The herald., 1897-07-31
On the Financial Question

| To the Editor of the Los Angeles
| Herald: 1t is very evident from reading
| over the presidents last message to
congress that he is trying to deceive the
people on the financial question. or that
he is being willfully misled by the sec
rotary of the treasury and others.
| 1t is true that there is a sentiment that
our monetary system needs revision, but
not on the lines advocated by the In
dianapolis' convention, whose recommen-
dations would be most pernicious in their
effects. President Mckinley says in his
message that he favors plan by which
our paper money could be issued with
less expense to the government and
the people" But the plan proposed by
the Indianapolis convention he refers
to would have the effect of a greater ex-
pense to both the government and the
people, for they recommend the retire
ment of the greenback and the issuing
| of bank notes instead, reducing the tax
for the circulation of bank notes to one
quarter of one per cent. This means
that on each 100000 worth of bonds
the banker could, by depositing them
with the government, draw out $97, $50
in bank notes, leaving an actual deposit
of only $3.50 with the government, and
, yet on this $3.50 investment, he would
draw 4 per cent interest on the 100000
worth of bonds, or $4,000. OF course he
would have to pay a premium on the
bonds, but should he desire at any time
to redeem these bonds. the premium
could readily be realized by placing
them on the market for sale. On the
$97750 received from the government
| in bank notes the banker could realize
a profit of at least Z per cent net addi-
tional by loaning out the money to the
banks customers, giving him net profit
Of SIC, SAP so on the 500, 900 worth of bonds
and putting the government to an ex
pense of $4,000 yearly interest on the
bank notes. Uncle Sam has not paid
cent interest for all the greenbacks tina;
have ever been issued, but Wall street
| is trying to blind the people to this fact
The presidents message favors the
appointment of a monetary commission
| 10 investigate our financial affairs, but
| by his own words he practically pledges
| them in advance to the scheme men
toned above, by recommending the ac-
lions of the indianapolis convention ia
vorably. He says that he favors "sound
money" and endorses plan by which
the old state banking system would be
brought into effect again, with all the
unsoundness that then existed, and his
sincerity in bimetallism is clearly shown
by his endorsement of plan of placing
! the money of our country on gold ba
sis alone, as previously advocated by
Secretary Gage before he took office.
Why should any money issued by a
bank be sounder than money issued by
| the government itself, and how can it
| be? Have not the people more conf
dence in the governments promise to
pay than they have in the promise of
any bank, no matter how good or how
large a capital it has? Can any banker
or financier in the country give any
sensible reason for favoring the retire
ment of the, greenbacks, treasury notes.
silver certificates, ETC., and issuing more
bank notes instead of the same, on which
the government has to pay 20 per cent or
more interest to the bankers for the
money which they actually leave oil
deposit in the treasury?
They say ait would stop the run on the
treasury" to retire the greenbacks, be-
cause they are redeemable in gold. But
they are not redeemable in gold at all
except by courtesy, and the government.
has perfect right to redeem all it's OBJ
| legations in either gold or silver if it
chooses. Is not the bank note just as
much entitled to be redeemed in gold
as the greenback, and could not the
bankers after retiring the greenbacks
claim with just as much force that it was
necessary to redeem the bank notes in
gold in order to sustain the government
credit, and claim that if this was not