Jacob S. Coxey
The Cause and the Cure !

I have purchased a mammoth tent one hundred feet by two hundred feet that will accommodate 10,000 people, and a forty-five foot baggage car painted white with red and blue letters one and one-half inches in height, giving the Non-Interest Bond bill in full, the Initiative and Referendum, etc., which you can find in this book under "Inscriptions on Coxey's Car."

This purchase was made with the intention of traveling all over the United States and lecturing free to the people on Good Roads and National Currency based on Non-Interest Bonds;  and this Good Roads and Non-Interest Bond Library is being published with the intent and desire to get the idea to the masses of how easy it will be to substitute a cash system to take the place of the dangerous credit system, and abolish interest or usury, by state, county, town and municipal employment of all surplus labor in beautifying and improving the country when there is a surplus production or no demand for labor in productive enterprises, also to procure money to purchase and pay for railroads, telegraphs, telephones, ship canals, street car lines, water works, gas and electric light plants.

A careful reading of this book will make the proposition clear to the reader.

Believing that when the American people once understand this proposition they will have the courage of their convictions and make their representatives, pledge themselves to vote for the enactment of the Non-Interest Bond bills Initiative and Referendum and Imperative Mandate into law before you give them your ballot.

It is the duty of all citizens, regardless of political affiliations, to take hold of this subject and help agitate and educate the people until it is enacted into law.

This book is printed in both German and English, which I will furnish you at five cents per single copy, or, by writing to my address at Massillon, Ohio, will deliver them by mail to any address at one dollar per hundred, postage prepaid.

It will be of interest to know how much progress has been made with this non-interest bond bill.  The Commonweal march to Washington in 1894 was made on same.  This plank was in the Populist platform of Ohio in 1894, 1895, 1896 and 1897, and in Iowa in 1897.  Mr. Abe Steinberger, editor World, Girard, Kansas, had it placed in third congressional district platform in 1896, in which district a Republican had been elected in 1894 by 2,000, and Hon. Ed. R. Ridgeley was placed in nomination and made his campaign on the non-interest bond bill.  Mr. Steinberger arranged with the merchants of fourteen towns to pay my expenses, and I made fourteen speeches on the proposition.  Mr. Ridgeley was elected by 4,000 majority and he has introduced the bill in special session of this congress.

Jacob S. Coxey

These Planks Should Be Placed in All National and State Platforms.

It is the crime of the Nineteenth century that three millions of our fellow citizens are in involuntary idleness, thus causing an irretrievable loss of millions of dollars daily, hence we demand that whenever any state, territory, township, municipality or incorporated town or village deem it necessary to make public improvements they shall be permitted to deposit with the secretary of the treasury of the United States a Non-Interest bearing bond, not to exceed one-half the assessed valuation of the property, exclusive of all improvements thereon, of the state, territory, county, township municipality or incorporated village, in exchange for full, legal tender currency, and bond to be retired at the rate of 4 per cent per annum.

We demand a service pension to all soldiers of $8 per month and in addition 1 cent per day per month for each day of actual service.

President, vice president and United States senators to be elected by direct vote of the people.

In order that the people maybe enabled to regain control of their state, county and municipal affairs, we demand that the constitution of the state be so amended that 10 per centum of the qualified electors of either of these subdivisions shall have initiated a movement for an act or proposition, it shall be mandatory on the secretary of state to refer the act or proposition to the people affected for their acceptance or rejection at the next general election;  whenever any such public act or proposition shall be approved by a majority of electors voting upon the same it shall become valid and operative from and after the official canvass of such vote.

Top of each side of car: Jacob Sechler Coxey's "Good Roads and Noninterest Bond" Campaign Car and Tent.

On each end:  "Keep off the Grass."

On one side:  "All railroad section men to receive no less than one dollar and fifty cents per day of eight hours' work."  Up-to-Date Non-Interest Bond Bill in full:

An Act to Provide for Public Improvements and Employment of the Citizens Of the United States, to Encourage Industry and Produce Prosperity, and to Procure Money to Purchase and Pay for Public Utilities.

Section 1.  Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That whenever any state, territory, county, township, municipality or incorporated town or village deeming it necessary to make any public improvements and give employment to unemployed citizens of the United States, or to procure money for the purchase or construction and operation of state capitols and all state institutions, railroads, ship canals, water ways, harbors, levees, bridges, ditches, tunnels, telegraphs, telephones, public roads or highways, court houses, street car lines, waterworks, gas and electric light plants, school houses, public halls, libraries, market houses, sewering and paving streets, public parks or any other public utility so as to furnish employment for all surplus or unemployed citizens in beautifying and improving the country when there is a surplus production or no demand for labor in production at living wages, they shall deposit with the Secretary of the Treasury of the United States a non-interest-bearing twenty-five year bond, not to exceed one-half of the assessed valuation of the property, exclusive of all improvements, less all outstanding and existing indebtedness, in said state, territory, county, township, municipality or incorporated town or village, and said bond to be retired at the rate of four per centum per annum.

Sec. 2.  That whenever the foregoing section of this act has been complied with it shall be mandatory upon the Secretary of the Treasury of the United States to have engraved and printed treasury notes in the denominations of one, two, five, ten and fifty dollars each, which shall be a full legal tender for all debts, public and private, to the full face value of said bond and deliver to said state, territory, county, township, municipality, or incorporate town or village ninety-nine per centum of said notes and retain one per centum for the expense of engraving, printing, bookkeeping, disbursing and taking care of this department.

Sec. 3.  That after the passage of this act it shall be compulsory upon every incorporated town or village, municipality, township, county, state or territory to give employment to any idle man or woman applying for work and the rate shall be not leas than one dollar and fifty cents per day for common labor and three dollars and fifty cents per day for team and labor, and that eight hours per day shall constitute a day's labor under the provisions of this act, the same rate to be paid to both men and women.

See. 4.  That any State, Territory, county, township, municipality, incorporated town or village issuing Non Interest Bonds under this act shall levy and collect an annual tax on all the taxable real estate, exclusive of all improvements, of the State, Territory, county, township, municipality, incorporated town or village depositing Non Interest Bonds sufficient to pay into the United States Treasury each year not less than four per centum of the total amount received from the United States Treasury until the whole amount shall have been paid, and that whenever these Treasury notes are returned to the Secretary of the Treasury at the annual payments of four per centum they shall be retired, cancelled, destroyed and not again reissued.  In case either gold, silver or any other lawful money shall or may be sent in lieu of the Treasury notes issued on any Non Interest Bond deposited under the provisions of this act the Secretary of the Treasury shall hold or retain such lawful money aforementioned until the Treasury notes issued on Non Interest Bonds deposited by State, county, township, municipality, incorporated town or village shall come in or be presented through the regular channels of business with the Secretary of the Treasury when he shall release the lawful money so held and retire, cancel and destroy as hereinbefore mentioned.

Sec. 5.  That this law is to take effect on and after the passage of this act.

On each aide of car:  "Keep Off the Grass," Good Roads and Non-Interest Bond, Lithograph:

Municipal purchase of street car lines, water works, gas and electric light plants, so as to furnish heat, light, water and power to the people at cost by the cities, towns or villages depositing their Non-Interest Bond with the national government in exchange for full legal tender currency, which shall be used to either purchase or build street ear lines, water works, gas and electric light plants.  Street car fares, water, gas and electric light rates to be high enough to return to the national government annually four per cent. upon the principal, but without interest, the balance of the revenue to pay the running expenses of the cities, towns or villages and abolish taxes.

How to purchase public utilities, state ownership of railroads, telegraphs, telephones and ship canals by state depositing Non-Interest Bonds with the national government in exchange for full legal tender paper currency which shall be used in paying for railroads, telegraphs and ship canals.

Freight and passenger rates to be charged sufficient to pay running expenses and return to the national government annually four per cent. of amount borrowed, without interest.

When Voters Ask It.
TWO PARALLELS.
See Page 13.
Initiative and Referendum.

