Cottonwood report. [volume] (Cottonwood, Idaho) 1893-1901, 1898-12-16
BY j. M. WOLBERT,
'nn,mon -
Subscription s61. SO per Year
IN ADVANCE
Entered in the Posto6ice at Cottonwood
Idaho, as Sscond-class matter.
MONEY.

AAohOys duO are DIS SJdDl6 az Cne
government whose bonds are back
OF them. Paper money issued direct
by the government without the in
termediary of the banks would have
the same elements of stability. with
out the burden upon the people, Of
Understanding bonds.
1t has been argued that the issu-
Ing of bank notes is not source of
profit to the national banks. If this
argument is not false, then the
banks may be expected to welcome
the suggestion Of plan which will
relieve them of suspicion. The fact
that all the banks do not at all times
use to the fullest extent their privi-
lege, does not justify the argument
The do not use their privilege
whenever it is more profitable to
themselves to use than to hold it
In reserve, and we have seen that
the interest of the banks and the
interest Of the people do not always
go hand-ln-hand under the exist
Ing system: The sixty millions of
government bonds issued by the
last administration, and following,
naturally, the construction of the
law Invented during the previous
Administration, made possible the
Initiating" Of our currency by fifty
four millions more of national bank
hotes. This was considered safe.
The Game influence which brought
about that Issue Of bonds, under
excuse of protecting our national
honor, which was being threatened
with the object in view of forcing a
bond issue; now demands the re-
tiremeht Of Our greenbacks TO the
end that they be replaced with more
National bank notes. This is the
system advocated by those who say
that advanced" methods require
less ana less of actual money with
which to do business. That the
banks would supply all credit and
necessary money may be true, but |
they w6tld come too high for the |
welfare of the "plain people," It is |
estimated that the Understanding |
resources 81. all the banks in the |
country are about four times the
amount of our nations money. Our
real danger lies in this very thing.
The real cause Of trouble spring
from what is virtually bank fat
money, which gives the banks pow
or to expand or contract our cur
fency at will. By bank fat money
! mean that part of bank deposits
pot held Iii the bank reserve, but
loaned, deposited again, and again
IN part loaned, and so on, thus null
tiplying the circulating medium by
simple extention of bank credit, and
holding it subject to contraction at
The will of the banks. This adds
to the proportion of mon
les which pay tribute to the bankers
by being in circulation only while
someone is paying interest on it.
The banks thus loan the same
money to several different men.
Money thus loaned is therefore
|tbiect to the call of several differ.
hent men.
!, The banks safety lies only in the
act that they are not likely to call
or their money all at the same
fit1e. Whenever this does occur the
bshks suffer a "run," and unless
funds can Immediately be obtained
TO meet it the bank must fail.
Then the depositors are assured
that the bank has only suspended
temporarily, and will pay one hun
bred cents on the dollar as soon as
lts loans can he called in. But when
bne bank fails, others usually 90
down like ten-pins from the same
pause, namely, from depositors call
Ing for their dollars which have
been loaned perhaps several times
pVer. The result is then attributed
TO ..loss Of confidence" etc., etc.
:, When there is too little real rnoh-
BY the demand for bank credit
sfoTs Until the danger point is pas
sed. The less real money, the great
Pr the demand for bank fat, or in
visible money, which means increas-
ed profits. for the banks, or would
mean that if they ever knew when
TO stop. They say we need an "elas-
tic" CURRENCY. What the business
world needs ia q stable cnrranoxr
ii One which cannot be manipulated
they cry that the government should
30 out of the banking business.
Why, one of the chief functions of
government is to provide and adjust
Bhs currency to the needs of the peo-
pie. It 10 mot right that a govern
|pg ethction should be delegated to
'iis Bankers nor 70 any Bet ii Msh. /