Bemidji Daily Pioneer Newspaper, October 2, 1916, Page 4

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NELSON P=i IVERS RINGING SPEECH Launches Gampaign in Minne- sota for Hughes. SCORES DEMOCRATIC PARTY Senlor North Star Senator Flays President Wiison and Adminie tration Policy. The campaign for Republican con- trol of the North Star state and the Placing of Minnesota in the Hughes column might be said to have been officially launched: Saturday ~when United States Senator Knute Nelson delivered the keynote of the cam- paign at Sundberg, in Kandiyohi county. With more than one-half of the voters of the county and nearby towns as an audience and a special train from the Twin Cities carrying hundreds of boosters Senator Nelson delivered himself of the following: Owing to dissensions in the ranks of the Republican party, and to the fact that it had two candidates in the fleld, Woodrow Wilson was, in the fall of 1912, elected president of the United States by a minority, though a plurality, of those who voted at that election. The fact that he was chosen by a minority ought to have made him less partisan and more con- siderate of the welfare of the Ameri- can people. He ought to have been less eager to inflict his ultra-Demo- coratic propaganda upon the Ameri- can people, for he held an elective mandate only from a minority. He had no right to assume that a ma- fority of the people were in favor of him because he was a Democrat, or that they were in favor of radical, socialistic, and ultra-economic schemes of Democratic legislation. Seeks to Dominate Congress. No president, since the days of Jackson, has so sought to dominate congress and to subrogate it to his will and to dictate the legislative policy of the country as President Wilson. To accomplish this purpose and for the sake of notoriety, he began, at the outset of his adminis- tration, to adopt the custom of deliv- ering in person, orally, his messages to the ‘two houses of congress in Joint session. By such an oral mes- sage he inaugurated his tariff legisla- tion, and by such an oral message— his last—he urged and induced con- gress to pass the law giving certain classes of railroad men—the best paid men in the railroad service—the same SENATOR KNUTE NELSON. pay for an eight hour day’s work that they were receiving for a ten hour day’s work, or an increase by legislative flat, of twenty-five per cent. Legislation inspired by the presi- dent, and fortified by caucus rule, has, to a large exteént, been the method that has prevailed under this Demo- cratic administration. And under this method congress has been in ses- sion two years, seven months and fifteen days of the three years and seven months that have transpired of President Wilson’s term. This leaves less than a year of his term up to date that congress has not been in session. Tariff Protection Destroyed. President Wilson was inaugurated the 4th of March, 1913. Although our country was then in & most prosper- ous condition, under the Republican tariff law of 1909, yet his first pur- pose was to uproot and destroy this system of tariff protection and to sub- stitute therefor a so-called free trade, or “tariff for revenue only,” system. In pursuance of this policy, he sum- moned congress in extra session; and congress, in obedience to such sum- mons, met on the 7th day of April, 1913. In his message he declared that: “I haye called the congress together in extraordinary session because a duty laid upon the party in power at the recent elections which it ought to perform promptly, in. order that the burden carried by the people under existing law may be lightened as soon a8 possible nflnorn_rdnthufl the business interests of the country ‘may not be' kept too long in suspence as to what fiscal changes are to be, to which they will be required to adjust themselves. . It is clear to the whole country that the tariff duties must be altered. “The sooner that is done the sooner We shall escape from suffering from e facts and the sooner our men of business will be free to thrive by the law of nature (the nature of free business) instead of by the law of legislation and artificial arrangement. Quotes President’s Message. “We must abolish everything that bears even the semblage of privilege or of any kind of artificlal advantage and put our business men and pro- ducers under the stimulation of a constant necessity to be eflicient, eco- nomical, and enterprising, masters of competitive supremacy, better work- ers and merchants than any in the world. Aside from the dutles laid upon articles which we do not and probably can not produce, therefore, and the duties laid upon Iluxuries and merely for the sake of the rev- enues they yield, the object of the tariff duties henceforth laid must be effective competition, the whetting of American wits by contest with the wits of the rest of the world.” In obedience to this executive mandate, congress — the Democrats being in control of both houses—pro- ceeded to formulate and enact a new tariff act, which finally became a law on the 3d day of Oct., 1913, and