Fort Worth gazette. [volume] (Fort Worth, Tex.) 1891-1898, 1891-07-16

t Wn.n Tdrt It. u aees business, and
to his st. Louis banker, and that
goes to balance the bank account between
the Fort Scott bank and the ST. Louis bank
and the st. Louis bank with this $1,000
draft balances or puts it on the account of
my home bank. With it, then, we see
that 5000 has been added to the
circulation of our country and rot
one dollar of money has changed hands.
! Transactions of this and similar kinds are
taking place daily and hourly, and millions
and billions of dollars of credit are thus put
IN circulation directly affecting prices, with
| put few dollars of money passing from
hand 10 hand; in fact all of the large bust
ness transactions of our country are carried
on i'll this way. The way the balances are
adjusted is by means of what are called
clearing houses which are very simple
IN their operation, and can be made plain 10
you by any good business man
According 10 Mr.. Locke Enquiry into
the Currency, page 21 the adjustment of
the clearing house, even away back in 1889,
amounted to S15,000000 daily, while the
amount of money passed was only one-ff-
| teenth of that amount.
Mil again says in the same book and
| chapter, sec. 6, by means of the various
| instruments OF credit which have now been
| explained, the immense business of q coun-
| try like Great Britain is transacted with
an amount OF money surprisingly SMALL
|
| made by The bank examiners show that out
| of every 500 that circulates and thereby
I fixes prices, So. 30 Is credit and $50 is
money: that is, that twelve-thirteenths OF
| the circulation that fixes prices is credit,
| while one-thirteenth is money
| Mil again says. book III. chapter xii sec
| ton /: But we have now found that there
! are other things, such as bank notes, bills
| of exchange and checks, which circulate as
| money and perform all the functions of it,
| and the question arises, do the various sub
| stitutes operate in prices in the same man
ner as money itself! Does an increase in
the quantity of transferable paper
tend to raise prices in the same
| manner and degree as an in
crease in the quantity of money!
His answer Is plain and to the point.
"What acts on prices is credit, in what
ever shape given and whether it gives
rise to transferable instruments or
not. will proceed to explain
ana suostantiate this opinion" And
again he says: "A man may obtain goods
upon his note payable at future time
These purchases have exactly the same
effect on prices as if they We're made with
ready money. The credit itself, and not
the form and mode in which it
is given, is the operating Cause
Why was it, my friends, that the recent
failure of Barring Brothers in London
should have brought down the price of
wheat = cent 4 bushcl in Missouri? Why
was it that this failure 5000 miles across
the ocean, IN foreign country, lessened the
prices OF everything that a farmer had
to sell in the United Statesf
1t was not because there was any less money
in this country after than before the fail
ure. 1t was because the confidence of the
moneyed men of the world was shaken in
corporate and individual credit. This
caused contraction of whatl The credit
OF our people-the 921G per cent-and this
contraction brought down prices, on that
principle that any contraction of the pur-
chasing medium decreases prices.
Mr.. Mill again says: Thus general
prices, during commercial crisis, fall as
much below the usual level, as during the
previous period of speculation they have
risen above it; the fall, as well as the rise,
originating not in anything affecting money,
but in the state of credit"
And in conclusion he says: 1.-THE general
operation OF credit upon prices being such
as We have described" and then my farmer
friends, SUPPOSE this scheme is put into
operation when this new sub-treasury
money comes out, suppose the noneyed
men refuse to give credit on it or in other
words suppose it should become a depre-
ciated currency, you would then see
contraetionLof what?-not of
the ~, money but, of the credit,
go, and if this credit should be diminished
20 per cent only, then you have lost all your
grain for SO per cent of its value, and the
government owns your grain You hold
your deprecated currency and very soon
the jails would hold the old sub-treasury
advocates.
1t is evident that If any particular mode or
form of credit is calculated to have greater
operation on prices than others, it can only
be by giving greater facility, or greater en-
enlargement to the multiplication of credit
generally.
Now nv hrof her.S II 10 Nf ba r,,or& rit
importance to you, your family and our be
loved order, that you fully understand this
argument, for the whole sub-treasury
scheme is based upon the statement that
the volume of the purchasing power Is {,
fixed volume, and its advocates claim
for it but one great merit, and
that is that it will make this vol
ume flexible but the foregoing argument is
unanswerable and clearly proves that 921z
per cent of the purchasing power of this
country is credit; and therefore, Of course,
IL huctuates, increases and decreases, eI-
pands or contracts with the needs of bust
ness.
Make your sub-treasury advocate answer
this argument before you let him go any
further, for this lies at tile very root of his
whole scheme, and you owe 1t to yourself
and yours and to our beloved order to see
that he answers it fully and honestly.
Another unanswerable objection to this
is that its author says that the
volume OF currency could be increased by
he farmers during the fall and winter
months in order 10 enable them to have
more money to handle their crops.
But if this scheme is for the purpose of
yetting more money to handle his crop how
S he to get the money! Why, by putting
lis crop in government warehouse whera
lie cannot handle it. He cannot ge. his
money until his crop is locked up by the
and he cannot handle his
rop while it is locked up. Then
uppose we corn and wheat raisers lock up
ur weat and corn, we thus draw it out Of
he market, and as the volume of money is
low greatly increased and the prices of
correspondingly higher, ana the
wheat and corn out of the market, what ara
he poor people who do not raise these nee.
ssaries of life to dot Starvation, riot and
'loodshed would inevitably follow, and tins
ad picture would be presented to them OF
heir government aiding in starving them
Again, the same author on Political Econ.
my, chapter II, book Iii, section 1, says:
Among other causes of fiuctuation, one
&c have found to be, the quantity of money
n circulation. Other things being the
anne, an increase Of the money in circula-
ion raises prices, a diminution lowers
hem"
The same author, same book, chapter
iii, section 4, uses this language:
THAT an increase of the quantity OF
honey raises prices, and diminution
,wers them, is the most elementary propo-
H. 81