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*5. Magnifying the UngerPrint Tthe HE proved oil producing area in United States is estimated as only 4500 square miles. When you contrast this with the area of the United States—3,026,789 square miles—the proved area is but a finger print on the map. Yet from this 4500 square miles must come the raw material to drive all of our motor driven machines, and practically all of the oil to lubricate the machinery which makes possible the happiness and prosperity of the nation. To magnify this finger print is the task in which the Standard Oil Com pany (Indiana) is engaged. By reason of the Burton Process, which largely increases the amount of gasoline re coverable from a given quantity of crude oil, and dozens of other methods developed in its laboratories and refineries, the Standard Oil Company (Indiana) has multiplied the quan tity of finished petroleum products available for the use of men wherever they may live. The development of the Burton Process has done more to promote the manufacture of automotive machinery than any other single discovery since the usefulness of gasoline as a fuel was made known. Because of it there is a plentiful supply of crude oil available today, and gasoline is selling for a low price. Without it the price of this fuel would be beyond the reach of the average man. The use of this process is not confined to the refiners of the Standard Oil Company (Indiana) alone, but is being made available to others under conditions which are just and equitable to all. The Standard Oil Company (Indiana) has a just pride in the work it has done, and is doing, to so increase the quantity and qual ity of its products as to make possible the use of labor-saving machinery throughout the world. Thus is the Standard Oil Company (Indiana) doing a big work in conserving the natural resources of the nation, and in helping others to do likewise. Standard Oil Company (IndianaJ 910 So. Michigan Avenue, Chicago, I1L Mention the Leader Wher Writing Advertisers PAGE FOURTEEN (Continued from page 7) the issue of federal reserve notes by $16,000,000. In other words, federal reserve banks now hold a little more than one dollar of gold for every dol lar of notes they have issued. The re serve banks have destroyed the paper money which circulates among the many and hoarded gold in their own vaults. More than 40 per cent of all the gold in the world is now in the United States, and all of the gold in the United States is now the property of the federal reserve banks, except that part which the government holds for redemption of gold certificates. How did the reserve banks become the owners of all this gold in the short period of seven years? In the begin ning of the year 1914 the reserve banks had no gold. NOW THEY HAVE PRACTICALLY ALL OF THE GOLD Not only do they have the gold, but THEY OWN THE GOLD. Where did they get the money with which to buy this gold? The total capital and surplus of the reserve banks, according to their last statement, was only $315,000,000, and yet with this shoestring capital these banks own gold to the amount of two and a half billion dollars. HOW DID THEY GET THIS GOLD? This problem puzzled me for weeks. I sought all kinds of advice, legal and otherwise, only to leave the persons whom I questioned as puzzled as I think I have found the only possi ble solution. The reserve banks have purchased the gold with their own notes, for the reserve act empowers them to do this. But of course they had to have some gold to start with. I therefore assume that in the begin ning the national banks purchased their federal reserve stock amounting to 6 per cent of the capital and surplus of each bank, with gold. We will as sume that the federal reserve banks started with $100,000,000 in gold. With this gold reserve, the reserve banks could then issue $250,000,000 (two and one-half times the amount of gold held) of reserve notes. With these bright, new, crisp notes the re serve banks could go out in the mar ket and buy $250,000,000 of additional gold. Then, having a new supply of gold, the banks could issue two and one-half times the amount of new gold held in freshly printed reserve notes. In other words, the reserve banks could now put out an additional issue of $625,000,000 of notes. With this fresh supply of notes, the banks could buy more gold, and then issue fiotes with which to buy more gold, and so on ad infinitum. CANT TURN A WHEEL UNLESS THEY SAY SO The war forced the allies to ship a large part of their gold to America. The reserve banks bought this gold with their own fiat paper money. The only thing to interfere with the proc ess, as I have described it above, is that the reserve banks must also keep a gold reserve against thfiir deposits, but I know of nothing to stop them from investing their deposits in gold, so that deposits also may have been used to purchase gold. What WE DO KNOW is that the reserve banks have all the gold in the country. This gold is held in the vaults of the banks in the form of bullion, not money. Bank Power Absolute—People Helpless The federal reserve board and the banks connected with the re serve system now dominate abso lutely the fiscal policy of this na tion. We can not turn a wheel without their consent. They may give credit or they may withhold it. They may make interest rates high Or they may make them low. The federal reserve board fixes the interest rate. The board fixes this rate by taking a vote on what the rate shall be. The federal reserve rate now stands at 6 per cent, which means that the member banks must charge 8, 9 or 10 per cent to their customers. interest enters into every turnover of goods. The price of a suit of clothes, for example, contains a good many interest charges taken from the farmer who grows the wool, from the buyer who buys the raw product, the manufacturer who cleans, cards and weaves it into yarn, then into cloth, the manufacturer of the suit of clothes, the jobber who sells it to the retailer and the retailer who sells it back to the farmer. Perhaps interest is taken as many as five times on the average: At 8 per cent the interest charge on a $30 suit of clothes would amount to about $5 and on a $60 suit of clothes about $10. And now let us note an incon sistency so stupendous that it would be ridiculous if it were not tragic. The excuse for deflating the currency made by the federal reserve board was that the defla tion of the currency was the only way to deflate prices. The first thing the federal reserve board did was to raise the price of inter est. The banks set out to deflate everybody else but not themselves. Instead of lowering the interest rate in order that deflation might be uniform, the reserve board ac tually and violently increased the price of interest. USING THEIR POWER AGAINST UNION LABOR A period of depression is precisely the time when the debtor needs help7 most and on the easiest possible terms. Instead of extending this help by low ering the interest rate, the reserve board raised the rate, thus forcing the "debtor to pay more interest at a time when there was less business or less values with which to pay that interest. While riding in a Pullman coach re cently I was told by a Pennsylvania manufacturer that 500 banks in his territory had entered into an agree ment to lend no money to manufac turers under their jurisdiction until those manufacturers had established open shops in their plants. As to the fact of this statement I know not, but it was made to me just as I have stat ed, it. The cold-blooded and deliberate pur pose of the reserve board to deflate the farmers and the wage-working class in order to get cheap raw materials and cheap labor, was not intended to crush the business men and the manu facturers generally, but it has caught the manufacturers and caught them hard. The great monopolies and trusts of course can stand it. They will lose temporarily, but they will gain in the end. The processes of deflation exterminate the weak. The strong survive, and then when the process ends and another period of inflation begins, the trusts and monopolies command the field, for competition has been wiped out or lessened. What may one do against such odds? Well, one may protest. In the struggle for liberty brave men choose to fight, whatever be the odds. The individual may do nothing alone, but groups of individuals may do much. The individual farmer is help less, but under the banner of such a militant organization as the Nonpar tisan league the farmer may become invincible. He must be as loyal to his brother farmers as the bankers are loyal to each other.