Los Angeles herald., 1891-09-06
GOVERNMENT CREDIT
A Reply to the Paper by
W. L. Graves.
The Peoples Party and the
Money Question.
A Claim That National Credit Is
Used on a Partisan Plan.
The Financial Demands OF the Peoples
Party-COngress to Declare What
Is Mopey-SOme Novel Ideas
on Finance.
[By A. G. Hinckley.

By A. g. Hinckley.
The HERALD last week published {
paper by w. L. Graves, of the Nationa
Bank of California OF this city, on
Government Credit. The following is 6
reply:
have read the article on Government
Credit, by w. L. Graves, recently pub
lished in the DAILY HERALD, and feel
that an injustice is done to the financial
demands contained in the platform o.
the Peoples party, by some of his state
ments and comparisons. 1 quote this
plank in full:
a. The right to make and issue
money is sovereign power to be main.
tanned by the people for the common
benefit; hence we demand the abolition
Of national banks as banks of issue, and
as a substitute for national bank notes,
we demand that legal tender treasury
notes be issued in sufficient volume to
transact the business of the country on
a cash basis, without damage or espe-
cial advantage to any class or calling,
such notes to be legal tender for all
debts, public and private, and such
notes, when demanded by the people,
shall be loaned to them at not more
than per cent. per annum upon nom
perishable products, as indicated in the
sub-treasury plan, and also upon real
estate with proper limitation upon the
quantity of land and amount OF mondy." F."
These propositions are clear, and as
definite as can be made in platform.
They afford ample money for business
use.
He asks: "Under what law could it
be done? There is none expressed or
implied in the constitution of the
United States" Evidently the writer
has not read article /, section s, clause 5
of that instrument. "The congress
shall have power to coin money, regu-
late the value thereof, and of foreign
coin."
Webster thus defines the verb coin
"To stamp or convert into money" be
defines money as "any currency to be
employed in buying and selling" The
common law provides that "words and
phrases are construed according to the
approved usage of the language" This
is the law and the authority which is
upheld by the supreme court in Knox
vs.. Lee: "Whatever power there is
over the currency is vested in congress.
II the power to declare what is money
is not in congress, it is annihilated. {"
Supreme court reports 18th Wall, page
545.
In attempting to show how paper in
fation produces bankruptcy, he ex-
claims: "This is the natural result of
Socialism," AS the ultimate dream of
the Socialist is no money at all, this
weighty conclusion falls without argu-
ment to point beneath criticism. In
considering this plank, what foundation
can the writer find for the following:
"Credit has to be based upon par
tisan plan. No scheme yet advanced
will enable the masses to take advantage
of it. That of land as basis of security
would only help the land owner; what
are the other classes to do? That of
cereal crops in warehouses is open to
the same objection that Of cotton the
same. AS matter of justice each citi-
zen would have the same right to mort
gage his machines of all classes and
kinds, products of all manufacturing
establishments the stock-grower his
cattle, horses, sheep and wool; the
stock broker his bonds; thus making
the government one huge pawnshop,
and reducing us to Socialism. This
would be departure from all our ideas
OF government and could only result in
relief by reputation"
The national credit is now being used
on "partisan PLAN" That plan is the
national banking system. These banks
get the use of the national credit in
nd 70 -.
est on them; get 80 per cent Of their
the highest rate of interest the people
can be forced to pay, and the peoples
deposits are lent at the same rates. BY
this ingenious contrivance banks obtain
triple interest on their capital invested
in United States bonds. If you don't
like that statement, we will put it an
other way. For all the currency the
banks owe the nation, and for all the
deposits they owe the depositors; ON
both these debts the banks receive high
rates of interest from the people, who use
these debts as money to do business
with. Bank notes are not legal tender,
yet they are issued to banks ad libitum,
while greenbacks are called in and
burned!
A very poor swap! Besides costing
the people over 100000, 900 in interest
on bonds used as basis.
The whole amount of the currency de-
stroyed and replaced by interest-bearing
bonds have caused the people direct
loss of over $4,000, 1000, 900. The "con-
tracing policy'xyas kept up until it re-
quires twice an@ thrice as much labor
and produce to pay debt now, as it did
when it was incurred. This harvest to
the creditor class has been ruin to the
debtor class. 1t is no whit better than
robbery, but as it has all been done un-
der the sanction of wicked laws, the
perpetrators have escaped punishment.
The people are tired of a monopoly OF
government loans to a class who are
getting rich on what they owe. The
land loan and sub-treasury plans afford
a safer and better basis for money than
the national banking system.
The basis of these banks is United
States credit, and their money is not
legal tender. The Peoples party has
the same basis, and has in addition
l. The specific security-land and non
perishable products. 2. A low rate oi
interest. 8. A currency adapted to the
requirements of the business OF the