252-713-2m-3467 
BULLETIN 

OF 

THE UNIVERSITY OF TEXAS 

NO. 284 
FOUR TIMES A MONTH 
EXTENSION SERIES 34 JUNE 22, 1913 

PUBLIC DISCUSSION DIVISION 

OF THE 
DEPARTMENT OF EXTENSION 

Intercollegiate Debates and Bibliographies 

On 

Old Age Insurance 

And 

Banking and Currency Reform 


P·UBLISHED BY THE UNIVERSITY OF TEXAS 
AUSTIN, TEXAS 

Entered as second-class mail matter at the postoffice at Austia, Texas 

PRElrACE. 
This bulletin contains the affirmative a.nd negative speeches of the University of Texag debating teams in the intercollegiate de­bates of 1913, together with bibliographies. The main speeches onl31 a1·e incl11(led, arranged in tl1e order of affir111ative-negative in each case. 
The Universitv of Texas is a. member of two intercollegiate debat­
~ 
jng leagues: The Triangular Debating League, consisting of the State Universities of Colorado, Missouri, and Texas; and the Penta­gonal League of Southern State Universities, consisting of the State fJniverfities of Arkansa~, I1011isiana, }[issjssippi, '11ennessee, and Texas. In the Tr!angular Leag11e the question for debate 'vas, Re­8olved, that a Policy of Compulsory Old Age Insurance should be adopted by the Federal Government, Constitutionality 1vaived. Mr. Eugene H. Cavin of Galveston a.nd. Mr. Dou~la.s Tomlinson of Hillsboro sup.ported the affirmative of this question in a debate witl1 the University of Co1orado, held at Austin on April 18, 1913, the negative winning by a vote of t\ro to one. On the same date a Texas team consisting· of Mr. Charles I. Francis of D·ent.on and Mr. Geor~e W. Dupree of Clairette upheld the neg:ative of the san1e question in a debate with the Universit}r of Mis8011ri at Col11mbia, ~fissouri. the Texas team winning-a unanimous deri~ion in this debate. 
In the Pentae-onal League series the question for,, debate wa.s. 
Resolve.d, tha.t fhe Plan for a National Reserve Associa.tion ~~ pro­posed by the Uriited States Monetary Commission offers a desirable remedtt for th.e defects of ou.r present Ba.n.kin.g a.nd CurrenCJ/ Sys­tems. Mr. Theodore A. Gatchell of Austin and Mr. Svlvan Lang of San Antonio upheld the affirmative side of this· question in a debate with the University of Mississippi at Austin, Texas, April 11, 1913. The Texas tea.m won a unanimous decision. On the same date a team from the University of Texas, consisting t)f Mr. Winfree W. Meachum, Jr., of Anderson and Mr. Tom B. Ramey, ,Jr., of Tvler upheld the negative of the same question in a. debate with the Universitv of Tennessee at Knoxville, Tenne~se. In this debate the affirmative side won the decision by a vote of two to one. 
It is interesting to 11ote that two of the members of the Texas teams were former district winners in the debates of the State De­bating and Declamation League. 
UNIVI·~RSITY OF TEXAS lNTERCOLL'EGIA'l'E DEBATING TEAMS, 1913. 
In order from left to right, Texas-Colorado Debate: Eugene H. Cavin and Douglas Ton1linson. 'I exas-Missouri Debate: Charles I. Francis and George Vvr. Dupree. 
UNIVERSITY OF TEXAS· INTEBCOLL"EGI.A.TE DEBATING 'l,EA:MS, 1913. 
In order from left to right, 'rexaR-1"Iississippi Debate: Theodore A Gatchell nnd S~1lvan l~ang. Texas-Tennessee Debate: Tom B. Rame~ and Winfree W. Meachum, Jr. 

COMPULSORY OLD AGE INSURANCE. 
FIRST AFFIRMATIVE SPEE.C·H. 

BY EUGENE H. CAVIN, OF GALVESTON, TEXAS. 

Mr. Chairman, Honorable Judges, Ladies and Gentlemen: 

In offering the plan of old-age insurance which we of the affirma­tive advocate tonight, we o·ffer a plan which En!!land, after forty years of experiment with industrial insurance, has seen fit to follow as ±he best remedy for the relief of her old-age poor; a plan which has operated in Germany for half a century, and which has been found to work so successfully that this year the plan in Germany was extended three-fold; a plan which Denmark, which Fra.nce., which every great civilized country in the world to-da.y, with the single exception of these United States, is successfully operating and constantly extending. 
Briefly, the plan is this: Throughout the laborer's active life, a small monthly premium is to be paid for the support of old age. Of this small premium, the laborer pays a part, the employer pays a part, and the government pays a pa.rt. The money thus raised is to be used for supporting those who would otherwise be objects of charity in their old age. 
In the discussion this evening, it is my purpose to present th~ needs of gome plan for the relief of old age poverty in this country, and the intrinsic merits of the plan which we propose, while my colleague will describe the successful working of the plan in every great and civilized country in the world, except in these United States. 
Year by year, as this country grows. older, there is a gradual in­crease in the percentage of the old people in our population. The census of 1910 shows that from 1900 to 1910 the number of people in this country who had reached the age of 65 and over increased 869,000, or according to population, an increase of two-tenths per cent. A large number of this steadily increasing class are too poor to provide for themselves. This offers the steadily increasing prob­lem of providing for them. 
There are in this country 18,000,000 wage earners. There are 1,250,000 former wage eaniers who have reached the age of 65 in want, and are forced to depend upon public and private cbarity for support. Now, if everyone of these 1,250,000 old age depend­ents had a monthly income to take care of him, there would be no 
•'Jld age poverty. If we could give just such an income to ever)1 
[Tn·iverS'ity of Texas Debates 
old age dependent) it would certainly be desirable; if we could give this income at a very small cost, it would be more desirable; if we could give this income at no additional cost at all, it wo·uld certainly be most desirable. Let us see. 
In an effort to take care of these 1,250,000 former wae-e earners who have reached the age of 65 and who are in want, the people uf this country are spending annually in nublic and private chnrity, $220,000,000. Yet, although we a.re spending enough money to adequately ca.re for 011r old-age poor, the3r are not a.dequa.tely ca.red for. Why? Because o·f the la.ck of a systematic method for col­lecting and administering the money which is now being spent in a l1aphazard manner! Thus we see that this situation exists: We have 1,250,000 old age dependents. We spend enough money to provide for them. B11t they are not provided for. Whv? Because 've have no systematic method for collecting and administering the money which we are spending ! Now, ladies and gentlemen_ \vha.t is it that we propose to do? We simplv take the 1,250,000 old age dependents we have. We then take the $220,000,000 we are spending. And what we propose to do is to provide a systematic method for collecting and a:dministering this money instead of allowing it to be wasted in the present haphaza.rd manner. 
Can such a plan be worked ? Let us see. 
We have 18,000,000 wage earners. We are spending $220,000,­000 to take care of the 1,250,000 wae-e earners who r&ach old age dependency. But we are spending this m·onev und-er a very haphazard plan, the administration of which costs a waste­ful per cent of the capital. But we propose to do this: Dividing this $220,000,000 by 18,000,000 wage earners, we find that $12 }Jer wage earner must be raised per year. Dividing this $12 per year by 12, we find that $1 per wage earner must be raised per month. Dividin~ this $1 per month by three, that is, the pa.rt of the premium paid by the government, the employer, and the em,.. ployee, we find that the monthly premium which must be pa.id in order to put our plan into successful or>eration is 33! cents. Now~ how about the cost of administration? Why even in Germanv, the country against which the opponents of our plan complain most bitterl,r, the administration only costs 7! ner cent. So we find that under our plan, the $220,000,000.00 necessary to ~upport the aged poor, can be raised a.t the small cost of a premium of 331 cents. Furthermore, under our pla.n.. the admin­istration of this money only costs 7! per cent, whereas, under the present plan the administration of this money costs manv times as much. In other words, we simply replace chaos with system. Olrr 
Co1np1tlsory Old Age Insurance 
}Jlan is not one cent of additional cost. We simply propose that the money we are now spending shall be collected and administered in a systematic manner, instead of the present haphazard manner, in order to save the waste of misdirected expenditure. 
How much b-etter is our plan than the present plan of individual saving! Under the present plan of individual saving, each laborer must provide all the money which will be needed to c-are for him in his old age. But only one out of every fourteen ever reaches the age of 65 years, and needs this annuity. Therefore, the present plan is costing the laborers as a class, fourteen times as much BB is necessary. To illustrate: Suppose fourteen laborers a.re serving under the present plan to provide for old age depend­ency. Suppose, for example, $100 apiece will be needed to sup­port those who reach old age dependency. Now we have seen that only one of these fourteen laborers reaches old age dependency. Eo, v.1hile these fourteen laborers must each save $100 apiece, mak­ing a total of $1400 which must be saved, ·vet only one of them reaches old age dependency, and, therefore, only $100 is needed to provide for old-age dependency of this class of fourteen. So we ~ee that in providing for old age dependency under the plan of individual saving, for every $100 needed, $1400 must be raised. 'rherefore, under our plan, $1 of savings will go as far as $14·of savings will go under the present plan. Then, since our plan does everything that the present plan of individual saving could do, and. only costs one-fourteenth as much, isn't our plan better than the present plan? But granting the merits of our plan, some have questioned the right of the government to make it compulsory. Ladies and gentlemen, the government itself is based u-pon the right of society to control individuals where the welfare of society demands it. Individuals are compelled to pay taxes. Why? Because the welfa,re of societv demands it. Individuals should be compelled to pay the premium on an old-age insurance policy ! Wh)7 ? For the sa.rr~e reason that the payment of taxes is cornpu1­sory: Because the 'lt1elfare of societ'I/ demands it! Because the rights of the individual are subordinate to the rights of society! 
But let us see if the compulsory feature we propose is as bwd as its opponents would have it seem. Fearing compulsion be­cal1se of the way it sounds, it opponents say: Let the plan be vol­untary. But a voluntary plan could only succeed if the laborers wou]d voluntarily take advantag-e of it. Then, if the laborers will voluntarily take advantage of the plan anyhow, we can do no possible harm by adding a clause which requires them to do so, because you do not affect a ma.n when you require him to do that 
Universi,ty of Texas Debates 
which he will do anyhow. Suppose the law which requires men to wear clothes when they go out on the street were to be repealed ! Yet surely we would all wear clothes voluntarily. Then suppose that the next day the law requiring men to wear clothes we1·e to be reenacted ! How much would th,at affect us? Not one jot! Wh}r? Because it would simply require us to do that wl1ich we would do anyhow! 
So, if our opponents attack this compulsory feature_, they :find them~elves in this embarrassing predicament: If the voluntary plan will not succeed, then the svstem, if adopted at all, must be compulsory. On the other hand, if the voluntary -plan will succeed .. it must be l1niverRally adopted. If it will be universally adopted anyhow, then the addition of a clause requiring it to be adopted will not in fact coerce anybody. 
Now, having seen that the compulsory feahire of this plan is not at all the p·aternalistic bogie its opponents would have you believe, we next naturally inquire: Is the compulsory feature sim­11ly a harmless a.ddition, or will its adoption do anv affirmative good ? Even if the experience of other countries had not demon­strated that the compulsory feature is necessary to the successful adn1inistration of the plan, the compulsory feature would still be rendered desirable because of the money it will save. Any volun­tary system must be carried on by solicitors. Insurance company statistics show that it costs 40 per cent of the premiums to solicit and collect them. Therefore, any voluntarv nlan would cost 40 per cent more than will our -plan, which dispenses witl1 the services of these solicitors and collOOts the insurance through the ein·ployers. 
If a voluntary plan, then, would succeed, the addition of a com­
pulsor~T featl1re co11ld do no harm; since the compulsory feature is 
necessary to the sl1ccessfl1l administration of the plan, and, f11rther­
1nore, since the comp11lsory feature will save to the aged poor 40 
per cent of their savings v;hich 11nder a voluntary plan they would 
lose, can any one seriously contend that the compulsorJr feature 
is not to be desired? 
B11t aside from the good which thus directlv flows from the 
plan, there is another, I would almost say a greater reason for its 
niJoption. Picture to yourselves the worn-out toiler, turned from 
the 1·anks of the industrial army beca.use he is too old to work·. 
Where does he go when the day of his usefulness is p·ast? Some­
times he goes to the poor-house; sometimes he goes to the street­
corner to beg; sometimes he goes to the home of some poo1' son or 
daughter, where, although he knows there waits the loving wel­
Compulsory Old Age lnsttrance 
come, he also knows he is too heavy a burden. So the burden of the old man's support falls at last upon the father of a fa.mil)' upon whose shoulders too many burdens already bear do\\in. What is the result? In thousands of cases the children of this family must give up their education and go to work. The burdens must be borne! The child must help ! 
And of wh-a.t avail in such cases, let me ask you, are ·your co111­pulsory education and your child labor laws? What can they do when the wolf must be driven from the door? A thing must be possible before it can be done. Give us this system. Give this old man his insurance policy, and let him go to that home not as a burden; it may be as a help. Give the child of this home a chance, and let his footsteps turn from the factory whistle and answer the school bell. Then will yo11 build up a healthy citizen­ehip of :free Americans ! 
Will you reject this reform, and turn these thousands of chil­
dren away from the door of equal opportunity which we Americans love to boast is open to all? Will you reject our plan when '\Ve l1ave sh-0wn you that there is a steadily growing need for some plan for the care of the aged poor in this country, beca11se the percentage of aged poor among our people is steadily increasing; that our plan makes adequate provision, and without additional cost_, because it simply means that the money which we a.re now spending improperly, shall be spent properly; that our plan j~ better than the present plan of individual saving, because our l)lan does everything that the present plan does and onlv costs the laborer one-fourteenth as much~ that the compulsory featu1·e is to be desired, because it harms no one.. is necessary to the successful administration of the plan, an·d will save to the aged poor fortv per cent of their sa.vings, which under a voluntary nla.n would have to be paid to solicitors; that it will relieve thousands of families of a burden which will enable the children of these fami­lies to go school. 
It is for these reasons, to~ether with the fact that compulsory old age insurance has been adopted with marked success in every civilized country in the world.. except in these United States, that we of the affirmative submit that the plat: is necessary, practical and just, and should, therefore, be adopted in this country. 
T.Inive1·S1~ty of Texas Debates 
FIRST NEGATIVE SPEECH. 

