securities of one kind or another which its officers, the votaries of the "System," have purchased in immense quantities at slaughter prices the millions belonging to the Chicago bank and to other correspondents of its own in Cincinnati and Omaha and St. Louis and other big cities. The decline is stayed, and then the world learns that the panic is over and that the stocks, of which the people have been "shaken out" to the extent of a billion dollars, have recovered in a day $500,000,000 of it, and that probably in a few days more will recover the other $500,000,000. Who has recovered this vast sum? The people who had been "shaken out"? No, indeed! The votaries of the "System" have made it—they and the frenzied financiers whose haunt is Wall Street, and whose harvest is in such wreckage.
The part that the five little banks innocently played in this terrific robbery was unimportant. What is important is that it was the funds of their depositors and others like them which the "System" used to turn the Stock Market and make an immense profit out of the recovery of values. It is true the banks received but two and one-half or three per cent. for the use of their balances, and their officers would scorn the suggestion that they had put any of their money in jeopardy in a Wall Street gamble. But what I have outlined happened, and has happened many a time before and since, and goes to prove my assertion that every financial institution which is taking the money of the people for the ostensible purpose of safeguarding it or putting it to use for them, is a part of the machinery for the plundering of the people.
Sooner or later, every dollar taken by the "System" through Wall Street's manipulation of stocks directly affects every man, woman, and child in the United States. Let us, for example, see how a stock slump in New York affects the owner of a small life-insurance policy in Wyoming. The shares of the American and English ocean steamship companies were bought up by the "System" at double their worth and converted into a "trust." New stocks and bonds to a number of times their value were issued and sold to the public. The great insurance companies bought many millions worth of these securities, using for the purpose the money they had collected from the policy-holders, a dollar at a time. This "investment," at the moment it was made, actually represented a loss to the purchasing insurance companies of millions of money, for millions more than the property was worth or could possibly be made worth had gone to the people who formerly owned the steamship properties, and many millions more to the "System" as its share of the swag. And it should be remembered that the men who organized the steamship trust were the men who invested the insurance company's money in its securities.
The policy-holder in Wyoming knows about the steamship trust and about the terrible loss sustained by those who invested in its securities. He does not realize, however, that his insurance company has been buying such poor stuff, for he is persuaded it is a great and noble institution, and far above Wall Street and its rash gamblers. Even when he and his kind find their yearly dividends on their policies growing less and less and their premiums rising "because of the tremendous increase in the expense of doing business," they do not dream of connecting these misfortunes with the "System's" trustifications of inflated securities; nor do they associate them with the glowing accounts of the half-million-dollar seaside palace built by the insurance company's officer who entered the employ of the institution a few years before, with his salary for his fortune, and who is now pointed to as an example of thrift, being worth from ten to fifteen millions.