The Grange advance., 1876-02-09
THE GRANGE ADVANCE.
WEDNESDAY, FEBRUARY9, 1876.
H. H. YOUNG, Publisher t. Editor.
The Financial Reform.

cent artlCle, tnat the currency con
templated by the advocates Of fnan-
cial reform was not, by any means,
worthless paper evidences of indebt-
edness, constantly liable to depreci
alton, but actual money, having a
fixed and Interchangeable value, and
really sounder than gold currency
or any resting upon a gold basis.
We think that we then answered
fully every objection that can be
urged against the reform system: ex-
cept such as arise from considering
its influence upon the foreign CON-
merce of the country, and upon
banking. To the latter of these
two classes Of objections we now
propose to address ourself: The
advocates OF gold or metallic curren-
cy, almost at the same moment that
they denounce the system we adyo-
cate, tell us that there is not a suffi-
cient quantity Of the precious met
ais in the world to afford currency
enough to satisfy the demands of
trade, and this deficiency they pro-
pose to supply with bank notes,
nominally redeemable in specie, but
actually i,redeenable, because, as
they themselves allege. specie
enough cannot be obtained to re-
deem them!
Under their plan banks of issue
are necessity, and they seem una
BILE to conceive Of any currency
system which will render them use
less. "What will become of the
the banks?" is the first question
they ask; ard when told that we
propose to dispense with such insti-
tutions; they next assert that it is
essential to have banks in order to
float the credit of the government"
We are not sure that we understand
this phrase. 1t seems to us, how
ever, that what they intend to say.is:
that banks are required to float the
Ae6t Of the government and this
assertion is palpably untrue. The
credit Of the government floats its
debt, and, if it had no credit, all
the banks in the world would avail
nothing; while, as long as it has
credit it may sustain its debt with
out the Intervention of banks. The
only relationship that banks sustain
to the government, so far as its debt
is concerned, is that of agents or
brokers. That is: they sell the
government bonds. If there were
no banks the government would
only have to entrust the sale of its
bonds to some other description of
agencies.
1t is very clear that while the
credit of the government is good,-
while its bonds afford safe and lucra-
tive investments,-their sale can be
effected through treasury officers
just as conveniently as through the
banks, and more cheaply, for the
reason that the brokerage now paid
to bankers would not then be nec-
essary. Now, capitalists buy their
bonds through the banks, and the
latter receive a commission for SELL
ing them; but the banks do not
make the bonds valuable, nor is it
necessary to use their agency in the
transaction. The officers of the
treasury, who now dispose of the
bonds to the banks, could just as
we'll sell them to the real purchas-
ers. Hence, the assertion that
banks are required to "float the
government credit" is the sheeres1
nonsense. But were this even true
it is no argument against the reform
ed currency system, for that doe:
not contemplate the destruction O
banks, by any means. 1t simpl,
proposes to dispense with the circu
laGon Of bank notes as currency