BY GEORGE M. DUPREE, OF OLAIRETTE, TEXAS. 
}fr. Chairma.n, Ladies and Gentlemen: 
A system of compulsory old-age insurance, administered by a host of Federal officials, reaching out over f orly-eight states of diverse interests and different economic conditions, involving the incomes of twent.31-five million laborers, in order that a few tho11sand workmen may become so-called financially independent­this is the proposition which the affirmative is called upon to sup­1>ort. It must be understood in the beginning, that the q11estion is not whether this old-age insurance is better than our present eon.ditions, but whether or not such a system recommends itself to the American people as a fixed governmental policy. Do yOll know, gentlemen, that in Germany under compulsory old-age i11surance, pauperism is actually increasing, while in this country, nccording to government statistics, pauperism is decreasing? Do you know that the countries adopting old-age insurance have made it a mere incident of unemployment, accident, invalidity and otl1er phases of insurance? Do you know that every nation adminis­terin~ forms of old-age relief has ado1)ted that policy? We· of t!1e negative oppose the adoption of such a measure for the following reasons: 
First: The cond.itjons of our societv •/ are not such as to war­
. 
rant the adopt.ion of the proposed plan. Second: .li. system of compulsory old-age insurance admin­istered by the Federal Government is inexpedient. Third: A system of compulsory old-age ins11ra.nce administered by the Federal Government is im,practieable, and, 
Fourth: A consideration of the evils that would arise from the adn1inistration of such & system does not recommend its adoption as a desirable remedial measure. 
It is my purpose to show that this system is unnecessary a.nd inexpedient. My colleague will show that such a system is im­practicable an·d l1ndesirable. 
The supporters of compulsory old-age insurance must show . that tl1e conditions are such as to warrant the adoption of this svstem in the United States. They must show that the proposecl plan is in conformjty with ...t\.merican customs a.nd ideas, a nil that s11ch a measure, considering the social forces now at work, will so]ve the problem of o.Jd-age dependency in an expedient, 1detSirable 
Oompttlsory Old Age Insurance 
and praeticable manner. We wish to provide for such denendents, hut it does not necessarily follow that we should adopt the plan proposed by the opposition. Let us investigate the necessity for adopting any such plan. 
The American laborer is not to be compared with those of other nations. He has a social standing, a force of organization behind him, and the individual influence of social welfare of which no other nation can boast. Our ,dependent workmen are now cared for by mediums of support based upon our peculiar ecc~omic con­ditions and American means of relief,-mediums direct in their nature, relieving the individual laborer according to local condi­tions. 
An organization characteristic of our American methods is the 
United Charities. This agency, though still in its infancy, is the 
real basis for the solving of our poverty problem without resort 
to a plan not in conformity to our American ideas and customs,­
a medium having for its aim the better conditions of the poor 
and for it,s basis the solving of social diseases by trained stl1dents 
of such conditions. Whatever its faults ma.y be, there 'vill be 
remedies in the future, for the American laborer is vitally inter­
ested in this question. The purpose of the American inediums 
is to allow individual responsibility, to furnish the motive for 
encouraging the laborer to provide for his future welfare, and 
when he fails, to extend, to him the needed aid. 
But aside from the gigantic social forces which, when estab­
lished, will alleviate our old-age problem in accordance with our 
local conditions and industries, there are certain fundamental 
objections to the expediency of the proposed measure. The opposi­
tion wish to impose this Federal syst~m without re!!ard to our 
diverse interests and different economic conditions. France, Den­
mark, Australia, England and other nations have a.dopted forms 
of old-age insurance, but did they adopt the insurance policy 
which Germany administers? No, they have adopted policies 
peculiar to their own economic conditions and industrial labor. 
Germany, a manufacturing nation, adopted her insurance to meet 
the needs of such a class of workmen. Denmark, a dairying cen­
ter, has conformed her insurance to meet the needs of this class; 
Australia, an agricultural country, has adopted a svstem to-pro­
vide for this principal class of laborers; England a manufacturing 
and commercial nation, has provided a medium to meet the needs 
of that larger class of workmen. Those nations with mining as a 
principal industry must conform their insurance to meet that 
14 [ln·iversity of Tezas Debates 

particular class of employees. Texas represeni:s a greater diversity of interests and conditions than all Germany. New Jersey is closely allied to Denmark in the conditions of its labor problem; Kentucky or any of our agricultural and stock-raising states pre­sents economic conditions of labor much resembling those of Aus­tralia; the New England S1tates presents the ma.nufacturing and commercial interests that are to be found in Great Britain. Yet the opposition propose a Federal system operating uniformly in the agricultural, manufacturing, the dairying and the mining sections of the United States! They suggest a scheme which proposes to unite the labor conditions of Germany, Denmark, Australia and England-all of which exist in the United States under one iron-clad system of insurance, while each of these countries has found it expedient to adopt that insurance policy best suited to their labor interests. 
But the greatest evils of the Federal compulsory old-a.ge insur­ance system are not that it is unnecessary, nor that it is incapable of adapting itself to varying economic social conditions, but its greatest objection is to be found in the complexity which is inher­ent in the administration of such a law. Germany, after a practi­cal experiment of twenty-five years under the most favorable condi­tions, is confronted with these three indictments by Mr. Frieden­burg, an organizer of the system, and for years President of the Imperial Commission. He says, first, that the state insurance, specifically designed to replaee pauperism and charity, is itself merely pauperism under another form; second, that the systen1· has fostered to an incredible extent the German evil of Bureaucratic formation, for, seemingly sound in theory, it has become a burden to the German nation on account of its complex and intricate aclministrative machinery; and third, that the whole system has become a hot-bed of fraud and corruption, and, therefore, a source of demoralizing influences. 
Compare, if you please, the facilities for ad.ministering such a law in Germany with the facilities that exist in this country, and you ca.~ _not help _but see that the evils which have developed in that m1l1tary nation, ll~ed to the rule of an iron hand, would be augmented in this country one hundred fold. Consider for n moment the fact of a Federal system of comnulsory insurance reaching out over forty-eight states-of which Texas alone has more varied economic conditions and a wider range of industries and population than the entire German Empire. Consider the vast amount of clerical work required for the w~ekly assessment 
Oompuls01ry Old Age Inswrance 

scheme; the hoard of collectors, inspectors, committees, bureaus, and courts required for the administration of the plan. Consider the opportunity offered for political pull, for the corruption of officials, and I believe that you will realize the expediency of rejecting such a measure as is proposed. On the dockets of the German Oourls to-night there are four hundred thousand insurance c,11ses demanding adjudication, and although the assessments against the employers have constantly increased, the cry of the masses on the one hand is still heard that ''Capital is the oppressor of labor. We demand a fair division of the profits of indns~y.'' On the other hand, we hear the quiet warning voice of the ~tudent of political economy, an·d the admonition of the patriot, that ''The moral fibre of the people is weakening, and the spirit of class hatred is becoming more intense.'' So great has become the complexity of the German system, so numerous the evils arising under the administration of the law, that students have been led to character­ize this scheme as ''the cancer which is destroying the vitals of our country.'' 
Now, ladies and gentlemen, if there exists in the United States to-day these great remedial agencies to which your attention h~ been directed, and which promise to effect a desirable solution of this problem in the future, in conformity with American methods and customs, then the plan of the affirmative is wholly unnecessary. That the plan of a compulsory old-age insurance system in this country is inexpedient may readily be seen when one takes into con­sideration our diverse interests and varied economic conditions, our different standards of living and wages paid to American laborers, and finally, the plan is inexpedient because of its com­plexity of administration and its effect upon individual character. If my colleague can show that it is both impracticable in admin­istration and undesirable in its effects upon the individual and upon our citizenship in general, then we ask you to reject a system which is not onlv incompatible with ·our varied economic conditions_, but foreign to the social tendencies of our country, to the charac­teristics of our citizenship, and to the policies of our government. 
SECO.ND AFFIRMATIVE SPEEC·H. 

BY DOUGLAS TOMLINSON, OF HILLSBORO, TEXAS. 

The most accurate insurance statistics show that for everv one 
. . 
. 
thousand persons livinj? at the af!e of twentv, five hundred will be Jiving at the age of sixty-five, a.nd two hundred of these will he 
Universi·ty of Texas Debates 
in poverty and want. There are in this country to-day 1,~50,000 human beings with human flesh a·nd blood and hearts who at•e suffering the miseries of old-age poverty, too old to work any more_, begging or ,dependent. 
My colleague has shown in dollars and cents that these aged poor can be cared for under our plan without additional cost what­ever, because our plan replaces the present unorganized wasteful­ness with a11 efficient ~ysten1. Our plan will solve the p·roblem. 
All other plans are admitted make-shifts. No other plan in the 11istory of the world l1as ever pretended to solve the problem of old­age dependency. In the history of mankind, only three other gen­eral plans have ever been offered: first, pensions or insurance by pri­vate corporations like the Steel Trust; second, :Free Government Pensions; and third, Voluntary-instea.d of Comp.ulsory-Govern­ment Insurance. 
Of these three plans, pensions for aged employees by private cor­pora.tio11s is the worst, because many corporations use the scheme not so much to provide for their aged employ~es as to ad.d to tl1e company's profit. For example, the Cambria Steel Co1npany m·akes a profit of $11,822 a year from their philanthropic old-age pension department. Further, old-age insura.nce for employees b3r private corporations prevent.s mobility of labor. The laborer 1nust stay with his one company continuously for froip. fifteen to forty yea.rs in order to get his insurance ; he must stay with bis company no matter if labor is little needed there and great indus­tries are crippled for lack of labor elsewhere; if the laborer is dis­charged or quits he loses his old-a.ge pension forever; he is tied to the one company, regardless of sanitary con·ditions, regardless of the kind of work to which he ma.y be shifted; he becomes a kind of chattel of the company, especially during his declining years, because if he leaves th.eir service he can never hope for an old-a.ge pension. In brief, insurance or pensions for aged employees by private corporations would tend to reduce free American laborers 
to the position of the serfs of the Middle Ages. Old-age pensions by private corporations adds to the profits of the corporations, but from a social standpoint this plan is a bitter failure. 
Free Government Pensions is the second plan. In this country we know what a pension system means; it means freely voting money out of the government t.reasurv into the individual pocket. To relieve old-age dependency we would have to give a free pension to every needy and l1eserving old person of the nation. Our oppo­nents can not defend such a system. for this country because the cost ·would be prohibitive, and because our experience with military pen­
CompulsO'fy Old Age Insurance 
si?ns sho'Ys, to speak plainly, that many congressmen buy votes with pension money. Fifty years removed from any serious war~ we are spending more than $158,000,000 a year in pensioning mostly ''old soldiers'' who never smelled gunpowder. Why? Because they vote for the man who will vote them the monev. Now, adopt the universal policy of voting money out of the gov­ernment treasury into the individual pockets of all aged persons. and there is before each politician and each party the constant temptation to attract votes by offering larger pensions to each per­son, and by lowering· the age limit offering free pensions to larger numbers of people. The fact that many congressmen do not vote against excessive military pensions when only the old soldier vote is involved shows the danger of beginning the universal pension policy involving all voters. Our opponents will. not defend such a system unless,like drowning men, they catch at a straw. Our plan of insurance guards against this danger by making each person help to pay through early life for the annuity he is to get in old age; thus there is no temptation to the la.borer to vote for a larger annuity that he needs for his own protection, because he himself has to help pay for it during long yea.rs before he can expect the benefits. England tried the old-age pension system for four years and gave it up to adopt our plan of compulsory insurance. The free old-age pension system is a failure. 
For relieving old-age poverty, only one other plan has been tried in the history of civilization. The third plan is that of voluntary rather than compulsory old-age insurance by the government: offer old-age insurance to all, just as under our plan, but do not requjre the laborer to take ad.va.ntage of it; let him take advantage of it voluntarily. ~rhis plan looks so good on its face that every nation has tried it first, but each nation has in time abandoned tbe voluntary plan to accept our compulsory plan. The reason is clear. 
Un·der the leadership of Gladstone, England adopted the plan of voluntary old-age insurance by the govemment in 1864. Prac­tically no one took advantage of it. In 1872 an expert committee w·as appointed to revise the plan, another expert committee a.gain revised the plan in 1892. England tried every variety of volun­tary old-age insurance, a.nd in all the fortv years literally did not write as m-uch insurance as the London Prudential writes in t.en days. France and Denmark had the same experience, and dropped voluntary old-age insurance to accept our pla.n of compulsory insur­ance. 
Massachusetts has recently inaugurat.ed the voluntary insurance 
University of Texas D.ebates 
system and has issued only fifty-six oid-age policies. Wisconsin adopted the voluntary system and, at the last report I could get, so few applications for insurance had come in that their bureau had not even begun to issue policies. Canada tried the volunta.ry plan, sent broadcast over the Dominion their advertisement bulletin on ''Comfort in Olti Age.'' Ca.nada has issued two hundred and forty-four policies. Voluntary old-age insurance is a failure. 
The system of pensions by private corporations is a. failure; the system of free government pensions is a failure; the system of vol­untary old-age insurance is a failure. 
On the other hand, our plan of Compulsory Old-A~e Insurance is succeeding in every great civilized country in the world except our own. Germany adopted it in 1889. Every laborer whose income was below $476 was required to take out old age insurance, the cost being divided between the laborer, the employer, and the government. This was the experiment of 1889 ; if it had been a failure, the whole scheme would have been repealed long a.go; if it had been only a moderate success it might. merely have been con­tinued in operation without extendin~ its sconP ~ but the nlan of compulsory old-a ..e-e· insurance has proven so universallv satisfactory that it has been constantly extended. In 1.899 it included all labor­ers whose incomes are $1250 a year, almost three times as much as it WM at first. 
The plan we propose is succeeding in Germany. No Political party in Germany, no great ec.onomist or sociologist in Germany now advocates the repeal of the law. Their management is so efficient that it costs only ?''-! per cent for litie-ation; the remuining 91-! per cent goes directly to the benefit of the insured. 
Dr. Paul Kaufman, President of the German Imperial Insurance Department, says : ''The successful handling of the labor prob­lem by means of social insurance is one of the strongest :factors in Germa.~y's constantly growing industrial progress.'' Dr Spieckler says : ''We ha.ve secured higher efficiency in our industri~ due to the increased worker's efficiency, all brought about by reliev­ing our workers from worry and distress'' fo·r the future. . 
Under this plan for increasing the efficiency of their laborers Germany has advanctd from fourth to second place in the world's trade ; the property of her people has doubled in value: the.re are 18,000,000 sa.vings banks' accounts; wages have risen on the average for unskilled workmen about twenty-five per cent, for skilled work­men about fifty per cent, and in certain trades even one hundred per cent; there are fewer unemployed in Germany than in any 
Oomp'lilsory Old Age Inwurance 

