Orleans County monitor. [volume] (Barton, Vt.) 1872-1953, 1895-04-08
MONEY, CURRENCYAND BANKING

The national bank note in this coun
try is safe because there are in the
hands of the government bonds of
the United States, belonging to the
banks, amply sufficient for the redemp
ton of every note. The difficulty
with this national bank circulation is
that it's amount depends upon the
amount of the public debt. The debt
of this government has been paid off
with rapidity that is marvellous, SO
that while the population and ex
changes Of the country have been in
creasing, the amount of bank note
circulation has been diminishing.
The national bank notes have been
replaced by government paper repre-
senting gold and silver, but princi
pally silver. How greatly people pre-
fer paper to silver is illustrated by the
history of the silver certificates and
the efforts of the government to
force silver dollars into circulation.
In 1886, when there had been coined
in silver S244, Az, 1856, the amount of
silver dollars actually in circulation
was $61, ,5O2, ,155. In 1894 the coinage
of silver had increased to $421, ,776, ,408,
and the amount of silver in circulation
had fallen to $50, ,443, $40. At the same
time the certificates representing sill
yer dollars had so increased that the
amount of silver held in the treasury
for their redemption had increased
from $1OO, ,8O6, 800 to 1881, 143, ,3O1.
But we are now inquiring what
money really is, what it means, and
what laws govern it, and determine
it's amount and its distribution.
Paper currency issued by banks, it's
origin and operation, may be best
illustrated very simply. A man goes
into a rural community, let US say,
where there is a general store. He
knows the storekeeper, who has con-
fidence in his integrity, or he has gold
or other valuable security, which he
deposits with the storekeeper. It
matters not why the storekeeper
trusts him. Confidence and trust are
at the base of the great structure of
commerce. When that departs men
will be obliged to carry coin about
with them, and when that time comes
daily, perhaps hourly occurrence,
must cease. But no one that realizes
the deep significance of the advance
of civilization believes that commerce
will cease through the failure of
mems confidence and trust in one
another. The man whom I imagine
as going to the simple rural COM
munity, desires to purchase the pro-
ducts of the farmers of the neighbor
hood. He says to the storekeeper:
I have nothing with which to buy
their products. But they know you.
They have confidence in you. They
will accept your promises in pay
ment for their produce. Give me
orders on you, and we will share the
profits of the transaction
Upon this the stranger obtains the
orders. For the community in which
he is carrying on his transaction these
orders constitute a currency. The
stranger goes out among the farmers,
and finds, as he anticipated, that they
are perfectly willing to exchange
their products for the orders on the
storekeeper. He ships his purchases
to the market, and from the pro-
ceeds of the sale he pays the store
keeper the amount of the orders issu-
ed by him for the purchase of the
farmers products. Besides the
amount of the order, he pays the
storekeeper something for the risk he
has run and for the accommodation.
! The amount that he pays is proper