The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1894-09-02
SOME OLD TIME MONEY PLANS,
A Review of Financial Rene
dial Measures.
The State and Its Power to Issue
Money on Securities.
A Dissection of Many schsrass for tho
AmslloratIon of Producers
and Laborers in. Money
Msttcrs.
TBY ARTHUR JOHNSTON. |


The attention of ths Pc opls's party, at
the present time, seems to be mainly
devoted to the existing industrial de-
preston, which they asssrt to be solely
due to the contraction of the currency,
and which they propose to remedy by q
governmental issue OF $4,000, 0O0, 900 Of
paper money, based upen the security
of landed property and other valuable
commodities.
Their spokesman. the Hon. Thomas v.
Gator, thus outlines the scheme: 1--WE
propose to abolish all power of control OF
the gold ring andsof private banks over
money, by the issue of sufficient vol
ums OF legal tspdsr treasury notes,
directly into circulation, without the
intervention OF banks at all and by the
sub-treasury plan, or the plan intro
ouced into Pennsylvania so successfully
for more than 40 yesSs.
ut is not proposed that the govern
ment shall issue this money until it
gives good security. Suppose California
desires SOC, 900, GOO, the state would
take to the nationsa sub-treasury it's
gilt-edged bonds, payable in Install
ments in thirty years at 2 per cent in
terest. Cities dssiliing wafer works,
lighting works, etc., can do the same.
Agricultuyists may tender gilt-edged
mortgages for so per cent of the value
OF the farms they actually work. of not
more than GAO acres. The title to safe,
non-perishable staple products in ware
houses may be received for short loans.
There is no proposition to iesue money
to the people but 20 provide sufficient
currency and to issue the came into cir
culation through means which are safe,
sound and which provide proper
guaranty of redemption by return OF
the money, so that iS can be reissued ia
the same manner again and again
continuously"
This proposition is no exception to
Solomon's axiom that thsi ia nothing
new under tho sun, and y, 'ceurs to me
that it mighf be interesl z 10 briefly
review the h5story OF sonss OF the similar
schemes in tive past. and the fate that
attended these old-time attempta to re-
form the financial system
Two centuriss ago the financial con-
cerns of every nation OF Europe-with
perhaps the single exception OF Holland
H.
In France the extravsgant administra-
ton of affairs during the long reign Of
Louis XIV had brought that nation to
the verge OF bankruptcy. Indeed, it was
seriously proposed that she should de-
clare herself 40, and thus, at one fell
ewoop, get rid OF all her burdensome
obligations.
England had suffered in like man
ner during the reign OF Charles II, be.
sides being exhausted by her profitless
wars with the DuIch republic, and her
own internal conf icts.
In this condition, of affairs it was to be
expected that many schemes should be
devised intended to cure this national
distemper; and, I'M fact, many such we're
offered.
The names OF ma ny OF those who were
thus anxious to play the part OF state
physician are VEAL known to fame
Locke. the author of The Human I'm
dsrstanding; William Paterson, the
founder of the bank of England; John
Law, the originator of the Mississippi
Hcheme; Sir Dudley North; Child, the
banker, and Sir William Petty, each of
whom offered scheme of his own, Diff
fering more or lees from all the others.
Paterson proposed that government
committee be appointed empowered to
make iosns without interest to COM
panie5 and merchanta, ard to construct
vast public works to- provide employ.
ment for the industrial armies of that
day. Gold and silver were to be coined
free of charge, ami all ex port duties were
to be abolished and all import duties
materially reduced. Rather remark.
able proposition, it would seem, coming
from q man who YVES the father OF the
bank OF England, the very name Of which
suggests stability.
Locke advocated the circulation OF
large amounts OF gold and silver, OF
which he commended that real riches
consisted, though he laid great stress
on the advantage OF numerous popu-
lation. He deprecated any interference
by the legislature with the rate OF in
tereet, which he said should no more be
fixed by law than the rent of housed.
He declared that the wages of the la
borer ehould be sufficient in amount to
enable him to procure the necessaries
OF life, and that rise in the prices OF
products should be followed by q simi-
lar rise in wages.
Sir William contenaed that labor was
the father and active principle OF wealth
and land the mother. He was opposed
TO usury laws and any interference
whatsoever by the government with
commerce or industry. He thought that
the country might have too much money
20 be prosperous, and declared himself
monometallist.
Sir Josiah Child wanted low rate OF
interest established by law, which he
thought @ panacea for all ills.
Sir Dudley North thought that the
source of all wealth was human indus
try. and might exist independently of
gold or silver. He thought it great
mistake to suppose that the stagnation
OF trade arose from the want Of money.
In his opinion legislation could never
make people rich. North objected to all
banks.
Law asserted that natural wealth con.
sisted in the people of the state and
etorehouses of native and foreign goods.
These depended upon trade and trade
depended upon money, and the more
money there is the more people are en-
ployed. Furthermore be contended that
eredit, ii that credit could be put in cir
culation, had all the beneficial effect OF
money. Therefore the function of q
bank was 10 create instruments Of credit.
He proposed that the government
create such bank, to be under its sole
control, and that its notes be only given
in exchange for land sold or pledged.
Such currency. he said, would supply
tina countYv with abundance of monav