In order that the people may be enabled to regain control of their state, county and municipal affairs, we demand that the Constitution of the State of Ohio be so amended that ten per centum of the qualified electors of either of these sub-divisions shall have initiated a movement for an act or proposition it shall be mandatory on the Secretary of State to refer the act or proposition to the people affected for their acceptance or rejection at the next general election.  Whenever any such act or proposition shall be approved by a majority of electors voting upon the same, it shall become valid and operative from and after the official canvass of such vote. We demand a service pension to all soldiers of $8.00 per month and in addition one cent per day per month for each day of actual service.

State, county, township and municipal employment of all idle labor at not less than one dollar and fifty cents per day of eight hours, in beautifying and improving the country, when there is no demand for labor in productive enterprises.

After a careful reading and thoughtful consideration of the contents of this book, and the fact that the publisher and author has gotten over a half million copies into the people's hands at his own expense, do you not think it your solemn duty to send one dollar to him at Massillon, Ohio, for one hundred copies to loan to your neighbors ?  Do not give them, but loan them, and the next time you meet them ask for the return of the book and their opinion.

The man who receives interest, receives something for which he gives no equivalent.

The obligations in the United States which bear interest, or are counted as interest-bearing -- the Government bonds, state, county, school, road, bridge, court house, township, city, town, all other Government, state and municipal obligations, railroad bonds, railroad stocks (real and watered), street railway stocks add bonds, water company bonds and stocks, electric lighting bonds and stocks, the bonds and stocks of all other manufacturing corporations, syndicates, trust stocks, brewery stocks and bonds, the real estate mortgage indebtedness, the chattel mortgage indebtedness, the personally secured interest-bearing notes in bank and the unsecured interest-bearing obligations, all are estimated to make a grand total of thirty-three thousand millions of dollars ($33,000,000,000) and some estimates place it at over 40 billions ions of dollars or forty thousand millions.  Part of the interest due on this appalling sum is due in England, Berlin, Hamburg, Paris, Boston, New York, Philadelphia, and to your neighbor -- but it is all "interest" -- something for nothing, a waste of the nation's life blood.  Some bears a low rate per cent, some higher, and same still higher, while the city pawn broker loans to his victims, who pass beneath the gilded three balls, at ten per cent a month or even more.  Eight per cent per annum is considered a conservative estimate, and this rate on the lesser sum mentioned above ($33,000,000,000) equals two thousand six hundred and forty millions of dollars, (2,640,000,000) as the annual interest drain on the industrial forces of the nation !!

This appalling sum will never accurately be appreciated when we stare in dumb, amazement at the bewildering maze of fig tires.  The human mind is too weak to grasp the awful truth set forth in the horrid row of ten figures needed to express the yearly tribute to Shylock.

How can we adequately measure the yawning chasm on whose beetling precipice we stand in imminent danger of being cast headlong by a single misstep ?

Let us try.

In the "Statistical Abstract" published by the Treasury Department at Washington, D.C.  This contains the statistics on crops, manufactures, etc., gathered at great expanse, a and published annually at public, cost.  The latest reports given are for the year 1894, and following is the total value of the crops named, on the farms or at the place of production, before transportation charges began to figure in the values -- not the value of the surplus after paying cost of raising and supplying the home consumption, but the total values for crops of 1894, in even millions:

Corn .......................... $ 554,000,000
Wheat ........................ 225,000,000
Oats.................. 214,000,000
Rye..................... ..... 13,000,000
Barley........................ 27,000,000
Buckwheat................... 7,000,000
Tobacco....................... 28,000,000
Cotton ........................ 204,000,000
Potatoes ...... ................ 91,000,000
Hay.................... 468,000,000
Wool.......................... 24 000,000
Sugar....................... 24,000,000
Gold........................ 38,000,000
Silver (coining value) ...... 77,000,000
All other minerals including oil .... 497,090,000
Grand total ................ $1,543,000,000

Amazing and dazzling as is this showing of the productions of the country, it requires it all to meet the annual interest charge and we have fallen short by ninety-seven millions of dollars that most be made up from the rice and broom corn crops and then draw upon the fisheries and forests furnished by a bounteous nature to pay the usurer's demands.

Remember this is all the crops named leaving nothing to turn into horses, cattle, hogs, poultry, eggs or butter -- these crops are all included in the grain and hay crops necessary to produce them.  Then we see it takes ALL the raw products of the country to satisfy the usurers, leaving only the values that come from the forests and fisheries to support the teeming millions and fight back the gaunt spectre of starvation from the homes of all the producers of this stupendous wealth.

How long will the beast of burden meekly bow his neck to the yoke of the oppressor ?

How long will these interest burdens be held sacred by those whose children go naked that the usurer may get the amount of his claim ?

After a careful reading and thoughtful consideration of the contents of this book, and the fact that the publisher and author has gotten over a half million copies into the people's hands at his own expense, do you not think it your solemn duty to send one dollar to him at Massillon, Ohio, for one hundred copies to loan to your neighbors ?  Do not give them, but loan them, and the next time you meet them ask for the return of the and book their opinion.

The undersigned, constituting more than one-fifth [1-5] of the voters of the City of Massillon, Ohio, do petition the Council of the City to formulate the proper ordinance [according to the initiative and referendum] and to take the necessary steps to procure from the general Government the sum of One Hundred Thousand dollars [$100,000.00] to be expended according to law in the making of public improvements in the City, including the paving and sewering of the streets, the building and maintaining of schools and school houses, public library, public hall, market house and public park, the purchase, maintenance and operation of waterworks, street car lines and gas and electric light plants to furnish water, light, heat and power.

A petition [the above petition] of more than 20 per cent. of the voters of the City having been presented to the Council, and it being mandatory upon the Council to comply with the request of the voters as indicated in the petition, it is now by the Council resolved that the question of adopting or rejecting the following ordinance be submitted to all the voters of the City at a special election to be held on June 6, 1901, as to whether the City should proceed to procure from the general Government the sum of money mentioned in the said petition, to-wit: One Hundred Thousand Dollars, to be expended for the purposes therein named.  And it is ordered that prior to such election notice of the intention to hold the same shall be published for at least thirty days in the newspapers of the City.

Section One.  That said City of Massillon procure from the general Government the sum of One Hundred Thousand dollars.  [Less the one per cent. to be deducted by the Government for engraving, printing and bookkeeping.]

Section Two.  That the City, by its proper officials, execute and deliver to the general Government its bond, or obligation, for the like sum of One Hundred Thousand dollars, to run for the period of Twenty-five years, stipulating for the return by the City to the Government of the amount thereof in Twenty-five annual installments of four per cent each, without interest.

In voting, those who favor the Ordinance shall vote "Non-Interest Bond Ordinance Yes," and those who oppose "Non-Interest Bond Ordinance No."

Such election being presumed to have been held, if a majority vote "Ordinance No" that, of course, ends the matter, but if a majority vote "Ordinance Yes," it would become mandatory upon the Council to pass another resolution directing the proper officials to prepare the Bond and send it to Washington.

In illustrating the City of Massillon's Non-Interest Bond, you can easily understand that that which applies to Massillon would apply to all cities, towns and villages;  then make the same application to Townships in building Roads, Bridges, School Houses and Ditches by the Township Trustees issuing Non-Interest Bonds on the Township.  The County Commissioners on the Counties to build Court Houses, County Buildings and Bridges.  The State Legislature authorizing the issue of Non-Interest Bonds on the State to buy, own and operate the Railroads, Telegraphs, Telephones and Ship Canals.

THE CAUSE AND THE CURE !

Statement by Mr. Jacob S. Coxey, of Massillon, Ohio on the Currency Question.

Before the Sub-Committee of Ways and Means Committee of Congress, Washington, D.C., Tuesday, Jan. 8, 1895.

(Official Report of Mr. Coxey's verbal statement, taken for the Government by the stenographer of the Committee on Ways and Means.)

Sub-Committee
Wm.J. Bryan, Benton McMillin, Justin R. Whiting, Julius C. Burrows, John Dalzell

The subcommittee of the committee on Ways and Means, having under consideration the subject of bond issues, this day met, Hon. William J. Bryan in the chair.

Mr. J.S. Coxey, a resident of Massillon, Ohio, appeared before the committee in advocacy of the following bills:

53rd Congress, 2d Session, H.R. 7463, June 15, 1894.