other nation in the world; the death rate has considerably dimin-· ished; the length of life has risen from 38.1 years to 48.8 years. Germany is satisfied with the plan we propose. 
These facts impressed England so strongly that the Trades Con­gress of Great Britain sent a commission to study the Germa11 situation. This commission officially reported back tha.t there were literally no slums in Germany. Then England adopted a compulsory old-age insurance system. The law went into effect on July 13, 1912. England's method of administration is simple and efficient. Each laborer is given an insura.nce card; a.t the end of the week he carries this card to his employer who affixes to it an 8 cent insurance stamp_; the laborer then carries this card to the postoffice, gets his credit, and the postmaster forwards the card to the Central Burea.u. 
Engl8Jld, after studying and experimenting with every known system for relieving old-age poverty, at last adopted the plan of compulsory old-age insurance which we of the affirmative offer to-night. The Liberal party in England passed their compulsory old-age insurance law; the conservative party no lon.ger declares against it; the Labor Party through its leader, Mr. Ramsev Mac­Donald, has officially declared in favor of it. England is satisfied with the plan we propose. 
France began experimenting in 1850, an·d by 1910 rea.ched the goal at which all nations ultimately arrive Compulsory Old-Age Insurance. All whose incomes are $600 a year or less are required to insure, the government paying a liberal part of the cost. The French system has one especially no~worthy provision for encouraging th1·ift. The laborer may contribute a larger pre­mium than is required, and so by his own foresight and saving pro­vide for himself a Jarger annuitv on reaching the pension period. France is satisfied with the plan we propose. 
Without going into the detailed system of other countries, it is sufficient to sa.y that the experts of all European nations assem­bled at Rome in 1908 and again at The Hague in 1910, and both conferences declared officially that compulsory insurance was the best and most efficient means of solving the problem of old-age dependency. 
Germany says compulsory old-age insurance is a good thing; our opponent'8 i;ell Ger.many that she is mistaken, that the system is ba.d. Denmark says compulsory old-age insurance is good; our opponents say it is bad. France savs old-age insura.nce is good; our opponents still insist it is bad. England affirms that compul­sory old-age insurance is good; our opponents waxed mighty in 
. University of Texas Debates 
stature and wisdom-deny it. The experts of all of the nations in Europe in conference twice declare that the combined expertence of their nations has shown that compulsory old-age insurance is the best solution of the problem. 
Our opponents can escape this overwhelming testimony onlv by saying that their theories overturn all of the facts of Europ·e; -that in the interpretation of these facts they themselves are wiser than the World's congress of experts! That would be mighty hard on these experts, but I guess they could stand it. 
Our affirmative case rests upon this rock: I have shown that every other plan that has ever been tried has failed; the nations one by one have abandoned them to take up our plan; our system has never failed anywhere; no nation having ever adopted old-age insurance has ever abandoned the policy, but on the other hand each has constantly extended the scope of its operations; my colleague has shown that our plan can be a.dopteC: in the United States and will care for old-age dependents without adding one penny to the annl1al $220:000,000 've are at present spe11ding ineffectively for the purpose, because our plan will substitute a system for present unorganized wastefulness. 
Every other plan has failed; our plan has alwavs succeeded; hence our opponents are driven either to accept our proposed comnulsory o1d-age insurance or to defend the barbaric -policy of making no provision whatever for old-age poverty. Dr. Reinhart, a mission­ary, discovered one wild l}eathen tribe in the far interior of Thibet whose custom it .was to drive their useless aged from the tents to the wilderness to starve. Are the gentlemen on the negative will­ing to say that society in America should be allowed to cast off its aged poor to starve ? 
Honorable Judges, upon this Gibraltar we rest our case : every 
other plan has failed; our plan of Compulsory Old-A~e Insurance 
has always succeeded, and it can be adopted in this country with no 
additional cost. 
SECOND NEGATIVE SPEEC:H. 

BY CHARI.ES I. FRANCIS, OF DENTON, TEXAS. 
Mr. Chairman, Ladies and Gentlemen: 
My colleague has shown that the adoption of a compulsory ald­age insura.nce law by the Federal government is unneeessary and inexpedient; unnece8sary, in. that there are now at work on th.e 
Compulsory Old Age Insurance 
problem certain gigantic forces which will in the end effect a. desirable solution; inexpedient, in that our varied economic resources and peculiar Federal form of government preclude an effective administration of the system. He has pointed out that the inherent complexity of the proposed measure will destroy what­ever benefits might theoretically be expected to result from the 
adoption of the plan; and he has shown that a compulsorv inst1r­ance law is unsuited to the individualistic sentiments a.nd ideals of the American people. The opposition in their constructive argument have said that old-age poverty is due fundamentally to our unfair industrial sys­tem, together with the naturally improvident character of the average workman, and that the only way that this condition can be remedied is through the agency of a compulsory old-age insurance law. Gentlemen, we are constrained to take issue with the affirma­tive in the very premise upon which their entire argument is founded. If the average workman is improvident of the future, can com·pulsion remedy this defect of character ? Just as the mus­cles of the body are not strengthened but rather weakened by inac­tivity and idleness, so a.re self-reliance and independence taught only by the exercise of these qualitiffi. We are, therefore, unable to discern how governmental paternalism can ever instill these quali­ties in the American laborer, of the lack of which the affirmative complain. Nor can we understand how in the face of modern irLvestigation and research, the opposition can contend that poverty is due to the unfairness of our economic system. We contend that it is due primarily to socid and not to economic ca.uses. To illustrate my meaning: Prof. Divine of Columbia University sa:ys, ''We have too long been paying for the effects of our social diseases without trying to remedy their causes, a.nd the social condi­tions of the American people demand that we must remedy these causes instead of year by year paying for our in·dustrial defects.'' Germany has instituted an old-age insurance plan, a.nd yet accord­ing to the statement of Dr. Friedenburg, former President of the Imperial Insura.nce Commission, and according to Henry W. Far­num and Dr. Emil Munsterburg, leading European authorities, poverty has increased at a remarkable rate since the inauguration of the plan. Our own country has had no such Federal insurance plan, yet according to 011r census reports, poverty decreased, during the period from 1890 to 1903, 15.1 persons for every 100,000, and during the period from 1;90.3 to 1910 it decreased to 8.8 persons per 100,000; during the past thirty-three years it has decreased 
30.6 persons per 100,000 of population; an increase in poverty 
[!niversity of Texa.s Debates 
under a compulsory insurance system in Germany and a decrease in poverty in this country where no such system exists. Germany h!is tried to solve the problem by a spurious law of compulsory ins11rance; jt has pursued the policy of paying year by year for its industrial defects. Our country has in a small way pursued the policy of removing the causes which give rise to poverty. The German plan has failed. Our own plan has suc­ceeded in a measure. Then which, ladies and gentlemen, ehould be the future policy of our country ? Furthe1•more, ac­cortling to the statement of Dr. Friedenburg and Herr Zahns, Germany expends more today in proportion to its population on charity and out-door relief than it did before the inauguration of the Federal Insurance System. Herr Za.hns, a leading German a11thority formerly connected with the administration of the insur­ance law, after a research covering the years 1909-1910, has pub­lished the following statement: ''In reality the poor expenditure both as regards the number of beneficiaries and as regards the number of individual allowances, has almost everywhere increased.'' Dr. Friedenburg further says: ''As to the promise to kill pauper­ism, it is remarkable how little of that promise is heard to-day.'' Germa.ny thus bears a double burden-the burden of charity, administered by poor relief societies and cha.ritable organizations, and the burden of Federal insurance, paid in a large part by the laboring classes who are least able to bear the burden. In this country, we have but one burden-the burden of charity-which is paid by that portion of society which is :financially able to make such a contribution. Year by year, according to the United States census reports, this burden of our country is decreasing, while both the burden of insurance and the burden of charity are increasing in the German Empire. 
!1.odern society is confronted with the great problem of tl1e ~ocial evil. Shall we allow the conditions producing this evil t<> continue, and seek to make amends to the victims by a money pay­ment? Yet!' speaking comparativel}1 this is what the opposition 
, 
proposes; this is what the above statistics show that Germ.any has done,-merely contjnued that social system which produces the abnormal condition of poverty, and hence has failed to find a rem­edv for the ca.uses of its social disease. The result has bee·n additional burden of insurance plus the increasing burden of charity. 
An analysis of the debate up to this point, shows the following status: The . affirmative says (forgetting the experience of Ger-. 
Compulsory Old Age Jns.urance 
ma.ny)., ''Our indutitrial system is wrong; it produces old-age poverty; remedy it by each year paying the price of your negli­gence and incompetence." The ne,gative says : ''Poverty is due primarily to social conditions_; remedy the evil by eradication of the fundamental cat1ses.'' The affirmative says: "The American laborer is incompetent and inca.pable; hence compulsion is neces .. sary.'' The negative says: "The incompetence and incapacity of the American la.borer is not inherent, as the British investigation committee sa.id, but due to disease, lack of education, n1ental and physical inabilities; and the paths of reform must follow the lines of industrial educa·tion; the passage of fundamental social la.ws for the able, such as Workmen's Compensation, Minimum Wage, and Child Labor Laws; a.nd finally, scientific and orga.nized charity must provide for that portion of society which has become depend­ent upon the state.'' 
But passing b3r the experience of G·ermany, and disregardin.g the opinions of our leading economists voiced by the President of Wisconsin Ulniversity when he said: ''Di·d we but appl}; the agen­cies which we have at hand, we would solve within two ge.n·era­tionH the great social problems that confront our nation/' let Ufi pre­sume that the Ame1·ican people desire this compulsory insurance law even though it does not reach the fundamental causes of pov­ertv. What diffi.culti€s would we encounter in the practical namin­ishation of the law ? · 
Society would be divided into two great classes: those com­pelled by law to provide for old age through a system of insurance; and those who are exempt from such provision, inasmuch as their wages exc.eed the minimum required by the government. Statis­tics will hardl3r warrant such a division, for proportionately just a~ many lawyers, just as many ministers, just as ma.ny merchants become p-aupers as i11dustrial laborers. So any system of compul­sory insurance must fail in its purpose of pTeventing old-a~e pat1­pcrism among the uninsured classes, and such classes in this coun­t1~y would a.mount to more than 65 per cent of the entire poPttlation. But the classes subject to st1ch a law-mind you, representin~ bl1t 35 per cent of our population-may also be diivded into two classes: 
(1) Our industrial classes rep·resenting those whose employment is steady and whose incomes are fairly regular, and (2) the grea.t army of the irregularly employed whose wages constantly var~r from month to month, such as carpenters, masons, contract work­ers, agricultural la·borers, seamstresses, house-servants, wash­women, and so forth. 
[Iniversity of Texas Debates 
The former class, our industrial la.borers, according to the United States census, represents 24 per cent of the laboring classes; the latter class, those irregularly employed, represents ap·proximately 76 per cent. In the case of the 24 per cent, a system of compulsory insurance might be administered by compelling the emplo~rer to deduct from the salary of the employe the amount of the 'veek]~? a8sessment.. But in the case of 76 per cent of the waJ~·e earners, tl1e irregularly employed, no assessment could be made by the 6toppage-at-the-source plan, :for their wages are uncertain, varying from month to month, and the wage-earner has no certain employer for any considerable length of time. So any system of compul­sor}1 insurance must fail in its purpose of preventing old-age pa11­perism in the great army of the irregularly employed, and it is from the latter class, as Frederick I. Hoffman says, ''that the majority of old-age dependent paupers come.'' Now, o·f this ind11s­trial class representing but 24 per cent of our wa.ge earners (not of our population, mind you), what proportion will ever rea.p the benefit of an insurance policy? Reliable statistics, found in the 1910 census reports, shows that only one man out of every twenty­five reaches the age o.f 6·5 years, the lowest age at which a -paid-up policy could possibl1r be granted. Then of the 24 per cent of the laboring class, who ]1ave a potential possibilitv of receiving a paid­up policy, only one out of every twenty-five will reach the minimum age limit. The other twenty-four will pay for the one, and will realize no benefit whatever from the thousands of assessments which they have been forced to pay to the Federal government. Gen­tlemen of the affirmative, is this the equitable system for which you plead? Do you mean i:o say that you will attempt to assess the salaries of twenty-five million laborers for the benefit of such a s·mall per cent of our population ? When of this small per cent three out of ever four are independent o·f all forms of charity? You propose to institute a gigantic system of insurance in order to remedy old-age poverty, when such a system could not possibly benefit more than one-half of 1 per cent of our population. Then it is unreasonable to suppose that the system will succeed in its 
• 
prrmary purpose. 
To summarize my second point: Our government under the p1·oposed plan will purpose to reach but 35 per cent of our popula­tion, the other 65 per cent being exempt; of this 35 per cent only the industrial class, amounting to but 24 per cent of the wage earn­ers, can be reached, as the other 76 per cent are irregularlJr em­ployed; of the 24 per cent only one out of every twenty-five will 
·Oo·mpulsory Old ""4.ge Irisurance 
ever receive any return on his investment, a.nd to those whom aid is given, a la.rge majority will have no need for su.ch aid. We con­tend that the results do not justify the means. 
My colleague has discussed the great complexity attendant upon the administration of a Federal Insurance System ; in Germany so complex a.nd intricate has it become that practically everv bene­fit expected by its sup·porters has failed to materialize. Join to the inherent complexity of the scheme the fact that it fails to reach the fundamental causes of poverty, and benefits only such a small per cent of our population, and it will readily be seen that the system is impracticable in administration. 
In 1884 Bismarck, Chancellor of the German Empire, when asked his reason for proposing and supporting a social i11surance. policy, said: ''Beca11se it will be an inoculation against socialism, the power of which, although d.etrimental to tl1e empire, is steadily increasing.'' When Bisma.rck made that st8.tement the influence of the Social Democrats in governmental affairs wa.s practically negligible; in 1872 they cast a vote of 125,000. In the election of 1912 their candidates received a plurality of 3,oo·o,ooo votes, the Socialist vote amounting to 7,500,000 out of a total vote of approxi­mately 12,000,000. The platform of the party is ''the destruction of capitalism, and the inauguration of a state monopoly of the production and distribution of goods.'' 
Social insurance but added fuel to the flames of Socialistic ideas; 
the lines of class cleavage have become clearly more marked; and 

