hardly developed ourselves? It may be, possibly, that we want to develop the Argentine Republic by investing $25,000,000, but would it not be well for us to try to invest $25,000,000 in some of the Southern States and let them blossom like a rose? It strikes me there is a field there more important than to go down to Buenos Ayres or any other South American city.

Mr. BLACK. Don't you think it is of more importance to protect ourselves from this English domination at home than it is to go into the matter of South America

Mr. SPALDING. I appreciate what you say, but it is not in line with our discussion at this time.

Mr BLACK. I didn't mean to interrupt.

ISSUE BONDS OF SMALL DENOMINATIONS.

Mr. SPALDING. I do not understand we are under the domination of England. When we sell bonds payable in coin they are put on the market and should be sold to anybody who wants to buy them. Of course if England desires to buy she should have a right to do so, and the lower rate of interest this Government can obtain on her bonds the better. I think an issue of bonds in small denominations, sums of $20 or multiples thereof, would be a beneficial thing for this Government; and let all the people have an interest in the bonds, say, at 2 or 14 per cent, and so let them become practically interested in the finances of the United States, and not leave it to large corporations and syndicates. Mr. BROSIUS. What would you do with the money? What do you want to issue bonds for when you don't want any money? I don't understand the gentleman's point.

Mr. SPALDING. The point has been made, and the inquiry has been made, that we were under the domination of the English in regard to our finances.

Mr. BROSIUS. I did not inquire about that.

Mr. BLACK. Mr. Brosius addressed himself to that point this morning in reference to these South American countries-that we were dependent to a degree that was humiliating if not disgraceful.

Mr. BROSIUS. Yes; that our business was done through English bankers.

Mr. SPALDING. I understand there is somewhat of a general desire here to retire the $346,000,000 of greenbacks. I see how you will need the money if you undertake any such scheme as that.

Mr. BROSIUS. You didn't mention that before.

Mr. SPALDING. I say instead of having the bonds taken up by a syndicate

Mr. BROSIUS. I agree with you. I advocate letting our own people have our bonds.

BONDS PAYABLE IN GOLD.

Mr. SPALDING. And our bonds, instead of being payable in gold, shall be payable in coin of the United States which is maintained at a par value with gold.

Mr. BROSIUS. That is the way it is. We haven't a bond payable in gold.

Mr. SPALDING. You never could get a bond of the United States under this administration-of the $262,000,000 that they borrowedunless you paid gold for it.

Mr. BROSIUS. There is not a bond required to be paid in gold; there never was such a bond issued.

Mr. SPALDING. I understand that, and fully agree with you.

Mr. BROSIUS. You spoke as though the bonds were payable in gold and ought to be made payable some other way.

Mr. SPALDING. Every bond issued under the present Administration has been payable in gold; that is, the bond you purchase has to be paid in gold. There have been $262,000,000 of them. No man in Michigan, no man in Tennessee, or any other place could buy one of those bonds unless he sent gold. He could not send greenbacks or national-bank notes, silver certificates, or any of the currency they use out there. Consequently, he was barred from being a bidder. They were barred because of the fact that they.did not have gold. The people out there did not get the opportunity to buy any of the issues of bonds, to take any of them, unless they bought through a syndicate and paid an enhanced price to get them.

LONDON THE MARKET OF THE WORLD.

Now, we had, through Mr. Brosius, a man of straw set up in regard to purchasing wool in Australia.

Mr. BROSIUS. Not Australia, but Argentina.

Mr. SPALDING. The wool market of the world is in London and the wool that is raised in Argentina is sent to London for sale, largely; hides are largely sent to London for sale. That is the market of the world, and the exchange is very easy.

Mr. BROSIUS. Do you mean to say that a bill of goods of wool I order from Argentina is sent to London to be sold to me?

Mr. SPALDING. I say that the majority of all the pounds

Mr. BROSIUS. That does not meet the point. I instanced a case to illustrate how we were dependent upon the banking facilities of England, and the instance was that if I wanted to buy a bill of goods worth $5,000 in Argentina I can not send a letter of credit on a New York house. I have to send a letter on a London bank and the draft is drawn in the London bauk.

Mr. SPALDING. I think you are mistaken.