A BILL to provide for public improvements and employment of the citizens of the United States.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That whenever any State, Territory, county, township, municipality, or incorporated town or village deem it necessary to make any public improvements they shall deposit with the Secretary of the Treasury of the United States a non-interest-bearing twenty-five year bond, not to exceed one-half of the assessed valuation of the property in said State, Territory, county, township, municipality, or incorporated town or village, and said bond to be retired at the rate of four per centum per annum.

Sec. 2.  That whenever the foregoing section of this act has been complied with it shall be mandatory upon the Secretary of the Treasury of the United States to have engraved and printed Treasury notes in the denominations of one, two, five and ten dollars each, which shall be a full legal tender for all debts, public and private, to the face value of the said bond and deliver to said State, Territory, county, township, municipality, or incorporated town or village ninety-nine per centum of said notes, and retain one per centum for expense of engraving and printing same.

Sec. 3.  That after the passage of the his act it shall be compulsory upon every incorporated town or village, municipality, township, county, State or Territory to give employment to any idle man applying for work, and that the rate be not less than one dollar and fifty cents per day for common labor and three dollars and fifty cents per day for team and labor, and that eight hours per day shall constitute a day's labor under the provision of this act.

53d Congress, 2d Session, H.R. 7438, June 12th, 1894

A BILL to provide for the improvement of public roads, and for other purposes.

Be in enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Treasury of the United States is hereby authorized and instructed to have engraved and have printed, immediately after the passage of this bill, five hundred millions of dollars of Treasury notes, a legal tender for all debts, public and private, said notes to be in denominations of one, two, five, and ten dollars, and to be placed in a fund to be known as the "general county-road fund system of the United States," and to be expended solely for said purpose.

Sec. 2.  That it shall be the duty of the Secretary of War to take charge of the construction of the said general county-road system of the United States, and said construction to commence as soon as the Secretary of the Treasury shall inform the Secretary of War that the said fund is available, which shall not be later than sixty days from and after the passage of this bill, when it shall be the duty of the Secretary of War to inaugurate the work and expend the sum of twenty millions of dollars per month pro rata with the number of mile of roads in each State and Territory in the United States.

Sec. 3.  That all labor other than that of the office of the Secretary of War, "whose compensations are already fixed by law," shall be paid by the day, and that the rate be not less than one dollar and fifty cents per day for common labor and three dollars and fifty cents for team and labor, and that eight hours per day shall constitute a day's labor under the provision s of this bill, and that all citizens of the United States making application to labor shall be employed.

Diagnosis of the Disease.

The Chairman.  Mr Coxey, if you are ready to proceed we will hear you.

Mr Coxey said: Mr. Chairman and gentlemen, I think it essential, in order to show the necessity for the passage of these proposed bills, to do as physician does in attending a patient with some dangerous disease.  The first thing the physician does is to call in his neighboring physicians and hold a consultation, and diagnose the disease; then the diagnosis will indicate satisfactorily to them the medicine that is necessary to be administered in order to restore the patient to health and vigor.  We find throughout our country today a diseased condition, and I will try to diagnose the disease for you.

It will take us back to the spring of 1893.  We find at that time we had $1,500,000,000 of all kinds of actual money in circulation.  A thousand millions of that actual money was in the hands of the people, the farmers, and laborers, and miners, and merchants, and in the merchant's tills, making their exchanges.  After they paid their debts they took their surplus earnings and deposited those earnings in the banking institutions of the country.  Then the bankers loaned these deposits or earnings of the people out to the manufacturers or employers of the people.  The balance of actual money amounted to $500,000,000, which was held by the banks as a bank reserve, and upon this bank reserve the banking institutions of the country had created another kind of money, which consisted of commercial paper.  That commercial paper is what the manufacturers took in payment for their products.

For instance, suppose a steel manufacturer of Pittsburgh takes a contract to deliver steel and when he delivers that steel he agrees to take in payment for the steel notes running from three to four months' time.  That note is answering the purpose of money, the medium of exchange, because it has exchanged the products from the steel manufacturer to the jobber or consumer who purchases it, just the same as though he had paid the actual money for it.

After delivering the goods and receiving the note in payment, the next thing that the manufacturer does is to go to the banking institution, taking the notes with him, indorsing them, and putting them in his bank book, and the banker takes them and discounts them, deducting the discount, and credits the manufacturer with the balance.  Then that is subject to check.  Now, the banking institutions in 1893 had discounted $4,500,000,000 of that kind of paper, commercial paper, manufacturers' notes, based upon $500,000,000 of bank reserve.  There was $9 of credit money discounted by banking institutions based upon $1 of actual money to pay the $9 with.  Then, the only money that was being used to exchange our commodities was the $1, 000,000,000 in the hands of the people and in the banks as deposits.  The $500,000,000 of bank reserve were to all intents and purposes, so far as the exchange of commodities of the country, out of circulation, because it was held as reserve.

The money mediums we used to exchange our commodities, were $4,500, 000,000 of commercial paper, and $1,000,000,000 of actual money -- $5,500,000,000 all told.  Then, in the spring of 1893 England threw $108,000,000 of securities upon our markets, converted them into gold, and commenced the withdrawal of gold out of the country.  The great daily newspapers commenced the agitation that the continued purchase of silver under the purchasing clause of the Sherman act was causing the gold to flow out of the country.  These editorials, starting originally with the papers of New York, Boston, Philadelphia, Chicago, and all the great daily newspapers of the country, were taken up by the country newspapers, and the bank depositors getting the daily and weekly papers, reading these editorials, where they saw the number of million dollars leaving the country daily and weekly, and the assertion that the cause of it was the continued purchase of silver under the purchasing clause of the Sherman bill, and if that clause was not repealed it would create a panic, because it would drive every dollar of gold out of the country -- as I say, the bank depositors reading these editorials, their minds were prejudiced and framed and they became alarmed and rushed to all the banking institutions and commenced to withdraw their deposits out of the banks, so that the latter part of June and first of July, 1893, we found this condition: That the manufacturer, who had, previous to that, made contracts to deliver his product and take in payment for that product notes running for four months' time, went to the banking institutions with the notes and the notes were turned into the banker, but the banker said: "Self-preservation is the first law of nature, and we must first protect our depositors.  We cannot discount any more commercial paper."

Now, that condition became general in all the banking institutions of this country, and the result was that this confidence money or commercial paper which was being used to exchange products up to that time was refused by the banking institutions to be any longer discounted, and the manufacturer was compelled to close down his plant.

Manufacturers Make Their Own Money.

Now, I want to give two illustrations.  I was talking with Mr. Schmick, who is secretary and treasurer of the Cherry Valley Iron Works of Leetonia, Ohio, where they have quite a large plant and employ a great many men, and he said: "Mr. Coxey, I do not know what caused this business depression, but I know this: when the panic came on the Cherry Valley Iron Co. had deposited at Cleveland $40,000 to their credit, and I went two or three days before pay day and drew a check for $10,000 to get the currency to pay the men their money.

"The banker said to me, 'Mr. Schmick, we can not allow you to draw this money out.'  'Why,' I said, 'what is the matter?'  'Why,' he said, 'there have been runs made upon our bank and all the banking institutions of this country, and we have not got the money to cash the check.'"  He waited there two days, and at the end of that time the banker, by considerable hustling, raised $6,000.  He wanted $10,000, and had $40,000 upon deposit, and when he found he could only get $6,000 he telegraphed to another iron concern in Columbus, Ohio, by the name of King, Gilbert & Warner, to send him by express $4,000 in currency to Leetonia, which he did, and with that $6,000 he got from the bank at Cleveland he went back to Leetonia and was able to pay his men, but he called his men up after paying them and told them what had happened.

He said to them, "I think it would be better to close down our plant, because there is a panic in the country now.  It is impossible to get money to pay you, and you will be dissatisfied and make trouble for us."  The men withdrew and went to their labor organization and held a consultation, and their committee went back and reported to Mr. Schmick that they thought he should run on if he had orders; that they would work and wait until they got it.  That is one illustration.