took the place of the Republican tariff law of 1909. In making his first assault upon the tariff, President Wilson and his party followed in the wake of Cleveland and his party in 1893-4. But for the great European war and the great demand for our products resulting therefrom and the greatly inflated prices arising from this ex- cessive demand, this last Democratic tarift act would have resulted in as great, yes, even greater, industrial stagnation and suffering among labor- ing men than prevailed in 1894, 1895 and 1896, Destructlve Features of Tarlff Law. While this law removed much of the protective duties on the products of our various manufacturing indus- tries and thus, to some extent, crip- pled them, yet this was mild com- pared with the havoc wrought on the products of our farmers. Nearly all the products of our northern farmers were efther put on the free list or 80 greatly reduced as to be practi- cally on the free list, and afford no real protection. Those who are curious about the exact figures can compare the agricultural schedules of the Republican Payne tariff law with those of the Democratic Underwood law and thus easily discover the dif- ference. Had it not been for the great European war our northern farmers would have sustained losses by the million from the effects of the Underwood law. With a wheat crop of over a billion bushels in the United States and upwards of 350, 000,000 bushels in Canada, leaving 2 surplus, over food and seed, in the two countries, of upwards of six hun- dred million bushels in 1915, our wheat farmers would have had, but for th,e great war, fifty or sixty cents a bushel wheat instead of receiving from $1 to $1.50 a bushel for the same. And the same pro rata differ- ence would have occurred in respect to oats, rye, barley, cattle and hogs. Assails Underwood Tariff. The avowed purpose of the Under- wood tariff law was to destroy pro- tective duties as far as practicable, and by means of the tariff secure ample revenues. The law was suc- cessful in destroying the good effects of protection, but it was an utter failure as a revenue producer. The flood of importations and the paucity of the duties collected during the fiscal year 1916, as compared with the fiscal years 1910, 1911, and 1913, show how open the door of protec- tion has been and how scant the du- ties collected have been. In the meantime, while there was such a great decline in the duties collected under the new tariff law, there was no diminution in internal revenue taxes, including corporation and in- come taxes, but rather a considerable increase. Yet, notwithstanding such increase, owing to the great decrease in duties, it became necessary for the Democratic party to secure additional revenue for the needs of the gov- ernment, and this was obtained through the act enmtitled “An act to increase the internal revenue and for other purposes,” approved Oct. 22, 1914. Under this law there has been collected up to the end of the fiscal year 1916 the sum of $136,347,428 In taxes, thus supplying to some extent the deficiency of duties arising from the Underwood tariff law. The im- ports were as great in the fiscal years 1914 and 1916 as in the fiscal years 1911 and 1912, yet the duties collected each of those years were over one hundred million dollars less, thus demonstrating that even as a revenue producer the Underwood law was not equal to the Payne tarift law. In view of these facts it is, therefore, idle for Democrats to claim that it was the war that necessitated the passage of this additional -inter- nal revenue act. . It was because the Underwood law was not as good & revenue producer as the Payne tariff act. The Democrats have proved themselves incompetent to enact even a “tariff for revenue only” law. Kept Us Out of War. The claim that President Wilson has kept us out of war with the belligerents of Europe is most far- fetched and ludicrous. We all know Chat the warring natfons of Europe Bave had their hanas full on land and sea in battlng against each other. Nome of t& a kad aay ! hips or soldiers to sp... ZeT ‘an ..tack upon, or invasion of, our country, and none of them have manifested a pur- pose or desire to make such an attack or invasion. And as to our own country, we have not been in condi- tion to invade or attack any of the belligerents or any other country save Mexico. In the pursuit of Villa, the best we could do was to send about eighteen or nineteen thousand regulars into and along the border of Mexico. These were all the regular troops we could muster, and our militia, or na- tional guard, could not, under the oconstitution, be taken out of our country and used in a foreign war. And as to our navy, it is admitted on all sides that it is far inferior to that of England, Germany, and even to that of France. How could any sane man, under such circumstances, harbor the notion of our making war ypom any of the gréat belligerents in Burope? 