The Kinsley graphic. [volume] (Kinsley, Kan.) 1890-1940, 1891-08-28
aoVERNMENT LoANa

OF
ss.OoosO0o Of school Money Leaned 0z-
Upon the Improved Farm Property q
the state
There can be no better or safer Sc
curity for a government loan than the I
real property of the nation If the loan
is placed upon such property at one
half or one-third of its real value, IL Is
as secure as the government itself, and
the currency based upon such a loan IS
as good as a government bond or gold
and silver.
THE main argument against such a
policy is based upon its supposed inn
Prsctieabuity. This has been answered
/ by stubborn facts. The state of OREGON
has now more than g. COO, 600 of school
money loaned out upon the improved
] farm property of the state. The amount
! Of the loan is fzed at one-third of the
/ fairly appraised value Of the farm. The
/ entire management OF the loan is
confined to the state school land
board, consisting of the govern
or secretary Of state, and
/ state treasurer, and is without any cost
I to the state other than that involved in
/ salaries paid to the members OF the
| board for their entire official duties
amounting in all to g, 500 per annum.
/ The applicant pays for the examination
/ OF the title to his land and its appraise-
meut by the attorney Of the board for
] the county in which the land is situat-
| ed The machinery is perfect and
/ comparatively Inexpensive, and the Sc
/ curity the best in the world. The loans
/ for the whole state are made by the
/ state board at the capital. and the dis
/ tribution of funds throughout the state
is fairly made. This system has been a
/ blessing TO Oregon farmers, and it may
/ be a blessing to the farmers OF the
/ whole country by emonstruting the
/ entire feasibility of loaniug govern
ment money upon the improved real
! property of the country.
THE next question Of importance
! evolved by the proposed financial sys-
tenn is: How shall the money be pro
! cured by the government for making
such a loan? If required, it could and
| would be procured as it was in order to
carry on the late war, but the amount
to be provided would TO great extent
depend upon the exact conditions Of
the fiscal policy established
] '4If the loans were made to the people
upon improved real property at the rate
not exceeding four cent, and the cur
reucy for such loans, as well as gold
and silver, was changeable at viii into
government treasury notes or bonds
! bearing interest not exceeding three
per cent, the result would undoubtsd-
Iy be that the issuance of not nearly so
much currency would be required as
would be If no such provision for fund
ing it was made, inasmuch as investors in
- =
furnish the required amount If a
policy be adopted of changing the cur
reucy into bonds and the bonds into
currency at the viii of the holder OF
either, under the necessary restriC-
] tions, the whole financial business of
the country could be adjusted to the
| proposed system without any greater
/ enlargement of the volume of the cur
/ rency of the country than its actual
business requirements demand Such
a policy would place the currency OF
the nation upon the safest foundation
possible, and would entirely preclude
those extremes of contraction and exc
pansion so hurtful to business interests
for, if there should be in circulation
more money than could be advan-
tageously used 1t would seek invest
ment in government securities, while,
if there should be an urgent need for
more the bonds would be changed into
currency.
''The loaning of money by the gov
/ eminent at four per cent would at
once fix that rate throughout the cOun-
. try without any other or further legis-
Iation, and the capital now employed
at ruinous rates of interest as leeches
upon the people, thereby eNhausting
the life blood from all of our industrial
pursuits, would, by the conditions con-
fronting it, be invested to large eN-
tent in government securities, thereby
a
? required; or, if not so invested, it would
/ be compelled to seek out new enter
! prises for its employment Thus the
! accumulated wealth of our plethOric
, capitalists, now Overburdeniug our ma
= tional industries with its ruiuOus exc
= actions. checked in its unlicensed
, ! power, would patiently and effectively
subserve the common veal
THE plain alternative presented to
that class, and to the whole people of
this country, SO far as our financial
S ! system is concerned, is reform or revO-
d luton. And whatsoever party shall
T bring about the needed reformation in
5 the fiscal policy of the government viii
, secure the favor of a just God and the
a support of a grateful people"
d The foregoing is an extract from an
g able article contributed to the North
American Review by Gov Sylvester
l. ! PennOyer, of Oregon The governor
d starts from a sound premise and arrives
= at a logical conclusion Under a sys-
c tenn of government loans direct to the
L. people the rate of interest estab lished
q by the government upon such loans
would at once become the legal, cure Of
rate of interest the country over
But while proceeding IN the right di
e rectiou, and while his article shows the
hold the financial demand of the peo
j pies party is obtaining upon the mind,
d of the people. IS not the governor
- groplnB oLndlys ana uoes ne not as ye
II see ''as through glass darzlyP"
% No Legitimate business or industry
y can pay four per cent and live The
l. average net annual increase OF natious'
'e wealth is three per cent, and such ne
'e annual increase represents not only the
y earnings of capital but also the savings
h OF labor Three per cent interest give
y it all to capital and leaves labor moth
}? ing. -Four per cent takes it all. and al
p so takes one per cent of the wealth
T. which existed at the beginning of The
y year, which one per cent must be paiC
-e out of the wealth possessed by lab0l
IL at the beginning of the year.
TX Thus, it viii be clearly seen that gov
X eminent savings bonds drawing thrs'
Ia per cent would be the best Investment
n securities in the world, and If they rep
it resented the currency with which TIA
exchanges of the nation were transact
y ed or effected, the holders of such bond