the people clamor for a greater degree of protection from the state. 

Politically America knows no servile class; if it is ever created 

through a system of compulsory insurance, we will have no Bun­
desrath as in Germany, to defeat the will of the popular assembly. 

To illustrate: To-day in the United States no political party 

dares to favor a reduction of the pension system, and as a conse­

quence, though fifty years removed from any serious war, we have 

a pension list the largest in the history of our country, and con­
stantly increasing through popular demand. Just BO under an 
insurance system, in order to curry popular favor, our parties would 
be forced to favor an increase in the assessments against employers, 

a lowering of the age limit, and more extended privileges to the 

masses. We of the negative hesitate to favor the adoption of a 

system which experience shows will become entangled in. politics, 

where fraud and corruption will creep in, and by which the dema­
gogues may appeal to the feelings and interests of the insure~. 
Whereas my colleague has shown that the proposed measure is 
[Tn.iver8.ity of Tex°"-~ Debates 
unnecessary and inexpe.dient, tha.t it is inherently complex a.nd incompatible with American sentiments, institutions and ideals, it has been my purpose to prove that the law does not reach the funda­mental causes of poverty; that whatever benefits m.ight theoreticallv be expected from the system, the practical results do not justify the 1nea.sure in that s11ch a few would reap the benefit of the law, for it does not include within its scope the welfare of the uninsured classes, amounting to 65 per cent of our population; it does not include the great army of the irregularly unemployed, amounting to 76 per cent of the wage-earners, and it will be of no benefit to those who do not attain th.e minimum a.ge limit; joined to these defects is the fact that complexity arising from the administration of tl1e law would be serio11ely detrimental to, and perhaps destructive of, the efficiency of the scheme; that the system would become entan­gled in political alliances, would encourage class hatred, and fos­ter the tenets of Socialism. For these reasons we ask the reiection of a compulsory system of old-age insurance administered uniform!)" by the Federal Government. 
BIBLIOGRAPHY. 

BOOKS AND PAMPHLETS. 

Australia.. Attorney General. Old Age P.ensions. PublishPd 
for the Government of Australia bv J. Kemp, 1908. Adams and Sumner,·Labor Problems. Boyd's Compilation of Insurance Laws, 11912. Canada. Parliame11t, 1906-1907. Senate Old Age Annuities. 
Otta.wa, Govt. Printing Bureau, 1907. Devine, Edwin T. Misery and Its Causes. Dryden, John F. A Method of Providing With Certainty for 
Dependent Old Age. American Underwriter, 1908. Dr. Friedenburg's Criticism of German System of Social Insur­
ance. Eberfield, System of Charity. German Government document. Frederick A. Ogg. The Governments of Europe. The Macmil­
lan Co., 1913. Social Progress in Contemporary Europe. Gives status of insurance in various European countries. 
Henderson, C·ha.rles R. Introduction to study of dependent, de­fective, and delinquent classes and of their social treat:inent. Bos­ton, D. C. Heath & Co. 
Henderson, Charles R. Modern Methods of Charity. The Mac­millan Co. The Social S,pirit in America. 
Compulsory Old Age In.surance 

Hoffman, Frederie;k L. Paper read before Board of United Charities. Jn Report of United Charities Association, 1908. _!\.lso American Journal of Sociology, September, 1908, SQCial In­surance. 
Investigation of· Imperial Insurance Commission of New South Wales. Government Document of New South Wales. Great Britain, Laws, Statutes, Etc., 1912. Insurance Act, by William A. C·asson. London. C. Knight & Co., 1908. Massachusetts Con1mission on Old Age Pensions. Report~ 1907. Boston, 1907. 500 pp. Missouri University Bulletin by Dr. Charles Ellwood. ...t\.lms­house Statistics. Murray, London J. The Manufacturer of .Paupers·: a Protest and a Policy. 1906. 
Nearing, Scott. Social Adjustment. 
Proceedings of National Conference of Charities and Correction. Papers by C. R. Henderson, E. A. Vanderlip, Frank A. Fetter. Report of British Investigation Committee. British Govern­ment. Report of Imperial Insurance Commission of Germany. Govern­ment Document of German Empire. Report of Massa.chusetts Investigating Committee. Bureau of Statistics of Massachusetts. Seager, Social Insurance. A Program of Social Reofr1n. The Macmillan Co., 1910. Squier, Lee Welling. Old Age Dependency in the United States. The Macmillan Co., 1912. 
United States Census Reports for 1900 and 1910. · Workmen's Insurance and Compensation Systems in Europe. Annual Report of U. S. Commissioner of Labor, 1909. Govern­111ent Printing Office, Washington. 
P:RRIODICAI.'8 • 
..4..ffirmatii'e Refe1·ences. 

Amer. Jour. Soc., vol. 17, 177-87. Atlantic Mo., vol. 108, p. 
105. Econ. Jour., vol. 9, pp. 520-40. Independent, vol. 61_, pp.' 705-6; vol. 64, pp. 1103-4; vol. 65, p. 175. Contemp. Rev., vol. 93, pp. 94-107. Scribner's Mag., vol. 37, pp. 454-67. Survey, Janu­ary 20, 1912, p. 1622. World's Work, vol. 3, p. 2019. Rev. of R's, vol. 27, pp. 84-5. Harper's Mag., vol. 119, pp. 727-34. Fortn. 
Unive1rsity of Texas Debates 
Rev., Jan. 20, 1912, pp. 40-59. Forum, vol. 40, pp. 569-76. 19th Century, vol. 69, pp. 1141-56. Pol. S·ci. Q., vol. 26, p. 500. 
Negative References. 

Rev. of R's, vol. 38, p. 746. Arena, vol. 23, pp. 635-46. Forum, vol. 28, pp. 287-700; vol. 68, p. 187. Nation, vol. 69, p. 146; vol. 82, p. 96. 19tl1 Cent.11r31, vol. 30, p. RSO; vol. 4-5, p. 681; vol. 68;' pp. 957-74. No. Amer. Rev., Jan. 1912, pp. 108-19. Westn1. Rev.> vol. 176, pp. 209-14. Atlantic ~fo., vol. 108, pp. 105-9. Econ. Rev., July, 1892. Blackwood's Magazine, J a.n., 1912, pp. 1'"17-54. Outlook, vol. 30, p. 1911. 
Banking and Curren.cy Reform 
BANKING AND CURRENCY REFORM. 

FIRS'l1 AFFIRMATIVE S•PEECH. 
BY THEODORE A. GATCHELL, OF AUSTIN, TEXAS. 
Ladies and Gentlemen: The s11bject.un·der discussion this evening is, Resolved, That the Plan for a Natio·nal R·eserve Association as Proposed by the U. S. 
. ~ 
. 
]fonetary Commis~on Offers a Desirable Remedy for the Defects of Our Present Bankilng and Currency Systems. 
Our present monetary system arose at the time of the Civil Wa-r, and it was formed for the purpose of furnishing a market for 
U. S. Bonds on which the w.ar was financed, and to secure a safe currency system. But as President Wilson points out, in endeavor­ing to secure safety 1ve sacrifice :flexibility, so that to-day we have neither the one nor the other. To-da.~y, therefore, we have simply a bond-secured currency as contradistin.guished from asset currency, with the result that the amount of bank not.es in circulation is not based on the busine8s demands but solely upon the amount of bonds which are issued. For example, if the Panama Canal is to be built, we must necessarily have an extra amount of bonde, and therefore in addition a11 entirely superfluous issuance of bank no+~s. Is it within reason to suppose that if a lock canal costs fifty million~ more than a sea level canal, we should have fiftv million dollarE'.l additional of bank notes in circulation? So, the changes in the price of bonds and not the business demands, is the sole factor which determines the amo11nt of notes in circulation to-day l1nder our p.resent currency system. 
The most vital defects of the system, therefore, may be enum­erated as follows: first, the inelasticity of currency; seco11d, the lack of cooperation between banks ; and, third, the financing of our exports by foreign bankers alone. As a result of these evils we see constant expansion in our bank notes, with no corresponding contraction, which results in inflation and a panic every few years. We see an annual money deficiency at the crop-moving season. Farmers have to pay eight per cent for loans throughout the coun­try while Wall Street spe9ula.tors get these same loans for three per cent. We see Texas cotton, exported and financed by European 
ao [Tniversity of Texas Debates 