Now I will give you another one.  Russell & Co., a manufacturing concern of Massillon, Ohio, when the panic came on had contracts to deliver steam engines for manufacturing plants throughout the country.  They delivered the engines, and after the delivery they received notes in payments for the engines.  They took the notes to the banking institutions and were unable to get them discounted, and the result was they could not get money to pay their men, and they were compelled to close down their plant, and after being closed down for over six weeks, throwing 800 men out of employment in the city of Massillon, where I live, the only way they could start up their plant was by issuing their own money, and that is what they did.  Here is one:

I am not presenting this as making any fight against Russell & Co., only to corroborate what I say is the cause of the present business depression.  They closed down their plant and they only way they could start it up was with yellowbacks instead of greenbacks.  Let me say something else in that connection which I think is strong proof of my claim as to the cause of the present business depression.  J.W. McClymonds, treasurer of Russell & Co., is also president of the Merchants National Bank.  C.M. Russell, who signs himself as secretary of Russell & Co., is a director in the Union National Bank of Massillon.  You all know that the presidents and directors of banking institutions say whose paper shall be discounted in their institutions.

Now, if those two men connected with Russell & Co. delivered products and took in payment notes -- you know that all the property of the men giving the notes is back of the notes -- and then indorsing these notes to a banking institution which they control and are unable to get their own notes discounted in their own institutions, how can you expect a manufacturer who has not influence with a banking institution to get notes discounted ?  Does it not corroborate and prove conclusively that that which has closed the manufacturing plants down in on account of the manufacturers not being able to get their paper discounted, and to get actual money to continue their business ?  If that is the case, the issue which was fought last fall on a fear of the repeal of the tariff was a false issue.  That is the point I make, and it was simply done, I believe, to divert the minds of the people from the real cause -- the money question.

There is something else in connection with Russell & Co., and that is this: Mr. Russell told me within the last three weeks that they had $1,000,000 of farmer's notes in their safe.  They also manufacture threshing machines and they take in payment the notes of the farmers and whoever will buy of them; and he said they had $1,000,000 in their safe and he could not tell anything about the value of them whatever.  He did not know whether he would get 10 per cent. or 25 per cent., or what; and he also told me something else in connection with it that they had mortgages upon the crops of farmers in Oregon and that the price of the product was so low they did not harvest the product but allowed it to rot upon the field.  That is something else which I think deserves the attention of you gentlemen.

What the Panic has Cost the Country

Now let us see how that has affected the price of the products of the country -- the fact of the manufacturing plants being closed down.  It has created an army of unemployed numbering from 3,000,000 to 4,000,000 people -- say 4,000,000 of people.  Now, 4,000,000 of people as heads of families means from 15,000,000 to 16,000,000 people dependent upon those 4,000,000, and adding the two together you have 20,000,000 of people who used to be consumers and producers of commodities out of the market; because when a laborer is thrown out of employment upon which he depends for a livelihood, he can not purchase the money to buy the necessaries of life.  Is there any further reason for the fall in the price of wheat down to 50 cents a bushel, and the same way with wool to 12 cents a pound, because these 20,000,000 of people have been stopped from purchasing and consuming.

Then, the question of horses comes up.  The farmer wonders why the price of his horses goes down and thinks there may be an overpopulation.  But that is not the case.  Let us look and see who is was who purchased the farmer's horses four or five years ago, when he got $200 to $225 for a horse.  It was the manufacturer.  What did the manufacturer do with the horses ?  He used them for conveying the raw material from the railroad to his plant and the finished product from his plant to the depot.  They were the people who were buying them, and in anticipation of the wants of the manufacturers of this country the farmers commenced to raise and produce horses and get them ready for the market, and in 1893 they had them ready to sell, but when the farmers put them upon the market, who did they find were their competitors ?  Why, the very men whom he anticipated would be the buyers.

The manufacturer is now his competitor because he is a seller, not because he is producing horses, but because he has no longer use for horses, as his plant remains idle for a number of months and his interest account must be cut down in some way, and so he sells these things; he realizes upon them upon the open market, and when the farmer goes to sell a horse he comes in competition with the man whom he supposed would be a purchaser then.  Of course, the demand being taken away for the horse, the price is bound to fall.  It is true with every branch.  You will find it in the steel business, in the iron business, in the wool business, in the clothing business, and every branch will be affected the same, because you have taken the purchasing power away from the consumers.

Now you have seen this system fail.  Why ?  Because we had business based upon $1 of actual money and $9 of credit money, and I am not taking into consideration the hundreds of millions of commercial paper that lie locked up in safes of the manufacturers that are not used at all, but simply from the view of the statement of $4,500,000,000 of discount.

The Remedy:  Money and Work for the Unemployed

Now then I claim the necessity for these two bills which have been referred to your committee is apparent.  The reason I claim the necessity for the passage of these bills is this:  We should get down to a system of actual money instead of credit money or confidence money, and this will bring it about.  The first bill is called the good roads bill, and is known as that.  That calls for Congress to authorize the issue of $500,000,000 of full legal tender Treasury notes, making them full legal tender for all debts, public and private, and appropriate to each State and Territory at the rate of $20,000,000 per month to set these 4,000,000 of idle and unemployed people to work in macadamizing the roads all over the United States.  I know they are needed pretty badly at Pittsburgh, and I know they are needed nearly as badly in the vicinity where I come from.

There is a provision in this bill which says that all labor shall be done by the day, and not by contract labor, and that the rate of wages shall not be less than $1.50 for a day of eight hours, and $3.50 a day for a team and labor.  This, in my opinion, would settle the eight-hour question, because it would bring about this condition:  that the Government would stand ready at any and all times to give employment to the idle and unemployed at a rate not less than $1.50 for day of eight hours, and thus no manufacturer or firm would be able to hire a single individual for less than what the Government would be willing to pay, which would be $1.50 a day for a day of eight hours.

Now the other bill, the non-interest bearing bond bill, calls for Congress to grant to the States, counties, townships, municipalities, towns, or villages the right to issue bonds, without interest, not to exceed one-half of the assessed valuation of their property, to run for twenty-five years, and to deposit those bonds with the Secretary of the Treasury at Washington as security for the repayment of the money.  Then that it shall be mandatory upon the Secretary of the Treasury to authorize the issue of the face value of these bonds in full legal tender money, keeping out 1 per cent., the actual cost of making the money, and forwarding 99 per cent. to the State, county, municipality, township or village which issues its bonds and deposits them with the Secretary of the Treasury as security for the repayment of the money, they agreeing to pay this money back to the general government at the rate of 4 per cent. per annum, all payments to be applied upon the principal, and in twenty-five years the bonds will be canceled and the municipality will be free from debt.  Now, I would like to illustrate:

Mr. Dalzell.  What is the amount contemplated will be issued by that ?

Mr. Coxey.  Not to exceed one-half of the assessed valuation of the property.

Mr. Dalzell.  Have you any idea of can you give us any approximate figures, of the amount that will be issued, take the last census for instance ?

Mr. Coxey.  No; I can not.

Mr. Dalzell.  You have not looked into that ?

Mr. Coxey.  I cannot do that for this reason.  My idea of the money question is simply this; we should furnish a sufficient volume of money for the demands of trade, and you will see as I go along, I will take up that question and make an illustration which I think, will make it clear to you.

Mr. Dalzell.  I am trying to understand this thing, and I understand that under your first bill we will have $500,000,000, and I would like to know how much additional we will have under the second bill.

Mr. Whiting.  I understand that would be determined upon by what the municipalities would decide to do, as to whether they would issue bonds or not.  Only townships which would want to improve the roads would take advantage of the law, and other townships might say that they did not care for them, so it would lay entirely with the judgment of the township.

Mr. Coxey.  Yes, sir.

The Chairman.  As I understand, the only limit is one-half of the total assessed valuation of all property in the country ?

Mr. Coxey.  Yes, sir.

Mr. Dalzell.  That, I suppose, is to be determined at the time the bonds were issued ?

Mr. Coxey.  Yes, sir.

The Chairman.  Do you allow the counties to issue and also allow the municipalities within the counties --

Mr. Coxey.  Yes, I will reach that point --

The Chairman.  Then, will there not be danger of duplication ?

Mr. Coxey.  I will answer this way, Mr. Chairman.  I do not anticipate a changing of the present bond system only so far as to abolish the interest.  Our present system allows all towns, villages, townships, municipalities, counties and state to issue their bonds bearing interest.

