The farmers' union. (Memphis, Mo.) 1891-1895, 1893-11-09
MONEY AND CREDIT
THE IMMEDIATE REMEDY THAT
is NEEDED.
Give Us More Primary Money to Pay With.
and Not More Promises to Pay Gold
The Banks and the Gold Eeserve-Iess
Credit and More Money.
What II Wanted.

the entire volume OF money and credit.
Before the panic set III, the total
volume of monev in circulation and in
banks, consisting OF gold. silver and
uncovered paper. fell somewhat short
of 81, 800 600, 600. OF this, IL little
over 81 600, DOC, 900 was in the hands
of the people, and some less than $500
OOO. 600 in the banks as reserves.
Upon. or out of the $500. OOo,CG0 in
the bank az reserves. Il purely credit
currency. in the form Of bank credits
or deposits, has been built up, amount
ing, including the reserves, to 81 300
600, 900, making IL total volume OF
money and credit Of $4,000, OUO. 600.
But from this should be deducted
$500, OOO. 600 of reserves on which the
- ,OOO, 900, 900 pure credit rates, this
being already included in the 81 800,
OOO. 900 of lawful money.
The total value of money and credit
then STOOD AS follows:
Lawful money ...... ...............sl.5 D,H"oO
Bank credits. OBSERVATION-DISCLOSURES. lua)uor
Total ,...............S ..5a O.tUluU
This volume embraces everything
by means Of which cash transactions
obligations of every description, in
volving money. are li4uidated. The
claim. therefore, that % per cent. of
the entire business of the country is
done bv means of credit, has no
foundation in fact. The volume of
money and credit, hy means of which
all business is transacted. is before us,
and there is nothing outside. II the
efficiency Of money and credit. dollar
for dollar. were equal, and they per-
formed equal work. then the proper
tion of work done 10y money and credit
would be Us 81 800, UOO, 900 to - 900.
OOO. 900, or rs nty-seven to seventy
three But the relative efficiency of
c':rrenry part Of this volume of money
and credit combined. is ALWAYS rcla-
lively greater than the credit part, and
in times like these is vastly more Elf
cicnt. At all times the efficiency of
the money. dollar for dollar. is prob
ably ut least two to one of credit. The
money remains from year to year and
passes many times from hand to hand,
while the credit part comes and goes,
rises and falls rs expectation and con
tidrncc ri,.. and fall. THIS volume of
credit is therefore quite properly
designated confidence money" II is
made with pen and ink 10y writing
credits in the books OF depositors in
the banks on which they are allowed
to draw checks. 1t is chiefly from
loaning this form of credit that banks
derive their profits. 1t is an agency
of vast Importance in commercial
transactions. and safe enough if kept
within proper limits. But the recent
creation of this form of currency in the
United States. through he multipll-
cation of banks, has gone far beyond
safe limits. The country has been
literally banked to- death. In other
words, bank credits have been created
beyond all bounds of safety and hence
the collapse.
Instead. therefore, Of an effective
volume of 50. 500. 900 900 of money and
credit now. the credit part has been
largely eXtinguishel by the destruc-
ton of condolences. while ut the same.
much of the $l.3OO. 900, 900 of money
has been boarded
What is needed ut such time to
sustain lcgi innate business and restore
confidence is quick enlargement of
the volume of actual money. Nothing
else will do it. 1t will be Il long time
before confidence will again rise to Il
height that will permit the banks to
Float II. 900. 900 900 of credit. or make
nm approximate in efficiency to like
volume of currency.
Moreover. to the extent that this
volume of credit takes the place of,
supplements actual money. it is AS
potent to raise prices and eNpel gold
rs its equivalent in money
In good times. when credit is ut its
pest. the total volume of money and
Frelit. AS above shown. may rise to
IS. 800. 600. 200. At such times debts
re- freely created: hu, confidence
reaks. credit collapSes and the whole
olunc Is reduced. AS now. to not one
alf what ii was six months ago.
As the 1000. 900 900 Of bank credits
rise out of the $500. 900, 900 of re-
YES. the withdrawal of 81. 900. 600 |
DO of the reserves neceSsitates the
Dntraction of the volume Of credits Nv
RUO. 900 900. Such contraction can
ever take place without collapse. I
lch as We now see. This is the con
tiOn when debts created with Il full /
blume OF currency are often re- |
,ired to be paid. In England the |
Foportion of bank credits to actual |!
pney is much greater than in the |
nited States: and their system could /
i be maintained n twelve month,
IRE ii not for the continual stream Of !
Pncy flowing into England from her |
vestmentS outside. That is quite |
ferent from our condition.
Nv hat is wanted now. and it should !
done quickly, is \ substantial in !
ase III the currency part OF this |
ume of money and credit /. is !
V II: an enormous sacrifice that any
Il can be obtained to supply the !
cheney. and enough to supply the !
sent emergency is out of the ques- |
with any sacrifice possible.
low unwise and unreasonable. at