'The truth, in brief, is that none of the belligerents could will got at us, nor we at them. The only war President Wilson has had on his hands and suffered from has been a diplomatic war, and that has been carried on by him with no credit or glory to our country. Record of Democratic Party. The chief claim, however, of the Democratic party is in respect to what they are pleased to call their scheme of so-called comstructive leg- islation. Great stress is laid upon the laws enacted - during President Wilson's administration. Currency Legisiation. In the fall of 1907, there was a 80- called bankers’ monetary panic in New York city, which not only seri- ously affected the banks in that city, but also to a considerable extent affected banks in other parts of the country. For a time the banks in New York suspended cash payments and this led to the suspension of cash payments in meny of the banks in our large cities. The panic finally subsided and spent its force by the end of the year without leaving the havoc and destruction in its wake that the panic of 1873 did. This panic led to the passage of the so- called Aldrich-Vreeland act of May 30, 1908, which provided for the is- suance of emergency currency through voluntary currency associations of fia- tional banks and also permitted na- tional banks in certain cases to obtain additional circulation, on other se- security than United States bonds. The act also provided for the appoint- ment of & national monetary commis- sion, “to inquire into and report to congress what changes are mneces- sary or desirable in the monetary system of the United States,” and so forth. The commission made an ex- haustive and thorough investigation, both at home and abroad, and gath- ered a large quantity of most val- uable data and material, consisting of many volumes, and finally made its report to congress on the 8th day of Jan., 1912, recommending, among other things, the establishment of a national reserve association, with & capital of $200,000,000, and with sub- sidiary locai, or branch, associations throughout the country. Stock sub- scriptions were to be lmited to national and state banks and to trust companies, but was not compulsory. A bill to carry out the recommenda- tions of the commission was intro- duced, but no action was taken on the same. I shall not at this time enter into further details in regard to the report of the commission. It is a part of the monetary history of this country, and much of the com- mission’s work was utilized and made use of in formulating the federal re- serve act, to which I shall later on call your, attention. While emergency currency associations were formed under the Aldrich-Vreeland act, no currency was taken out under it until the threatened panic of 1914, for the reason that after the subsidence of the panic of 1907 normal monetary and business conditions prevailed, business was good, and money abun- dant at reasonable rates. By its terms the Aldrich-Vreeland act ex- pired by llmitation June 30, 1914, In the federal reserve act the life of the Aldrich-Vreeland law was ex- tended for another year and a re- duction of the tax on the emergency currency was also made. Ne Change in Tax Rate. The act of Aug. 4, 1914, made no change in the tax rate, but removed some other restrictions which were not germane after the passage of the federal reserve law. The war in Eu- rope, which was impending in July and broke out in the early days of August, 1914, threatened our country with another monetary panic. The great belligerent countries of Europe proceeded to dump upon our market well nigh by the wholesale, ‘a large portion of the great mass of Amerl- can securities held abroad, and this dumping led to the outflow:of gold in great volume, and to a money stringency. Our great sheet anchor in this emergency, and which served to stay the panic, was not the rederal reserve system, but the Aldrich-Vree- land law and the currency, issued under it. Although ‘the'tax on this- ourrency had been ‘reduced | and re- strictions, rendered johsolete. by the federal - reserve act, ‘vemoved, yet] Jfundamentally, and iin its essence, it 'was the /structure’ of!“the |Aldrich- ‘Vresland act that gave us the needed relief; under the circumstanges the smergency currency - would, have been taken as -readily under ’ the THE BEMIDJT DAILY PIONEER original law, for the tax:merely, re ! %t could at least be regasded as & fated to the period of circulation. Federal - Regerve - System. There were on July 30, last, 7,579 national banks, with a capital and surplus of $1,797,438,000, which were members of the new system, and about 22,460 state banks, ,with a capital and surplus of $2,630,700,000, which were not members of the sys- tem, besides a large mumber of trust companies. In all the commercial and industrial countries of the world, great and small, but ours, a single great bank of issue stands at the head of their banks and monetary systems, while we have 12 heads for a part only of our banks. The reserve banks bave added no new banking capital. Their capital and reserves have all come from the member banks. And s0 far, after being in operation since Nov. 16, 1914—a period of one year and nine months—only 6 of the 