The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1876-04-08
Gold. from the Garden Of Eden to the
Discovery Of America.
ECONOMY IN CURRENCY

arises from the avidity Of the people to Sc
cure interest on money. They resort to all
manner OF devices to carry on trade with
ont money. when they have plenty Of it
loaned out at high rate Of interest. Many
merchants buy goods on sixty days credit,
when they have funds in bank drawing but
a trifie more interest than the discount on
the goods would amount to If they raid
cash for them. Their deposits in many
cases are loaned to SPECTATORS, who use the
money to corner" and unsettle the value
of the goods that the merchants are deal
ing in. With a currency in government
notes, restricted to a low rate of interest,
and its volume regulated by interconverti-
Bile bonds, merchants could forecast their
business with fair prospect Of success,
and without any fear of a sudden change
in values, which mighG destroy all their
profits and perhaps bankrupt them, as it
often happens when gold is the measure,
and "Wall street the qdHgeT."
| How are importers to pay for foreign
goods They must export as much as they
import, or buy gold to settle the balance.
They have done this for fourteen years,
and they will continue to do it, unless the
government attempts to balance gold and
paper again, for the especial benefit Of
foreign trade, and to the destruction Of
domestic industries.
When gold is no longer a legal measure
Of value it will lose its fictitious value and
decline to it's intrinsic value then the
gamblers in currency will lose their most
potent tool and be forced to seek some
other means Of livelihood. Cheap money
promotes trade on cash basis and dear
money promotes initiation, extended credit
grand transmutation scenes, and financial
panics These are truisms that the people
should not forget
BANKING.
Only within the past three hundred years
have paper notes, secured by gold, been
used As money and within the past fifty
years banking, under this system, has be-
come one Of the Zine arts" Expert finan-
ciers frequently balance twenty dollars in
paper with one in gold occasionally they
fail to maintain a balance, and when they
do the paper always falls to their creditors
for an expert financler never loses his
grasp on gold.
Financial facts i'll balancing pa
per and gold we're practiced in this
country extensively previous to our
late war; and it is being prac-
ticed largely in England at the present
time. In 1857 there were two hundred
and sixty-three banks in the New England
States, not including those in Boston, cir
culating S24, $3.50, 900 in their own notes,
with only 81, ITO, 900 in specie, held for
redemption twelve dollars in paper to one
in gold The same year New York State
banks were circulating seven dollars in pa
per to one in specie, held for redemption.
March u, 81, the Clearing House trans
actions, for 6fty-four New York city
banks, amounted, in round numbers. Ia
$40, 800, 900 in paper balanced by 81 800,
600 in gold ttoeI,ty sereH dollar IL paper
to one ia gold
This was on the eve Of the great fnan cia
panic. and the imitation bubble was rapid
ly approaching a collapse but the fifty
four city banks sound, as far as their own
notes were concerned, for their circulation
was less in amount than the specie held in
their vaults for redemption /; but they were
floating large amounts of doubtful paper
hypothecated by stock lobbers and other
spectators. August 9Th, 81, the loans d
those fifty-fOur banks amounted to 1922,
900, 900, their circulation g, OOO, 600, ant
the specie in their vaults amounted to Sl2
OOO, 900. October 9Th, '57,-the blackest
I day Of the panlc-their loans amounted Il
S97, OO0, 900, their circulation to g, OOO,
900, and their specie to 81, 600, 600 From
August 9Th, to Oct. 8th, 81 those fifty -four
banks reduced their loans only $50, 900.
900 thus leaving S97 900, 900 in the hands
, Of spectators, which they were unable u
call IN in time to save their depostors from
bankruptcy. \. is plainly evident that
: the panic of 1857 was not caused by al
l. 4
by an initiation Of bank notes. Ii wa,
caused wholly by the banks loaning then
deposits to spectators without proper Sc
curities The banks had, for long time
been loaning deposits at high rate Of in
| terest, on very poor securities conse
quently the bank became inflated with
worthless securities, and when the people
called for their deposits, instead Of receiv-
ing bank notes, they were invited to ex-
anime the worthless assets held as securi-
ties for their money. The Ohio Life lnsur-
ance and Trust Co., at that time supposed
to be the cornerstone of the financial sys-
TEN Of Ohio, went into bankruptcy and
the grand initiation scheme Of 1857 which
was reared upon gold basis, collapsed,
with heavy balance in favor Of the specu-
lators. Pancs r',i occur under any imam
cial system where gold is the standard of
values, and high rate Of interest is al
lowed on the currency Of the country "A
high rate Of interest is the talsman that
draws money from legitimate trade into
wild speculations.
For fourteen years our currency has been
government notes, secured by the whole
material wealth Of this great nation. No
juggling device Of gold standard has in
terfered with its free circulation, and,
therefore, it has worked admirably. There
never has been any system Of currency to
equal 1t, in convenience, economy and Sc
curity and if it is abolished, it will be the
most gigantic fraud that was ever perpe-
trated upon free people.
England claims that her currency is
founded upon q gold basis let us see if
that Is so. The first issue Of e ,U00, 900
IN Bank Of England notes is secured by
Bills OF Exchequer, aud the law requires
that the balance Of its issue shall be Sc
cured by gold held in its vaults but when
there is any extraordinary demand for
money, parliament conveniently suspends
that portion Of the bank act requiring gold
securities, end the bank is allowed to issue
notes on government securities, until the
demand for money is fully supplied.
There are thirteen banks in England
that are floating $500, 600, 900 in paper,
with $40, 900, 900, in gold to secure their
loans and Endorsements nifty dollars ~ pa
psr to one IA gold Such is England's
boosted financial policy, established on
gold basis. Cannot hard money advocates
discover imitation in this system Of bank
ing There is one creditor Of the English
government that could collapse that gigan-
tic financial bubble and beggar the nation :
And yet were are told. by some Of our