The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1894-02-04
A FINANCIAL DIALOGUE.


Baggs and Mr.. Perfwig, merchants
Mr.. Periwig Good morning, Mr..
Baggs: how wags the world with you
today?
Farmer Baggs-About as common,
thank you; BUT times are awful dull
and we are doing very little on the farm
this year.
Mr.. P.-Why not? What's the mat
ter?
Farmer Bob, prices are away down;
we can get nothing for our produce, and
why should we waste our time in raising
things We cannot sell, can you tellP
Mr.. P.-But it will not do to give up
farming entirely; else we will all starve.
You must raise something, whether 1T
pays or not. Isn't that so, Mr.. Bags
Farmer B.-Well, yes; we raise q
little to exc out living; but we are all
the while falling behindnand, whether.
we raise little or much, and that is very
discouraging. Can you tell what the
matter is, and why you merchants de-
not pay living prices for our grain aA5
other stuff, formerly. w
Mr.. P.-The fact ia, my friend, money!
is terribly tight, and times harderethfp
ever before. We would gladly pay lbstfgf
prices for your truck, but really<Me
cannot afford it.
Farmer B.-Well, what makes money
80 scarce? What has brought this AonSi
dition of things about? What Aas
caused the hard times? You merchants
ought to be able to explain. Tell US
where the money has gone.
Mr.. P.-Why. it is known quite gem
orally that contraction OF the currency
has been going on in this country for a
long time; in fact, ever since the war;
not with steadness and uniformity, but
nevertheless with great certainty. 1t
has been the policy OF the government
under both parties and has been pur-
eued with euoh vlgor that now the
quantity of money in the country is
reduced TO a very low ebb. The money
in actual circulation does not amount to
81 per head of the citizens, whereas it
ought to he seven times seven for the
proper transaction OF business. In
France, where less money to the man IL
needed, the amount in circulation per
capita is fully $50, and owing to this
abundance OF money France is today
the most prosperous country in the
world.
Farmer B. But how, Mr.. Periwig,
was this reduction of money in this
country brought about? What pro-
duced it?
MIR. P.--That is proper question and
easily answered. 1t is brought about by
the bankers, with the cooperation OF
the government at Washington. We
have in the United States nearly 1000
national banks. They are, in proper
sense, government Institutions and are
able to command the support and CO.
operation of the government in all their
financial movements. Acting IN concert
they can contract or expand the volume
OF the currency at their own sweet will,
and contraction "a their policy now.
Farmer B.-But why should the
banks desire to contract the currency
What advantage can it be to them ?
Will you explain?
Mr.. P.-Yes. That ia plain enough.
BY restricting the quantity OF money.
that which remains is the more valuable
and will command more products. The
more valuable money is the less valu-
able is everything that money will buy.
When money is scarce and dear every
thing else is cheap. In flush times you
can get dollar for bushel of wheat,
but in times like these you do we'll to
get dollar for two bushels.
Farmer B.-Bu. have heard it de-
MED that money is scarce. My neigh
Dor Jacobs heard banker say the other
day that money was never more abund-
ant. Are you quite sure there is not
enough money out somewhere to do the
business?
Mr.. P.-Well, let us see. What inter-
est are you paying on that mortgage OF
yours?
Farmer B.-Ten per cent; and my
banker tells me there is plenty of money
to loan at that rate upon good security.
Mr.. P.-But, if times were good and
money plenty would you pay that high
rate OF INTEREST," We used to borrow
money when we needed it at 6 per cent
on no better security, did we not?
Farmer B.-Well, yes. But can't you
account for the high rate of interest and
the low price of products in any other
way than by the action OF the banks
and of congress in restricting the amount
of money in circulation? l read in my
paper last week that the tariff is re-
eponsible for the hard times; may not
that be the case?
Mr.. ply no means. The tariff has
but little, ii anything, to do with it.
The demonstration of silver was long
step in the direction OF contracting the
currency, but not the only step. By
concerted action among the banks, the
boarding of money is now going on, and
before long the condition of the country
financially will be so desperate that
the people must have money from
some source and at all hazards. Then
the national banks will be in position
to demand of congress the granting OF
other privileges as a condition OF FUR
nishing money to the psople, and among
the PRIVILEGES demanded by the banks
will be the authority to issue their own
notes upon the deposit of any kind OF
bonds that may be approved by the
comptroller of the currency. Ihls 8
the present aim OF the banks, and when
they are authorized to furnish the
money, there will probably be pleanty
of it for time; but the banks will then
hold the power, more firmly than ever,
to create panics whenever their interests
NAV be subserved thereby.
Farmer B.--Did you mean to say that
the late contest in congress over the
silver question was carried on by the
national banks?
Mr.. P.-Most certainly. All of the
1000 of those institutions have perfect
understanding among themselves on
every great financial question. Their
organization is complete. 1t is strictly
non partizan and processes to be non
uoI;tloal huf IL 10 politicol in tho hrrad