The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1891-09-10
CHEAP NONE =.
Something Tor the Alliance Sub

I Something Tor tho Alliance Sub
Treasury Advocates TO Think Over
We could do our farmer friends who
are following the lead Of the demagogues
in the Alliance organization, no greater
i favor than to give them the history of
cheap money in the Argentine Republic
1t was trusting in Argentine securities
that came very near wrecl1ing the great
| banking house Of Barring Bros of London
last fall, and which has brought such
widespread disaster to the Argentine
Republic where the delusiye scheme
was first launched The sub treasury
plan Of the Alliance, put forth at Ocala,
Fla, last Spring, and endorsed by the
State Alliance of Virginia, and other
State Alliances recently, is Of a KIN
dred character with that described be-
low. The farmers may form some idea
OF the direction in which they are NOV
ing by following the advice and appeals
of the ignorant and corrupt men who
are seeking to lead them away from the
safe and conservative banking and mon
etary system of the United States, which
has brought to the country SO much fl
nancial stability and prosperity. Let
them be warned in time, and cut loose
from an organization which is being en-
gineered by demagogues who would, if
their measures were adopted, intiict upon
this country a ike ruin to that which
has been and is being experienced by the
South American States, where similar
scheme has been effectually tried.
In the Century, we find the following
iect which threatened whole Cont
nent with ruin, through the Barring Bros.
banking house.
an 1873 there was established in the capital
city of the Argentine Republic. Buenos Ayres,
main object was to make loans on all kinds of
landed property. The principle upon which
these loans were to be MADE was much the
same Senator Stanford is advocating Il
basis for similar loans by the United states
| property in the province could go to the bank
and secure loan for half It's value, which was
, gave him a mortgage bond called cedula,
which was to run twenty four years, at from
and IN per cent commission The interest was
payable quarterly, and there were coupons at
tached for twenty four years. The ceuuaS were
issued in alphabetical series, beginning with A
aud running to T. They We're bought and sold
on the Bolsa Stock Exchange. and from then.
first issue became an important element IL
speculation. The first issue of series 4 was he
tween Sl3000G0O and Si4.GO,aU, the Argentine
dollar being about ninety six cents of our money,
, being based upon the unit OF the French none
tary system These remained at par for only a
short time after issue They were quickly fol-
lowed by Others until series A closed with a total
issue of sg7s 394 900 hen came series D with an
issue OF 81 Of5,OU, series With Soi3OOO series ID
| u.
with total issue or Si5,s 0,3(Q at per cent,
and i with total issue of $6.lttM0 at per cent.
i Ten years after the banks establishments over
$l00.000,000 OF the ceduas had been issued, all
, based be it remembered upon the landed prop
erty of a single provinces They had fconl tile
outset been used for speculative purposes, and
every year this became more wild ana reck =
less. ring was formed between directors of
: the .bank and certain favored brokers for the
absolute control of the successive issues. Moor
could obtain concession for a loan VINO did not
: make application through the brokers, and III
order that all the members Of the ring might
reap their share of the profit the value OF the
property upon which the loans We're placed was
raised to extravgant figures
Tie fictitious prosperity which the iypothecary
Bank brought to Buenos Ayres infected the en-
: tire republic, and in 1884 Congress passed law
annexing a National Hypothecary Bank to the
National Bank, which was the fiscal gent Of The
Government and OF all the provinces except
I}uenoS Ayres. The issue of the cedulaS on the
landed property OF the nation was authorized,
for fifty per cent of its value, at interest from
A to per cent, with per cent. amortization and
per cent. commission no single loan 10 exceed
: S250,000, and all payable at tine end OF twelve
years The issue OF cedulas was at first limited
to S40,Wo,tsD, but this was extended from
: time to tine so that in November, 1850, six
years after he National Bank began the exper
lment 1T had Out no less Than W. tUtco IN gold,
all bearing interest. The Bueu0s Ayres Bank
had increased its issue Of caduas 50 that at the
same date it had ONT less than $3.50 00,DN, but
these were in paper, making the grand total OF
f money which lad been loaned upon iano il the
Republic during seventeen years. 1854 o00000, or
U over $40 fer every man, woman and child.
, When the National Bank went into the by
i pothecary business in 1854 paper money at
rs,
a tonal prosperity were felP during mat year
: against Mediterranean steamers anu checked
nmi ration. Heavy Hoods dnrins the fall de-
layed the shipmentof crops from the interior to
0U0,og9 was to be placed, but the European mar
ket which was expected to take sluWSHn OF it
was SO nearly satiated with Argentine invest
ments Of one kind OF another 5Iat ii declined to
: take more than si3,pto0UN.
a vincial Bank OF Buenos Ayres, and compelled it
it to suspend specie payments. Whereunon the
: currency legal tender Gold rose at ouee to II
per cent. premium, and then to 20 per cent IN
: February it had reached 80 pel cent, and if corr
tnued to rise steadily till at one time il Yves at
= cooper cent. That is to say; 500 il paper was
that the gold standard was abandoned, the de
n | mand for more paper money began to be heard,
: most unlimited volume. Under the pretense Of
creating sounder financial system and secur-
:. ing more stable currency, a law was passed III
November, 1887, establishing system of State
banks forty in number, similar to our national
600, and began to issue paper money, not being
required, as orr BANKS are 10 be able at all times
l to redeem their notes with gold When the
premium on gold had reached 30 per cent, the
Government took the position That the increase
+ an outcome Of currency infiation, and issued q
: decree allowing the banks to issue currency
practically without limit. AZ tiie same Tune
and to prove it's belief i'll its own contentious,
threw $50 COZ of its gold reserves on the mar
ket. The gold premium continued to rise with
no percepGible check, and as it rose the banks
pour "a ont more and more paper money in u
frenZied attempt to check its upward night.
1t was discovered after a TIME that, through
trickery, there were several millions more of this
rredeemabie paper money IN circulation Than
had b.en supposed. provision Of the Nation
al Banking Law required that all banks reorgan
) zing under it should withdraw and cancel their
old notes when they put their new ones in cir
culation. seyera. banks, in collusian with dis
honest officials, violated this requirement. and
kept large amount OF their Old issue in circula-
tiOn with the new. AT one time the amount OF
this fraudulent money, based on nothing what
ever, amounted to $ii1,0n,o0. Some of This
afterwards destroyed, but the latest official esti
mate put the amount still in circulation at over
$s5,000,0OO. AS the latest attanabe total of the
regular paper issue of the banks places it at
in circulation in March Of the present year.
worth about % cents on dollar, was $3.50 00,Q0o,
ey. This per-capita circulation Of Siu3
for every man, woman. and child Ia the republic.
rha on b certainly f4 eaws pe5 5 esS
the highest sum per capita our widest cheap
money advocates have ever demanded,
| In 1856 the National Bank had capital Of &c.
O00G00. sterling, and the Provincial Bank one of
of f8 000 sterling. Not penny OF the latter
remained. The National Rank had lost es,S0O,
900 Of it's el00GD 0e0 and owed the Government
el4,000,li0. The two banks had lost therefore,
during five years experience with cheap money
based on landed property, about tNl,G00,0o0 ster-
ling, sum more than double the pita OF the
Bank Of England.
When the collapse came the nation gave Itself
over as France had done two centuries earlier.
to rage and despair Men who We're believed to
be worth millions found themselves paupeI's.
One who had been worth $20,000.0O0. which he
had accumulated during lifetime's devotion
to honest dustry, but who had been tempted
to venture it in speculation, lost every dollar
Mexico Next.
A special despatch from San Francisco