Mr. Dalzell.  A matter of regulation by state law.

Mr. Whiting.  Not to exceed 5 per cent.

The National Banking System a Precedent.

Mr. Coxey.  There are different regulations in different states.  In order to illustrate this I will take a municipality that is assessed $200,000; then it would be allowed to issue bonds not to exceed one-half of the assessed valuation, which would be $100,000, and without interest, running twenty-five years.  They would forward that bond to the Secretary of the Treasury and deposit it with him as security for the repayment of the money, which is similar to what the national banking institutions are doing now with the Government bonds.  Then he would authorize them to issue $100,000 of full legal tender money on this bond, keeping out $1,000 to pay the engraver, printer, paper manufacturer, etc., for making the money, and he would forward $99,000 to the treasurer of the municipality, to be paid out for making all manner of public improvements, such as street car lines, electric light plants, waterworks, putting in sewers, paving streets, building school houses, market houses and making every manner of public improvements that would be a convenience and a comfort to the people of the municipality where the bond was issued.  Now the question arises -

Basis and Redemption.

MR. M'MILLIN.  How do you provide for the redemption of these bonds ?

Mr. Coxey.  I will tell you in a moment.  The first question that arises in a man's mind is, What is back of this money ?  That is always the first question when you bring this up.  You have issued a bond for $100,000, and back of that bond is $200,000 of assessed property.  There is $2 of property back of every dollar you have made and put into circulation before you have made any improvements.  Then you start the idle and unemployed to work in creating value in the public improvements, and the city treasurer will pay money out to men who render the services and create the value; thus, you expend $99,000 in creating $99,000 of value in the shape of public improvements, which is added to the $200,000 of assessed value, and you have increased the value of your money when you put it into circulation for services rendered and value created 50 per cent. over when you commenced, so when you finish your improvements you have $3 of property back of every dollar of circulation, whereas you had $2 when you commenced.

Now, as to the redemption about which the gentleman on the right asked me.  The first year they levy a tax rate to raise 4 per cent. per annum to be applied upon the principal, the same as they do now in levying a tax rate of 6 per cent. per annum, to be paid in interest, while they still owe the principal.  You raise the taxes, you send them in an express package to the Secretary of the Treasury, and he takes the amount of taxes there, just the same as the postmaster takes a stamp, and cancels it, and that money has been redeemed, and through taxation -- the only true redemption of money.  He credits that $4,000 4 per cent., upon the principal of the bond down to $96,000 the first year, and you still have back of that $96,000 in circulation $299,000 of value.

MR. M'MILLIN.  What do you do with the $4,000 sent to the secretary of the Treasury ?

Mr. Coxey.  It is canceled and withdrawn.

MR. M'MILLIN.  You provide for cancellation after return ?

Mr. Coxey.  Yes, sir.

MR. M'MILLIN.  And you provide no metallic redemption at all ?

Mr. Coxey.  No, sir; no metallic redemption.

MR. M'MILLIN.  In the event a county or municipality defaults in the payment, where do you provide suit shall be brought for the enforcement thereof ?

Mr. Coxey.  The property belongs to the Government because it has got a bond on it.

MR. M'MILLIN.  But you see the Government would want the money; it would not want to run every town in the country.

Mr. Coxey.  It is simply a part of the Government.  Every municipality and every town is part of the government, and it is simply furnishing the people --

MR. M'MILLIN.  But you do not provide where any suit is to be brought or litigation by which they can be forced to pay when they fail to pay ?

Mr. Coxey.  Not any more than under the present bond system.

MR. M'MILLIN.  If there should be no provision would not that necessitate the closing of the transaction in the Federal court, as that is the only court of the Government of the United States ?

Mr. Coxey.  I presume it would.

Mr. Dalzell.  All this if I understand you, proceeds upon the assumption that it is a proper function of the Federal Government to authorize loans by municipalities on various improvements ?

Mr. Coxey.  I will illustrate that, Mr. Dalzell, right along in the argument.  Yes, sir; that is the stand I take.

Advantages Over the Present Bond System.

Mr. Dalzell.  For instance, under the laws of Pennsylvania, if a municipality is confined in issuing its bonds to 5 per cent. of its assessed valuation, you would overturn that law by a Federal law that authorizes them to issue 50 per cent ?

Mr. Coxey.  Yes, sir.  Now, the second year they levy another tax rate to raise another 4 per cent., the amount they agreed to pay back to the General Government annually.  This is sent to the General Government, to the Secretary of the Treasury, who cancels it, and you have reduced your principal in two years to $92,000 and you still have your $299,000 of value back of the $92,000 in circulation.  By continuing that process, paying 4 per cent. per annum upon the principal, at the end of twenty-five years your bond is handed back by the General Government, and the General Government says to the States, counties, municipalities, townships and villages, "you have done your part and we now cancel the bond."  They are free of debt.

Take the present system.  How does the municipality borrow money?  They call the council together and authorize the issue, say, of $100,000 of bonds, if they need that much money, provided they have got property enough.  Of course the limit is smaller than what I give, but I only make the limit so as to furnish the money in case they need it.  I do not think they will need it, but I do claim if they need the money they ought to have the privilege of getting the money, and they will not borrow more money than they need from the simple fact that they are taxed annually 4 per cent. to pay back, but these payments go upon the principal.  Now, say the council authorizes the issue of $100,000 of bonds and they agree to pay 6 per cent. interest upon the bonds and the bonds are to run twenty-five years.  They deposit the bonds with some banker or money lender.  They receive the money upon the bonds and then they go and tax the people and raise 6 per cent. interest upon that $100,000, $6,000 for twenty-five years, and at the end of twenty-five years they have paid $150,000 in interest, and then they are just where they started, because they still owe $100,000.

If the municipality under the present law can issue bonds and tax the people to pay 6 per cent. interest upon those bonds for twenty-five years, it strikes me it should be able to pay 4 per cent. upon the principal without interest, and under this system, I believe, if adopted, it would go a long way toward abolishing municipal taxation.  You take large cities like Philadelphia, New York, Pittsburgh, and the majority of the great cities, the revenues from the street-car lines, waterworks, electric and gas plants would more than pay back to the General Government this 4 per cent. per annum upon the amount they borrowed from the General Government to pay for these expenses, and therefore it will not only lower the tax rates, if not altogether abolish the tax rates in municipalities throughout the country, but it would have a beneficial effect upon the city manufacturers, because my friend here in front realizes this fact, that a great many manufacturing plants are driven out of large cities on account of excessive taxation.  They are driven to seek places in the country, on the suburbs of the city, that are inconvenient to people who want to go to the plant to get material and repairs and all that kind of thing, and this will take away that bad feature of driving the manufacturers out in the country.

A township under this bill can borrow money from the General Government and use the money to build a school-house and make township roads.  The counties can put out county bonds and deposit those bonds with the Secretary of the Treasury and build a courthouse and make improvements; and I would like to illustrate that, because in my own county, Stark, our county commissioners have authorized the issue and have issued $200,000 of bonds, bearing 5 per cent. interest, to run twenty years.  They have sold those bonds, and they have the cash to be paid out to build a courthouse.

Now, they will tax the people of Stark county 5 per cent. on the $200,000 for the next twenty years, which will be $200,000, and we will be where we are today, because we will still owe the $200,000 of principal, and I do not know we are going to get the money to pay it.  Under my plan you would issue bonds running for twenty-five years without interest, deposit the bonds with the Secretary of the Treasury, and receive the face value of that bond in full legal-tender Treasury notes, keeping out $2,000, the actual cost of making the money, and the Secretary of the Treasury would forward $198,000 to the county treasurer of Stark county to be paid out for building that courthouse.  Then they would tax back out of the county $8,000 each and every year to be paid and applied upon the principal, and at the end of twenty-five years our bonds would be canceled.  Now we are taxing out of the people of Stark county $10,000 each and every year, and at the end of twenty years we will still owe the $200,000 in bonds.  That illustrates the county loan.  You go up to the States and see how beneficial it would be to the States.

Shall the Government own the Railroads ?

