Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1890-05-24
Senator Stanford Addresses the Senate
on His FaYOrite Bill.
A COMPREHENSIVE DISSERTATION
No Possibilities He Says Of Financial
Wealthy and Humble
Will be Benefited Alike.
tsrEuAI DISPATCHES TO THE RnooRD-uslos J

1nlS scnSme, WDlcn was at HrSt regarded
as somewhat chimerical, is now consid.
cred by many Senators and Representa-.
tives as perfectly feasible and practicable.
Representative Ewart to-day introduced
a similar bill in the House.
Senator Stanford had the close attention
of the Senators to-day, and the galleries
showed great interest. Following is his
speech in full:
Dir President: On the 10th of March l
introduced resolution intended to pro-
vide for additional money for use of the
people, and to effect this end suggested that
the Government should issue its money
direct to the owners of unincumbered agri-
cultural property, independent of improve
ments. l find that although the resolution
has been widely commented on, it is not
always clearly understood.
As an aid to its proper understanding
have presented a bill providing for loans
by the Government upon real estate. 1t
will be obseryd that the plan is very
simple. There is little completely about
it, and the department created to accom-.
plish its purposes will be much less COM
plicated than our Postoffice Department
is to-day.
The bill authorizes loans not exceeding
one half the value of the property mort
gagged but probably loans will never reach
more than one-third the value of the secur-
ity. The principle of the Government
loaning money upon propertyis completely
established in its present advance of 80 per
cent. upon Government bonds. The
tremendous results of energiziug this 80
per cent. in putting it into activity are ap-
parent to all. Equally valuable will be
the energizing of the latent forces
of real estate. The bill confines its pro-
visions for loans to agricultural lands, but
in time they will probably be extended to
other kinds of property and eventually to
municipalities, with proper restrictions
but for the present desire to be conserv-
ative and take no chances. Therefore
want loans limited to agricultural lands.
/ will proceed now to consider the practi.
cal question of how to Furnish sufficiency
of money. The bill provides that the Gov
ernment shall loan on agricultural property,
independent of Improvements, fifty per
cent. Of the assessed value at the rate of in
terest of two per cent. per annum. The
best security that can be offered is agri-
cultural land, The power of the Govern
ment to create money is conceded, and its
value is the same, whether made up of
iron, copper, silver, gold or paper. An
important point therefore, is that il should
be stamped by the Government, whose
credit is unimpeachable and which has the
power of making money.
The next important consideration is
how can the Government, without injury
TO itself, place in circulation that which is
so much needed and so absolutely essential
to the commercial and business transactions
of civilized life. The Government can &C.
complish this by taking the agricultural
l. i. .c
terms and conditions indicated in the bill.
No pressure for redemption can be brought
to bear upon the Government, as only those
who are entitled or in condition to have
mortgages redeemed can make claim. The
Governments paper will always be re-
deemed by the Government surrendering
the mortgage upon presentation of the
amount of money necessary for that pur-
pose. The Government loans its credit to
an individual in order that the whole peo-
pie may have sufficiency of money with
which TO prosecute their business.
The bill provides that money thus issued
by the Government shall be legal tender,
payable for all debts and claims, public
and private except interest on national
bonds and the redemption of national
notes. There is no analogy between this
scheme for Government of 10000 COO of
people, with its boundless resources issu-
ing its money secured directly by at least
81 for 81 on the best possible security that
could be desired. and any other financial
proposition than has ever been suggested.
1t is true there have been other loans se-
cured by mortgages, as, for instance that
of the safety fund system of New York,
but in that case the money issued was that
of a bank. In a small way money has
been loaned on real estate before, as pro.
rIRc1 pan vi in TINA nf XViI1ia
Penn, but never has great nation, such as
the United States, made its own money
and put it in circulation with special
security of real estate of double value OF
money coined.
/ therefore do not recognize any analogy
between the plan embraced in the bill
under consideration and any other that has
ever been proposed.
We can all well understand the gre t
advantages TO the people at this time of q
loan made by the Government Of 80 pei
cent, upon its own securities. One hun
dred thousand dollars of Government
bonds at four per cent. only produces fou,
thousand dollars. Yet, when its value be
comes energizsd to the extent of 90 PEI
cent, (which the Government advances)
its power is so increased that 500, 600 il
this activity may in the course of yea
double its value, and pass from hand Il
hand many times, stimulating the variou
industries of the country. So, too, thi
bill will have corresponding energizint
effect.
The money issued is not intended to &C
commodate the farmer alone, but as i
comes into circulation it will put th
means of prosperity within the reach O
those who are engaged in the smaller an,
larger industries of the country. Th
money issued by the Government become
automatic-it will contract when there i
less use for il and expand when there i
greater demand, thus disastrous financia
contraction will cease to be possible.
4 think there is good reason for fix
ing the rate of interest at per cent
No farmer will borrow money unles
he has use for it, and when b
ceases 10 have use for il he will returl
the money. That, however, will seldom
occur because the very activities that vii
be created by the liberal supply of none
will make a demand for it, so that tn,
man who has borrowed money of the Gov
eminent at ? per cent. will be able to loal
TO various active interests at higher rat
OF interest The extent to which the rate c
interest he pays is burden to the borrowe
is largely determined by the nature of th
business in which he may be engsgeG
The farmer having but one yearly produc
finds the interest which he paws burde
upon that product, which he came
reeoup as does the merchant. For instanc,
farmer owning farm worth $4,000. boz
rows upon il 5000 al 6 per cent, and in
mediately places heavy burden upon th
product of his property, for his interest
500 per annum, and the product of hi
farm, very likely will not be above 81 00
A merchant borrows from commerci.
bank 5000 perhaps with a single indor:
for sixty days and pays 6 per cent. for Ii
use of the money. He has, say 5000
worth of merchandise ON hand. whic
he turns over every two months, thl
making $4,000 to bear interest OF 6 d
cent. upon 5000. Besides, this intere
that he pays can be added to the cost of b