The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1895-07-29
sTATE JoURNAL. MONDAY EVENING. July 20, 1885

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no inducement to that man to ship that
bullion to London-that is where this
premium was; it wasn't here, nor in
New York. The freight and insurance
and expressage would more than con-
sumo that 2 or per cent, not to speak
of being out of the use of his money
in the meantime. Hence he would
take it to the United States mint and
have it coined into money that he
could use Immediately. (Applause.)
We have thus far considered what
primary money should be made of and
its relation to credits. It is important
in the study of money to inquire into
the quantity necessary to transact the
business of the country. How much
money does the aggregate business of
the country demand? We have seen
that there is not to exceed $500, 200, 900
of primary money (gold) in this coun-
try, and 81, 800, 900, 900 in circulation of
primary and credit money combined.
If this was properly proportional
credit to primary money-would it be
enough?
Harvey Banking Methods.
1t is in effect admitted by the other
side that it is not, but they say bank
credit with the check system supplies
the balance. The Coinage Laws and
Appendix" we have been using, pages
215 and 240-I now hand the book to
Mr.. Horr-show that the total deposits
of the people in the United States at
a certain day in 1898 in banks Of all
kinds, were So, 848, 1862 $50. This is in
the face of the fact that there is only
81, 500, 100000 Of money of all kinds in
circulation; and it, as we know, is not
all deposited in the banks. This leaves
at least s., 300 900, 900 more money sub
ject to check than there is of our whole
stock of money. The surplus is what
is known as bank credit and check sys-
tenn. It also indicates what is a nor
NAL amount of money for the transac-
ton of the business of the country.
Give it your impartial judgment, and
you cannot escape the conclusion that
the $4,000, 000,O0 approximates the
quantity necessary. You cannot say
that it is in existence, for it is not.
You cannot say that it is the capital of
the business men, on which they are
transacting the business of the coun-
try. You can only say that experience
teaches that so much is necessary.
You cannot say that it exists. It rep
resents the amount of cash capital nee
essary for the business of the country,
but it is not cash capital. 1t is one
third money and two-thirds bank cred
it. There is one-third enough money
to furnish capital for and facilitate
the business of the country, and the
o171r
nish the other two-uhirds. On the
one-third we pay no interest. 1t is not
Understanding money; it is the money
of the country. We pay interest on the
other two-thirds. To say there is
$4,800,000, 900 deposited in the banks, is
to say at the same time the banks are
DIR" wing interest on So, 800, 900, 900 of it.
It works this way: fA' deposits $4,000
in bank. ''B' borrows the $4,000 from
the bank, but does not take the money;
it is placed to his credit. Now the S1O,-
600 has swollen to $4,000 on deposit.
The $4,000 is still in the bank. "C''
comes in and borrows it and places it
to his credit. Now there is $4,000 on
deposit. Interest is being paid on $780,
900 of it. "a" has $4,000 to his credit,
the capital in his business, on which
he is paying no interest. "B' and CO..
have each $4,000 to their credit as cap
ital in their business, and they are both
paving interest This is the
way the banks work the actual volume
of money in existence up to the normal
volume. With 81 500 O0O, 900 in exist
| ence, the people are using it and pay
ing interest on $500 OO0, 900 additional.
This interest varies from to u per
cent. At per cent it is a tax of $685.
900, 900 annually to support this system
in supplying the shortage in our money
| volume.
Horr Becomes Sarcastic.
Mr.. Horr-That whole question of
! whether banks are curse to the world
and as to the credit of the country being
the country's life blood, will come later
| in this debate. When I reach it in the
regular order daughter and applause)
| it will be presented to Mr.. Harvey's
| perfect satisfaction. daughter and ap-
plause) Indeed I doubt whether he
won't leave the room in perfect disgust
with himself for having entered into
this debate. Oaughter9 I now pro-
coed to the question I was talking
about. According to the report of the
senate committee the decrease in the
price of 226 leading articles on our
farms and in our shops and factories
since 1879 is only about Z per cent.
That is no more than the natural de-
crease in the price of such productions
owing to the improvements of machin-
cry which I spoke to you about and
which should always diminish the
price to the consumers of the country.
/ Silver has decreased in price so per
cent, so have several other articles in
the world, Influenced by the peculiari-
! lies surrounding each article, and conse-
quentIy not Influenced by the unit or
measure having appreciated. >
There are mines in the United States