The great issue, I believe, which is before the American people today is whether the railroads are going to own this Government or the Government is going to own the railroads.  I can show you plainly under this how you can buy up the railroads of every State and Territory, and pay for them, and the people will not be taxed one cent to pay for the railroads, and in order to do that I will illustrate how they organize a railroad corporation, because I think it is essential to do so.  It requires half a dozen men to organize a railroad corporation.  They get together and organize it.  The next thing is, they go to the State capital and get a franchise, and that franchise give the right of way through every man's property to the railroad.

They start an engineer to surveying the railroad, and he goes to a farm of a farmer, and gets over the fence and order a stake put here and a stake put there, and probably one put right up to the house, and by that time the farmer comes out and he says to the engineer, "What are you doing here?" The engineer says, "I am staking out a railroad."  The farmer says, "Where are going to run it ?"  And the engineer replies, "I am going to run it right straight through your house."  The farmer becomes angry, and he drives the engineer off his farmer.  The engineer goes and reports to the railroad corporation, and states that they cannot go through the farm.  The attorney of the company goes to the court and petitions the court to appoint a jury or commission to assess the value of the farm.  They do that, and they go back and render a verdict of $700 damages done to the farmer against the railroad company.  What does the railroad company do ?  They take $700 of lawful money issued by the General Government and tender that in court and say to the man, "Now move out."  And if he does not move out they get the sheriff and move him, and the law gives them that right.  Now, that man had a deed to that property; he owns it, and where is the law for it ?

Under the Constitution and law, which says it is for the common benefit of the whole people of this country that that railroad should be built straight through the farmer's farmhouse, how, under the same law and Constitution that guarantees equal rights to all and special privileges to none, I claim that we can condemn the railroad property of this country and take it.

The Government Can Buy the Railroads Without Taxing the People

Now, how can that be done ?  Go into the courts after the passage of the non-interest-bearing bond bill and petition the court to appoint jurors or a commission to go and view the railroad property of the States and Territories, and, after they have viewed it, to render their verdict in the courts and state the number of millions of dollars necessary to pay for them, and then tender them lawful money as issued upon bonds without interest running twenty-five years, based upon all the value of the States; deposit those bonds with the Secretary of the Treasury and get the face value of them, less per cent. for making the money, in full legal-tender money, and then take that lawful money and tender it into the court which will be lawful money, and get deeds for these railroads, and then go to the railroad magnates and tell them to move out, just the same as they told the farmer under the same law and same Constitution.

How beneficial that would be to the manufacturers and business men and laborers of this country !  Under this system you will have abolished dividends upon railroad stock, including all the water, and also interest upon railroad bonds.  No more interest upon railroad bonds then, and the revenues and freight receipts from the railroads would more than pay 4 per cent. per annum back to the General Government which you have agreed to pay upon the amount borrowed from the General Government, and in twenty-five years your bonds would be canceled and you would be free of debt and the freight rates could be lowered much more, and under the system alone, by abolishing dividends upon railroad stock, interest upon railroads bonds, you stop this drain of gold that is leaving our country now daily and weekly to pay dividends and interest abroad.  I say that this Government has the right to make money which would be doing this, and save that $300,000,000 annually to the people of this country.

Elasticity of Money and Automatic Regulation of the Supply

Now the question comes, How are you to put the money in circulation?  I claim that this non-interest bearing bond proposition will act in regulating the good of the business of the country exactly the same as the governor does the speed of a steam engine.  When I was a young man 16 years of age for ten years I ran a stationary engine in a rolling mill, and we set the governor to run the engine at 60 revolutions a minute.  I put the steam on, and the engine commenced to start, and when it commenced to get up to 60 revolutions a minute the governor balls went up and began to close the valve, and when it closed the valve the engine slackened down to 59 revolutions, and then the balls would drop and start to working the valve in the other direction so it worked up and down, regulation the speed of that engine between 59 and 60 revolutions a minute.  This bill will act the same, and in this way:

There are 4,000,000 idle and unemployed people in this country; 1,000,000 of them always work upon public improvements when they are made, but there are none to be made now, because we have not the money to make them.  Three millions of them work in manufacturing plants and upon farms, and they are idle for the same reason that the farms are not profitable; and the same way with manufacturing plants; they are closed down.  The 4,000,000 of men will start to work after the passage of this bill, and at the end of the first eight hours they have created, as they get not less than $1.50 a day, $6,000,000 of value in the establishment of public improvements.  Now, as you create value by great public improvements you coin that value into a medium of exchange called money of full legal-tender value for all debts, public and private, and you pay those $4,000,000 of men for the services they have rendered in creating that value.

The first evening these 4,000,000 of men take $6,000,000 of the representative of the value they have created in that eight hours and they go to the various stores of the country and they purchase of the surplus products of the country.  They take them out of the stores and leave in their place $6,000,000 of legal-tender money; they go to work the next morning; having consumed some of the products -- they have had a good breakfast, say the first in a year -- they work another eight hours, and at the end of that eight hours they have created another $6,000,000 of value, for which the Government gives them $6,000,000 of full legal-tender money, representing the value of these improvements which they have created, and they purchase another $6,000,000 of provisions.  In one month's time they have created $140,000,000 of medium of exchange, representing the value of the improvements they have created, and these men have purchased and paid for and consumed $140,000,000 of the surplus products of the country.

Now, if we create a demand and work off the surplus products, the merchants will write to the manufacturers and the farmers for more goods, and tell them that they want to pay for those goods with money; that they do not want any longer to give their notes, running for three or four months.  It may be that manufacturers read that with surprise, because they have been accustomed to do business by receiving and tendering notes in payment, and, they say, we can start up now, because we do not have to ask the banker to discount commercial paper, but we will start up and pay manufacturing expenses, and when we deliver the goods we get money in payment for them.

They try to start the plant, and they find somebody has hired the men.  Where to they find the men ?  They find 3,000,000 who have worked in the plants are now working on public improvements, opening the valve at Washington and letting the money in to start the whole wheels of industry going again, and they have done it.  They call 3,000,000 off the public improvements because the engine has gotten up to 60 revolutions per minute with 4,000,000,000 men on public improvements.  They take 3,000,000 off and then the engine slacks down to 59 revolutions, when the 1,000,000 left there enables the engine to run from 59 to 60 revolutions, and by that system it equalizes the speed and keeps that engine running between 59 and 60 revolutions a minute all the time this bill is left upon the statute books.

Then you have taken away by the adoption of that every chance of any possible stringency in the future.  Why ?  For this reason, if there is a strike among the coal miners, or the employes of some manufacturing establishment have got a complaint, the men idle and unemployed can go upon the public improvements, and they can get a fair return for a fair day's work, and if a manufacturing plant burns down they have got a place to go to work and create a demand for the productions of the country by the work on public improvements, and consuming the surplus products.  They have got a chance to work there and create a demand, to supply which these plants will have to set to work.  Another strong feature of this is this question of what we call over production, being surplus production, from the simple fact the purchasing power has been taken away from the people.  Now you will give them purchasing power to consume this surplus product instead of producing something that will be put upon the market and come in competition with an already overburdened market.  This is not a marketable improvement.  You do not sell it.  It simply improves the state, counties, townships, municipalities and villages for the general good of all.  You do not sell the improvements.

What Money Is.

Now, as to the question of money.  I wish to touch upon that because they tell you that you have got to have money which is redeemable in gold.  Now, the kind of money I have advocated here today is not only redeemable in gold, but in silver, or iron, or copper, or wheat, or rye, or oats, or cotton, or wool, and everything else that is produced in this country, including labor.  Then you have got a stronger money that that which is only redeemable in gold, because it is redeemable in gold and everything else.  Let us analyze that part.

You start two men to work.  Say one man works upon a highway and he works eight hours, and at the end of that eight hours he has created $1.50 of value in improvements, and the government coins that into $1.50 of legal tender money.  It pays him at the end of the service $1.50 of full legal tender paper money, which is the representative of the value that he has created.  He has it in his hand.  It is an order for all the kinds of goods in the country.

Suppose the second man is a man working in a gold mine, and he works eight hours, and at the end of that time he brings up the actual value in his hand what is called the intrinsic value of $1.50 in gold.  Now, say these two men start for the grocery store and purchase $1.50 of groceries each.  The man who works on the highway says, "I want to pay for those groceries," and he tenders the legal tender note of the government, and the groceryman says, "I will not take it.  The man who has the gold tenders his gold in payment to the groceryman, and the merchant says, "I will not take that."

