The Democrat. (Scotland Neck, Halifax Co., N.C.) 1884-1896, 1896-04-02

stricken owners was no more available
than If IL had been sunk to the bottom
of the sea.
DIFFICULTY OF BANKS N A CRISIS.
Ia England or Canada the crisis
would have been met Immediately by
the creation of an enormous volume Of
bank notes loaned on approved CONNER
cial paper In this country, however,
such action was impossible Only a
small part of our currency, about one
eighth. is issued by banks, and their
machinery is 50 bunglng and clumsy
+ it takes SO long to get it runnlD9-that
! it was impossible for the national banks
/ to do anything TO relieve the situation.
1t would have been very profitable for
them if they could have done SO. and
many of them made the attempt to ex
| tend their circulation; but, as has been
! shown by Hon. John De Witt Warner of
/ New York, they could not get their
/ clumsy machinery at work soon enough.
1 The national bank system utterly failed
/ at the critical moment. The clearing
/ houses came to the rescue as best they
could. They calmly ignored the stupid
statutes of the United States, and saved
| thousands from ruin. Thousands more
! might have been saved If a little SIM
/ pie, practicable device had been in oper
alton What is that device? Nothing
more or less than to permit any holder
/ Of government bonds to convert them,
I principal and accrued interest, into cur
rency at his pleasure, and TO reConyert
the currency into bonds at pleasure.
BONDS AND CURRENCY CONVERTIBLE.
Under this simple plan millions Of
bonds would have been converted into
currency at the time of the panic and its
worst evils avoided. After the scare was
over-when the panic stricken hoarders
began to unlock their currency and let
it into the channels of trade-much of
the currency issued to tide over the cri
sis would have been returned to the
federal treasury and bonds taken out
again.
In putting forward this plan 1 make
no claim to originality. 1t has been
urged by many eminent statesmen,
from Lincoln s great secretary in the
sixties to the able and clear headed
member from Ohio, Hon. Tom L. John
son, but because of overconseryatisnl
nothing has been done.
There can be no valid reason why the
holders of government bonds should not
convert them into noninterest bearing
currency at will, nor why the holder of
government currency should not be al
lowed to convert that currency into low
interest bearing bonds.
GOOD EFFECTS OF TIE PLAN.
Simple as this plan is, it would bring
about the following very desirable re
suits:
First.-Impart to our federal currency
a degree of elasticity enabling it to ez
pand readily with the demands Of trade,
or at the time Of q panic, and to con-
tract when business fell off or when the
scare Of the panic had subsidized and the
locked up currency was let ont to take
its place III the channels of trade.
Second. Save to the people the inter
est on al bonds when converted into
currency, until the currency should be
reconverted into bonds
Third. Cause the national banks to
yield up their circulation. There would
then be no profit for them in maintain
ing q circulation. Perhaps this is one
Of the reasons why the plan has not
been adopted.
Fourth. Enable the federal treasury
to cease running gold warehouse for
the benefit Of exporters. Nobody but
gold exporters would ever ask TO con-
vert currency into gold if they had the
option of converting it into a low inter-
est bearing bond.
In conclusion permit me to ask why
the government should run a free ware
house for the benefit of gold exporters
any more than a wheat or cotton ware
house for wheat and cotton exporters.
The only way that the government
can finally redeem either its bonds or its
currency is through its power of taxa
ton. Make the former intarcnnvertible
and give our currency elasticity.
O. j. BUELL.
minneapolis