The midland journal. (Rising Sun, Md.) 1885-1947, 1891-09-25
Friday. Sept. 25, 1891.
The Warehousing System in
Finance.


eminent direct to the farmer or producer,
the wise ones in finance laughed immod-
erately at it, and were not slow in ponounc-
ing the plan one of the widest follies ever
conceived by class of foolish farmers.
wholly ignorant Of the laws Of finance.
When asked to give their reasons for such
belief, they said the scheme was unconsti-
tutional, and that the government had no
authority to loan money. The ignorant
farmer quickly cited them to the government
loan TO the Pacific railroads, to the Centen-
NAL Exposition and New Orleans cotton
exhibition loans. And 10 still more an
alagous proceeding, the loan of bills to
national banks. This blocked the uncon-
stitutional argument. They next charged
that the scheme was at best visionary and
impractical. Immediately the farmers cited
the wise fnanciers 10 France having tested
the scheme in 1849 with the most complete
success. Also 10 the practice in colonial
days; in Pennsylvania in 1889 and in North
Carolina in the same century. And later
still in Switzerland. In every instance the
scheme or plan worked superior to any other
financial system eyer tried. This kind o.
argument couldn't be answered and abuse
and Misrepresentation were resorted to-
which is the principal stock In trade of The
money class and those who sneeze wher
they take snuff, in vogue at present. Ii
addition 10 this these opposers allege the
Alliance sub-treasury ard the land loar
plans would he class legislation. This latter
objection comes with had grace from elias.
of people whose whole business rests on
class legislation of the worst kind.
The fact is that our whole system o.
finance rests on the warehousing system
with.a fraudulent practice in large meas.
ure. We have $1000OO,0OO of gold ware
housed in the Treasury 10 redeem $346, 000,.
0o0 of greenback circulation. Atall events
the Secretary Of the Treasury continues tc
stale there is that sum of greenbacks in cir
culation, which is probably S100,O0000C
too much. Our gold and silver certificate
system is on the warehousing plan recon-
nended by the farmers. The gold and sill
yer is stored in the treasury and notes are
issued on this warehoused metal. Bonds
are stored in the United States treasury
vaults aud the national bank currency is all
issued on these warehoused bonds Thi.
U. s. Bond warehousing system and The
issue Of national bank currency on them j,
more nearly the farmers proposed method
of storing farm produce and receiving an
issue Of notes from the q. S. Treasurer or
this collateral, than the others. The bonds
are warehoused for twenty years or till ma
furity and the notes issued on 90 per cent Of
them with a charge to the banking corpora
tion that receives them of one per cent pei
annum. THIS charter requires the return
of the notes at period not longer than &c
years. when they are destroyed and the
bonds delivered to their owners.
This is similar in principle to the ioanina
Of money on warehoused farm products, bu
differs in the use made of the money. The
banking corporation receives the notes from
the government, not TO pay labor and invest
in wealth producing pursuits, but to loan
again at an increase of interest many fold
10 those who are engaged in productive in
dustry. Here is where the bankers ware
housing system of U. s. Bonds and the
farmers warehousing system of farm pro-
ducts part company. The farmer under
ahe present U. S. Bond warehonsing has tc
borrow the money from the banks at six Il
any rate of per cent circumstances deter
mine. In the farmers proposed method Of
depositipg his products for security for (
loan, he asks but so per cent of the marke
value of his collateral and offers 2 per cen
for the use of the money for one year only
AT the end of that time or sooner the note
must be returned TO the Treasury and de
stroyed and produce removed. The interes
ofthe farmer by his warehousing products il
paid the government and goes into TIL
treasury as taxes. Under the banker
present plan the farmers and others pa,
several times that amount of interest whicl
goes into the banks Golfers You will MOTTO
that the present plan of warehousing u. S
Bonds in vogue amongst national banks i
the quintesence of class legislation. Tn
government furnishes them money whicI
the producing classes all must have, il
order that the banking class can loan th
the money and pocket high rate of interest
It is the people Engaged in productiv,
industry who really use the money, and n,
others. The banks do not use it. The,
are only agents for the government VIII,
charge and receive an enormous per cen
for this service which the Alliance ha
pointed out could be done without thei
aid, and al great saying to those who us,
it. The banks without being constitutes
loan agencies between the government ans
the people at an immense and useless ex-
pense to the latter, would pursue their le-
climate business Of banking, and the contro
of the currency of the country would b,
taken out of their power where it now i
and restored back to the government wher,
it should remain. As to the qualify of III,
security-iarm products. which the farmer
propose TO give, it is the very best in th'
world. In fact it is the base of all. With
out the annual products of the farm al
h..ns.o.s ...-..II .a.-I IN IL re- 81