What do they do ?  They go to that great arbiter, the justice of the peace, who settles any differences of $1.50 and is the agent of the government to that extent, and the three men, the merchant and the men who have created the value, enter the justice of the peace office, and the merchant says to the justice of the peace:  "These men have each purchased $1.50 worth of groceries, and they have not paid me for them."  The man working upon the highway says:  "I wish to pay for mine."  And he tenders his full legal tender paper money that he received from the government to the squire, and the squire takes it and sees the act of Congress and engraving upon it and the stamp upon it, which says:  "This is full legal tender for all debts public and private," and he looks up at the merchant in surprise and says:  "Merchant, that settles your account,"  The justice says:  "Then your account is settled anyway, because all you can get is what Congress says is legal tender for debt."  The merchant changes his mind and takes it then.

How about the man who mines the gold ?  He says:  "I want to pay the groceryman," and he tenders the gold to the squire.  The squire looks at it and says:  "What is that ?"  He says:  "That is gold, and that is what Sherman and Carlisle say is money; money is gold, gold is money, and gold is God's money."  The justice of the peace says:  "Take that to the Philadelphia mint and get the stamp of the government on it, just the same as the paper has, and then you can tender it in payment of debt, and not until then."  He does that, and he brings it back and pays the debt.  Now, what was used about that gold and paper money in paying that debt ?  It was the legal tender value, and that is all you can use in money.

Method of Paying Debts Abroad.

There is another question comes up, and that is, how about settling foreign indebtedness.  Mr. Blaylock, of Blaylock & Blynn, hatters, of Philadelphia, in conversation I said to him, in talking over this question, "Mr. Blaylock, have you not got a lot of accounts back here you would gladly take full legal tender American money for?"  He said: "You are right."  I said: "Provided you have got that money for the hats you have sold and you take it over to a bank of deposit, could not you buy a bill of exchange on England in payment of imported goods ?"  He said:  "Certainly."  I said:  "Where is the necessity of gold for money here?  You must part with your labor to buy it, and first part with the labor to buy paper money issued by the government, because you have got to render services before you can get it.  You cannot get it like the banks now.  They are not rendering services for the money they get; there would have to be services rendered and value created for this money, and then you can get the gold; if we need gold to go to Europe, buy that commodity, because when it leaves this country it simply goes as a commodity, as wheat, or cotton, or any other production in this country which is shipped to Europe."

Now, if there are any questions which you gentlemen feel like putting to me on this question, I will gladly answer them to the best of my ability.  I do not claim to know everything on the subject, though.

Mr. Whiting.  This plan would eliminate interest altogether ?

Mr. Coxey.  It would, as far as public improvements --

Mr. Whiting.  But would it not eliminate all interest ?

Mr. Coxey.  Well, no; I do not think it would.

Mr. Dalzell.  You say it would destroy railroad dividends, and all that sort of thing?

Protection and Revenue.

Mr. Coxey.  It forces the people who now have money invested in railroad enterprises, in telegraphs, telephones, to put their money into individual enterprises in developing the country, for example; and here is one important feature I failed to mention, and that is that there are $5,000,000,000 of English money invested in our different securities, trusts and combinations here.  We are taxed from $250,000,000 to $300,000,000 annually in interest and dividends for the use of a thing that we ought to make ourselves, money.  That is what this bill will do.  That is the kind of protectionist I am; I want to drive every dollar of foreign money out of this country and make the money to do our own business.

Mr. Dalzell.  And buy nothing abroad at all ?

Mr. Coxey.  Oh, certainly; we will buy something abroad; we will buy more abroad than now.  Why ?  They wonder why the receipts of the government have fallen off.  It does not appear to me that they have struck the root of it.  If you stop 20,000,000 people from consuming commodities, some of which undoubted come from abroad, that is one thing which would make your imports fall off; it is simply because you have taken the purchasing power away from 20,000,000 altogether, and from probably 30,000,000 more 50 per cent. of their purchasing power has been taken away and that has had an influence upon the subject of imports into this country; but here is the question of money.

We are at the mercy of the English money lenders now.  At any time they can create a panic, if they wish to do so, by throwing $200,000,000 or $300,000,000 of securities on the market, converting them to gold and taking the gold our of the country.  There would be one way of stopping the drain of gold upon the treasury if the secretary of the treasury would use the prerogative that he has, and that is to determine that he has the right to pay in any kind of lawful money issued by our government, and that when there is a legal tender presented to the Treasury he has got the right to present in payment for that legal tender silver.  That would stop the run upon the treasury if he commenced paying out in silver.

Mr. Dalzell.  Let me ask this question: Why limit the beneficence of your scheme to municipalities ?

Mr. Coxey.  I do not.

Mr. Dalzell.  Why should not the individual property owner issue his twenty-five year non-interest-bearing bond and get 50 per cent. of the value of his property in this money ?

Mr. Coxey.  I will answer that question in this way: I under this plan propose to change the system of issuing bonds to borrow money for municipal improvements.  That is a great innovation over the present system, because it will break the backbone of a monopoly of money in this country.  I might agree with you that that might be a proper thing to do, and I believe it is, but I am not talking --

Mr. Dalzell.  I am not suggesting it, but I am simply asking why you should limit it to municipalities, and why not extend it further ?

A Change From the Credit System to a Cash System.

Mr. Coxey.  I realize that a man can be too radical in anything.  I am trying to accomplish something here that will be beneficial to the people of this country, and I am satisfied that it will furnish the money that is necessary to do the business of this country upon a cash system.

Mr. Whiting.  And you propose to be conservative ?

Mr. Coxey.  Yes, sir; I do.  I propose to substitute a cash system for a credit system, and we have seen the result of the other, the credit system, fail in the last eighteen months.

Mr. Dalzell.  You just draw the line upon municipalities ?

Mr. Coxey.  No; township --

Mr. Dalzell.  No; I mean municipal institutions, whatever they are; that is where you draw the line between radicalism and conservatism ?

Mr. Coxey.  Yes, sir.

MR. M'MILLIN.  Has it occurred to you there is a danger by the possession, operation, and ownership by the Government directly of all the railroads in the country; of its telegraphs, its telephones, and its means of transportation of every kind that an Administration once in power with such authority in its hands to subvert the Government and prevent it ever being ousted would ultimately result in a subversion of the Government ?

Mr. Coxey.  No, sir; I do not.  I do not understand anything of the kind.

Mr. WHITING.  Your idea is that accumulated capital could not lie idle and receive interest but they would have to engage in business ?

Mr. Coxey.  Yes, sir; private enterprises.

The Chairman.  Do you not think the 4 per cent. you fix would have some effect in determining the rate of interest charged generally ?

Mr. Coxey.  Yes; there is a taxation of 4 per cent. upon the total amount issued, but there will be an automatic valve working so that whatever number of men that will work are thrown out of employment by any means at all that number will work this valve and keep regulating it.

Mr. WHITING.  You think it would require Government agents to handle this money.  The bankers would have no longer an existence ?

Mr. Coxey.  Not any more than under the present system.  I establish a precedent by the National banks.  Under the national-bank act it requires five individuals to organize a national-bank corporation.  If they have $100,000 of real estate in this municipality and they conclude to start a national bank, they sell that property and buy $100,000 of money.  Then they sell that money and buy another piece of real estate called a Government bond.  It is real estate because it covers all the real estate of the country.  That bond bears interest, is non-taxable, and they deposit that bond with the Secretary of the Treasury, or the Comptroller of the Currency possibly.  He charges them no tax upon the bond, pays them interest, and gives them 90 per cent. of the face value of that bond in national-bank notes at a cost of 1 per cent.  Now, what have they done? They have deposited their property -- real estate -- with the Secretary of the Treasury, and received interest upon it and 90 per cent. of the face value in national-bank notes to take back to the municipality to loan out to the very men who bought that property, upon their notes bearing interest.

