The great West. [volume] (St. Paul, Minn.) 1889-18??, 1892-03-18

law shall be coined and put into circu-
lation
Section IA provides that all the money
in the United States treasury, except
the $3.50, 200, 600 held in the single re-
serve fund, shall be placed in a perma-
nent loan fund to be loaned to the peo-
pie through the medium of the banks.
The amount of money now in the treas
ury is about as follows:
Gold coin and bars, .e279 1000
Silver coin and bars, AT 600 900
Other money QeSS the net cash bal
ance for current expenseS) .......... 100000
Subtracted for single reserve fund. $4,000 900
We have remaining. Observation-Disclosures. $4,000, 900
New treasury notes to be issued. 800 900
Making total increase OF. .. 673,OOO,OOO
Thus we see that the amount of adj
ditional currency provided by the bill
IL about 1878, 00G,0 The figures used
in this calculation are taken from the
treasurer's statement of December 1.
1891
Section 16 provides against any con-
traction of the paper currency by pro-
viding for the resistance of all that
may be redeemed
Section y provides that all the mon
ey in the permanent loan fund shall be
distributed among the banks as capital
for loans to the people, on basis of
population and business needs. This is
one of the most important features of
the bill. 1t will prevent the concentra-
ton of money where it is not needed,
ho ~ y1or Sc,
needed. The money will be distribu-
ted in harmony with the laws of supply
and demand.
The number of banks provided for in
the bill will be about 5000. This gov
eminent capital will give an average of
1921, 900 for each bank. The bill pro-
vides that not more than $500, 600 nor
less than $40, 900 shall be placed in any
bank.
The perfect security which the credit
of the government will give will at
who have large sums of money to loan
will prefer to place their money in the
government banks at three per cent
rather than run all risks of making
loans outside at higher rates. This
would in a short time double the
amount of capital for loans. These de-
posits would be known as long time
deposits and would be distributed on
the same basis as the government de-
posits
When money is loaned out and put
into circulation, it nearly all comes
back into the bank mainly in the shape
of short-time deposits. Much of it is
then reloaned and comes in again and
is again reloaned. This principle is
now in vogue although it endangers
the security of depositors. But with
complete system of government banks,
this could be done with perfect safety,
for the resources of the whole system
could be drawn upon to prevent the
failure Of single bank. The fund
available for loans would thus be
swelled to a vast sum- 1nasmuch as
large portion of it would be govern
ment deposits and temporary deposits
by private individuals, on all of which
the banks would have to pay no inter-
est, it can readily be seen that the rate
of interest on loans to the people could
be reduced to a rate of three per cent
or less in a short time.
Section a1 provides that post Offices
shall be receivers of deposits for
banks.
Section % provides for loans to the
people on real estate or personal prop
erty up to one-third of its actual value.
1t also provides that no more than
$4,000 may be loaned to any individual.
This obviates the great objection made
to the Stanford loan scheme, namely,
that great corporations could take adj
vantage of it to borrow vast sums of
money.
Section % provides that loans shall
be at a uniform rate of four per cent.
to be reduced as soon as practicable.
1t provides also that the system shall
not be used as a source of revenue to
the government but shall pay it's own
expenses.
Section Is contains the very impor-
tant provision that the longtime bor-
rowers shall pay in at least five per
cent of the principal every year. Thus
at the end Of twenty years the debt
would be entirely wiped out, yet the
borrower would not have to pay as
much as he does as interest now.
Section 81 provides for replacing the
present building and loan associations.
Section 30 provides for the gradual
extinction of the present national
banks.
The following is a summary of the
strong points in the bill:
1. It puts the control of the financial
machinery in the hands of the govern
ment.
2. It makes large increase in the
volume of actual money.
3. 1t will draw into circulation vast
sums that are now locked up.
4 1t establishes low and uniform
rate of interest.
s. 1t encourages savings and deposits
of earnings.
g. The change from the present sys-
tenn is made naturally and gradually
without endangering panic
Z. Its.benefits will extend directly and
equally to all classes.
s. Under its workings bankruptcy,
panics and financial stringency will be
unknown. Independent.
1t is urged that free coinage of sill