Barbour County index. [volume] (Medicine Lodge, Kan.) 1880-current, 1893-04-05
A MONETARY SYMPOSIUM.
Private Credit and Bank Reserves-The
Specie Basis Fallacy aud Our Present
Banking System-Gold, silver and Paper
Upon Perfect Equality sud Govern
ment Banks Of, BY d For the People.

Specie Basis Fallacy AID Our Present
Banking System-Gold, silver and Paper
Upon q Perfect Equality sud Govern
ment Banks Of, BY q d For the People.
ONE KIND OF EXPANSION.
1t is claimed by some that there is
half billion dollars $500. 900, ,0OO) in
gold in the country. This is probably
an overestimate, but conceding that
there is fully this much, it is inadequate
to do the business of half dozen
states, much less of the entire country.
Compared with the amount of tokens of
value demanded to do the business of
labor and commodity exchange, the
gold supply is a 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 paper) With
every five dollars in government tokens
of value they cleared" over sixty-one
dollars of private paper.
Here the private currency of credit is
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 S120 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 coun-
try would be best represented by a vast
inverted pyramid resting on its apex.
Students of the phenomena of panics
are familiar with the results Of contract
ing the cash currency greatly below the
demands of exchange 1t is undoubt-
edly so contracted in the United States
at present There is not cash enough
to do ten per cent of the business, but
business men exc it out by money of
private issue which circulates for a
short time only and is then redeemed
or cleared"
This currency of credit is ordinarily
capable of expansion without much re-
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 transaction. I'm
| doubtedly this system of private paper,
| which is in reality money of limited ex-
| istence, is one of the greatest inven-
tions of modern times, but it depends
great deal more on faith than it does on
an actual leash basis" 1t may be well
enough for one dollar in gold to stand
for and redeem twenty dollars in paper
as long as there is no impatience among
the holders of the paper. When those
who have to wait 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 collapse
of the whole vast system. At such
times gold is worse needed than at 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.
1t thus appears that an undue con-
traction of the supply of cash is certain
| W ACouAb ALOU III OH uuQuC cADduSlOH OI
currency of private paper, in which
most of the business of civilized coun-
tries is done, and that this undue ex-
pansion is likely to result in collapse.
A very small sponge soaked in
alcohol will fill large balloon with hot
air. It is on this principle that some
| people who have reasons of their own
for their views would like to construct
the currency. They want the actual
supply of cash to correspond with the
spongue; and of the sponge they demand
control, 80 that it will depend on them
to say to what extent the balloon of
credit may be inflated. But it must be
apparent to every business man engaged
either in producing commodities or in
J distributing them through trade that
| an undue restriction of the supply of
actual case is an undue restriction of the
possibilities of trade extention.-St
Louis Republic.
| 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 'tof centering all it's force
upon the single point of doubling the
metallic basis of our circulating medi-
um." This is not the first suggestion
we have seen of this character, and we
may as well have an understanding
upon this subject now as to postpone it
to later period.
There are several doctrines of the
peoples party that are considered fun
damental, and one of these is that we
want no metallic basis for money,
| Iaf l~a, Il.
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 tho material
of which it is composed; and it needs
no other basis than the exhaustless re-
sources of the country and the national
| credit.
Aside from this, we have other de-
mands which were not made for mere
diversion. They were incorporated in
our platforms because they are right,
and they will not be abandoned at the
dictation of parties who seem to have
but a single idea in this contest We
favor free coinage among other things,
because it is right that silver should be
placed upon an equality with gold, but
the News may be assured that the peo-
pies party will never even consider the
proposition to drop the other demands
and make contest upon this issue
alone.
The silver states can never succeed in
the restoration of silver except through
party which is favorable to it They
are not big enough alone to accomplish
anything, and if they ever expect 70 Sc
cure free coinage OF silver in this coun-
try they rnay as well face the situation
and recognize that there are other sec
tions in this country besides the silver
states, and other interests besid IS silver
mining The agricultural states could
get along very we'll without either gold
or silver If they were given plenty of
paper money, and we desire here and