The herald., 1895-02-01
DROP THOSE BONDS.


SNSA kA~9S 1SNSSe
BY r. NJ. wIDNEY.
Our national finances have reached point
where it is becoming question of wholesale
robbery.
Financiers, backed by politicians of all par
tets are now advocating the sale of $500, OOO,-
600 worth of 50-year, 3 per cent bonds, with
which to take up the same amount of non-in-
rest bearing currency. thereby contracting
TO that extent our already contracted cur
rency.
Then they propose that banks may deposit
these $500 900, 900 of bonds and issue bank
no es thereon up to psr.
A more vlllainous piece of robbery has not
been publicly proposed in the history OF this
nation. Now for the facts onwhich this strong
assertion is made.
First robbery-S500 600, 900, per cent 80
year bonds Will ouble by reason of interest
every "a years. The accou mt will stand:
Interest first "a years on princi-
pal ACKNOWLEDGEMENTS. $500. c00, 900
Interest second "a years on
principal. ..................... 5OO,OOO,OOO
Interest on fl rst % years inter-
est. ACKNOWLEDGEMENTS. oOo,oVU,ouo
Total. s 1, 500, 900 900
That u.s. the people are to pay 81, 500, 600, 900
for the use of $500, 900, 900 for 90 years.
The money received from these bonds is to
be used in taking up $500,00O,000 currency,
creating such a contraction of our volume that
there must be Immediately provided a way to
replace it,
Second robbery-The banks are to be allowed
to deposit the $500, 900, 900 bonds and draw 3
per cent interest thereon and are allowed to
issue money notes for 100000, 900 by paying
the governmentH of l per cent per year to
cover government cost of printing the notes
and supervising the business.
The bankers here make net profit of 8 per
cent per year. or $1,000, 600, 900 in so years,
and do not invest one cont of money in the
transaction. For the 500, 100000 first put
up to buy the bonds is Immediately returned
by the return of $500,000 900 bank notes
guaranteed by the government.
The people pay this 3 per cent per year. or
$1,000 900, 00) in so years to secure the issue
of currency that now costs them no interest
whatever.
but 1t does not end here. The people having
thus by their national wealth issued a bank
note currency and presented it to the banks,
also pay them per cent per year, or 81, 500,-
900 in 80 years, and borrow this money their
own money de facto) from the banks at an
average rate of per cent per year, which
added to the per cent makes 8 per cent per
year for interest on money. an aggregate of
$4,000. 000, 900 for the use of $780, 600, 900 for
so years.
do not believe that our American bankers
desire any such a aud on their fellowmen.
But it is evident that there is n force operating
somewhere to produce this results.
The $500. 100000 currency to be taken up
with these bonds has been doing its money
work at par, most of it for a quarter of a GEN.
tury, and has saved the government about
per cent to per cent interest, which alone
represents an interest saving of more than the
original issue.
Yet it is now proposed TO take up the non
interest bearing currency and replace it with
an interest bearing debt that in so years will
cost us $1,000, U0O, 900 for interest alone.
But when the 50 years are past where will
we get the gold to pay the $500, 600 90 prin.
cipal, having pads 500, 900. OO) gold interest?
Cleveland says that $500, 100000 of per
cent bonds will fall due in 1907. Where is the
gold to come from to pay this? Why by an
other sale OF $500, 100000 per cent. so year
bonds which at the end of so years will rep
recent $1,000, 600, 900 more of interest.
Recent cablegrams from London say there is
plethora of money in London ready to in
vest in United States bonds Yes the money
is now idle 1t has been drawn out of business
lines. The owners cannot get in London over
1 per cent for it. They would only be to
happy to invest it in United States bonds and
take up all the American money, cancel it
and replace it with English money.
The cooperating robbers on this side of the
Atlantic, by the withdrawal of gold, are max
ing an opportunity for their coniederates on
the other side to invest
1t is absurd to assume that the financial sys.
TEN of this nation shall be based on the propo.
sition that it must furnish unlimited gold on
demand to commerce. England, France and
Germany do not, neithe does the Bank of Eng
land, or of France or OF Germany. Each of the
above can at any time charge a premium for
gold, while America furnishes free gold on
demand.
There is no buiness reason why the cur
rency of the United States should be currently
redeemed on demand OF spectators.
II a paper fund OF say 5000, 0OJ, 600 in gold
and $200,00O,0 900 in silver were stored in the
United States treatury, to be used for final re-
demption OF United ates currency, redemp-
ton when the nation had reached a condition
where it never would need currency again, 1t
would cover every financial requirement.
Those who wanted gold or silver could 60
into the market and buy it, as they now buy
wheat, or any other merchandise
national currency based on the wealth Of
this nation, in volume sufficient to meet our
pusiuess WautS snoulu De issued. non
Understanding government note has back
of it all that Understanding note called a
bond has back of it. If one is good the other
is good. The Understanding one is best for
the foreign bondholder. The non-interest-
bearing one is best as money for the American
people.
The problem is simple enough. That Is not
the trouble. The trouble is to so omplicate
1t as to befog the people, and induce them to
pay 81 5000, 900 for the use of $500, 900 900
for so years, for money that they will issue
themselves, and guarantee i'll the form of bank