The midland journal. (Rising Sun, Md.) 1885-1947, 1892-01-29
NOTICE 10 sUBsCRIBERs.

in the hands Of the peoples govern
ment is good security for the redemp-
ton of a volume of currency, especially
when 1t is considered that the two per
/ cent. safety fund it is proposed that
the banks shall provide is to guard
against q contingency that cannot hap
pen in the case of the United States
government; to wit, insolvency.
The United States government has
had In possession reserve fund for
many years Of one hundred million
dollars in gold to redeem three hundred
and forty-six million dollars in United
States legal tender notes, (greenbaclxs)
which has remained and yet remains
intact. no one having. so far, presented
one Of the notes I r redemption.
Applying Mr.. Knox's rule of suffi-
cheney this reserve of one hundred mill
lion dollars. with no possibility of in-
solvency, should be large enough to
secure an issue Of FIVE billions OF doll
lars in United States legal tender
greenbaclxs. IL three million dollars
will secure one hundred and fifty
millions of dollars in bank currency.
Besides, Mr.. Knox, as have before
stated, does not consider any reserve
at all necessary, except to redeem out
standing notes of banks ceasing to do
business on account of insolvency. But
suppose we say that in the case Of the
United States government reserve
fund Of Eve per cent would be neces-
sary to guarantee the redemption Of
full legal tender greenback currency.
It would then take one hundred million
dollars of gold or coin or silver bull
lion" to secure q paper issue Of two
billions of dollars
Now apply Mr.. Knox's principle Of
cooperation to the people, as he APP
plies it to the banks As the banks
under the operation of his plan are to
subscribe a fund of one per cent Of
their circulation, SO let the peoples
congress authorize the United States
treasurer to cover into the redemption
reserve fund each year sufficient
amount to keep such reserve fund all
ways up to the maximum limit Of one
hundred millions OF dollars, to guar
antee the redemption of the two bill
lions Of outstanding legal tender pa
per. This would be safe and practic.
"D.o' a no.s why noss
mr' nnoxs argument agaanst tne
pan Wouid proDaDiy pc tne yen OF
whose fat would give the proposed
bank currency the cloak of legality?
But what about the relative benefit
Of the two plans to the people atlarge9
In the one case the banks would have
500 of credit to loan to the people at
an average rate Q. eigns per cent Tor
wnlcn Sney "ouio Dc OUT JUST S< IN
goio OF SILVER com or Duuaon- In
tne otner case tne Sioo would be loaned
70 she people az rate OF interest," nos
70 exceed TWO per cent ~ is very
easy 70 discern wnicn would be the
0est ior Sne Danks NOW az 20 the
ne1ioinIy OF the Voiume OF oank cur
rency contemplated Dy TINS proposition
OF Mr. AnoxA Lei US De exact The
actual costof that haif OF the volume OF
nanK currency secured Dy tne proposed
saIeIy 1uno "oulo DC Tor eacn SlVO
the sum OF twenty Genus IN money, ana
the anterest upon OIL so Mr.. Knox evil
aentiy wisnes 70 convey the impression
tnat on account OF the low cost OF such
currency 10 the banks. that they could
a1ord 10 let Roodly portlon OF u he
lole az umes IN tneir vaults ana yet
reaiize . gooo average pront upon the
wnoie. But we Know and Mr. Knox
should know, that an addition OF two
or three hundred millions OF dollars to
our present volume OF currency would
make no more perceptlbie ripple npon
the stream OF commerce, than would .
peDoie cast into lake OF water. And
IL must DC remem oered that the banks
having controi OF TINS currency IL would
nor De let out 70 tne people unth the
extreme necessity ana urgent demand
LOT IL ralseo tne rate oi interest 70
satsIactory poinI rms would Do
snap ZOE tne panAs, DuS Sne nexiDnisy
does not make itseii very apparent
Inc requirements In order 20 . nexs-
pie volume OF money are;
flrst-A volume OF money limited In
amountoniy py the quantity that can
be prontably used In productive IN
dustries and the Channels OF commerce..
provided such money may be freely OBJ
tanned at ra a.e Oh interest which Will
equitaoly divide the net annual prod
uct OF the nation between the TIVE
ana capital
AS the net annual increase In ma
tional wealth has just about averaged
four per cent Tor the past twenty
years. money, II loaned by capatilists
or bankers should not cost moro than
two per cent II, however, money be