Then how does the municipality get any of that money ?  Here is this other property which has been sold to buy money, to buy bonds, 90 per cent. of the face given to them then; they go back to lend upon that property again, and tax the people 6 per cent. interest upon that bond, and the people are borrowing their own money because they have loaned these people 90 per cent. of the face value of the bond at a cost of 1 per cent., and they go and pay 6 per cent. for the use of that money.  This will avoid that, and I take the national banks as a precedent to establish the non-interest bearing-bond bill, because 2 per cent. of the people for thirty-one years have had this benefit of depositing this property with the General Government, getting 90 per cent. in national-bank notes at a cost of 1 per cent.  I do not ask that they pay interest upon the bonds and pay 90 per cent., but simply to give us the face value less the cost of making the money.

Mr. Whiting.  Some bankers have found it cheaper to use the money they had rather than use Government money at all.

Mr. Coxey.  After they started?  After they got deposits ?

Mr. Whiting.  No; before.

The Chairman.  The present currency plan we are discussing in the House allows a bank, under certain restrictions, to issue 75 per cent. in money upon the face of its capital, depositing 30 per cent. of greenbacks and Treasury notes, leaving a net advantage to them of a little more than 50 per cent. of the capital stock upon which they pan an interest or tax equivalent at most to 1 per cent. one-half of 1 per cent. for the regular expenses and one-half per cent. for a guarantee fund or safety fund.  Your plan does away with notes, and instead of allowing the banks to issue one-half of their capital you allow the municipalities to issue one-half of their capital ?

Mr. Coxey.  Yes, sir.

The Chairman.  So the people, under your plan, get the benefit of the loan, whereas under the proposed emergency plan the bankers get the benefit ?

Mr. Coxey.  Yes; only 2 per cent. of the people now.

The Chairman.  And then the banker uses the money for whatever he can make out of it ?

Mr. Coxey.  It allows him the right to charge 6 per cent. interest.  My scheme is established and precedented on the national-bank system to come and demand under the Constitution equal rights to all and special privileges to none, because it will benefit directly the whole people instead of 2 per cent. of the people.

The Chairman.  The rate of interest you have fixed is, of course -

Mr. Coxey.  It is not interest; it is simply payments.

The Chairman.  Entirely arbitrary ?  It can be made 5 per cent. for a less term or 2 per cent. for a longer term ?

Mr. Coxey.  Certainly it could.  This is simply a matter of compromise with Congress.

The Chairman.  Do you anticipate any danger from the contraction of the currency you speak of caused by the cancellation of this money when it comes in ?

Mr. Coxey.  No, sir; for this reason.  I thought I made that clear to you before, but I am glad to answer that question.  I claim that if a manufacturing plant is forced to suspend or burn down, or any dire disaster happens that throws a thousand men out of employment by shutting down, they have always got work on public improvements, because you cannot draw so far upon your imagination in the future when you will see a time when there will not be public improvements needed, because as we advance in civilization our wants increase, and as our municipalities increase in size they need more public improvement, and for that reason you can not draw so far upon your imagination that you will not see time when improvements will not be needed.

The Chairman.  You claim for your system the advantage of elasticity?

Mr. Coxey.  Yes, sir; I do.

The Chairman.  Which is also claimed by the advocates of the proposed emergency plan ?

Mr. Coxey.  Yes, sir.

The Chairman.  Except they believe that the banks will find it profitable to increase the currency when it is needed, and you claim that the fact that men are out of employment and need work will draw out money when it is needed, and when there is plenty of money out everybody will be employed elsewhere, so it will not be called for from the government ?

Mr. Coxey.  Yes, sir; that stops the valve of public improvements.  When the manufacturing plants are closed down the valve then opens because the men go on public improvements.  There is the elasticity; that is the automatic working of the valve.

The Chairman.  You think the plan by which you secure elasticity is a safer one than the banks can provide ?

Mr. Coxey.  Yes, sir; I do.  I think it is a dangerous system to allow 2 per cent. of the population of this country to say when you shall have money and when you shall not.  I know that from actual experience.

The Chairman.  Do you anticipate that your plan will arouse any opposition upon the part of the banks ?

Mr. Coxey.  Well, a little.  Mr. Chairman and gentlemen, I think you very kindly for hearing me.

Thereupon the committee adjourned.

The Commonweal Army had its conception in a plan devised in December, 1891, for the improvement of the public roads throughout the entire country as a means of furnishing employment to millions of unemployed men driven to enforced idleness by the closing of mines and factories, and the introduction of labor-saving machinery.

Bulletin No. 1 of "The Good Roads Association of the United States," of which J.S. Coxey was President, giving text of the Good Roads bill, was issued Dec. 7, 1893.

In January, 1894, the Non-Interest Bond plan was devised by Mr. Coxey, as a means of supplying the money to carry forward the improvement of the public highways and all other public improvements.

Bulletin No. 2 of the association was issued January 31, 1894, calling for signatures to petitions asking Congress to enact the Non-Interest Bond and Good Roads bills as laws, but having very little faith that Congress would do more than pigeon hole these bills, the idea was conceived of presenting the demand to Congress in the form of a petition with boots on, and, accordingly, on Feb. 28, 1894, Bulletin No. 3 was issued, giving plan of organization, March 25, 1894, Easter, as date to begin the march to Washington, line of march, design of badges, rules, notice of meetings to be held en route, and May 1 as the date of arrival at the Capitol.

March 25, 1894, Bulletin No. 4 was issued embracing General Order No. 1 to the army, when the memorable march was begun, which has taken its niche in history.

Sunday, April 29, 1894, the Commonweal, under the personal command of J.S. Coxey, reached the District of Columbia, going into camp at Brightwood park.  In addition to this contingent, sixteen other separate divisions were en route to Washington City from California, Colorado, Washington, Wisconsin, Illinois, Iowa, Oklahoma, Indiana, Pennsylvania, Massachusetts, New Jersey and other states.  The barriers they encountered, hardships they endured and the incidents of the marches have become matters of history.

On arrival at Washington Mr. Coxey called upon the Vice President and Speaker of the House and requested permission to hold a meeting on the Capitol steps, which request -- while not granted, was not denied.

Promptly on time, May 1, at 12 M., the Commonweal reached the Capitol, being greeted on the line of march and at the Capitol by the largest concourse of people ever assembled there.  Police interference prevented the army from reaching the Capitol steps, but by a strategic movement Mr. Coxey reached the steps only to be confronted by a lieutenant of police who forbade him to speak from the Capitol steps.  Anticipating such a possibility, Mr. Coxey then gave to the press the following protest:

WASHINGTON, D.C., May 1. -- The following is what Coxey intended to say today:

"The Constitution of of the United States guarantees to all citizens the right to peacefully assemble and petition for a redress of to every peace-loving citizen, every liberty-loving man and woman in whose breast the fire of patriotism and love of country had not died out, to assist us in our efforts towards better laws and general benefit."

J.S. Coxey,
Commander of the Commonweal.

The arrest and imprisonment of Coxey, Jones and Browne for twenty days, and fines of five dollars, and the imprisonment of the balance of Commonwealers by the Governor of Maryland, making a raid upon the camp in the night, by fifty heavily armed policemen from Baltimore, surprising each of the men and taking them before a "Jeffries" justice of the peace in the plot, who shamelessly ordered them confined in the Maryland workhouse for no other crime than not having any work to do, the justice expressing sorrow that Mr. Coxey was not one of the number, and showed great chagrin that the young man with the blue and gray uniform on was not Jesse Coxey, he having eluded the vigilance of the officers.  And though busy with his campaign in Ohio, Mr. Coxey went to the scene of the outrage and employed a lawyer -- Mr. Ralston -- and applied for a habeas corpus and put the governor of Maryland in such a dilemma that he was compelled to pardon the men out to save himself from the ignominy that would surely have followed his high handed proceedings ventilated in a court of record.  But by some oversight, three Commonwealers were not let out until the last week in October and the hardships that they underwent has been put in form of affidavits that caused the governor of Maryland to abandon the contest for re-election.  One of these three men is so broken by hardships endured, that he is only existing on charity.  Another one is in his bed in a public hospital in Washington, probably never to leave it alive.  While the third came out stone blind and all this in a land where the newspapers are filling their columns with outrages in Armenia, Siberia, and Cuba, but fail to see such as this under their very noses.