The midland journal. (Rising Sun, Md.) 1885-1947, 1895-08-09
LIVE ISSUES.
How a Bank Note Burdens the People.

A bank note is a bill of credit,
promising to pay in lawful money
on demand, issued by and resting
on the credit of a private corpora
ton established by law Being
payable or redeemable in money on
demand, it represents money and
circulates as such, and performs
nearly all of the functions of money.
Private corporations, therefore,
upon whom the privilege or power
to issue bank notes is conferred,
are practically invested with
authority and power to make and
put into circulation a medium of
exchange. The bank note is secur-
ed by government bonds deposited
with the government and which
inspires in them confidence.
A bank note possesses two fea-
lures which do not belong to MONEY
and which render it costly me-
dunn of exchange. One popularity
of bank note is the manner in
which it is issued and enters circu-
lation as medium of exchange. 1t
is almost always put into circula-
ton by loan or discount and thus
always incumbered with interest
and accumulates value for the bank,
whether in use or not. Its very
existence, therefore, is evidence of
tax upon production and trade.
That tax is the price of the bank
note as loan or discount, and fol-
lows it into every department of
industry in which it is used as a
producing force.
The other popularity, which
grows out of the one just mentioned,
is that bank note is not free to
obey the natural laws of trade and
the demands of industry, but is
subject to the will and under the
control Of the corporation which
puts it into circulation. Hence the
circulating currency of the country
may be expanded or contracted at
the pleasure of the bankers, causing
inflated prices of labor and com
mOdities, or financial panics, as
they may elect or that shall suit
their convenience.
1t is different with the greenback
or Treasury note. That is issued
and controlled by, and circulates
among, the people unincumbered
with interest, and, then a full
legal tender, is receivable for all
labor, products and property, and
will pay all debts, public and
private. Being controlled by the
people-not the money power-the
volume will be and remain sufficient
to meet all the demands of the pro-
ducing forces in every department
. of industry, and always to be found
when and where needed that the
greatest activity may be effected.
In order to get bank note into
circulation, it is loaned by the bank
on loans or discOunts-for sixty
or ninety days, with interest in adj
vance of from seven to twelve per
cent, according to location of bank.
At the expiration of the time for
which the note is issued the bor-
rover, unable to return the iden-
teal note received, pays the bank
greenback or another bank note.
This in turn is immediately loaned
to another person in need Of money,
and thus the process goes Oh in
definitely, and the original bank
note constantly realizes interest and
accumulates value for the bank,
whether it circulates in the chan
nels of trade and the industries, or
reposes in the vault of a bank of
deposit, or is destroyed. All that
interest comes out of the profits of
production, is tax upon the COM
munity at large, and is greater
burden than industry can long
bear. All that interest must come
out of the medium of exchange in
advance, even before it enters the
circulation among the people in the
industries. is added to the cost of
production and taken out of the
fruits of the laborer, or the price of
the production enhanced that much
and all in the end comes out of the
consumer.
Then, to develop to the greatest
activity the industries of the cOun-
try, and continue that activity with