12 banks have paid any dividends, and these §6 only a total dividend of 6 per cent. The new system had nothing to do with staying the threatened panic of 1914. That panic was stayed partly by closing the stock exchange, partly by clearing-house certificates, and largely by the currency taken out under the Aldrich-Vreeland law. So far the new system has been mostly a burden to the member banks. Bx- cept in the five cases mentioned, they have received no dividends and have lost the 2 per cent interest on their reserves which they formerly secured. The system has added no new capital or new wealth to our country. Our prosperity and our abundance of money has come from our immense exports and the high prices result- ing from the European war. Part of the proceeds of our exports have been invested in foreign bonds, but the great bulk of it has found its way into the coffers of the banks and the circulation of the country. Other Democratic Legislation. In the spring of 1914 the adminis- tration gave out, through the public press and otherwise, that a triology of bills would be introduced and passed to remedy most of the ills and wants of our, industrial and eco- nomic system. The general purpose, it was declared, was to repress, reg- ulate, and control all trusts and monopolies and all the great business interests of the country. These prom- ised bills were afterwards introduced, and turned out to be as follows: First. A bill “to create an inter- state trade commission, to define its powers and duties, and for other pur- poses,” introduced in the house April 13, 1914, Second. A bill “to supplement ex- isting laws against unlawful restraints and monopolies, and for other pur- poses,” introduced in the house April 14, 1914, This bill was commonly called in its transit through the two houses the Clayton anti-injunction bill. Third. A bill “to amend Sec. 20 of an act to regulate commerce, to pre- vent overissues of securities by car- riers, and for other purposes,” intro- duced in the house May 15, 1914, The purpose of this bill was to regulate the issuance of stock and securities by railroad corporations, and was really the most important and most valuable of the three bills. It passed the house, came to the senate, and was referred to the committee on interstate commerce. This commit tee on July 23, 1914, reported it back to the senate favorably, with certain amendments. But by this time a change had come over the spirit of the Dreams of the Democracy, and this, the best of the three bills, was left to languish and finally die an ignominious death. The trade commission bill became & law on Sept. 26, 1914. It created a commission of five members, with a yearly salary of $10,000 each, and with a secretary at a salary of $5,000 a year. Prosscution of Trusts. For a number of years there has been under Republican administra tion a pretty vigorous presecution of various big trusts and monopolies. This was not relished by them, and a hue and cry wemt up from them and their friends throughout the coun: try that it was difficult for business interests to know just what they could and could not do under the anti-trust law of 1890, and they vig- orously, through the public press asd otherwise, clamored for relief. At- tempts had been made during the last administration of President Roosevelt to pass a law to relieve them against what they conceived to be the harshness of the enforce- ment of the anti-trust law. This attempt failed, but they renewed their efforts, and the general impression among the public is that the trade commission act was passed as a par- tial antidote against the harshess of the anti-trust law. We know this, that since the trade commission act was passed ‘there have been no new prosecutions under the anti-trust law and the old cases which were pend- ing bhave moved along at a very gentle gait. Where a great corpora- tion has, in one way or another. absorbed all its competitors so it has all the field to itself, it is difficult to see what the trade commission can do to prevent unfair competition where all competition has ceased. It is true that the trade commission law does not repeal the anti-trust law, but the effect of the commission law is that big interests expect to go through its hopper before thsy are pushed Mmto the hopper of the anti-trust law. The best definition I ’have heard of the trade commisélon liw was that ex- pressed to me-by ‘s representative of one of the gréat interests, who said purgatory to the heil of the anti-trust law.” I can not find that the “;nde com- mission has so far judic ..i7 pessed upon any case involving unfair meth- ods of competition in commerce, or that it has, by its action in any case, put a stop to unfair methods of com- petition or granted substantial relief. I can find no information bearing directly on this matter in the first annual report of the commission of June 30, 1915. On the 29th day of August, last, I addressed and mailed to the commission a letter asking for further-information as to its work. This information has not yet been furnished. Child Labor