The midland journal., 1894-12-21
LIVE ISSUES.
The Money Issue.

SOHlC uCtotllo lIOiL UllC DdIllLHOLS
plan advanced by the banks. The
main difference is that the former
requires deposit of 80 per cent in
legal tender to secure the banks
issues of notes, and admits state
banks to the privileges of national
banks. The practical effect OF
either plan is to permit a bank to
issue currency to the amount of
about half it's assets. In other
words, 100000 of capital may be
swelled to $15O,OOO net for loaning
purposes, by the issue of $4,000 Of
the banks own notes. These notes
are thus secured by twice thei1
value.
But will such a currency ap-
proach in stability the dollar that
we would have under free and even
unlimited coinage of silver? At the
most extreme view, the bullion in
the silver dollar would be worth
certainly half the face value of the
coin, and the whole faith and re-
sources of the United States govern
ment would be back of the other
half. The security behind the sill
yer dollar would thus be far better
than the security the banks can
give under either of the plans pro-
posed. And this takes no cogniz-
ance of the increased market value
of silver or other benefits that are
claimed for bimetglism. The banks
could employ the silver dollar or its
paper representative if they had it.
But why should men engaged in
banking be allowed to draw interest
on notes to the extent of half their
principal, when all other people
have to pay interest on all the
money they require in excess OF
their capital?
The administration scheme de-
signs ultimately to have all green
backs and treasury notes turned
into the United States treasury as
security for bank issues to the ex-
tent of IS per cent of the banks
capital. The object of this is to
reduce the governments burden in
maintaining its ability to pay this
paper money in gold. But it is not
clear how the bank notes will be
safer, for they must be paid on de-
mand in coin or greenbacks, and
gold or silver can be demanded on
the latter at any sub-treasury. The
public would be taxed to pay inter
est on $75 of bank notes in order to
withdraw from circulation $50 in
greenbacks or treasury notes. Is it
wise to put such an additional bur
den on the public. especially when
falling values for products of farm
and factory imperatively require
lower charges for interest
Another bad feature about both
the Baltimore and Carlisle plans is
that they bestow upon the banks a
practical monopoly of the currency
issuing function. This might be
dangerous in the extreme. Bank,
ing (even without circulation) is
to-day as profitable as any equally
safe business, with bank stocks
more generally at par or above than
shares in any other business. The
banks are not so languishing as tt
require concessions or protection.
These and other objections are
sufficient to cause congress to &c
slow. Much as currency reform is
needed, it is not so necessary as tC
require hastily and illy-prepared
measure to be rushed through con
gress without due and weighty
consideration. The errors or care
lessness of 1873 must not be per
mitted. We do not know what the
wisest scheme of finance may be
but it is evident that it should rest
on sound basis, be adapted to the
varying needs of different seasons
or periods, be so constituted tha
every dollar should be as good a!
every other dollar, and that every
dollar draw interest but once. Ag
|, ricultural prosperity is vitally con
cerned in the money question
Hence Orange Judd Farmer de
mands a halt in the apparent hast,
to enact a measure that the peOpl,
have not had full opportunity tt
consider in all it's bearings.-Orang,
Judd Farmer, Chicago.
! Salt rheum often appears in colo