The Greenville times. [volume] (Greenville, Miss.) 1868-1917, 1891-05-23
THE FINANCIAL DEPRESSION.


In Mississippi Hon. H. NJ. Street is
regarded somewhat as authority upon
legislative revenue and financial ques-
tions. AS whatever he says upon these
questions is worthy of reading and
will excite thought, the following is
published:
To the Editor of the News;
One of the chief causes of oppres-
sion, under the present financial system,
is the constant drain of money from
the country at large which goes to the
money centres in payment of interest
on public and private Indebtedness.
A change that would stop this drain
and keep the money in circulation
throughout the country would be a
great relief. In the days of State
banks, organizations of individuals
were authorized TO issue paper based
ON specie at the rate of three in paper
for one of specie. In creating the
present national bank law, Congress
imposed prohibitory tax on all other
bank notes. 1t matters not how
secure these notes may be made, none
can circulate free of this prohibitory
tax, except such as are based OH de-
posit of United States bonds This
policy enhances the value of these
bonds at the expense of every other
interest in the country. They have
long been at high premium and to-
day it requires an investment of about
$l00, 900 in money to secure national
bank circulation of $4,000. This
makes paper as expensive and as diff
cult to secure as gold and silver. Con-
gress should repeal this tax on State
banks ana the States enact laws to
protect the people against irresponsi-
BILE institutions that would otherwise
follow such repeal. State banks
should not be permitted to issue three
for one of specie without some posi-
tive guarantee for its redemption
This can be secured by deposit OF
one-third specie and the other two
thirds in mortgages on real estate
worth double the mortgage. The
State should have supervision over
these banks aud guarantee the circu.
lation. To protect the State against
loss, all banks should be required to
deposit per cent of their circulation
as general safety fund. An associa,
ton of State banks should be author.
lied and empowered to cooperate
with the State authorities in bank ex.
aminations, and as this association
would be liable for the failure of any
part of the securities OF any one oil
more banks, the public at large would
be fully protected. This would be nc
hardship on the banks, as the failure
of any piece of mortgaged property t.
bring the amount secured by it
would be made good by the particular
bank holding it, while the association
backed by the State, standing between
all the banks and the people, would
only be necessary to strengthen conf
dence and prevent panics..
AS compensation to the State for it'
guarantee, and in lieu Of all other
taxes, these banks should be required
to pay annually into tho common
school fund of the State three per cent
of their circulation. If that amounts
to S25 per capita in Mississippi, about
Sl,000,000 would be added to the
school fund each year, without cost to
other taxpayers.
To prevent combinations of capital
monopollzing the benefits of the pro
posed law, 1t should provide that tho
mortgaged land should be actually oc
cupied and used by the beneficiary.
Congress then might provide that
money issued by banks, whose circu
lation is secured by deposits of specie
and mortgages and guaranteed by thC
State, should be received in payment
of all dues Of the government The
money would then circulate freely il
all parts Of the country.
The advantages of this system are,
First 1t makes real estate-some
thing that our people have-a basis fo
money as well as United States bonds
something very few possess.
Second. II establishes credit baset
on real estate at reasonable rate o
interest
Third. Whatever interest is pai'
would go back into circulation amoni
the people who paid II and the disas
trous drains under the present system
would end. III. M. STREET.