Morning journal and courier., 1891-08-11

hundred per cent. That is to say, four hundred dollars in paper was worth only one hundred dollars in gold. From the moment that the gold standard was aban- doned, the demand for more paper money began to be heard, and it was poured out by the government in almost unlimited volume. Under the pretence of creating a sounder financial system and securing a more stable currency, @ law WAS passed in November, 1887, establishing 6 system of state banks, forty in number, similar to our national banks. These started with capital of three hundred and fifty million dollars, and began to issue paper money, not being required, as our banks are to be able at all times to redeem their notes with gold When the premium on gold had reached forty per cent. the govern ment took the position that the increase was 6 trick of the brokers, and not in any way an outcome of currency imitation, and issued decree allowing the banks to issue currency practically without limit. At the same time. the government, to sat isfy the demand for gold and to prove its belief in its own contentious, threw thirty million dollars of its gold reserves on the market. The gold premium continued to rise with no perceptible check, and as 1t rose the banks poured out more and more paper money in 6 frenzied attempt to check its upward flight.
 It was discovered after 6 time that, through trickery, there were several mil ions more of this irredeemabie paper money in circulation than had been sup posed A provision of the national bank ing law required that all banks reorgani- zing under it should withdraw and cancel their old notes when they put their new ones in circulation. Several banks, in collusion with dishonest officials, violated this requirement., and kept large part of their old issue in circulation with the new. At one time, the amount of this fraudu- lent money, based on nothing whatever, amounted to sixty million dollars. Some of this was afterwards destroyed, but the latest official estimate put the amount still in circulation at over thirty-five million dollars. As the latest attainable total of the regular paper issue of the banks places it at three hundred and forty-fire million dollars, the grand total of paper money in circulation in March of the present year, worth about twenty-five cents on & dollar. was three hundred and eighty million dol lars, all irredeemable, and decreasing in value every day. This was a per-capita circulation of one hundred dollars for eve " man, woman and child in the republic. That ought certainly to have put "plenty va AASSl AA hhS PSNANho oA IAc pCOplcs for one hundred dollars is the highest sum per capita our widest cheap-money sdvo- cates have ever demanded. In 1886 the National bank had a capital of ten million pounds sterling, and the Pro vincial bank one of eight million pounds sterling. Not penny of the latter re- mained. The National bank had lost sS,- s00,000 of its ten million pounds, and owed the government fourteen million pounds. These two banks had lost, there fore, during five years experience with cheap money based on landed property, about thirty million pounds sterling, sum more than double the capital of the Bank of England.
 When the collapse came the nation gave itself over, as France had done two centu- ries earlier, to rage and despair. Men who were believed to be worth millions found themselves psupers. One man who had been worth twenty million dollars, which he had accumulated during & life times devotion to honest industry, but who had been tempted to venture it in speculation, lost every dollar.