The herald., 1895-02-07
CURRENCY REDEMPTION.


sue OF the 9th inst. l. 5. joins issue Win my
proposition that demand redemption OF gov
eminent and private notes is financial lie
and q financial absurdity.
Tho reader will understand that the above
forcible words are not used in their offensive
sense but to most emphatically emphasize a
particular fact. Now for the facts that "de-
mand redemption is 9 financial lie and alb
surdity."
In San Francisco, millionaires were in the
habit of obtaining demand loans from banks
for large sums at low interest, placing up large
collaterals. When payment was demanded,
they re- borrowed at another bank. This worked
all right in ordinary times. But in the panic
of 1893 the banks called these demands losn',
and stopped further loans. The demand mil.
lionaires tried to re-borrow at other banks and
could not. The millionaires offered additional
security and higher interest, stating that they
supposed all the bank wanted was interest.
No, they wanted the demand notes paid. But
the money could not be had, and the banks
were compelled to carry the. demand notes.
Thus proving that the notes were financial lies
and absurd.
Again, in New York the banks owed large
sums on call or demand. During the same
panic OF 1893 they could not meet the demand
obligations in money. and they issued about
$4,000. 600 clearing house certificates to use
ton true.
Again, all the banks in the United States owe
depositors over rs, 900. 900, 900. payable on de-
mand. The same banks hold less than $40 y
600, 900 in money with which to meet the
above demand obligation, proving that by
wholesale demand obligation is a lie and abb
surdity.
Again. the United States has outstanding
some S4O0 900, 900 demand obligation green
backs, treasury notes, and has not 25 cents on
the dollar with which to redeem on demand;
again proving my proposition. The Bank OF
England has outstanding $45, 100000 demand
notes. ana has not on hand 10 cents on the
dollar with which to redeem, again proving
my proposition.
But it will be said demand redemption
means, in the usual course of business and not
all rushed in at once. That again proves that
demand redemption is false, and is limited by
implied conditions that do not bind the holder
of the note
Therefore demand redemption being inan-
cial lie and financial absurdity, say elimi-
nate 1t from the system cut it out, root and
branch, and substitute the fact in nature and
in business.
L. S. also contests that nv propost on to
limit redemption to anal redemption is not
financially correct.
used as medium OF exchange, for which q
certain volume must constantly exit
If the volume is contracted or destroyed we
are just where we were before Its issue. But it
was issued to meet a continuing business
necessity that exists from age to age. Why
should the nation issue it in 1893 and retire it
all in 1894. and then reissue in 1894 and re-
tire in 1898, and SO on?
There is standing demand and current
necessity for its existence from a business
standpoint.
Therefore, the sytem should SO provide that
1t can not be run in by specu ators to the detri-
ment and contraction of business. But these
money spectators run it in only by virtue of
tho demand redemption feature of the note.
Now 1t is apparent that the business inter-
ests OF the people do not require demand
redemption of currency notes, and that de-
mand redemption is only used to the damage
of the people.
But why lock up $2oO,0o0,Ooo gold and
$3.50, O00, 900 silver for final redemption,
when the time arrives that wo shall no more
want a currency, and throw the key away?
Well, as basis OF unreasoning confidence,
which is a factor in business,
An excited, ignorant depositor rushed into a
bank and demanded his money. 1t was showed
to him over the counter, when with a look OF
surprise he said: "You got him, no want him
you no got him. want him very bad"
Tho same fact was demonstrated by the run
on banks in 1898. After the mental excite
ment had subsidized depostors carried their
money back to the very banks from which
they had withdrawn it.
Our business currency is therefore needed in
circulation all the time. As well burn up all
the rolling stock of our railroads annually and
make new ones, as to annually or daily redeem
our circulating medium.
A legal tender currency issued by the nation
is simply mutual contract or agreement by
the people that the currency will be received
among themselves as fixed representa-
tive of value for the convenient purpose
OF exchange Having thus agreed, it
is as good as gold among themselves for all
business purposes.
But why should the same people agree to fur
nish free gold to anyone who demandeI it?
Why should the government agree to furnish
horses or iron or any other merchandise on
demand? Just as well make currency redeem
able by the nation in wheat at SO cents per
bushel as to make 1t redeemable in gold at ST.
for each 23.S grains.
internationally we must use gold, SO long as
they demand it. Let those who wish to pay in
gold 60 and buy it and not require the IS, OOO,-
600 to buy it at premium and sell 1t to them
at par Why should 1 help pay out the bad
barg ain of one who contracts to pay gold?
The currency notes are the joint obligation
of IS, 100000 people for common use. Each
individual holds an obligation in the currency
note himself. And each one of the people
agrees to receive it at the same value that the
holder received 1t.
1t is not: therefore redemption in any form
when ii thus passes from hand to hand. TIL
is circulation as legal tender representation
of legal va .ue agreed upon mutually by all
concerned. ,--
When would finally redeem the currency?
Whenever the business interests of the people
OF the United States required it, and not be-
fore.
The new currency should not read payable
on demand" That is the financial lie and
absurdity" referred to. They should read
Payable in gold or silver at their commercial
value at such time as the interests OF the
American people require"
This would recite the fact, and the damage
now arising from the financial error in the sys-
tenn would be removed.
As the American people issue it for common
benefit, they alone are interested In its final
retirement.
Should the Angel Gabriel sound the final
trumpet of doom while this nation was in full
tide OF prosperity, 1t would matter nothing
whether a party held an unredeemed currency
note or gold or silver dollar. 1t would ell
burn up anyway.
EiNctrical Cooking.
Electric cooking is making considerable
Roadway and at present engages the fancy OF
fashionable London to no small extent, 1t be-