bankers simply because the American bankers are not allowed to deal in acceptances. We see a lack of mobilization of reserve8, lack of credit facilities, la.ck of cooperation between banks and an abso· lutely inelastic, unsatisfactory currency. 
To remedy these existing evils the plan of the National Reserve Association was brought forward. This plan is as follows: 
There will be an orga.nization similar to our counties, States and Nation, represented by the. local associations which elect the direc­tors of the fifteen district associations into which the country is divided, who in turn elect the directors of the National Association. The Governor oi the National Association and the two deputies and the other forty-three directors of the National .Association will exercise general control over all the Association, but the stockholders of the local banks throughout the country hold absolutely in their power the personnel of each board of directors, that is, the sub­stantial business me11 in each community. The pla.n contains eight different provisions : 
(1.) To insure the maintenance of ad.equate reserves, (2) to provide for the concentration of cash reserves, (3) to authorize the rediscounting of commercial paper by the Association, (4) to give to individual banks the facilities for an increase of their reserves and loaning power, (5) to e-rant further note-issuing power to the National Reserve Association, (6) to nrovide for a uniform rate of discount, (7) to sta,ndardize commercial paper. and 
(8) to establish foreign banks. 
This plan, resulting from our experience in the past, possess­ing the best f ea.tures of the European systems, and revised and r11ade suitable for modern :financial demands and the peculiar and widely differing conditions existing in this country is the medium we offer you this evening through which the present evil of our system may be cured and the future needs of our Nation be pro­vided for. The benefits resulting from the adoption of this sys­tem would be three-fold. The National Reserve Association, first, will furnish the ineans for cooperation between different banks and make possible concentrated reserve; '3econd, it will provide means for financing our exports, and, third, it will give us better creclit facilities. 
This pla.n will furnish a. means for cooperation between differ­ent banks. The aim of this plan is to establish a cooperative, not a centralized banking system. To-day in panic and crop-moving tim.es the banks act only for themselves and thereby both they and the public suffer. Under the proposed Na.tional Reserve Asso­
Banking arid Currency Reform 
ciation the banks will be able to obtain all the cash they need and they will gladly cooperate with each other. They will be able to do this because the plan (Section 28), proposes that the A~socia­tion may rediscount direct obligations of subscribing banks. Any bank, therefore, in times of panic when cash is necessary, needs only to send its securities in the form of commercial paper to the .&.t\.8sociation and immediately it will receive the amount in cash holdings. Nothing but cooperation can result when such a plan is in force. Contrast this state of affairs, if you will, to those existing 11nder the present system. This same bank.. in times of panic \Vhen it needs the caBh, may possess all the securities in the world, but under the present law it could not ,negotiate a single dullar's worth, with the result, that not alone do the banks suffer but the people as well, and no cooperation whatsoever will exist between ind.ividual banks. Moreover, all possible means, such as trans­ferring bond balances by telegraph, etc, are provided in the plan in 01·der to facilitate thjs cooperation. 
This mea.ns an a.bsolute elimination of exchange charges. The National Reserve Association shall at once upon application, with­011t cl1arge for tra.nsportation~ forward its superfluous notes to any depositing bank account to credit its balance. Once this coopera­tion is estal>lished, 've wil lbe enabled to have a mobilization of reserves and a large gold fund may be kept in one nlace. This concentrated gold reserve, always accessible, would be able to break panics and alleviate conditions. 
For instance, the Bank of England with a concentrated gold reserve of one hundred and fifty millions in 190·7, helped the United States with a reserve of nine hundred millions in govern mental vaults and twice that much scattered throughout twenty-five thousand various banks. The policy of every bank in times of panic would change under the National Reserve Association. In times of panic under our present system, each individual bank begins to hoard money regardless of whether or not the panic effects its section. Under the National Reserve Association the individual banks would be enabled to loan money to the a.ffiicted ones and thus immeasurably relieve the situation. This method has repeatedly worked with success. 
For example, on September 23, 1907, at Germany's commercial crisis and our panic the cash on hand of the Imperia.l Bank was $236,'197,000.00; on September 30 it had declined to $199,025,­000.00, a decrease in one week of $37,772,000.00. But, during the same week the loans and discounts rose from $289,750,000.00 
University of Texas Debates 
to $391,637,000.00, an increase of $101,887,000.00. The note circulation rose from $339,625,000.00 to $435,437,0·00.00-an in­crease of $93,812,000.00. Thus by merely increasing the loans and note circulation, Germany was able to escape the panic which the same year and the same month ran wild over the United States, and in which our banks were forced to decrease the loans and increase our reserves. 
My second point. The National Reserve Asso.ciation will pro .. vide means for financing our exports. This plan will enable the United States to finance our own exports a.nd thus get our propor­tionate share in financing the products of the world. We should :finance our own foreign exports, and the people of the South shoul1d be pa.rticularly interested in the matter of who exports, who :finances, who reaps the profit of our cotton. To-day our banks can not deal in acceptances because of ridiculous laws, th,ough they can lend on promissory notes which often do not have the security be­hind them that acceptances have. Thus the Texas farmer, when he exports his cotton, gives his bill of security and gets his bill of acceptance, :finds that no American banker is able to deal in this acceptance, with the result that the deal is put through by London: and London gets the profit. La.st year we exported six hundred and fifty million dollars worth of cotton. This amount was largely financed by sixty to ninety-dav bills drawn on Liverpool or Berlin. The business wa.s done and the profits received bv foreign banks and this large sum was in the last a.nalysis paid bv the cotton planter himself. We are now spending five hundred millions to h11ild the Panama Canal and we should be able to finance our own products and be able to profit by the canal instead of having to pay increased millions to foreign bankers. The National R.eserve Association meets this defect and offers a remedv. Thi~ 
I 
plan will be able to meet this demand .. first, tlirough its provision~ whereby the ba.nks can rediscount bills of exchange~ notes, drafts, etc., and second, through its liberal provisions whereby ba11k:s ma:y be organized under it in the foreign countries and there do the b11siness of this country. Thus, under the National Reserve Asso­ciation we will be able to :finance our own exports, our Merchant ).farine will again flourish, and we will be able to stand at the top in all fields. 
l\tI~y t11ird point. 'l,he National Reserve Association will give us better credit facilities. This point stands o·ut at once a.s one of the preeminent reasons for the adoption of the plan of the Na.tional Reserve Association. In modern times monev transa.ctions are 
el 
Ba·nlt,1:ng a.nd Currency Reform 
based upon credit, an:d the modern monetary system is based upon­a small foundation of gold upon which are added num.erous obliga­tions payable in gold which are settled by clearings of credit. This factor of credit is more important in business, in banking, in exchange than the actual gold. This, therefore, is one of my main reasons in advocating the adoption of the National Reserve Asso­ciation; that the proposed plan aims at establishing standard values for which a broad market ca.n be created, so that assets can be q11ickly turned into bank credits. 
In the discussion of this section of the plan, two facts art brought before our notice: first, that our present system fails to break -panics simply because it provides for no definite and well regulated credit facilities, and second, that the credit facilities of the plan of the National Reserve Association have always succeeded in averting panic runs and prevented :financial disturbances. 
In 1893, during a panic periocl of seven months, the legal tender money held by the national banks reached 23.2 per cent of their net deposits; liquidation of net deposits amounted to $203,~00,000 outside of the reserve cities. The reserves amounted to 30 per cent of deposits, being double the legal requirements. Here is a system which failed to break a panic for a period of seven months even with ca.sh reserves amounting to double the legal requirements. The lack of proper system of credit expansion was responsible for the panic run. 
Again, look at our panic of 1907. D·uring this disastrous year 've had no war sea.re, the country was full of gold, but sales of 50 per cent to 100 per cent could not bring money because our system had killed our own confidence in our own credit. 
The pla.n of the National Reserve Association has been modeled after the banking systems of England, France and Germany. The main head, however, in which identity exists between the svsteirts is to be found in the credit facilities features. In other wordR, the 1nethod of banking a panic and meeting the annual crop-moving deficiency in Engla.nd, France and Germany would be identical with the method necessarily taken by the plan of the National Reserve Association. These European systems have avoided panics fl.nd other :financial disturbances because of extensive credit facili­ties identical with those of the plan of the National Reserve Asso­
ciation. 
During the recent Morocco crisis, a war scare developed in France and actual hoarding of gold began ; the withdrawals from deposit banks were alarming. But there follo·wed no panic, the Bank of 
Un.it'ersity of Texas Debates 
France issued notes freely, the French banks collected their hold­ings of foreign paper and the general confidence in the bank's power to cope with the situation overcame the fright without the calamities that would have followed with us. All because of credit facilities which our present system lacks and which the plan for a National Reserve Association possesses. 
When France withdrew from Germany more than two h·undted million marks tha.t had been invested there, when England and R.ussian money was called back, when runs began on savings banks, Germany had to face a crisis identical with our panic of 190'r. "\\That happened? The Reichbank rapidly increased its credit facil­ities by about $150,000,00-0.00. Moreover, it had accumulated in times of peace vast sums of foreign bills, an·d when rates of ex­change moved up to a point warranting gold exports, it began to sell these foreign holdin.gs. At the same time, a s11ght increase in its rate took place, which brought new money, mainly American. Germany's assistance. This inflow of foreign money was increased by the sale abroa.d of German treasury notes. All because of credit facilities w·hich. our present system lacks and which the plan for a National Reserve .L4 ssociation possesses:. 
Commercial pap.er and bank acceptances form the main assets of European banks. These bills ha,re the widest possible ma.rlret, when millions are exchanged daily with the margins of one-six­teenth per cent ef one-eighth per cent in the interest rate without tl1e necessity of scrutinizing the paper when the bargain is struck. 
·Everywhere, bills of exchange have been s~ndardized, and a long Jist of financial success is the result. Yet, these same credit facili­tjes a.re provided for in the plan of the National Reserve Associa­tion, and still we hesitate about its adoption. This system is built upon credit as it necessarily should be. To be safe it should make cash less valuable or attractive than bank credit. This it 
J 
does by allowing depositor and bank alike to turn cash holdings into interest-bearing bank: credits. Thus, cash is allowed at all times to return freely and rapidly into the central reserve of the National Reserve Association. The Association would then become the safety valve of our Nation. Its existence plus its ability to main­tain the Nation's credit would create that safety for calculating eredits which would make the whole system practicable. 13y increasing or decreasing its rate of interest, by investing in the nation's commercial paper, by accumulating holdings of foreign paper, all of which is included in this plan, it would become strong enough to give efficient and elastic service in times of panics and thus protect each bank individually in time of need. 
Banking and Currency Reform 
On the one hand, therefore, you have our present system, incapa­ble of preventing panics, incapable of rendering help in times of need, incapable of efficient credit regulation, incapable of. protec­tion; on the other hand, the proposed plan of the National Ref'erve Association with extensive credit facilities, with ample provision for giving help, with the opportunity and power to better thP Nation's finances, with success and experience behind it, with a record of sta.bility, utility and practicability upholding it. Reform-· ation . a.nd renovation of our present monetary system is absolutely necessary. The North needs it, the South needs, the East needs and West need it. Why, gentlemen, during the last year eight national banks, the very foundation of our monetary system failed,. and eighty-three national banks were placed in voluntary liq.uida­tion. The foremost, the sanest, the most practicable remedy is to be found in the plan for a National Reserve Association as proposed by the National Monetary Commission. 
FIRS'r NEGATIVE SPEECH 

