The progressive farmer. [volume] (Winston, N.C.) 1886-1904, 1890-09-30

disc, he oasis OF business paper) no
one would take it's notes and credits
to any considerable extent, as it would
be seen by all that no proper provision
had been made to carry forward its
operations or to meet the losses to
which it would be subjected Such
banks, therefore, from the very nature
of things have never been abe to
make even the first successful start.
The moment they have attempted to
issue notes and credits as currency,
these have always been presented for
immediate redemption in coin. AS
they can pay neither merchandise nor
coin, they have no other alternative
but to go into immediate iquida ion.
That currency may at all times
be convertible, the means of its re-
demption must always be provided
previous to its issue, not by the bank,
but ny the public, the producers of
merchandise. With such provis on,
the currency from the moment of its
issue would take care of itself The
attempt to make such provision after
issue would be certain to oefeat itself.
When merchandise is provided the
necessities of consumers compel them
to purchase it, piece, by piece, for
consumption. Their necessities and
purchases will have the effect to main
tain S price, so as to render it ade
quate to the discharge of the currency
issued against it. But neither real
estate nor securities can be taken for
consumption, piece by piece; they
must be sold in gross, or not at all. "
Real estate and securities, he ably
shows, can be neither eaten, drank
nor worn, and cannot, therefore, form
so safe or stable a basis for currency
as merchandise, which is daily and
hourly distributed throughout the
country for consumption.
ESSENTIALS OF SOUND PAPER CURRENCY.
Now, let us briefly sum up the es-
sen ial elements of sound paper cur
rency:
l. 1t must be backed by the public
confidence that it is at all times con
ver1ible in specie of its equivalent.
2. secure this confidence there
must be such constant public demands,
for which it is receivable on a par
with spec;e, as will enable its prompt
convertibility into specie, or its equiv
alent.
3. To insure this, it's volume must
be regulated by supply and demand !;
an
4. This can only be accomplished
by making it the representative of the
distribution of merchandise for con
sumption, which would prevent its
volume from ever reaching a point
beyond which it could not be imme
diately converted into specie or some
necessary article of merchandise on a
specie basis.
TREASURY NOTES SECURED BY STAPLE
CROPS.
The plan of having the federal gov
ernmept issue treasury notes based
upon the great staple crops fully
meets these prerequisites to an in
creased issue of paper money.
For every dollar of treasury notes
to be issued by the government, the
farmers propose, in some form, to
pledge their cotton or wheat to the
extent of only 80 per cent. of its actual
market value. This creates debt
on these staple crops, the whole, or
nearly the whole of which is con-
sumed within each year. For the
payment of this deot the treasury
notes issued by the government would
be accepted by the government on a
parity with gold. The notes which
would be issued upon the crops could
be made similar il all respects TO the
present treasury notes. They would
perform all the functions performed
by the present treasury notes, would
be receivable for the same class of
public and private dues, with the ad
ditioLal strength that, by their very
issuance, another use for them would
have been created, to-wit: the payment
of the debt created by their issue.
Now, the great staple crops are sold
upon a gold basis. Wheat and cotton
es specially form our leading articles of
export; their price is fixed on gold
basis in Liverpool and London, and,
therefore, as the product on which
the treasury notes would be issued,
would have to be sold on gold basis.
The notes issued on them, which would
be accepted by the government on
parity with gold, would necessarily
pass on gold basis. Again, as their
issuance would not be arbitrary on the
part of the government, but only upon
demand and the pledge of the crop, no
note would pass out of the treasury
except on a gold basis. If it could be
conceived that these notes would de-
preciate at all, their depreciation would
necessarily occur at the point OF time
when most of them were outstanding,
L 4 Il