The herald., 1897-12-20
The Administration's Financial Plan

Herald The financial plan of the admin
try. Mr.. Gage, secretary of the treasury,
asks congress to pass a law to take the
government out of the banking business
and to confer additional powers upon ma
sage, favors all the essential features
Of Mr.. Cages plan, but touches the sub
| ject gingerly. He ventures, however, to
suggest that the banks be allowed to
issue their own notes, as money, up to
the full face of the bonds they have de-
posted, and that they be exempted
from half of the tax now paid by them on
their circulation; also that more banks
be established. All this, and more, is to
be done to maintain the single gold
standard and to carry out the absurd
and exploded theory that gold only is
honest money" These recommendations
are ostensibly made in the interest of the
whole people, but are really intended for
the benefit of the banks and have been
demanded by late bankers conven-
tion. Gage Is a national banker and
his whole scheme would, If adopted
make the burdens lighter for the banks
and their profits much larger, while 1t
would put heavier burdens on the peo-
pie. Ought any more favors to be show
cred on the banks? Let us take hasty
look at the banking system. They in
vest 100000 in government bonds, bear
ing interest payable semi-annually; the
government then issues to them $4,000
in bank notes, which they loan to the
people. In this way they get two inter-
ests on one investment; they harvest
two crops where they plant but one. But
that Is not all. They receive individual
deposits of vast sums Of money which
they loan out, for which they give the
depositor no security. When pan!cs
come, as they do come, often under our
very defective banking system, the de-
positors lose millions. thousands of men
are bankrupted, business is Frustrated
and widespread ruin ensues. Why do
Mr.. Gage and the president not suggest
something in the interest of the people,
instead of talking turkey" all OF the
time to the banks, and 'buzzard" all of
the time to the people? Why do they not
recommend that the banks be taxed a
nominal sum, say per cent on their cir
cuaticn, the money thus raised to go
into a sinking fund (kept in the United
States treasury, out Of which depositors
in suspended banks should be paid In full
for losses sustained by banks closing
their doors? If such law were enacted
millions of money now hid away because
banks afford no security whatever to
depositors would come out of their hid
ing places and be deposited in banks, or
go into circulation, and all runs" on
national banks would be at an end, for
every depositor would know that his
money was in safe place, for Uncle
Sam" would guarantee it's safety. But
who expects such efficient and badly
needed legislation in the interests OF
the masses so long as the banks are in
the government business?
A government postal savings bank
would be of incalculable benefit to the
masses, but who has spark Of hope that
the banks will allow such a movement
in the interest of the people to succeed?
Thomas efferson said:
Bank paper must be suppressed and the
issue of the circulating medium restored
to the nation to whom it belongs. Banking
establishments are more dangerous Than
standing armies.
The president, Lyman Gage. Mark
Hanna, and the single gold standard
people, disagree with Jefferson and all
the leading statesmen since his time.
They say the banks must issue all the
paper money and the government must
go out of the banking business. Never
has the issue between banks and the
people been so clearly defined as now.
The issues of the next campaign are be-
ing made up; they are, indeed, already
we'll known. The Republican party will
stand for the theory that banks shall be
given the power to control the monetary
system of this great nation, and issue
all the paper money, based on perma
nent bonded debt of the government,
and that coin" shall be held to mean
gold only.
The true Democratic party, with the
Populists, the Silver Republicans and
reformers generally, will contend for the
right and duty Of the government to is
sue the paper money, and they will in
sist that coin means both gold and
silver. They will contend for bimetal-
lism and claim that SO long as metal is
used as money it shall consist of both
gold and silver at an agreed ratio, with
free coinage of both, as provided by the
constitution, and that both shall be legal
tender for all debts They will contend
that while they are not enemies of bank
ers personally, yet they will resist all
attempts to enlarge the privileges Of
banks and oppose the proposed reduc-
tion of taxes now levied on banks. With
bimetallsm as the basis of the financial
system Of the country, a stable cur
rency can be maintained, for when gold
is scarce the debtor can pay in silver and
when silver is scarce he can pay in gold.
With this as the custom and the law,
neither creditor nor debtor would he
wronged for the system would be just
to both, and the power of the unscrupu-
lous money monopolst to oppress the
debtor would be greatly curtailed, If not
prevented altogether.
From Washington to John Sherman
both gold and silver were honest mon
ey," and were called "coin." ask when
and why did "coin' become honest
gold" and dishonest silver?" Observ-
ing people are beginning to find out when
and why. Who ever heard that gold only
Is honest money" till after the money
loaning classes had possessed them
selves of hundreds of millions OF dollars
Of bonds and mortgages? These debts
were contracted when silver was "hon-
est money too. 1t was clever financier-
ing to make all these debts payable in
gold only, but who will say the trick was
an honest one? If Farmer A should
go in debt to Mr.. + for $1,000, to be paid
in grain" Cor in wheat or CORN, 1t
would be "Srnortn for 7? to ssac1Ira fha