BY TOM B. RAMEY, OF TYLER, TEXAS. 
Ladies and Gentlemen: 
The career of the so-called Aldrich Plan has been most extraor­dinary. For quite a time the plan seemed certain of success, and all that appeared to be lacking was the formality of passing the bill in Congress. But gradually the tide of public sentiment has changed, until to-day its staunchest sup·porters have abandoned all hope of its being enacted into law in its present form. At New Orleans in 1911, the American Bankers' Association g-ave its unqualified a.pproval to the plan of the National Monetary Commis­Rion. But at Detroit last September, the same Association of bankers totally abandoned the Aldrich Plan, and resolved to cooper­ate with any and all persons in divising a better :financial system. In 1911 we saw in the Aldrich Plan a scheme of reform calculated to­satisfa.ctorily remedy all the evils in our present banking system .. In 1912 we saw in it a plan strongly repudiated by the leading opin-· ion of the country, we have seen it specifically rejected by the' Democratic platform, specifically opposed by the Progressive plat­form, ancl as specifically ignored by the Republican platform. 
When we think of the powerful influence and pressure that has been brought to bea.r in the attempt to crystalize sufficient senti­ment to insure the passage of the Aldrich Bill, we sometimes won­
[Tn.iversity of Tex·as Deba.tes 
der that it proved :t failure. In view of the fact, however, that it did not succeed in spite of the powerful influence behind it, we are inevitably led to conclude that the plan must contain certain funda­1.aental features that are objectionable to the people of this country. It is our intention in this dis.cussion to expose the most flagrant faults in the Aldrich Plan, and to show yo11 how the proposed scheme, if enacted as a remedy for the evils in our present banking system, would be impra.cticable and undesirable. 
Certainly one of the most serious objections to the Ald.rich Plan arises from the opportunity afforded by it for the inflation of our currency and the over-extension of credit. The fun·damental fea­ture of the National Reserve Association is to concentrate a great part of the cash reserves of the banks of the country into one great fund to be used as a sort of common reserve against bank deposits, and at the same time to act as a basis for an issue of credit currency, 
ol 
which would eventually become our princinal circulating medium. The Association will have the power to issue its notes. to practically an unlimited amount. Section 51 of the Aldrich Bill makes pro­vision for an uncovered note issue of one billion two hundred mil­lion dollars without any effective prohibitive tax. Mark you, this sum is far in excess of the uncovered untaxed note issue permitted by the twenty ~reat central banks of Europe combined. 
The affirmative maintain that the greatest and most funda.mental evil in our p-resent bankin.g system is its inelasticity. They tell us that our money lacks a needed elasticity and is not responsive to the demands of trade and commerce. Experience has taught us that the mone3r supply is subject to the law of supply and demand the same as other commodities are, and that it flows automatically from communities \vhere it is over-abundant to those in which it is n1ore in dema.nd. This is what constitutes the trt1e elasticity that money should possess. But this natural elasticity will be destroyed if a larg-e issue of rredit notes is made, a.s is proposed u11der the Aldrich Plan. The elasticity claimed for thesn credit notes is that ihey will be issued only for the regular commercial dema.nd, and will be retired when that demand is ~atisfied. But experience in thP-United States has demonstrated that bank notes issued t1pon the credit basi~ will continl1e in circt1latio11 until they wear out. Paper rnonev once issued and absorbed becomes a part of the active capi­
.. 
tal of the country, and its destruction has the same effect as tl1e destruction or withdrawal of capital in any other forn1. The fJanic of 1873 was caused by the attempt of the government to withdraw fro·m circl1lation the legal tender notes which were never 
Banking arul Currency Reform 
intended to remain permanently in our money system. But the enlling in of so much currency was the taking a way of so much capital from active 11se, and this constituted a draft upon the vol­111ne remaining which it could not stand, and a. panic resulted. The Government soon abandoned the undertaking, however, and we have tl1e legal tender still with llB. The history of the operations of c11r national bank eurrency also illustrates this point. Since its first issue the vol11me outstanding of these notes has steadil~r increased, and ha8 never decreased, regardless of the demnnds of commerce and trad,~. In 1900 the amount of these notes was $200,000,000; while to-day it is $700,000,000, which 1·epresents an increase in ten years of two hundred and fifty per ·cent. At nc period has there ever been noticed the slightest symptoms of thift m~ysterious elasticity, the notes increasing the same whether money was easy or tight. 
It is now generally conceded by the experi~nced bankers of the country that our present currency issue is excessive, and would seem to demand some restraining action by Congress. Even the strongest proponents of the plan of the National Monetary Com­mission, including Professor La..ughlin, a.dmit that the evils they complain of in our present system are not due to a scarcity of our currency. B11t the Aldrich Pla.n, instead of proposing to put a check on further expansion, would give the National Reserve ..~ssociation the power to increase the existing volume of our cur­rency to an unlimited extent. The amount of our so-called infe­rior currency outsta.nding at present is as follows: Legal tender notes, 346 million dollars; legal tender silver, 550 million dollars; and national bank notes, 700 million dollars, making the vast sum total of 1596 million dollars. Gentlemen, I ask you how we can possibly ignore all laws of monetary science, and still further inflate 011r currency by eliminating the 700 millions of bank notes, and s111Jstituting therefor. as provided in the Aldrich Bill, the enormou.; sums of 900 million dollars of untaxed National Reserve Associa­tion notes, with an additional 300 millions of notes only taxed l~ per cent. 
There is no limit :fixed upon the note-issuing power of tha National Reserve Association except tha.t a reserve of at lea8t 331 per cent must be held in the vaults of the Association in lawf11l money. The balance may be represented by commercial paper. Even this minimum reserve will likely be considerably redueed by the provision made in Section 42 of the Bill which permits the A~sociation to deduct half of the amount of bonds which it takes 
as T.Inivermty of 1"exas Debates 
over f1·om national banks from the liabilities, in effect using such bonds as partial reserve. The notes of the Association will be merely paper promises to pay, the same as the notes of any other corporation. While they would circl1late freely as money, thev wnuld not be money in the basic sense. You can't make a dollar out of 33! per cent gold and 66! per cent promise, and be always sure that that dollar is going to be just as good as a gold dollar. At a.ny rate you ca.n't pay foreign debts with that kind of money. 
What will be the result of this unprecedented expansion of our cuI"rency ? Instead of working to prevent the occurrence of panics and periods of business depression, it will only tend to a:ggravat~ the evil. One of the strongest supporters of the Aldrich Plan frankly concurs in the opinion that the origin of each rec11rring period of tight money in this country can be traced to preceding periods of easy money~ It is an indisputable fact that commerce suffers more in the long run from periods of over-abundance of our present circulation than from scarcitv. 
Our friends of the affirmative ask us, if the paper dis~ounted hy the National Reserve Association must be based on actual commer­cial transactions, how it is that such inflation is possible? The answer is simple. Although for ordina.ry times the loans of the National Reserve Association itself are restricted to commercial paper, there is nothing to prevent its member banks from ma.king any kind of loans they please. The purpose of the Reserve Associa­tion is to supply the banks of the country with currency as called for, a.nd thereby the Association becomes practicallv an appenda.ge to each member bank whose ordinary resources are thus immensely increased by the note-issuing privilege indirectly conferred upon it. Now, it is well known to most of us that nearly all of our large city banks invest their resources in stocks, bonds and similar secur­ities, finding it far more profitable to make this class of loans than to hold their funds for the inconstant demands of commerce. In the fall of the year when the l1sual commercial demands occur, the Reserve Association will relieve th-e banks of their commercial loans, a.nrl they will not be obliged to call in their loans on stocks and hnnnA but will be a.bie to continue their investments in these spec11­lative securities. Should this latter class of loans call for more money than their commercial paper can sup.ply, then the National Reserve Association may loan them direct upon their own notes, provided such are endorsed by a local association. It thus can be plainly s€€n that the Aldrich Plan not only offers a large field for inflation, bl1t for dangerous speculation as well. ­
Banking and Currency Reform 
Mr. Aldrich says that under his nlan the banks of the country will be able to replenish their reserves indefinitely. Is this not equivalent to saying that the b8Jlks may expand their loans inde:fin­iteJy? So long as the Reserve Association stands rea.dy at all times to convert commercial paper into circulating notes which can be used by the banks to purchase more commercial papers, wl1ich in turn should be converted into circulating notes, and so on ii1defin­itely, it would seem that there wou_ld be little check on inflation except such self-restraint as each individual bank might be able to exercise. As an illustration of what could be done with this plan in operation, let us say the Austin National Bank has $200,000 in gold in its vaults. Suppose this is deposited with the National Reserve Association, and credit is. taken for it. Under the pro­posed Ia.w the Austin National Bank still counts this two hundred thousand dollars as reserve cash on hand. The Reserve Association also counts this gold as part of its reserve, upon which it issues two hundred thousand dollars worth of its own notes. Now let us suppose that the American National Bank is short in its reserves, and g~ to the National Reserve Association with two hundred thousand . dollars in commercial paper for discount. The Reserve Association pays for this paper with its own notes, which are se­cured by the same funds that count as legal reserve for the Austin National Bank. Thus the two hundred thousand dollars in gold which now counts as reserve for the Austin Na.tional Bank, would under the proposed plan count as cash reserve in three places. First, it would count as full reserve against eie-ht hundred tho11sand dollars of deposits in the Austin National Bank.; second, as full reserve against two hundred thousand dollars of notes and two hundred thousand dollars of deposits in the National Reserve Asso­ciation ; and third, as full reserve against eight hundred thousand dollars of deposits in the American National Bank. In other words, the same two hundred thousand dollars which to-day acts as reserve for eight hundred thousand dollars of deposits, would under the reform system serve aB reserve against two millions of lia'bili­ties of three different concerns. 
Assuming that the plan were in oneration., and that all the banl{soi the country that a.re now eli~ble became members of the Associa­tion, they would at once have the right to borrow from the Associa­tion six thousand millions of dollars, and in addition to this would have the power to accept the paper of business concerns to the amount of two thousand millions of dollars. Bear in mind that this sudden addition to the powers of credit expansion is not 
':1:0 Univer.~ity of Texas Deba.tes 
intended only for emergency, but as· a function to be exercised by the Association under normal conditions, and in the course of everyday business. Whenever, in the opinion of the managers of the Reserve Associat1on, the public interests so require, in a.ddition to the above powers set forth, the Association may discount the direct obligations of the subscribing banks. To this there is no limit whatsoever. 
One of the leading arguments that has been adva.nced in favor of the Aldrich Plan is that it will create a stable and uniform ma.r­ket for discounting commercial paper. Section 30 of the Bill provides for a uniform rate of discount throughout the United Stat.es. Without any argument we readily see that this provision is unjust, for it would compel the small country ba.nks with small resources to compete on the same plane with the large city banks whic:h. have almost unlimited resources. This would literally force the smaller banks out of business. Again, our friends of the a:ffirm­ative fail to consider that the best paper handled bv a majority of ot1r banks to-day is not included in what the Aldrich Plan conte1n­plate~ as commercial paper. It has been estimated that ha.rdly one-tenth of the total loans and discounts of the banks of Texa~ to-day will be acceptable to the National Reserve Association for collateral. Any reliable banker in Texas will tell you that the 1Jt1lk: o:f the loans n1ade by the banks of the State to-day on co1n­mercia.l transactions, particularly the smaller co·untry banks, are long time loans, ranging from eight to t"\velve months in duration> We can readily see that the twenty-eight-day discountlng privilege of the Association, or even the four months' privilege, would be of little benefit to the local banks in making loans necessary each year to the farmers for producing, harvesting and ma.rketing cotton, grain, sugar and other a.gricultural products. These processes usually require from six to nine months time, and for this reason .. if nc other, the smaller banks of the country prefer the longer time loan.s. The only ba11ks that would benefit by the discounting privi­l(lges of the National Reserve Association would be the large banks in the two or three 1nonev centers of the country. As I have ~hown you most of the loa11s of these banks are on stocks and bonds.. ano. tl1e short time discou.nting privileges of the Associatio11 fur11ishP~ them an adequate means to further their speculation in these securi­ties. 
We have heard much the past few years about the shortcomings of our present banking system in the United .States, and some have gone so far as to agree with Andrew Carnegie that it is the worst s'rstem in the world. But when we learn that the svsten1s in other 
e .' •I 
Ban-king and Currency Reform 
countries are faulty a.Jso, and have just as many panics as we have, and when we remember that this country has had unpa1·alleled prosperity under the; existing system even a fair degree of pros­perity came to Andrew Carnegie himself-we should hesitate for a long time before giving approval to any new untried scheme th~t is as revolutionary in character as is the Aldrich Plan. We do not contend that the present system is absolutely infallible, and we admit that its growth and career has been irre~lar and unsys­tematic. But it has gained much from actual experience, ·and it now represents an almost perfect adaption to the conditions under which it exists. The living organism is now in evidence, and whatever it has done in the way of reform should be in the direc­tion of improving and strengthening this syste1n, not destroving it. The people of Am.erica under no conditions will consent to a bank­ing plan that will completely undermine our present independent and decentralized system that has played a most important part in. the upbuilding and development of the nation. The burden of proof is upon those of the affirm·ative. There devolves upon them the obligation not only of proving that their proposed pla11 will satisfactory rem·edy all the evils in the existing banking system, b11t also of showing beyond a reasonable doubt that the objections 
to their plan as set forth by the negative, a.re totally unfounded. 
SECOND AFFIRMATIVE SPEECH. 

