Hutchinson gazette. [volume] (Hutchinson, Kan.) 1895-1902, 1896-06-11

"Certalnly l Will, answered ln0
\ banker. I'VE have league in New
! York whose mission it is to reward or
pay editors to print our ideas on sound
money but go ahead with your ques-
tlons."
what Is national banknote, for
which we sell our labor?" asked the
farmer.
"A national bank-note is promise OF
national bank to pay the amount
named on the face of the note" an
swered the banker.
PAY what-gold?" asked the farmer.
, ooh, no; lawful money" answered
the banker.
THAT gives you an option Of paying
it in silver. Do you pay out silver?
asked the farmer.
Mostly silver, silver certificates,
notes of other banks, etc." answered
the banker.
But, Mr.. Banker, II you have the OPP
Ntion and pay it in silver, why do you
1claim that, if the government has the
./optlOn 1t should pay in gold?" asked
the farmer.
Because we are on gold basis; and
il government paid out silver, conf
dence would be affected, and gold would
go to premium" said the banker.
"Then, If we are on gold basis, said
the farmer, why don't you pay your
notes in gold?"
Because" answered the banker, 1.-The
law gives me the privilege Of paying
lawful money and we educate the people
who want gold to demand gold of the
government for that lawful money, and
that relieves the banks of the burden of
providing the gold for the gold basis"
"Then, what we get for our labor is a
paper promise Of bank?" asked the
farmer
"Oh, but it is good-good all over the
country" said the banker.
what makes 1t good" asked la
borer.
1T is secured by United States
bonds" said the banker. For every
5000 we issue In our bank notes, we de-
post a s., 900 bond in Washington. The
law furnishes us with 5000 in bank
notes for every thousand dollar bond
there deposited"
And the bond is the property Of the
bank and the government is responsible
for its safe-keeping, and it's return to
J YOU" asked the farmer.
eyes," answered the banker.
"YOu buy bond with 81 900, and then
get 5000, that is good currency as that
which you gave for the bond?"
"Ye-yes," hesitated the banker.
I what Is bond?" asked the farmer
"a honda United States bond?"
aked the banker. "Why, every one
Knows what United States bond is. 1t
is a promise of all the people that the
holder of the bond shall receive interest
until the bond is matured and the prin-
cipal named in the bond at maturity"
Then you draw interest ON the
bond?" asked the laborer.
YES" said the banker
and" continued the farmer, you
get back 5000 out of the $1,000 you paid
for the bond. Then isn't it true that
you are drawing interest on the full
bond, when, in reality, all that you have
loaned the people is ten per cent Of that
bOnd?"
"That's not the way we state II" said
the banker.
mo-" interjected the editor, you
don't state 1t in that way, but 1t is an
exact statement of the privilege you
anIoty OF tha avnanoa oP tho uyao lth rro
ducers, the bread-winners, the widows
and orphans included. Tell him also
that you are exempt from paying inter-
est on the bond or the notes."
81 haven't finished asking questions"
said the farmer.
Go on" said the banker, with a
tired" look at the editor
Il want to ask how you get your
bank-notes into circulation" continued
the farmer.
1--WE discount notes; that is, for in
stance, retailer who buys goods and
henn't the money to pay for them gives
hiis note, his promise to pay at certain
date. The manufacturer who sells him
the goods indorses the note-writes his
name on the back of it-and then ne
brings it to our bank. We deduct the
interest-discoun it, and take the dis
count in advance-and the balance we
loan him, and enter it on the deposit
book of the one for whom we discount
it. When he draws a check we can
give him in payment our bank notes."
Then" questioned the farmer, you
draw interest on the bond at Washing
ton and interest on the notes of your
bank; isn't it double interest for part of
your money!"
well, we don't state it that way"
slowly answered the banker.
No" remarked the editor, ut is not
stated that way; they are too busy edu-
eating the people on honest money"
-. ut appears to me-" remarked the far
mer, that bank-notes are a promise
to pay on which the bank draws inter-
est. The retailer pays interest on what
he owes, and the bank receives interest
on what 1t owes"
That's 1t" chuckled the editor. THE |
honIr 10 Iiufpo IN fha ipfaraoA 80 r,t,,A |