Barbour County index. [volume] (Medicine Lodge, Kan.) 1880-current, 1892-01-06
Bardstown, XIV.
BAN KING.

bardstown, Ky.
BANKING.
A Scheme of Credit Infiation-The Con-
sumers Pay the Bills.
Money and banking are the chief
factors in the mechanism of exchange,
and this is the most important question
which confronts the people of this
country to-day. Every producer of
wealth labors to produce something
that can be exchanged for the products
created by the labor of others. The
transfer of these products from the
producer to the consumer constitutes
the commerce of the world and affects
every vein, artery and fiber of our
civilization. Every expense of every
name and character connected with the
exchange must be paid by the consum-
ers, the great mass of whom are labor
ers in the varied fields of industry.
Hence labor is not only the sole
produces of wealth but is also the
principal consumer, and is. therefore,
pre-eminently interested in the ma
chinery by which wealth is exchanged
According to Adam Smith, the prod
uct of labor is it's natural reward; and
as labor is both the producer and the
consumer, it follows as logical Sc
quence that absolute justice would se-
cuse to labor as producer all that la
Dor was required to pay as a consumer,
less an equitable compensation for
transportation, superintendent, etc.,
connected with the distribution. This
would secure an abundance to every
useful worker just as long as an abun-
dance was produced. But under our ex-
isting system of exchange the pro-
ducers of wealth find themselves grow
ing poor. The farmers of this country,
once the owners of the great bulk of
the wealth of the nation, now possess
loss than % per cent. of that wealth,
and yet they have been engaged in the
work of furnishing the food for the
world. They have been engaged In a
losing business as demonstrated by sta
tistics. They have lost in the exchange
the wealth created by their labor, and
what they have lost constitutes the
major part of the vast accumulations
of wealth now in the possession of our
American plutocracy.
1t therefore becomes a matter of the
first Importance that the average
citizen and voter should understand the
system by which the products of his
labor are exchanged. Money is legal
tender for debt in which all balances
must be paid on the demand of the
creditor, but it is only comparatively
small per cent of our circulating
medium Ninety-five per cent. of the
business exchanges of the country are
effected by means of credit-bearing in.
terest Money is deposited in the banks
by persons having funds which they do
not need for immediate use. These de-
posits are loaned by the banks to bor-
rowers, secured by mortgages on
property. When the borrowers expend
the money it is returned by others to
the bank in the form of deposits, and
again loaned to other borrowers, By
this process the same dollars are con-
tinually being loaned and reloaned for
interest Thus by continually creating
interest bearing debt, money is kept In
circulation and the wheels of commerce
moving.
Under this system only the small
cash reserves required by law are kept
in the banks. According to the latest
figures that we have at hand the banks
of the country had in their vaults In
October, 1890, a cash reserve of S475,-
754, 900, while they owed their deposit
ors the sum of 81, 1876, 600, 00e We thus
learn that the banks at that time had
on hand little more than enough to
pay 81 in IS of the sum which they
owed their depositors. The difference
between the cash reserve and the
amount due depositors, the enormous
sum of 3,75s 246, 0c0 is purely credit
currency, with no foundation in money
whatever. And yet this bank credit
that has been loaned to the people con-
stitutes the basis of the interest bear
ing debt that burdens the industries of
the country, every dollar of which the
money power claims must be paid in
gold.
At an average rate of only per cent.
interest, this bank credit or confidence
money costs the people 1925, 424, 76O per
annum, q sum equivalent to the earn
ings of 626, 374 laborers at 81 pa- 20.
Such is the system of bank r,,,edit wb;ch
under our moneta"J system takes the
place 'na' ssnould be filled by full legal
! senGer money AS the basis of this
credit currency is only about one-eighth
OF lts volume, the withdrawal of small
portion of the bank resources must be
followed by a contraction of the circu-
latlng medium equal to eight times the
amount of the money withdrawn. Thus
800, 100000 withdrawn from the bank
reserves would be equivalent to with
drawal of $500, 600. 600 from the circulat-
| ing medium.
Under such q system of credit infia-
ton the people are. kept in continual
danger OF financial reverses Depres-
sion to agriculture, poverty and suffer-
ing to wage workers and bankruptcy
and ruin to legitimate business are its
legitimate fruits Fifteen thousand bus
mess failures during 1890 emphasizes
the demand for its removal and the es-
tablishment in its place of debt pay
ing system of finance. Advo-
cate.
Miirs autobiography.
T.