The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1880-01-02

pretence OF payment. 40 socn 40 II 10 foun'
that the "interconvertible' bills are cheap, a
they arc meant to be, and therefore buy bu
little, people will stop lending or trusting. Tia
such money will presently buy nothing, though
its debt-paying power will remain, sverybod,
must realize, and, as the only way to protect
himself, everybody Who can first sponge OH OIL
| own debts will stop taking the paper, or letting
others get into debt to him. Thus this money
must start Just where dishonored legal-tendsr
notes end, and, after robbing all creditors
must lob workpgmsn tothe last, and die on
their hands.
Some propose to limit the amount OF the oiiis
to DO issued in order to prevent thsm from
being worthless. But that would make them
too scarce for the people who want them to pay
debts with. What use is there in issuing any
new kiud of paper. il 1t is not to be more
plenty, easy to get, and cheaper, than the notes
are now? But il it is more plenty 1t Will be
less DESIRED and therefore will buy lees. Any
paper that has once begun to sink in value, or
buying power, it has bean shown, tends to Sink
st!l further constantly. because people dis
trust il, expect il to sinb, and put up their
prices and charges as far as they can. None
would believe that the first issue would be the
last. No nation has ever been able to keep
within any limit the issue OF legal-tender that
is not redeemed, and . currency that depends
for value entirely upon the ability OF nation
to do what no nation has ever done is fitted
only for the region that Is "paved with good
intentions" prudent farmer would never
hire man who is In the habit Of burning down
the barns OF his employers. a prudent nation
will not trust itself to nee any kind OF money
that has become worthless everywhere else, and
brought ruin upon Industry and trade.
Finally, few propose that the bills shall be
convertible into honest bonds, which promise
coin and bear interest in coin. They think this
would give desirable elasticity" to the cur
rency and when notes were not redeemed the
plan had some excuse. But now the notos are
convertible into gold itself. The currency has
a real elasticity faculty OF increasing or de-
creas.ng in volume according TO the real needs
OF the country. IL we have too much, gold
goes out and the unerring laws Of nature take
care that only enough goes out to remove the
excess. II we have too little, gold comes in, as
more than $4,000, 900 came in August, and more
than IS, SOC, COO in the fret week Of September,
and the unsrring laws OF nature take care that
only so much comes as we really need. When
gold comes, real capital is added to our re-
sources, and expansion Of that kind does not
threaten to make the notes bad again. We
get only what we can.pay for, and speculation
is forced to keep step with the solid progress
of the country in production and wealth. But
the volume OF interconvertlbs bills would be
governed solely by the rate of interest in this
country alone. A gigantic speculation pushes
up the rate of interest as surely as any increase
IN real production OF wealth, or legitimate ac-
tlyity OF trade. Bills would flow out as fast,
If wanted for reckless gambling only, as If
needed for productive industry. Without any
gain in real wealth, the wild fever of gambling
would demand and get more currency, which,
in turn would make the fever still hotter. There
would be no safeguard whatever More and
more of our capital would be taken away from
legitimate uses, and thrown to fesd tho fame
OF speculation. But even children have a say
ing, 4" Whatever goes up must come DOWN
Prices cannot so up in balloon forever and
the inevitable end OF such frenzy OF specula-
ton is crash. Suddenly ruin would fall upon
industry. Fright would seize men of capital,
who would rush their money by the millions
into interconvertlble bonds for safety. Then
violent contraction world complete the ruin.
No more dangerous scheme, for causing alter
nate spasms OF wild imitation AID fatal contrac-
ton, ever was devised. A currency OF that sort
would not be elastic, but explosive. Mr. Kee-
ley, OF Philadelphia, is trying to evolve from
cup Of water force enough to haul railroad
train 100 miles. lie gets tremendous force,
which bursts metal castings OF enormous strength
but it seems to be an explosive, not an sxpsn-
sive force. 1t will not draw a pound, but does
tear down everything around it. Interconvsrt-
ibls paper would differ from good money just
as the Kelley motor differs from steam.
The money that We have works well. 1t 10
elastic, bat safs, and already the dawn OF
grand prosperity gilds the sky. Why should
70 risk everything in trying new devices p
Nat would become Of farmer:who should
,lotE up his fields OF growing wheat, and be-
,in oNer again, because some stranger comes
% ssA him new kind Of seed?
XVII.
NATIONAL VS.. "wILD-CAI" BANKS.
We have In use two kinds OF notes. The