Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1890-04-19
LOAsS ON Farm LANDS.
sTANF0RD's PLAN OF GOVERNMENT
ASSISTANCE EXPLAINED.
1t Will Not Interfere With the Bank.
and Money-Lenders, But Indireely
Benefit Them.

T lOlu Tic Cdu EIduC4eCO EAdulueL, ApIll
To the Editor of the Examiner
desire to answer some objections made to
Senator Stanford's plan of Government
loans on farm property at rate of interest
as low as per cent or less.
1t is said it will injure the banks and
money-lenders. This does not necessarily
follow. 1t is no, proposed by this plan to
loan money on commercial paper or on
business ventures All the vast transac.
tons on the Produce Exchanges, Stock
Exchanges and Boards of Trade will not
be affected by this scheme, except that the
business of these exchanges will be in
creased by the increased productions of the
country and the large activity ii will create
in all sorts of enterprises. What good
bankers want are short loans and plenty of
business. When the country is prosperous
the bankers as well as the merchants share
in that prosperity. Nine-tenths of the
money loa.ed in this country is not on
land, but on commercial paper, overdrafts
and credits, which the Stanford scheme
does not interfere with in the least. The
Government loans money 10 the National
banks on its own bonds, and also on silver.
Why not on land, the best security of all 4?
But some say this scheme will make
money too plentiful. There has never been
too much good money. especially if it be
kept active. There is great deal of money
now locked up in certain places that is of
no use to anybody. Take the United States
Suo-Treasury in this city. 1t has had in
vaults for years an average of s60,00O,O00 in
N.a1y1 ,oI0
IL the bottom of the sea as to lie idle
where it is. In the Washington, New York.
Chicago and other Government deposit
tories the amount of money piled ND is
astounding. 1t runs into the hundreds of
millions, yet the greatest stringency has
prevailed in the money markets of the
country for months at time in recent
years. The Government had an ocean of
unemployed money, but not dollar could
be used to relieve the stringency. Only this
last winter money was in brisk demand in
New York ar from 10 to 80 per cent. inter-
est for weeks, causing widespread evil and
decentralization of business. The vast
amount of money the Government has on
hand ought to be utilized in some way to
save the country from panics, high rates of
interest and financial disasters. Eliminate
the farmers as borrowers from banks and
private capitalists, and there would be
ample funds to do business without fric-
ton or disturbance. The Government itself
should loan money to the farmers on their
land. 1t can do ii at lower rate of inter
est than anybody else, and what benefits
me farmer benefits the Government.
THE GOVERNMENTS MAINsTAY.
The private money-loaner on land has
no concern about it, except to get back the
principal and interest, with chance to buy
the land cheap if the owner cannot pay.
II anything, the man who holds a mort
gage on another mans land prefers that the
borrower shall not prosper. But the Gov
eminent has every interest in the farmers
prosperity, for in the end the producing
classes pay all the taxes.
Let fortunes bubble, rise and fall,
Who sows field or plants tree
Is worth them all.
If the Government depended on the mid.
die men and the traders for support, it
wouldn't live year. II is the men who
till the soil who support the Government.
Now, whether that support shall be strong
or weak frequently depends on the rate of
interest the farmer has to pay when he is
compelled TO borrow. The country banks
in this State usually charge 10 per cent. for
the money they loan to farmers. This
means that the profits of incumb ered farms
GO largely to the banks, and not to the
hard working agriculturist. If the farmer
could get money for l or 2 per cent. interest
what difference it would make to him
Money at 10 per cent. means poverty; at
per cent. it means plenty and prosperity.
And when the farmer is prosperous the
country merchant does better business
and is better paid the shoemaker has more
shoes to make; the tailor has orders for
more good clothes; the manufacturer has
more purchasers for his wares good times
prevail in the rural districts, and this in
turn benefits the city and makes business
active all over the country. 1t is claimed
that the Stanford plan for Government
loans will bring about these desired results
and do more to advance the industrial and
financial interests of this nation than any
legislation we have ever had.
But some doubts have been expressed
about the stability of paper money issued
10 so many mortgaged farmers. Over. pru-
expand our currency and depreciate its
value. That great gift to American states
manship-Henry Clay-said: Anything
the Government will receive in payment
for public dues is money, and good money,
no matter what its form may be-" No ex-
pansion based on fixed values ever hurts
anybody. More bankruptcy, more misery
has been produced by unnecessary contrac.
tons of our currency-tenfold more-than
from any other cause. In 1873 silver was
stricken down and demonetized, and about
the same time there was also another large
contraction of the currency by the with
drawal of many millions of greenbacks.
What followed is known full well. The
country was in the throes of a financial
panic as soon as the contraction was COM
pleted. In the words of Mr.. Bland, Banks
all over the United States, with few excep-
tons, closed their doors against their Gus
toners and the public. You could not get
your own money, nor could you borrow
Confidence hao fed. Disaster and ruin
were written in the faces of the people
everywhere. Money could not be had.
Those who were so unfortunate as to have
debts TO pay had no recourse but the bank.
rGptcy Courts. Their dockets were crowded
with litigants. There were in name Courts
of bankruptcy, but in fact they were Courts
of confiscation, where the property of debt
ors was taken and turned over to creditors
without consideration"
A PICTURE OF DEPRESSION.
Such is the picture drawn by the author
of the Bland silver dollar of the awful
panic of 1873. 1t Frustrated the Eastern
States for years afberward, and it was
caused entirely by contraction and q false
idea of finance. just as the old school of
doctors thought that people should be
bled frequently, SO the Anticipated financial
doctors think that huge contraction
should be forced occasionally, even if the
greatest destruction OF values and wide
spread failures in business are caused by
IL. Under the Stanford plan there will be
no forced contraction. The Government
will receive back the money ii loans to
farmers when it is handy ana convenient
to pay it. There will be no foreclosures.
When the farmer has sold good crops at
fair prices and has no further use for the
money he will return it and lift the Gov
eminent mortgage from his farm. This
will be healthy and perfectly natural
contraction and can harm no one. 1t is
the forced return of loans that devours
farms.