The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1875-08-06

From The foregoing ngufeS IL Woulu seem
that 10 London, at least, they have learned
how "to pay debts without moneys "a les
son that Andrew Yarranton, the father OF
English political economy, desired to teach
10 his countrymen at as early date as 1877
to-day nearly all of the large debts in that
city being paid by mere bank credits, which
have .solutcly little or no monetary fouuda
ton Whatever.
With a capital and reserve, or surplus, OF
G12. 1853 O59, of which nearly the whole, or
e12. $40, 083, is invested in public securities,
real estate, &c., these institutions have grsdu'
ally accumulated line OF loans of sl0O,-
504 .3S5, resulting in credits TO the borrowers
or their assigns, called deposits, almost
wholly the out.gro WITH of ttese loans OF
Ell 90 605,OS5. So long as there is no extra.
ordinary demand for payment outside OF it
these deposits are readily kept atloatthrougb
and by means Of the clearinghouse.
These deposits, which are worked through
checks, become an instrument Of payment as
potent as would be the addition OF Gl00.-
| 900 900 to the money of Great Britain. In
other words, they are in their effect equal to
| the doubling of the gold circulation Of the
realm, which Is now estimated by the high.
est authorities at gl00, 100000, but with this
| difference, that the deposits being worked
| by the few they become an instrument for
the ACKNOWLEDGEMENT Of those few and for
| the enslayement OF the many. These credit.
uongers and those in our own country un-
derstand this full we'll, and when they cry
out against " imitation" they pretend to be
opposed to the very thing they are in favor
of. What they are really opposed TO is hay
ing such a normal volume of current mo-
new of the realm as will obriate all nece5.
sty for that immense volume OF bank Gre
dit. through the use of which they annually
lew taxes upon the public to the amount of
hundreds of millions of dollars.
The "cash" el4, $3.50. 1866 held by the Lon
don banks above famed, small as it is COM
pared with their liabilities payable on de-
mand, consists largely of mere deposits (cre.
d,s) with the Bank of England, thus consti-
tuting the latter the almost exclusive base
upon which rests this towering superStruc
ture Of bank credit. The Economist has
recently said "the reserve of the Bank Of
| England is the only reserve the nation pos
sesSes, and has not been increased in proper
ton to the very great amount of the demands
to which the bank is now exposed as COM
pared to those it bad formerly 10 meet" The
weight of these demands" may be inferred
from the fact that during October and No.
vember, 1874, the deficiency of the bank note
reserve OF the Bank OF England as compared
with the mere bankers balances in its hands
ranged from e734, 900 to S2 ,47S, 900.
The reason why the burden has so increas-
| ed is found in the fact that while, since 1874.
the trade of Great Britain has increased many
fold, the circulation of coin has Incl eased but
little, and that Of notes not issued on coin or
bullion actually in hand not at all. Hence
the growing trade has annually to call upon
banks for an increasing volume of their in.
ferior substitute, credit circulating through
the London and other clearing. houses
| Judge Kelley and the gathering hosts, Of
which be Is now the acknowledged leader,
only demand that the people of this country
shall 20 longer be placed under the tyranny
| OF such legislation as limits the money Of the
country below the actual wants of business,
TO be followed by the creation of an inf tied !,
expensive, and unstable bank credit system
| ike that OF England. To that end, they ad-
vocate full yolumed currency, at all times
interconvertible with United States bonds,
bearing fixed rate Of interest not exceed
ing 2.65 per cent. Such currency will in
time cause nearly all business to be done for
cash, as in 1876, and will save us from
those desolatipg crises which sooner or later,
| in Great Britain, here, or elsewhere follow
| an infilted credit substitute for sufficient
volume of "current money of the realm"
HENRY CAREY BAIRD.
Philadelphia, August ?, 1915.