The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1869-12-11
A New Monetary System,
CHAPTER IV.-SEcrIoH I.

THE AMOUNT OF SPECIE OWNED BIZ TIL
BANKS, AND TIE INTEREST PAID BY TIL
PEOPLE ON BANK LOANS
TO- nTUED.)
The table shows that the average amount
of the capital of the hanks IN the State o.
New York. during the period mentioned,
was &43, 569,59I. and their average in.
debtedness was $l06, 931, 0O4. The differ
cnce of thess two sums 10 sea. 1861 Alb.
The annual interest upon &6S. 1861 ALB, at
seven per cent, was "a, 4S5, 1873, which the
people Of the State paid 10 the stockholders
and officers Of the banks for furnishing
bauk-notes above the Iamount of their pro-
feseed specie capital. The people wrote
their own notes, had them indOrsed. and
took them to the banks 10 be discounted.
The banks engraved their bank-notes, and
gave them in exchange for the Endorsed
notes. For engraving thess notes, and
making these exchanges. the people Of the
State paid to the banks annually "a .435. 1888,
or as much 81 the farmers Of the State re-
ceiEc for four millions four HUNDRED and
thirty. five thOusand three hundred and
thirty tbree lrnshels Of wheat, at 81 per
bushel. The labor Of producing such al
amount Of wheat Ras great the hbOr of
producing the bask-nctes was very small,
yet the interest pAid on these bank-notes
would have bought snis quantity Of wheat.
At the end Of the year The p opls of the
State rsanFned oil The bank-noses to the
banks, together With the value o. this large
amount Of wheat to pay the years interest.
The same amount Of interest accrued every
year, and called for the same amount Of
their products. They sold their products in
market, and paid the interest to the banks
with the proceeds Of the sales, the same to
them as il they bad carried their wheat and
products directly 10 the banks to pay the in
terest. If the entire capital of the banks
had been specie, the people would have paid
the same amount for the use of the bank
notes which would have been issued over
and above the specie.
The interest yearly paid for the use Of
So, 1861 AIS, in bsnk-notes. was legal
equivalent for the four millions four hun
dred and thirty-five thousand three hundred
and thirty-three bushels of wheat yearly
raised upon certain quantity Of land; and
the legal value Of the &63. 1861 ALB, in
bank notes, was equal to the actual value Of
the land and labor necessary to produce the
wheat The power of the bank-notes was an
exact balance against these products and the
land upon which they were produced. If
the quantity Of money was at any time d.
minished, and the rate Of interest increased,
a larger amount Of products was required to
balance the smaller amount Of money, and
larger amount Of products to balance the in
terest on the smaller amount oil money.
Still this money must have been used to
balance products, for it was the only public
representative Of value, and must have been
employed as a tender, or as a substitute for
a tender, in payment of debts. The promise
Of the hanks to pay specie for their bank
notes on demand, does not enable them to
paw the specie nor does it alter the nonopO-
policing power Of the interest on the money
over products.
If our bank-notes are good for the pur-
chase Of property by the people, certainly
hey should be equally good for the purchase
Of property by the banks. Let US reverse
The relative positions of the banks and the
people. Suppose instead Of lending their
money to the people 70 buy property, the
banks should buy property with their
bank-notes, aud let il out to thu paOula.
This would pot The bank.nctes into circuls.