Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1891-06-13
The Banks-Double Interest.


unless founded upon the rock Of truth, will
in the end be forced 10 yield to circum-
stances too powerful TO be controlled by
error. Tho eternal years OF God" are
Truths.
We have no wish to antagonize any such
party as the Alliances. State, national and
county, constitute. We examine its creed
with respect, and whilst we praise where
we can we censure only where we must.
As we said yesterday the Democratic party
must be liberal in treating with a party
made up Of the bone and sinew of the
land. We. the Democrats of Virginia,
must be content TO contemplate the posi-
bllity that we are fallible ourselves, and so
prepare ourselves 10 weigh we'll all the ar
puments which can be adduced in favor of
the teachings of our Alliance brethren,
who are our natural allies, and whose
help we shall be compelled to ask, not
only in the presidential and congressional
elections of next year, but In the legisla-
tive elections of this year.
So much by way of introduction to a
few comments which we feel called upon
70 make upon an article that appeared in
the last issue of the Charleston CIV. Va.)
Farmers Advocate. The article alluded to
is amusing if not instructive. II quotes
from US the statement that the Govern
ment would have TO pay exactly the same
amount of interest upon its bonds that 1t
does pay If there were not a national bank
in existence, and then adds:
"The DISPATCH don't seem TO be very well up
IN the national banking system. Every one who
lays the slightest claim TO intelligence upon the
economic questions Of the day knows the fallacy
Of the above proposition. The banks draw inte-
rest upon the bonds, and besides have 90 per
cont. or 500 out Of every 300 Issued 70 them In
currency 10 lend the people, based upon the very
bonds which constitute their security. II this Is
not double interest what Isl"
Our statement is literally true and the
man who does not know it TO be true
ought not TO undertake TO discuss financial
or economic questions. The Government
would have to pay interest upon exactly
as much debt after the destruction of the
present banking system as it now pays.
We need not argue this proposition.
Now as TO double interest. Let US see
how that Is. The bonds deposited in
Washington are deposited not in the inte-
rest Of the banker or capitalist, but in or
der TO secure good currency for the peo-
Pile and save the note-holders from the pos
sibilty of loss. The bank would rather
issue its notes without furnishing any Sc
curity for their redemption. but UNCLE SAM,
looking 10 the welfare of his family, re-
fuses TO allow any Treasury notes to be
put into circulation until the bank has de-
posted in his pocket (the Treasury
bonds enough to make those notes good
from one end of the Union to the other.
The Government does not issue Treasury
notes to the banks, or rather the notes Is
sued TO the banks are issued to them be-
cause UNCLE SAM is afraid his people might
be the losers If the bank were empowered
TO issue the notes itself. He sees TO it that
not too many notes are put out. He does
this by keeping the bonds in his pocket and
counting ont to each bank all the notes
that 1t will be allowed to issue. All this,
It will be seen. is done in behalf of the
public and not in behalf of the banks.
This will appear clearly if we suppose
that the present banking system.wereiabol-
ished. Would the banks or any other
bondholders lose their interest because
the banks were closed? Certainly not.
As we have repeatedly said, the Govern
ment would have to paw annually exactly
the same amount Of interest it now pays.
Where, then, would be the double inter-
est? Why it would be just where it is
now-nowhere. 1t is true bank or o man
owning 100000 of Government bonds
could not get from the Government notes
to use in his business or to lend out. but
he could deposit his bonds with a banker or
capitalist and borrow upon them 80 per
cent. of their face value, Just as he now
deposits his bonds with UNCLE SAM, and
borrows upon them 30 per cent. of their
face value. So that the upshot Of the
matter would be that the note-holders
would no longer be able 10 call upon the
United States to become responsible for
the redemption of the outstanding notes
The'issuer Of the notes would not be our
Government, but "heartless bankers
and other capitalists. Who would be bene-
fted by this substitution of moneyed
men for UNCLE SAM? Who would gam
anything by it? Would the United States
Government Not dollar. Would the
note-holders? Not one of them. Would
it be any easier TO borrow money. Not
one whit. The whole fabric is built upon
the sand, and would topple TO its fall at
the first attack made upon it by the
money-changers.
And where, We ask again, would be the
double interest? The capitalist would az
DOW invest his $780, COO in Government
bonds and draw interest upon them, and
would also, or could il he chose, hypothe-
cate those bonds with q bank, banker, or
capitalist, and borrow 80 per cent. OF their
face value, just as be now hypothecates
them with UNcLB SAM and draws 30 per
cent. Of their face value; but nobody
would call this drawing double interest.
Yet Il surely would be drawing double In
terest If the banks draw double interest
now.
The proposition 10 issue Treasury notes
(greenbacks) directly TO the people" is
OF the same nature as the propositions we
have just been considering. II is O simple
deiusion. IL has no merit in itself. 1t lie
mere form Of words having no real mean
ing All United States Treasury notes are
now issued directly TO the people, or else
thefe ~ no possibility Of issuing them in
that manner. What is meant by the
phrase directly TO the peopleY"
Nothing. When the Government issues
aus notes II issues them "directlyn 10 its
oieoltors-not elsehow. Would you have
the Government give away us notes? Oh,
no. IL must pay them out 70 its credl-
.ors-to Keep the Government going.
That IL just what il does now. viii tho
impceunious masses receive any of these
notes directly from UNCLE SAM9 Nav.
verify. He will take care that these notes
60 into the pockets Of those persons only
who have pecuniary claims against him. |
Treasury notes viii not be any more album. |
dAnt than they now ara Thev ,.til :, -, ~ |