Iowa County democrat. [volume] (Mineral Point, Wis.) 1877-1938, 1892-11-04


way only in this country has increased by
"a per cent. against probable increase of
population of less than 10 per cent There
has been a corresponding increase in traffic
By waterways, the whole volume of which
is about one-quarter as much as the railway
traffic. This additional movement by rail-
way only comes to three hundred and forty
million GAO O00, 0O0) tons of food, fuel, fibers
and fabrics-hauled 113 miles on the aver
age.
If this is computed at $50 per ton, it rep
resents
IN THE FIRST TRANSACTION ONLY
an increase Of business exchanges amount
ing to SC, 800,0 600 in single year.
Unless one has the kind of imagination
which is developed by practice in dealing
with these great sums these facts convey
little or no impression to the mind. A
better way to state the case is this: In 1889
the railways of the country moved $500
tons-13,660 pounds-of food, fuel, fibers
and fabrics 100 miles for each inhabitant.
In 1890 they mosed II 22-100 tons, or %, 400
pounds, 113 miles for each inhabitant.
Now, by far the larger part of the increase
OF this traffic by railway consists in draw
ing products from more and more distant
sections where there has been no increase
in the banking facilities; hence the absorp-
ton of every kind of note and coin-legal
tender notes, bank notes, gold certificates,
silver certificates or other representative
of money, as well as silver dollars, which
have thus far maintained their parity with
gold through government redemption.
Are the people in these far distant states
and territories to be deprived Of or forbidden
to provide themselves with currency or
circulating medium, which is not capable
of being forced upon any unwilling person,
but which may rest wholly upon the conf
dence and credit reposed in the manage
ment of local banks by the people of that
special neighborhood, secured in such a
way as each state may find suitable and
safe?
The effect Of the prohibitory tax upon
state bank notes is to deprive states of the
opportunity to serve themselves. It is a
merely partisan pretense to say that this is
a movement to go back to the wildcat"
currency of fifty years ago
There is no need of the adjustment of our
circulating medium to the present condi-
ditions of our internal commerce; the first
and essentially necessary step toward that
adjustment is the repeal of this tax on
state bank notes. Otherwise no congress
money, either in the form of legal tender
notes, greenbacks. silver dollars or some
other kind Of currency, probably of unsafe
quality
Is it not an utter absurdity to assume
that in these days of quick and ready COM
munication a state bank can force an
UNSOUND AND INSECURE BANK NOTE,
which is not legal tender, upon the COM
munity?
How is the great volume of transactions
now iqu1dated? What are the facts of the
case?
Ninety-fve per cent of all business tran
sactions, perhaps little less, probably a
little more, are now liquidated by means
of checks, bills of exchange or drafts
which are not legal tender but which
constitute the principal circulating medium
of our great and increasing traffic.
Yet the government does not attempt to
exercise any supervision in respect to these
drafts, checks and bills of exchange. Their
use is voluntary, and the government is
called upon to intervene only when default
occurs in payment.
Again, it is perfectly competent for any
person, firm or corporation, to issue checks
upon bank in which money is deposited
for any sum in even dollars from one to
thousands. Such checks may be used in
liquidation or payment of obligations for
goods or for wages. Undoubtedly checks
paid out for wages or services are very
often passed on by him who has received
them to the grocer or butcher in his neigh
borhood or town. They are then sent by
the grocer or butcher or the small trades
man to the dealer in the city from whom
he buys his goods. Such checks are finally
sent in for redemption by the city mer-
chant.
This is not SO common a practice as in
any considerable measure to affect or add
to the circulating medium, but it is a limit
ed practice, and there is no law against it.
It's also perfectly competent and suitable
for any individual in any town to buy PR.
duce from bis neighbors and to pay with
his checks on bank, either one check or
several from 81 to s. each, provided his
neighbors will take them; but he cannot
force such checks into circulation.
The government undertakes no super
vision on checks; it only intervenes to
compel the payment of the check by him
who has drawn it, if he has no funds in the
bank or if the bank fails. There is no tax
upon this medium of exchange, checks
may be used to any extent.
Now, what is bank note?
1t is not lawful money; that is to say, it
is not a legal tender; it is an obligation Of
the bank to pay lawful money to the bearer
It cannot be forced into circulation. In
other words, it is check drawn or made
by the officers of the bank upon the funds
of the bank.
The reason why the government has I'M
dertaken to supervise the issue and the
protection of the holders of such notes from
fraud is that to the mass of the people a
bank note has
THE sEMBLANCE OF MONEY;
it is representative money, and through
lack of information about the conduct of
the bank note holders may be defrauded by
failure.
If government supervision or the deposit
of security is required precedent to the
issue of bank notes, what supervision is
judicious? Can the central or general gov
eminent exercise such supervision or
require security for national bank notes by
deposit of any other bonds than those of
the United States?
Can the general government authorize
national banks to accept state bonds as Sc
curity for note issues?
What state bondsS Would the states sub
NIT to discrimination by the general gov
eminent in the selection of bonds? Assuredfy
not; yet, in order to secure the circulation
of bank notes, such discrimination would
be absolutely necessary. Could the general
government, through its officers, require
city, town or county bonds to be deposited
as security? What bondss OF what cities.
towns or countiesf
Again, discrimination on the part of the
general government is impossible. Can
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