BY SYLVAN LANG, OF SAN ANTONIO, TEXAS. 
Mr. Chairman, Board of Judges, Ladies and Gentlemen: 
lfy colleague has already explained to you the evils existing to-day in our monetary system, the plan for a National Reserve Association, and how this plan when applied to our modern condi­tionA, satisfactorily meets all our needs. But it does more than this: for in it there are safeguards and provisions which will preve11t its md.suse and which render ridiculous all attempts of the oppo­nents of the plan to criticize it. 
Standing out as one of the preeminent evils of the present sys­tem, both in the opinions of such experts as Dr. Seligman of Colum­bia and Dr. Scott of Wisconsin, and appearing from the recent hearings of the Money Tn1st Investigation Commission, is the fact that the money of the country centers at all times in New York City, for as the bankR must keep part of their funds in liqt1id form., and as they can get 2 per cent in New York on call loans, while if the money were kept at home, it would either lie idle or else be 
[jniversity of Texas Debates 
converled into dead assets by being invested in commercial paper, the banks naturally send their surplus funds to New York. Out of this condition arises the difficulty of :financing our crops annu­ally, as was illustrated last fall, and the strang-e spectacle as in 1907, that when our country is most prosperous, and our crops the la1·gest even then a panic is quite likely to result from the competi­tion between the fa1·mers who need this money to move their crops and the Wall Street speculators who are using this money, combin­ing to drive up unreasonably .the interest rates on our limited, inelastic money supply. It is this condition which any plan for monetary reform must rectify, and a question raised by some per aons is whether the plan we propose will perform this function. However, when we look at the conditions which draw the money to New York, we shall see how this plan strikes at the root of and will eradicate this evil. 
Our present system requires tha.t all banks keep a reserve against deposit'8. Small cou.ntry banks must maintain a reserve of 15 per cent-9 per cent of which they may send to reserve and central reserve cities to receive interest upon and can still count it as a pa..rt of their reserve. The reserve city banks, as in Galveston and Dallas, must maintain a reserve of 25 per cent against deposits, 12i· per cent of which they may send to the three central reserve cities-New York, Chicago, or St. Louis, and can still .count it as part of their reserve. Though these banks may send the major portion of their reserves to one of the three cen­tral reserve .cities, they must k~ it in such form that they can get it at any time to meet a demand in 9.ny particular locality. TJ1eref ore their correspondent banks must of necessity make call loan~ for them, as otherwise, the money could not be easily secured, and the reserve would not be m-aintained in a liquid form. New York is our only big city where extensive loans of this nature are made, and the banks to re·ceive the 2 per cent call money rate which they can secure by sending their money to New York, con­tint1ally send part of their reseTves there, thus furnishing cheap money for speculation and Wall Street purpoees, which every few yearE! is bound to culminate in an over-extension of credits and consequent panic, and making it extremely difficult to secure thi~ mon~y throughout /he country when actually needed for crop­mov1ng purposes. rhe fact that the average deposits of countrv banks in New York institutions is $600,000,000.00 and that oi1 November 1, 1912, only last fall, these banks had u-pwards of $723,000,000.00 in New York when the money was badly neede·d 
Ba,nking and Currency Reform 
over the whole nation, amply proves the seriousness of this situa­tion. 
To rectify this evil we point out to our opponents Sections 26, 27, and 28 of the plan by which it is provided that all banks which are members of the Association may rediscount 28 days and 4 months paper and also 90-day acceptances and that by turning over this note to the Central Association the local bank receives an a.mount of bank noteB equivalent to the amount of the loan, which umount the bank turns over to its customers. In other wordd, there will no longer be a necessity for these banks to send their money to New York and loa.n it out at 2 per cent in order to obtain ready money, for they can secure the cash they need at any time by sim­ply rediscounting all good commercial paper at 6 per cent. How would any common sense individual or institution conduct him­self or itself under such circumstances ? When in place of their only being able to keep part of their reserve in liquid form and profiting from it by loaning it out in New York at 2 per cent on call loans; they can always secure cash for their reserve by redis­counting good commercial paper at 6 per cent, will they not keep their money at home· wher.e needed, where it will not drift into Wall Street ·and aid in promoting panics, where it can be loaned out for legitimate crop-moving purposes a.t a higher and more profitable rate than was secured for the same money when used for call loans, and where it can thus, with the greatest elasticity, expand a.nd contract . according to legitimate business needB, and thus prove to. be a satisfactory method of relieving the stringency ut those two most es~ential periods-during threatened panics and for the annual crop-moving demands? 
Thus we see that by the adoption of this plan the money of the country will not center into New York to such an extent as it does to-day, and therefore, tha.t all criticisms of the plan in this respect are unjustified. . Among all of the arguments and objections which have been brought forward · against this plan, there are three which stand out prominently. First, that this currency will not contract after once being issued ; second, that this is just a scheme of Wall Street to gain, control; and, third, that the big banks will domi~ nate the Association to the detriment of the small banks. 
In answer to their first objection, we point out four provisione. which will force contraction a.nd there prevent inflation : 
Firstly, these bank notes cannot become inflated, since they will be merely coterminous with the business to which they relate. These notes are to lle issued on 28 days or four months -paper which is sufficient in length for crop-moving purposes. So, if an ora.nga. 
[!niversity of Texas Debates 
grower in California, or a cotton raiser in Texas wish·es to . borrow money to move his cotton, he will go to his local bank, give them l1is note, a.nd receive a credit account for this a.mount to draw upon. This note the hank sends to the local Association which transmits it to the Central Association; which then orders that amount of bank notes equivalent to the amount of the loan be turned over to the local bank which the bank gives to this farmer. After the farmer no longer needs this loan, he goes to his bank, returns the money, and pays off his note. The money is then sent by the local bank to the Association which returns the note it held as security, and therebJ·, the currency, having thus been returned to the association, has auto.matically contracted, as it will eontract a.fter the need for it has passed. 
Secondly. The law of supply and demand would force contrac­tion. It is an economic principle that the price of any commodity is governed by the a.mount of that commodity and the demand fol' it. So, the price of money, that is, the interest rate on money, is governed by the money available for loans, and the ba.nkers will therefore promptl:y retire the currency when. not needed, for th~y have no desire to see the interest rate lowered by keeping this money in circulation when riot a.ctually required. 
The third provision which will force contraction in the require­ment by Section 41, that a reserve of 50 per cent of the notes and deposits be maintained, or a. heavy tax p·aid in lieu thereof, so that if the reserve fell to 40 per cent there would be a 6 per cent tax o-n these notes, which would force them to contract. The additional provision that under no circumstances can the reserves fall below 33 per cent and the fa.ct that all bank notes in circulation will bear interest a.t li per cent from 900 to 1,200,000,000 and 5 per cent above that amount are additional sa.fe~1a.rds to prevent infla­tion. 
And, fourthly, we point out that by Section 26 these rediscounts 
are restricted to con1mercial paper, and as we shall continue to have 
our National and State Bank Examiners and our five reports 
a.nnually from the National Banks, besides additional monthly 
reports by the Association as to its condition, and a weekly report 
to the Comptroller of the Currency, the banks will not dare to 
make loans on speculative securities, which they are not prevented 
from loaning on under the present ]a.ws. A.nd as I have shown that 
this pla.n possesses every possible means for a speedy contraction of 
tl1cse bank notes when not needed, yet, at the same time, not ra.is­
ing ~o man~r restrictions as to ma.k:e jt next to impossible to is8ue 
Ban-king and (,1urrency Reform 
them and secure the benefits therefrom, and as these rediscounts are restricted to co1n·mercial paper, any expansion which is based on these legitimate business demands can not possibly result in inflation. 
The second chief objection to the plan is that Wall Street will gain control of the Association. Control of the Association can be secured in two ways. Firstly, by controlling the forty-six directo:rs of the National Association. Thirty of these will be ele-cted from the fifteen branches into which the country is divided, that i~, two from each branch. Now, only f ourtee11 of these directors will come from the seven districts in the· New En~land, Eastern and ~fiddle Western States, whilr sixteen will be elected from the eight districts jn the Southern and Western States, and that these sixteen will be Wall Street men even our opponents will not attempt to assert. Nine of the forty-six directors will be elected by the variou8· banks of this country, voting in proportion to their stock capitaliza.tio11. Then, say your opponents, Wall Street with all its capitul will surely elect these nine, and thus gain the ascendency in the Associa­tion. But the combined ca.pita.I of the banks in the three central reserve cities and also of the banks in every one of the reserve cities in this country a.mounts to only $425,000,000, while the capital of our country banks amounts to $577,0-00,000, or one-third again as much. And it will lie within the power of these small country banks, with their tremendous stock majority, to elect the8e nine directors. That these sixteen directors from the South and West and the nine from the country banks, make a total of twenty-five, or a majority of the board of forty-six even the mathematics of our opponents cannot overcome. But this is not all. The re­maining seven members of the Board consists of the Secretaries of the Treasury, Agriculture, and Commerce and Labor, the Comp­troller of the Currency, the Governor and his two Deputies. Do our opponents claim that these men, directly in the public eye, will at­tempt to serve Wall Street? If not, we must place them with the other twenty-five, m·aking a total of thirty-two, or more tha.n double the fourteen directors which Wall Street might possibly, bl1t not probably gain control over, and definitely proving that Wall Street will not be able to control the Association in this manner. 
But there is yet a second method pointed out by President Schl1r­man of Cornell, through which control of the Association will be re­tained by the local banks, and not by Wall Street. We have seen how the National Directors are elected. Now the directors of the Branch Associations who elect the thirty National Director8 are cho~en as follows: one-half are elected from the local ,~ssocia­
Un.iver.sity of Texas Debates 
tions without rega.rd to stock ownership; one-third are elected a.ccording to the nuni·ber of shares of the National Association helcl by the local Association, and the remaining one-sixth are to be elected by these others, and shall represent the agricultural and industrial interests. The directors of the local Associations who elect the directors of the branch Associations are chosen by the local banks, three-fifths of the directors being elected by the bankE rega.rdless of the respective capitalization, while the other two-fifths are elected according to the number of shares which these bank0 l1old in the National Association. So we see that throughout the entire plan, the small local banks are given the power of electin.g a majoritv of th.e directors of each association. Thus the directorate 
o.f the National As~ocia.tion rests ultimately with the local hanks, or as President Scht1rman aptl)r p·uts teh situation: ''That just as ii1 011r Feileral Government the localities elect me.mbers of Con­gress and vote for president in p-ro·portion to their population, so also while the Aldrich scheme provides for certain centrj}lized bank­ing functions which are essentially National and vests them i.n the National Reserve Association which is superimposed upon our existing banks without impairing their independence, the control of the National ReBerve Association itself is in the hands of directors elected by the vote of the localities, their electorate being ultimately the lo·cal banks·.'' 
Now, who co·ntrols the local banks? Are not the farmers and ranch owners the chief stockholders of the country banks, and are not the-manufa.cturers, storekeepers ·and lawyers the chief stock­holders of the city banks? Do they not elect the officers and dire-ct­ors of these banks, and will it not also lie within their province to elect the representa.tiYe from their bank to the local association, these local associations to elect the directors of the branch Associa­tions and the branch Associations to elect the National Directors? T·o be sure, it is a. representative and not a direct vote, but iJL is, nevertheless, these prosperous farmers and solid business men who will be at the base of this system, and it will be within their power and not within the power of Wall Street to elect the officers who a.re to administer a.ffa.irs. 
The third chief obiection raised by the opponents of this. plan iR that the bi~ banks will control the smaller institutions. The recent hearing-before the Money Trust Investigation Commission shows how the big banks in New York, through interlocking directorates and the vast amount of cash which the country banks to-da.v keep with them, are able to exirt a vast influence over them. We potnt 
Ban1~ing and Ourrency Reform 
out that under this Aldrich Plan the small banks will no longer he uz1der the control of the large New York institutions, for they will no longer be dependent upon them. To-day the countrv ba.nks send their surplus funds and p·art of their reserve to New York in order to always be able to secure ready money and to receive the 2 per cent interest upon them. But under the plan for a Nat.ional Reserve Association there will be no need of this, for as these cou11­try banks can rediscount commercial paper at 6 per cent and always secure currency when needed .. there will be no necessity for their sending their funds to New York b·anks, they will cease doing so, and naturally will no longer be dependent upon them. Not alone will these small banks cease to be dependent on the big banks, but the big banks will no longer be under the same necessity of con­trolling state banks 2.nd trust companies. The reason we find such control is because big national banks need some medium through which to· loan on real estai:e security and carrv on a satisfactor~y savings bank business, which they can not to-dav. but which the Aldrich Plan provides for, in that under it they can make limited loans on real estate and liberal provisions are made whereby they can conduct an efficient savings bank depa.rtment. 
But besides the ~mall banks no longer being dependent on the 
big ones, and besides there not being-t.he same necessity to-da.y for the large national banks to control state banks a.nd trust com­panies, even if the big banks wished such control they would not attempt to secure it, for by Section 'i it is provided that if 40 per cent of the capital stock of any subscribing bank is owned directly or indirectly by any other subscribing bank, person, or corporation, then neither bank can vote at all upon their stock capitalization, and these banks, acting together, can only have one vote for the election of directors to. the local Association. 
Considering that only by votin.g in this Association can a mem­ber protect its interests, and considering that if banks, even indi­rectly, o"7D. 40 µer cent of the stock of other banks, all of these banks lose absolutely their right to vote at all a.ccording to their stock capitalization, and only retain the power of collectively cast­ing one vote for the directors of the local Association, and consider­ing further, that besides this penalty, there will under this Aldrich Plan be no incentive for the big banks to control state banks and trust companies and that the smaller banks will no longer be de­pendent on the large ban·ks, and also that the Association can never pay more than 5 per cent dividends on its stook-considertng all these facts, no reasonable person can possibly fear that under this 
Universwi,ty of Texas Debates 

plan the big ba.nks will be able to, or will desire to~ control the sm.aller banks of the Association. 
Honorable Judges, the Aldrich Plan is now before you. We have shown you how the present defects are remedied and how coopera­tion between the banks, mobilization of reserve and elasticity In the c11rrenc'r and credit facilities ca.n be secured: how the funds of 
~ . 
the country will be kept where needed and will no longer drift to Wall Street, where they can not be secured readily for crop-moving purposes, but remain to a.id in creating panics ; how the claims of the opponents of this plan, that contraction will not take place, that Wall Street will control the Association, and that the big banks will dominate the smaller ones, is totally unfounded and can not possibly occur. And lastly, we point out Section 58, which reserves to Congress, the direct representative of the people, the right to alter or amend the provisions of this act every ten years. We do not flaunt the stars and stripes and ask you heedlessly to adopt this plan, but looking at it from a common-sense business standpoint it appears admirably suited to meet the annual crop­moving dem·ands and to remedy the other defects of the present system, while retaining an elasticity of currency and structure which will provide a satisfactory method of preventing any threat­ened panics, and of solving other financial problems which we are bound to encounter in the future development of this Nation. 
SECOND NEGATIVE SPEECH. 

