Buchanan County bulletin. [volume] (Independence, Iowa) 1869-1891, 1876-10-06
The Independent (areenbach, PARTY.
Chicago Tribune

voter, the friends of an enlarged and
exclusive governmental issue of pap
er money are gradually withdrawing
and taking sides with ono or the 9TH
er of the two national parties. The
theory that the unlimited or even
limited issue of grcenbacks could he
regulated" to the wants of the count
try by permitting them to be ex.
changeable at pleasure for bond
bearing 3.65 per cent interest has for
a long time deceived many honest
people, but those who give the mat
ter thoughtful consideration are in
varably compelled to admit the delu.
sion.
The general scheme of the friends
of an exclusive governmental paper
currency is that bank notes be pro.
hibited and that greenbacks be is
sued in lieu thereof, the national cur
rency amounting to $7OO,OOO,OOO
The holders of this currency are to
be permitted to surrender it at pleas.
ure, in sums of 500 and receive
therefor bond bearing 3.65 per cent
coin interest; this bond may be sur
rendered at any time and currency
received therefor. The strong argu.
ment in favor of this scheme has
been that it would regulate the vol
ume of currency in circulation by al
lowing the excess over the wants of
the trade to find Its way into the
bonds and be Withdrawn again when
the currency was in demand. But
this facility for exchanging dep,eci-
ated paper currency into an interest
bearing bond would, as all expert
ence teaches, find practical operation
in the currency passing into the in
terest-bearing bond. All the money
in all the savings banks and in all
the other banks beyond the sum
needed for ordinary daily transac-
tons would be put in the shape of
these bonds. Nearly every dollar of
funds available for loans to mer-
chants, manufacturers, miners, build
ers and dealers in all kinds of bus
mess, constituting the wages fund of
the country, is now in the banks.
They furnish corporations and manu-
facturers with the money to pay lab
or and to purchase raw materials.
The adoption of this scheme to give
an interest-bearing bond in lieu of
the notes would have the effect of a
general exchange of notes for bonds.
If two forms of currency be afoat,
one being worth only two per cent
more than the other, that one bearing
the higher value will be sought after
and boarded. The Government dur.
ing the War issued $27O,OOO,OOO
Treasury notes bearing per cent in
tcrest compounded. They circulated
freely. but in a month the accumu-
lated interest gave them value above
all other notes, and they rapidly
found their way into safes, bank
vaults and other req ositories, and in
a short time disappeared from gener-
al circulation. So would it be with
the greenbacks. The moment they
could be put into the form of an in
terestbearing obligation, that mo-
ment they would be boarded. The
whole volume or currency would
practically disappear. Each man
would hold on to his bond until he
had 4 payment to make, when he
would pay out to his creditor the
bond at its value with accumulated
interest. The bonds, like the COM
pounded-interest notes, would be ex.
changed in large transactions with
their accumulated interest, but as
they would have daily increasing
value, they would never go back in
to Notwithstanding notes. The
result would be the prohibition of
the bank notes, the retirement of the
greenbacks, and famine of curren-
CIV. There would be a contraction
of currency such as this or no other
country ever saw. The money now
held by banks, forming the loanable
funds, and which furnishes the means
for carrying on all branches of bust
ness, and which furnishes the money
to pay the wages of labor, would all
be withdrawn from circulation and
put in the form of interest bearing
bonds. The projectors of this scheme
urge it for the express purpose of
preventing contraction, and provid-
ing permanently for supply of cur
rency; but the scheme contains with
in itself the direct means and induce
ment for producing the contraction
to an extent not possible under any
other system.
Nor is the contraction, with its
sweeping and destructive consequent
ces, the only cost of this operation.
1t will add the amount of the cur
rency to the Understanding debt Of
the country. The bonds will bear
3.65 per cent. interest, and the annu-
al interest on $7OO,OOO,OOO Of bonds
at that rate will be 1923, 100000 IN
coin. This will increase the annual
tax for interest over 25 per cent, and
at the same time leave the country
destitute of currency. 1t will bring
the country instantly to the hard-pan
of gold and silver, with famine of
both.
Thoughtful and earnest men who
have studied this subject in view of
the propriety Of change in the pol
icy OF the government have general
ly discovered the fallacy of the inter-
convertible bond and currency
scheme, and have abandoned it. The
patent plan of doctoring the curren-
cy, and attempting to float as money
an irredeemable paper currency, has
lost it's fascination, and the wonder
to them is how so many intelligent
and honest people have been so long
deceived. The adoption of the in
terconvertible bond system would in
three months produce such a con-
traction and such paralysis of bust
ness, labor, and production that it
would arouse the country, and the re-
peal of the bond operation would be
compelled. And this would be the
outcome and the short life of that
measure which has been urged upon
the country SO vigorously and ear
nestly for SO many years.
In behalf of this suicidal scheme