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

/ ure, the correctness OF whose pr1ncl-
pies were admitted, simply because
the means suggested for its execution
were clumsy or defective. The wis
dom and correctness of the principle
once admitted, it becomes the duty of
the legislator to find some proper
mode by which it may be carried out.
During this part of the discussion,
therefore, | ask my readers to dis
miss entirely all questions as to
whether or not the plan proposd by
the Alliance is practical, but simply
to determine whether a sound cur
rency can be based on the greatstaple
crops. If they can be convinced of
this proposition the task of showing
| how it can be issued 8 easy. The
main question, therefore, TO repeat
myself, is:
CAN A PAPER CURRENCY BASED UPON THE
GREAT STAPLE CROPS BE ISSUED BY THE
GOVERNMENT
That will readily pass on a party
with gold ? To determine this we
must consider the essential elements
of paper money. Every one now
comedies that it is not only more con-
venient than specie, but in modern
times absolutely necessary for the con
duct of business. A great part of the
money in the country to day, exclu-
sive of gold and silver certificates,
consists of paper, and the silver Ger
tifcate passes more readily than the
silver dollar There has been since
1878, in round figures, $346, 900, 900
Treasury notes in circulation, and dur
ing that whole period they have
readily passed on the gold basis. In
addition, there are millions of national
bank notes, which in the financial
analysis, are chiefly based on the gov
ernment promise to pay; and these.
too, readily pass on a parity with
gold. Is is true that behind the ma
tional bank notes stands the bank is
suing them and the government bonds
deposited for their redemption, but
behind the Treasury notes stands
simply the plighted faith of the gov
ernment to pay in coin on demand, and
the coin reserved in the Treasury.
Why do these notes pass on parity
with gold First, because the public
has confidence in the governments
ability to redeem them in coin at any
time; second, because they are re-
ceivable for public dues, except duties
on imports, and are legal tender for
private debts. The annual demands
of the government for which they are
receivable at par with gold are very
great. They combine in the highest
degree two essential elements public
confidence in their convertibility into
specie, and receivabllity at par with
gold in payment of enormous annual
dues. The first cement of strength
is doubtless founded in large meas
ure upon the second. But to what
extent could they be increased :?
Would an ar Oitrary increase of one
thousand millions 50 shake puolic
confidence and exceed public demands
that they would fall below gold :?
Certainly there is some point at
which this would be the case. If this
is true, can it be said that $500, ,OOO,-
600 or $lOO,OOO,OOO would not ex
ceed public demand and shake public
confidence? If there is a point be-
yond which public confidence and the
demands Of business would not CO.
how is that point to be ascertained ?
Here lies the greatest difficulty in the
issue of paper money. Should the
government arbitrarily issue so many
millions of Treasury notes and trust
to luck not to exceed the demand, or
should it devise some plan by which
the supply can be regulated by the
demand? The latter is undoubtedly
the correct method. Currency"
says Jevons, in his work on 6 Money
and the Mechanism of Exchange" I"
"must be supplied Ike all other
commodities, according to the free
action of the laws of supply and de-,
mand." Page 237 In this view
John G. Calhoun fully concurred.
Perhaps the essential element of paper
money were never more clearly stated
than by him in his speech in 1887 on
the bill to establish the Sub Treasury.
He said: "On what, then, ought a
paper currency to rest? would say
on demand and supply simply, which
regulates the value of everything else
the constant demand which the
government has on the community for
its necessary supplies. A medium
resting on this demand, which simply
obligates the government to receive it
in all of its dues, to the exclusion of
everything else, exceps gold and silver,
and which shall be optional with these
who have demands on the government
to receive or not, would, it seems to
me, be as stable in its value as those
metals themselves, and be as little
liable to abuse as the power of coin
ing. 1t would contain within itself a