Law. Another matter of legislation for which the Democracy will claim great credit is the so-called child-labor act. In reference to this, it can be said that there are only some three or four states in the Union that did not| have on their statute books suitable and adequate: child-labor laws, and in these few states, where the laws were imperfect and deficierit, I have no doubt but what they would in due time have enacted the necessary laws. It is a very serious question, to my mind, whether this law is donsti- tutional, or if constitutional, whether it will afford the remedy sought. I voted for it with the utmost reluc- tance, and to some extent because I was ngxious to have the supreme court pass upon this important ques- tion for if such legislation is valid, the limits to which the interstate commerce clause of the constitution can be applied are well nigh bound- less. The Shipping Law. The next matter of Democratic leg- islation, to which I will call your attention, i8 the so-called . shipping law passed at the last session of congress. It provides for the pur- ‘chase, leasing, and operation of ships by the federal government at an expense of $50,000,000, exclusive of salaries, to be obtained from the sale of so-called Panama bonds. This leg- islation, the administration claims, was urgently needed because of the scarcity of ocean shipping and the high rates prevailing in consequence of the war. It is a novel scheme, and puts the government in direct com- petition with private enterprise and private effcrt, and will tend to em- barrass and retard the growth of our ocean shipping, now on. the high road to healthy expansion and growth. But walving . all this, the debate in the senate on this bill that it was utterly impossible for the government to procure any ships within the next two or three years. Panama Canal Bonds. In providing for the building of the Papama canal, authority was granted for the issuance of bonds to secure funds for that purpose. The cost of the canal to date has been approxi- mately $375,000,000. The administra- tion of the Republican party was so businesslike, prudent and economical, that all but $130,000,000 of the cost of the canal was paid out of the cur- rent revenues of the government. Only $180,000,000 in bonds were is- sued. And now the Democratic party, in their skirmishing around for rev- enue to meet their extravagant ap- propriations, has resorted to the Panama bonds for the purpose of buying and operating ships, and for the purpose of constructing a nitrate plant for the manufacture of some power and a lot of fertilizers. The Panama bonds were in their origin devoted to a specific and a sacred purpose, and now $70,000,000 of these bonds are to be devoted to two schemes of state socialism, the like of which could only spring from the womb of a Democracy intoxicated by the power temporarily placed in their hands. Philippine lslands. As an incident of the war with Spain we acquired the Philippine fs- lands. The people of these islands for more than three hundred years languished under the despotic tyran- ny of Spain. Spain had during all those years failed to develop the people or the resources of the islands. She had failed to provide for their education and had utterly failed to give them a decent government. Such a government as they had was not a governmeht of law, but 8 government of the army and of the monks. We found these poor people in a most wretched and deplorable ocondition, utterly inexperienced in self-govern- ment, or in any form of government regulated by law. It would have been still more cruel, in their then con- dition, to have cast them adrift to shift for themselves. That would have led to chaos and destruction, or to their sefzure by some foreign power thdat might Yail to treat them any bet- ter than Spain had. There was only one manly, honest thing for us to do. That was to do what we did do, give them a helping hand, establish a good government for them, provide for their education, give them title to the lands they occupled, and provide for the development of the resources of the country. All this, and more, was wrought and accomplished under the auspices of the Republican party. We have sent, from first to last, over twelve hundred American school teachers to thiose islands who have esiablished a system of schools in which the English language is taught. What a great advantage it must be to them to have a single language, common to all, instead of the many and peculiar dialects they have among them.” We have developed them in selfgovernment. and given them as full and fair a degres of self-govern- I pointed out in ‘St as they are, ia their present: | pondition, capable of exerclslns.r‘ geems to me that mo good: Amerf ¢itizen can fall to rejoice over flng Pave a pride in, the great Work “: the great record we have wrought 1; the Philippine islands. The record ol England in India, of France in Cochin China, or of Holland in Sumatra and Borneo, can bear no comparison with the great work we have wrought in the Philippine islands. Those islands, by