The Kinsley graphic. [volume] (Kinsley, Kan.) 1890-1940, 1893-03-31
A MONETARY SYMPOSIUM.
Private Credit and Hank Reserves-The
Specie Basis Fallacy and Our Present
Banking System-Goid, silver and Paper
Upon a Serfect 4 quality and Govern
inent BanSs Of, HS aad For the People.
Ar.

Specie Basis Fallacy and Our Present
Banking System-Goid, silver and PaPei
Upon Serfect quality and Govern
inent Banks Of, I3S AID For the People.
ONE KIND OF EXPANeIoN.
It is claimed by some that there is
half a Iislion dollars $500, oo0, ,00o) in
gold in the country. This Is probably
7 an overestimate, but eonceding tina,
| there is f3lly this much, it is inadequate
to do the business of half a dozen
| states, much less OF the entire country.
| Compared with the amount of tokens OF
| value deqnanAed to do the business o1
labor and covamodity exchange . the
gold supply is mere nothing.
Last year the banks in the. clearing
house cities of the United States
handled sixty-one billion dollars OF
private paper (private money or tokens
of value issued by private parties) and
| less than five billions of cash (gold, sill
| yer and government psper). With
| every five dollars in government tokens
of value they cleared" over sixty-one
| dollars % private paper.
Here the private currency of credit +
twelve dollars for every dollar of cash
handled in clearing" it. But IF we
make all this 'credit paper call for gold
the banks in the clearing house cities
alone would handle over Sl20 of private
paper for every dollar in gold in the
country available to redeem it.
This shows how little gold has TO do
in reality with business, and it also
shows the folly of attempting to restrict
business to the gold supply. If that
could be done, the business OF the toun-
try would be best represented by.a Sast
inverted pyramid resting on its apex.
Students of the phenomepa of panics
are familiar with the results of contract
ing the cash currency greatly below the
demands, of exchange. 1t is undDdbt-
edly so contracted in the United Shtes
at presest. There is not cash enough
to do ten per cent of the business, but
business men eke it out by money OF
private Issue which cireulates for a
short time only and is then redeemed
or cleared"
This currency of credit is ordinarily
capa BILE of expansion without much Ne
gard to the very limited amount of cash
on which it is supposed to be based.
Business men do not, therefore, feel the
need of cash currency, increasing
with the increase of population and the
extension of business. as they would
without this system that so greatly re-
lieves the demand for cash to be actu.
ally handled in each transactions I'm.
oubtedly this system of private, paper,
| which is in reality money of limited ex-
istenee. is one of the greatest inven.
Gons of modern times, but it depends a
60; t1,,, "a
an actual ''cash basis" 1t may be well
enough for one dollar in gold to stand
for and redeem twenty dollars ip paper
as long as there is no impstience amoae
the holders of the paper When those
who have to visit the longest to have
| the cash come their way will wait, there
is no trouble, but when they will not,
there is immediate danger of a collapse
of the whole vast system. AT such
times gold 10 worse needed than az any
other, but it is apt to disappear at once,
and for the time being it becomes i'm
possible to carry ON the business OF
commodity exchange, because the credit
currency has mostly disappeared and
because the cash, always inadequate,
has been locked up
IL III ilJDSiTS tDSy Ill suuuuc sCOIp
traction, OF the supply of cash is certain
20 result first in an undue expansion OF
currency of private paper, in witch
most of the business of civilized coun-
tries is done, and that this usd.le ex-
pansion is likely to result IN collapse
A very small sponge soaked in
alcohol will All large balloon With hot
air. 1t is on this principle tlfat some
people who have reasons of their owR
for their views would like to construct
the currency. They want the actual
supply of cash to correspond with the
spongue; AID OF Che sponge they demand
control, SO that it will depend os them
to say to what extent the balon OF
credit may be inflated. But itsmust be
apparent to every business man engaged
either in producing coHnmodities or in
distributing them through trade that
an undue restriction of the sapply Of
actual case is an undue restriction of the
possibilities of trade extention.5- st
Louis Repsblic.
NO METALLIC BASIS WANTED
The Rocky Mountain News, of MARCH
Z, in its leading editorial, advises the
peoples party to seize the present op-
portunity "d centeriRg ala its force
upon the single'point of doubling che
metallic basis of our circulating medi-
UNI This is not the first suggestion
we have seen of this character, and we
may as well haze an understanding
upon this subject now as to postpone it
to a later period.
There areoseveral doctrines of the
~l,-. l,,k
damental, and one of these is chat voc
want no metallic basis for money,
whether it be mono-metallic or 0bi-met-
allie. We'demand that every dollar in
circulation in the United States shall
be equal before the law to every other
dollar, without regard to .thc material
OF which At is composed; and it needs
no other Basis than the exhaustless re-
sources OF the country and the national
credit.
Aside from this, Me have other de-
mards which were not made for mere
diversion. They We're Incorporated in
our platforms because they az right,
and they will not Be abandoned at tbe
3ictation OF parties who seem to have
bat a'siDgle idea in this contest We
favor free coinage aufongo other things,
because it is right that silver should be
placed upon ano equality with gold, but
the News may be assured that the peo-
ple'S party will Hever even consider ting
proposition to drop the other demands
and make a contest upon this issue
alone.
The silver states can never succeed iD
the restoration of Silver except through
a party WHICH is favorable to ito Thcs
are not big enough alone 70 accomplish
anything. and if thes ever expect tsse-
cure free coinage of silver in this coun-
try they may as well face the situation
and recognize thAt there are other sec
tions in THIS country besides the silver
states, and other interests besides silver
mining. The agricultural states couod
get al8ng very well without either gold
cr si1var 80 fhAu Hyara van n1anf,y nf