Mr. BROSIUS. I gave the testimony of a man who had been doing it for twenty-seven years. I make this statement. A man can not draw a draft on South America that he can negotiate, in my judgment, any where in the United States at its face.

Mr. SPALDING. No; nor any other country.

Mr. BROSIUS. Yes, you can. You draw a draft on London any time and negotiate it, whatever the exchange is.

Mr. SPALDING. Whatever the exchange is. And so you can in Buenos Ayres and in the City of Mexico and any place I know of where they have any large dealings.

Mr. BROSIUS. If you make a point of that I modify it by saying that you can not do it except at a discount above the sterling exchange. In other words, it is not worth as much as it would be if it was drawn on London. In other words, practically you could not handle your draft.

Mr. SPALDING. We do it every day in the shipments of telegraph poles. I have illustrated that.

Mr. BROSIUS. You might for a small amount, say for $100, but you could not handle any draft for any amount.

BUYING FOREIGN WOOL.

Mr. SPALDING. It is simply a matter of correspondence whether there is any trade that carries correspondence there. You could not buy $5,000 worth of wool. You don't know anything about the grade of wool. It goes to London; it is so fine and so long, and so on, and it is put up at market there every day. No man in the woolen business would think of sending a man there to buy wool, when by telegraphing to London

Mr. HILL. Since wool came to this country under the free list there has been more wool bought direct in Australia and shipped to America than has been bought in the wool sales in London and shipped to America.

Mr. SPALDING. That may be in Australia, because of the par of exchange, but the most of the wool that is consumed is not bought direct.

Mr. BROSIUS. Mr. Spalding, do you know any reason why, when we want to buy a product of Argentina, we should wait for that wool to be shipped to London before we buy it, excepting on account of the lack of facilities to conduct transactions directly with Argentina?

PROTECTION FOR AMERICAN WOOL.

Mr. SPALDING. I will make, so far as my vote goes in this Congress and before this committee, the most difficult way to buy wool from Australia or Argentina. I will try to compel them to buy of Montana and Tennessee. I am not in favor of making it easy to purchase wool from Australia or Argentina.

Mr. BROSIUS. You are making a point of wool; but that was only an illustration. Take any other commodity.

Mr. SPALDING. I am not particularly anxious to get a wool market for the sheep shearers of Australia, and I will surround it with all the difficulties that it is possible for me to surround it with.

Mr. BROSIUS. Take coffee or spices or any commodity we buy from South America.

Mr. MCCLEARY. Would that be a hardship on our people at this time, when we are producing not half the wool we use?

Mr. SPALDING. We will produce all we want. I do not know—and I will state now I have not examined this subject with a great deal of care of any international bank that was ever established by England, by France, by Germany, or any other country.

Mr. Cox. You talk about an international bank. My friend this morning said England had her international bank, France had her bank, with branches in different countries. Now can he produce, or any man produce, any act of Parliament or any legislative body that ever authorized such banks as that to be established? Is it not the enterprise of individuals?

Mr. SPALDING. That is my information and observation in regard to it.

Mr. Cox. There are no such charters as that.

Mr. SPALDING. I don't know of any.

Mr. Cox. You can not produce them.

Mr. SPALDING. I know besides the Bank of England a few limited banks in Scotland, but they have small and limited powers and they are left without the issue of currency. They issue few bills, very few;

but the bills that are issued are largely of the Bank of England, which is a semiofficial bank of the Government.

Mr. BROSIUS. I thought I was very clear this morning in presenting the only reasons for the incorporation of an international American bank. One reason is that foreign governments and the South American Republics would be required to extend certain concessions to this international corporation for the purpose of carrying into effect the purposes intended; and, in the second place, it should be incorporated by Congress, so that it might be kept under constant supervision of the Federal Government, through its agencies, the same as our national banks-all this for the better conduct and the safer conduct of the institution, so that those who deal with it, those who make deposits in it, and all who are engaged with it would be protected in the highest degree possible under our system of institutions. Private individuals could establish banks as the English people do, but if private enterprise would undertake to establish an institution of this kind it would not be subject to Government control. It would be a free lance, and a good many people might suffer in consequence of it. I hope I have made clear the reasons for giving this the prestige and the authority and safety secured by Federal recognition.