reason of their location in the heart of the Orient, are a great asset to us in extending our commerce in the oriental countries, and our flag, representing our guardianship and our J government, is a still greater asset | to them. They are still only parti- H ally developed and still only parth% fit for self-government. Under flag and under our supervision, they will, in the years to come, gradually coalesce and grow in strength and manhood and become a homogeneous nation. The great mass of the people | are more than satisfled with our’ gov- erfi,ment and our supervigion. They prefer that to an oligarchy of schem- ing native politicians, who, in ex- ploitation of themselves, are shouting “Independence.” President Wilson and the Democrat- | ic party have taken up this shout and have advocated the scuttling of ghe islands. Shall what Admiral De and President McKinley, the Ameri- v can soldiers, and the American school teachers have wrought for these peo- ple and those islands go for naught? The odor of the Republican party is upon it, and, therefore, it is a stench in the nostrils of the Democracy, and, therefore, the islands should be scut- tled. The Philippine bill, with the scuttling Clarke amendment, passed the senate by the narrowest kind of a majority, the vote of the vice presi- dent deciding it. When the bill reached the house, we hoped that Wilson would at least be neutral, but such was not the case. He proved to be as much of a scuttler as Sen- ator Clarke. But fortunately there were about thirty northern Democrats who united with the Republicans in defeating the mefarious and unpatri- otic scheme, Rural Credit Legislation. The so-called rural credit law, .f which much credit is claimed by the Democrats, will be found to be of little help or use for northern farm- ers. It is based on foreign models, poorly suited to ‘conditions in our country. It creates a federal farm loan board of flve members, four of whom are to receive a salary of $10,- 000 per annum each. The law pro- vides for the establishment of twelve farm loan districts, with a farm loan bank in each. Before farmers can borrow, they must form farm loan associations, in which they must take and pay for stock to the amount of $5 for every $100 they want to b row. The scheme will be found to be so complicated and involved that few farmers will care to make use of it, unless money can be borrowed through it at materially lower rates than from other sources, which seems highly improbable; at least, in the north. If a farmer can borrow money from his local banker, on his farm, at say six per cent interest, he is not likely. to join a farm loan associatir and take stock at the rate of $5 f every $100 he borrows. In the north- ern states, where money as a generm’ rule can be obtained on first class farm mortgages at from five to six per cent interest, it is not likely that much use will be made of the law. It may be that in the south, where money is less plentiful and interest higher, some help may be obtained through the law. Tenants, who are 1 often times needy and worthy of help, can not secure money under the pro- visions of the law. Only land own- ers, who occupy and till their farms, | can borrow money under it. The sys- tem will prove to be very expensive and, inasmuch as it is to some ex- tent of foreign importation, it is, to say the least, questionable whether it will prove to be a success in this country. It is, in short, a new ex- periment of doubtful value which remains to be tried and tested. Law for Railway Men. This law, hurriedly rushed through during the last hours of the last ses- sion of congress, is the culminatio of Democratic legislative wisdom. "It is at the very apex of their so-called scheme of constructive legislation. What are the facts in the case? Four orders of railway trainmen had by vote, of which we have no reliable data, determined upon a strike to hold up the railway freight trafic of the entire country if their demands were not complied with prior to Sept. 4, this year. These demands were chiefly of a two-fold character: i First. The trainmen insisted upon the same pay for an eight hour day’s work as they were recelving for a ten hour -day’s work. This involved a flat increase in their wages ” twenty-five per cent. . Second. The trainmen insisted upon time and a half pay for all over-time, There was nothing in their demands, as some suppose, for shortening the workday. It was nothing more or less than a bald demand for a great in- crease in their wages. - And be it noted in this connection that, aside from a few of the higher officials, no men employed in the railway service receive such good and liberal wages as these particular trainmen. Their wages, compared with the depot agents, the train dispatchers, the telegraph operators, the switchmen, the flag- men, and the army of section or track | men, all of whom constitute upwards ! of four-fifths of all railway em; oyes, seem Mg':dlnd very liberal. This un- Tepresen army of rail had far greater A= iy

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