BY "\\'INFREE ,V. MEECI-IAM, JR., OF ANDERSON, TEXAS. 
Mr. Chairman, Lad·ies and Gentlemen: 
With the steady recurrence of panics, it has become self-evident that there are certain inherent defects in the present banking a.nd currency system, which must be remedied. But the remedy pro­posed must be one which does not increase, but eradicates the evils --0ne which must be beyond the danger of control by the monied power of Wall Street. The gentlemen of tl1e affirmative submit as their plan for a desirable remedy for the a.dmitted evils of inelas­ticity, and the la.ck of a proper discount market, the plan of a National Reserve Association. This Association is to be governed by a.n Executive Committee of nine men, and is to have absolute control over the reserves of the banks of the country. It also has the power to make loans, issue notes, and discount commercial paper-in short, it i~ to be the main unit in the chain o.f bank£. 
BanlL~ing and Currency Reform 49 
My colleague has clearly demonstrated to yon that the pr0--\n-~ 1 scheme is an undesirable remedy, because it absolutely fails to provide an edequate discount market, and, further, that it does not eradicate the evil of inelasticity, but tends to. increage it. And when we consider t11a.t the Association is to be the unit of centrali­zationj and the basis of every commercial and financial transaction: the question naturally arises: Who will control this Association? In a recent address, Mr. Aldrich said: ''I realize as fully as anv man can, that no plan where there is the slightest possibility tha"'t Wall Street or any other clique or combination can control, can or should be adopted.'~ 
We of the negative, therefore, insist, third, that the plan is an u11desirable remedy, because, despite the ingenious a.rgument of the preeeding spea.ker, there is a practical certainty that Wall ·Street can and will control the Association. S·ection 9 of the bill pro­vides that the Association is to be operated under the control of forty-six directors., three of whom are to be elected by the other forty-three, while the Governor is to be appointed bv the President from three names submitted to bim by the Boa.rd of Directors. If Wall Street can secure twenty-three of the forty-three directors. giving them a majority, it can control this unit of the cha.in of banks, and dominate the :finances of the Nation. Now, mind you, nine of these directors a.re elected by stock in the Association. Wall Street and its interests are certain to control these nine directors, because the great majority of the stock, which is the basis of their election, is controlled by its interests in the East. But the Eastern and New England States control six directors, and 43 per cent of the capital, while the States of the Middle West control eight directors, and 27 per cent of the ca.pita!. By combinin_g-these two, we get a total of fourteen directo·rs elected and controlled by the monied interests of Wall Street, with a total capital of 70 per cent. Combining-these fourteen directors, controlled by the monied inter­ests of Wall Street, with the nine directors elected by them on the basis of stock, we get a. majority of twenty-three directors. Conse­Quently, these twenty-three directors will control the elect.ion of th~ 
Executive Committee, and will dominate the Association for the spe·cific purpose of using it for their own iniquitous purposes and benefits. 
But the supporters of this plan urge and contend that the con­trol of the Association will be in the power of the smaller individual banks, beca.use of their combined capital. Now, two-fifths of the local directors are elected by the share votes of the individual banks, 
University of Texas Deba.tes 
and, in turn: the individl1al banks of a district are dependent upon the Central Association of that district for their reserves. Under the present system, however, Wall Street c.ontrols over 30 per cent of the capital stock of the smaller banks, and it is certain that it will not relinquish this control when it enters the Association.· Thus, many of the Central Associations will be controlled by Wall Street from their inception, thereby ma.king the combining of the smaller individual banks an utter impossibility, for they must de­pend upon the Central Associations for their reserves. 
Now, let us note the danger of control in the District Associa­tions. The banks of the local Associations are de·pendent in the matter of reserves and quick cash dem.ands upon the ·monied pow­ers of St. Louis, Chicago, and New York. One-half of the branch directors are to be elected by capital stock, and one-half bv stock representatives chosen by the local Association directors. But in each district, there will be a number of large banks controlling m-ore capital than the sm·aller banks combined. These banks will do1ninate the local Association, and, will, in turn, be dominated by the monied power. Thus the election of branch directors wil], in fact, be dominated by the large banks, and the smaller banks must submit to the directors so elected. The gentlemen propose to give the small banks a pretense of power and representation, bl1t, in fact, a pretense only; for the larger banks of the district. will con­trol. Thus, the gentlemen of the affirmative find themselves in this predicament : ''If Wall Street and its great interests refuse to come into this Association, there being no way to compel them, it will fail for it can never exist.'' No ! the danger which Mr. Aldrich fear~ is there. The plan will be dominated by the monied power of Wall Street in its local, District, and National Associations, thereb:y rendering the plan vicious and undesirable, and it should be rejected. 
But aside from the danger of control by Wall Street, there is another objection which :renders the pla.n undesirable. We refer to the fact that, if the plan is adopted, it will be a centralized monied monopoly. It means the centralization of our vast ba.nking and currency power in the hands of a few men. At the hea,d o·f tl1e entire system stands the Executive C·ommittee of nine men. This committee of nine exercises the powers of the Reserve Board, and it is to be the real head of the system. And what are the cen­tralize·d powers of these men? They have the power to make the by-laws of the Reserve Association; th.ey make the by-laws of the L-0cal Associations; they have the power to make the by-laws of the 
Ba.nking and Currency Reform 
branch Associations-in short, these nine men alone are to deter­mine the policy of tl1e entire banking system of the United States. 
Furthermore, these nine men have-the power to expel a.ny bank from the Association, although that bank may not voluntarily with­draw from the Association. These nine men maiy create ne"" dis­tricts at will, and they have the power to change the boundarie.~ of the old dist~cts whenever they see fit. We submit that this is a power which should be exercised by those in the loca.I associations, for they will naturally exercise more care and better judgment than nine men located at Washington. Thus, all the power of this Executive Committee of nine men reeks with the carefully concealed idea of centralization--centralization to be exercised for their own satisfaction, and for the satisfaction of the interests which they will represent. 
But let us notice what other centralized powers these nine men may exercise. The rate of discount should follow the law of sup­ply and dem·and, llut these men have the power to raise the dis­count rate, and to lower it in any community, district, or state, whenever it suits them to do so. Thus, they have the power to raise the rate of discount to 5 per cent in the Knoxville district, when, under the law of business demand, it should be three. Then again, they have the power to lower the discount rate in the Mem­phis district to 3 per cent, when by the law of supply a.nd demand it should be 5 per cent. We urge that it is impractical to place in the hands of nine men, the power to make a uniform rate of discount, when the ccon·omic and business conditions of this coun­trv are so variable and so different. 
UAnother aspect of this iniquitous centralization in the hands of nine men, is found in the relation of the smaller banks to the larger banks. Under this scheme, the larger banks are certain to dominate the smaller banks, because they will be dependent upon the larger banks for their reserves. Thus bank ''A,'' having a capital of $150,000,000.. has been acting as the reserve agent o.f bank ''B,'' with a capital of $t25,000. These two banks fall within the same District Association, and it is but natural and loe-ical to expect that bank ''B,'' being dependent upon ba.nk "A'' for its reserves, will be dictated to by ba.nk ''A,'' when it comes to the selection of the directors, instead of a.cting independently. 
'11urning now from these considerations of this centralized monop­
oly, for whose benefit is this centralized Association, under the 
control of nine men, to be brought into existence? Is it for the 
benefit of the people of the whole nation? Is it for the benefit 
lJn:iv.e1·sity of Texas .Debates 

of every class of business? Or rather is it to be adapted for the benefit of one particular class, and that class the bankin~ frater­nity? An investigation of the provisions of the bill will sho"\\·. The one fa.ct that stands out most prominently is that the National Reserve Association is to be controlled almost entirelv bv the bank­ing community. Upon investigation, we find that all the directers of the local associations will be elected by llankers, a.nd will be bankers. F'ive-sixths of the directors o.f the branch associations will be bankers and will be elected by . bankers. Coming to the Central Association, which will be the dominant body, we observe a control by the banking community. Fifteen of the forty-five rlirectors of the N·.atjonal Reserve Association are to be elected, one each, by the boards of the fifteen branch associations; but these branch boards are to be elected by ban]{ers, and five-sixths of the membership of each board consists of bankers. Following this pro·cess through each election, we find that a. total of forty-two of the directors of this Association a.re elected by bankers.. and \\rill be bankers. Is it tr11e.,,. then.., that this Association is to be 
d. benefit~ controlled by nine men, of, for, and b-y the bank~ers? Is it wise to turn the whole financial system of this country into the hands of bankers, especially when they are· so closely allied? 
We must bear in mind that any change of the present ba.nking system must be for the good of the public as a whole. We must realize that the public deposits of this A-ssociation alone will exceed its paid up ca.pita.I; that the funds which the banks deposit with the Association will be but the funds deposit.ed with the banks by the public, and that the paper which the banks redisco·unt with it will be that of the business community. We n1ust not forget that the National Reserve Association is to have a tremendous public power and responsibility, through its right to fix the bank rate of discount; its power over the foreign excha.n~es and shipments of ~old ~ its rights to issue the country's only elastic p·aper currency; its con­trol over banks and jts functions of holding a large percentage of the country's reserve money. Here, then, is to be created a vast centralized power, dominated and controlled by nine men, to work its weal or woe upon the business interests of this -country. We demand to know, is it wise to place this power in the hands of one class, to be operated for that class's. benefit, beyond the pale of control by the people at large? Would we turn over the entire finances of this country to the lawyers, if they were as vitally inter­ested in them as the ba.nkers ~rill be? No ! This is a. centralized monied monopol~y for the benefit of the ba.nkers and the bankers 
Ba.nking and Currency Reform 
alone a monopoly which has the power of life or dea.th over the business interests of every community-a monopoly which may wield its too great influence in politics, to secure privileged legisla­tion-a monopoly which may laugh at the threats of those who created it. Such a r,.ower should not be given the right to control the finances of this country. 
Honorable Judges, we of the negative have shown you that the plan cannot remedy the inelasticity of the present system, but rather that it tends to increase it; and second., that it absolutely fails to provide an adequate discount market. Furthermore, the danger of Wall Street controlling the Association is too distinct to be denied, while the powers of such a centralized financial monopoly · are too great to be exercised by nine men. In short, the gentlemen of the affirmative seek elasticity, and the direct result of their efforts is increased inflation; they plead for cooperation of all the­banks for the benefit of each, and they get private centralization-· centralization which binds together, in one solid phalanx, every bank, every commercial, financial, and political interest-centraliza­tion which takes from the government the rig-ht to a.mend for ten years, and subjects to the danget of control every individual's interest in the United States for a term of fiftv yea.rs. For these reasons, we submit that the plan is un-American, and is not to be desired. 
BIBIJIOGRAPHY. 

Affi1·mative References. 

Laughlin's Banking Reform. No . ....t\.mer. R.ev., vol. 188, pp. 212­25; vol. 1·93, pp. 539-50. Independent, Feb. 29, March 14, 28, 1912; vol. 72, p. 665. Nation, vol. 76, p. 184; vol. 92, p. 73. Everybody's:, March, 1912. F·orum, vol. 45, pp. 539-4,. C11r. Lit., Feb. 12, 1912. Outlook, vol. 88, pp. 106, 149-50, 340-1, 676-7. Lit. Digest, Nov. 14, 1911, Jan. 20, 1912, Q. J. Econ., vol~ 20,. 
p. 135. Pamphlet~ ''A National Reserve Association and the Cotton ~Iovement,'' Ba.nking Reform Series, No. 5. Pamphlets issued hy ~ational Citizens' League for the Promotion of a Sound Bankin~ System, ChicagQ, Ill. Congressional Record and periodicals for .Tune-October, 1913. 
Negative References. 

W.R. Hambey, ''The Aldrich Plan: A Review of Its Powers and Fl1nctions.'' No. Amer. Rev., March, 1912, pp. 310-18. Jour. Pol. Econ., vol. 16, pp. 94-7; vol. 20, pp. 25, 41. Independent, 
54. U n.iverS'ity of Texas Debates 
vol. 64, pp. 427-8, 1101-2; vol. 72, pp. 555-58. Nation., vol, 36, pp. 164-5; vol. 89, pp. 4:50-5. Banking Reform, March 16, 1R12. Cur. Lit., vol. 50, pp. 58·4-6. House Documents, No. 291, 62nd Congress. Everybody's, April, 1912. Moody's Mag., March, April, May, 19!2. Speeches by Sena.tor LaFollette, March, 1908. Congre&~io11al Record and periodicals for June-October, 1913.