Dakota farmers' leader. (Canton, S.D.) 1890-19??, 1897-12-31

purport of the bill. But abdication Of
the sovereign power TO regulate the
value of money, a power explicitly vest.
ed in the national government by our
Constitution rs just what Mr.. Cages
bit aims at, for it distinctly provides
for the contraction of our national cur
rency and the increase of bank curren-
CIV, while the avowed purpose of its
author is to lay steps for the gradual
surrender of the power to issue and
control the volume of our paper cur
rency to the banks And with the
power to issue and regulate the volume
Of currency would go the. power to
regulate it's value, or the value of cur
rency is dependent upon its volume as
com pared to the demands for it.
With gold payments suspended this
power over the value OF the currency
would be unlimited So long as the
banks promptly redeemed their notes in
gold the issue of such notes and the
value of such notes would of course be,
to great degree, tied down to gold.
This tor the reason that if the banks
issued so much currency as to- cause
prices to materially rise there would
come an increase in imports and check
to exports, for foreign traders will, Of
course, sell where they can get the most
for their goods and fill their wants
where they can fill them the cheapest.
Therefore any rise in prices in the
Unieed States built on bank imitation
q rise in price above the general level of
prices in Europe for such products as
we export allowing for transportation
charges and above the level of prices in
Europe for such products as we import
plus transportation charges and import
duties would inevitably check the de-
lnand for our products and lessen our
exports while increasing the shipments
Of foreign produce to our shores aud SO
the volume Of imports. And such de-
crease OF exports and increase Of i'm
pores would inevitably cut down the
balance OF trade in our favor and lead
to gold exports. Then the consequent
demand for gold would result in the
presentation to the banks of their notes
for redemption, thus putting per-
emptory limit to initiation of bank cur
rency.
Consequently, SO long as the banks
redeemed their notes in gold there
would be limit to their expansion, q
limit to their control over the volume
and hence the value of our money
But with specie payments suspended
there would be no such limit, the banks
would be free to expand and contract,
to decrease and increase the value Of
money and inversely raise and depress
prices. And with the burden of gold
redemptions thrown upon the banks
they would promptly suspend with the
return of normal crop conditions here
and abroad. They could not help it..
The national government has only been
able to avert it by borrowing gold at
great cost and this the banks would not
and could not do. They could not
afford to.
At present there is no demand for
gold for export simply because crop
failures abroad, coming coincidently
with our more than ordinarily bounti-
full harvests of wheat, have enabled us
to build up an adnor1nally large mer-
chandise balance of trade in our favor.
And with this balance we have been
able to pay our interest charges and the
expenses of Americans abroad and the
moneys due to foreign ship owners for
the use Of their ships without the ex-
port OF gold. But with the return OF
normal crop conditions we will have
great difficulty, as we have had in the
Immediate past, in keeping our mer
chandise balance large enough to do
this. There is only one possible way
Of doing it and that is to offer our pro-
ducts at prices low enough so as to con-
tinue to be attractive to our foreign
customers and thus keep up the volume
OF our exports while at the same time
cutting prices for what we buy abroad
so as to keep down the volume Of i'm
ports.
With all the competitive sources
other than the United States upon
which the nations of western Europe
have been in the habit Of drawing to
make good the deficiencies in their own
crops, practically exhausted exhausted
because of crop failures, it has been
easy for MS to keep up our products at