The Kinsley graphic. [volume] (Kinsley, Kan.) 1890-1940, 1891-12-18
n o. g.

intact. a. one having. g. iar. presented
one Of the notes r Tede nPtioE-
Applying Mr. Euoz's rule OF sum
cheney this reserve Of one hundred mile
lion dollars, with no possibility Of in
solveucy. should be large enough to
secure IN issue OF Eve billions OF dol-
lars in United States legal tender
greenbaclzs, IL three million dollars
viii secure one hundred and 6fty
millions of dollars in bank currency.
Besides, Mr. Knox. as J have before
stated, does Aot consider any reserve
at all necessary, except TO redeem out
business on account oE Insolvency But
suppose we say that in the case of tho
United States government a reserve
fund OF i've per cent would be ueces-
sary to guarantee the redemption Of
full legal tender Rreenbaciz currency.
II would then take one hundred million
dollars of gold or coin or silver bull
lion" to secure "a paper issue OF two
billions Of dollars
Now apply Mr.. RuoN's principle Of
cooperation TO the people. as he APP
plies it to the banks As the banks
under the operation Of his plan are to
subscribe a fuud OF one per cent OF
their circElstiou. so let the peoples
congress authorize the United states
treasurer to cover into the redemption
reserve fund each year sufficient
amount TO keep such reserve fund al
ways up to the maximum Emit OF one
hundred millions OF dollars. TO guar
antee the redemption OF the two 6il-
lions of outstanding legal tender pa
per. This would be safe and prActic-
able. II not why notf
Mr.. KnOE's argument against tho
plan would probably be the yell OF
FIAT money" Bat whose fiat? And
whose fiat would give the proposed
bank currency the cloak OF legality
But what about the relative benefit
OF the two plans to the people ntIargrT
In the ona case the banks would have
500 of credit 20 loan 20 the people Et
an average rate OF eight per cent for
which they would be ont just s. iu
gold or silver coin or bullion" ia
the other case the SiO0 would be loaned
20 the people at a rate of interest not
70 exceed two per cent" 10 is very
easy 70 discern which would be the
best for the banks Now ua 90 the
feasibility of the volume OF bank cur
renCy contemplated by this proposition
of Mr. EuoN's Let us be exact The
actual cost of that half of the volume of
bank currency secured by the proposed
safety fund" would be for each 500
the sum of twenty cents iu money. and
the interest upon 81 so. Mr.. Knox evil
IDENTIFY wishes TO convey the Impression
that on account of the low cost OF such
currency TO the banks, that they could
afford 70 let a Roodly portion OF it lie
idle at times in their vaults and vet
realize a good average profit upon the
whole Bat We know, and Mr. Knox
should know, that an addition or two
D or three hundred millions of dollars to
{ our present volume of currency would
make no more perceptiblc ripple upon
] the stream of commerce, .hnn would a
. 81 III
l IL must be remembered that the banks
/ having control Of this currency it would
/ not be let out TO the people until the
] extreme necessity and urgent demand
I for it raised the rate of interest 20 a
| satisfactory point This would be q
snap for the banks, but the heNiJility
I does not make itself very apparent
The requirements in order TO "a fezs-
/ BILE volume of money are;
Eirst-A volume of money limited iva
. amount only by the quantity that can
. be profitably used iu productive in
dustries and the channels OF commerce.
] provided such money may be freely oh.
taiued at a rate of interest which wit
I equitably divide the net annual prod
net OF the nation between the tyvD
[ factoFs-Iabor aud capital
/ las the net annual increase In na-
/ tiouai wealth has just about averaged
I four per cent for the past twenty
I wears, money II loaned by CapalIlGt4
/ or bankers, should not cost more than
two per cent H. however, money be
l furnished 20 the people direct by
/ themselves tgoveFnmentl it would be at
the cost OF issue, ell tax or interest
] paid above such cost taking the place
I OF other forms OF tavatiou-
/ Second-Au absolutely safe place Of
] deposit for the savings, or surplus
. money of the people, from whence IL
| can - obtained upon dsmands such
/ savings, while in such place Of deposit,
TO draw interest at a lower rate than
the established legal current rate for
the use OF money.
These require ments may be hlled:
Firstly the people, as a govern
i ment loaning their credit (money} 20
themselves as individuals, upon pro-
| ductive real estate at two per cent in
terest-
/ Secondly making such credit bills
/ fmoney) intereouvcrtible with United
I States postal savings bank bonds, oE
| convenient denominations. bearing OHs
or one aud oue-hnlf per cent interest
. and Obtainabis at the post Offices In the
cities and principle towns
This would give as "A flexible, elastic
1 volume Of currency, which would auto
| maticaIlv ad Just itself TO all ordinary
or extraordiHary demands for its use --
] George C. Ward. in Topeka Advocate,
COL LIVINGSTON