The Somerset press. [volume] (Somerset, Ohio) 1873-1977, 1882-01-05

R.-IIow do YOU arrive q, this opin-
ion?
Mr.. W--NVell all commercial panics
a~e precede and caused by a cont'ac-
ton of the currency. actual or coInp4r-
at We.
R--What do you mean by actual and
comparative contractiOn?
MIR. W.-SuDpose boz has a pair Of
pants which get wet and shr nk, that is
tual contraction. If the boy grows
till the pants are 100 small for him. that
is comparative co traction. The panic
of 1873 was caused by combination of
both kinds; the next one will De caused
by comparative contraction.
R.-Are there any signs OF a coming
panic?
Mr.. W.-Yes. AS the industry of a
country expands the volume of money
should expand cofrespondingly; if it
does not we have comparative con-
tract.on-the boy is growing too big Tor
his pants, you see-but as man exerts
his ingenuity to contrive substitutes
when he cannot have the realty, so
when expanding industry demands
greater volume of money, and the
money is not forthcoming. a sub stitute
is sou hit for, and that substitute is ex-
panded credit. This is what is taxing
place in tie United States. OF course
credit rests on confidence, and it also
neces-itates interest. and as the interest
on money under hardin bney system
always exceeds the earnings of the
( people (this is true OF both Canada and
the United States). it does not require
much prescience to fortell that time
will come when the accumu'a ed inter-
est will overlap the accumuiation of
industry, and then con idence must fail,
and the credit on which the business
was fioated will crumble and panic is
inevitable.
R.-What evidence is there that cred
it has taken the place OF money in the
United States?
Mr.. w Senator Jones, of Nevada, q
! leading Republican, and one OF the
ablest men IN the country, as Chairman
OF a Senatorial Comm ttee, reported
some two years ago that the total in
terest bearing debt, public. private and
corporate. was $4,000, OCO, co.; on this
the average annual interest is at least
seven per cent, or a total annual inter
est burden o. 8 4. 90 1000: now the
total circulating medium, gold, silver
and paper OF all kinds is less than this
annual interest burden. In other words,
the enti none. volume OF the country
finds Is wa. once every year into the
pockets OF the usurers as interest, anG
entails another interest burden ever,
time it goes into circulation again. A.
another evidence that credit has taker
the place of money may mention tina
while the total volume of money in the
country is less than one and a halt bill
ions the depos is in the banks foot nj
over two and half b lions. and whel
we deduct the money held BIZ the Gov
ernment and that actually in the hand
OF the pie and credit all the rest u
the banks they could not pa, ten cent
on he dollar OF Their deposits.
R.-Accordng to that the banks o
! the United States don t appear to be ii
the soundest position imaginable. w
have had small bank scare in TOr0n
, to. Which of the two systems OF bankin,
1 do you consider the better?
Mr.. W.-They are not to be com
pared by good, better. best but by bad
D worse. wo st, and have no hesitation
: in sa IN TIL It the Canadian S stem
worse than the United States. Bot
have the atal effect of allowing IRE
/ sponsible corporations 10 uShrp tn
most important function of Govern
: ment, the issuing and regulating tn
volume o. money. but the nUte-holde
in the United States is ,ully secured
: Toronto (Can. EUsntng Telegram.