LIMIT OF PERSONAL LIABILITY.

Mr. SPALDING. I am not arguing along that line. That is another thing. I will say that my own judgment in regard to banks is that where they hold the individual personally liable for all he is worth, the same as in Scotland and other countries, it is much better than in this country, where the stockholder escapes and the depositor is the man who loses.

Mr. BROSIUS. That used to be so in Scotland, but it is not any more. Mr. SPALDING. It was so less than two years ago.

Mr. BROSIUS. That way has worn out. There is a limit of liability. Experience has shown that is the best plan.

Mr. HILL. Is it a good loan to lend $2,400,000 on real estate-was that a judicious loan?

BANK LOANS ON FARM PROPERTY.

Mr. SPALDING. No; I don't think you or I would make that kind of a loan; but loans made on good farm property are not secure to-day, because the farm property has shrunk so. One individual in my district has 23 farms-that is just one little bank of $25,000 capital, organ ized under the State law-and he has got 23 farms, and is operating them.

Mr. HILL. And yet, in the face of that example, you stand here and advocate real estate loans for national banks?

Mr. SPALDING. He didn't have the real estate loans. If he had that he might have sold the mortgage

FAILURE OF THE BANK OF ILLINOIS.

Mr. SPALDING. There is one bank, of my own knowledge, that has lately failed, not far from Mr. Eckels's State, the National Bank of Illinois, a bank with a million dollars capital and a million dollars surplus, and it bears a little on what we have been discussing all along. That stock was selling at $240 on $100 invested-nearly double and a half its value, three days before it went up in smoke, and it has not paid,

and it will not pay, I believe, 75 cents to depositors. That has happened under all the supervision and safeguards that you have thrown around it.

Mr. HILL. Why did it fail?

Mr. SPALDING. Because they could not realize on their assets.
Mr. HILL. No; because of injudicious loans.

Mr. SPALDING. It is so with every bank in the West. They can not realize on their assets. A great deal of the property has shrunk in value, and they can not realize on it.

Mr. HILL. Did he have collateral?

Mr. SPALDING. No; he didn't have the collateral. He had two or three notes and the property so shrank that the creditors of the bank were compelled to take the real estate, whereas if they had taken it in the first place there would have been less cost?

Mr. BROSIUS. Would not that tend to show that notes can be safely issued?

Mr. SPALDING. They are selling corn there for 10 cents a basket, and in your country (to Mr. Calderhead) I understand it is selling for 5 cents.

Mr. CALDERHEAD. Ten cents a bushel.

Mr. SPALDING. And my friend said they were giving it away in Iowa. When you can not realize on the assets of a bank the bank is of no value so far as paying out money goes, and what I stated before the Comptroller was that I am interested in this and have my investments in it, and yet I am opposed to any bill that will simply make a credit currency, because we would all suspend specie payments and all be in a hole as in 1893, when the majority of the banks in this country suspended payments of currency of any kind. You know, gentlemen, how it was. It is not necessary for me to repeat this. We have the best currency in the world now. As long as the Government has plenty of money and the higher credit it has-and it must necessarily have the best credit-it can borrow money for a great deal less than any bank.

But that is wandering from the subject. I should be utterly opposed, first, to naming any incorporators. I am in favor of not creating anything here but

Mr. BROSIUS. No incorporators are named in the bill.

Mr. SPALDING. And I am in favor of any five men being able to incorporate an international bank, provided it is necessary to have an international bank at all.

Mr. Spalding having concluded his remarks, Mr. Cox addressed the committee, as follows:

STATEMENT OF HON. N. N. COX.

Mr. CHAIRMAN: What Mr. Spalding has said on this bill I indorse, but I am going further than he goes. I do not desire this morning to say mucn, except some suggestions on the outline of that which strikes my mind.

What is the proposition here? The proposition is to charter a bank in the United States, and I do not attach much importance, in one sense, to the names of the men who are put in here, because that only means that they are the ones who are going to get a charter. I do not care how you work it, they will be the successful men in getting the charter. That is what is meant. You propose to confer, by this bill, on these gentlemen, or any other gentlemen of like number, the power to organize