Dakota farmers' leader. (Canton, S.D.) 1890-19??, 1898-01-14

be opposed
That the plan launched before us does
not aim at contraction, that it contem-
plates the retirement Of our national
currency only so fast as bank currency
may be substituted we are assured; that
this substitution would result in giving
the banks the power to regulate our
measure Of values is denied. That
measure we are told shall be gold and
gold alone and that the substitution Of
bank notes redeemable in gold for
national currency redeemable in gold
would in no way affect the measure OF
values It would remain gold. And
this is obviously so. for so long as the
banks were held to a prompt redemp-
tion Of their notes in gold it is clear
that the volume of their notes, hence
the. supply Of money and it's value
would be regulated by their necessities
of providing gold for redemption. And
any imitation Of their issues SO as to
raise prices would add to these neces-
stiles, add to the demands on the banks
for gold in redemption Of their notes,
for raising Of prices based on an in;
crease Of bank currency and therefore
q raising Of prices that would not be
equally participated in by other gold
using countries would result in such
countries sending us more produce for
sale and takin. less Of our produce
with the inevitable result Of turning
the international exchanges against us
and 80 force us to send gold to pay the
debts which our exports Of produce
would not suffice to pay.
Such export of gold depicting the
reserves of the banks would force them
to call in their loans, contract their
currency, in order to replenish their
reserves. This, Of course, would force
down prices at home, while the exports
Of gold, making gold more plentiful in
the foreign banks and tempting them
to increase their loans, would tend to
raise prices abroad And so at last
would the equilibrium Of prices be re-
stored, SO that exports would balance
the charges incurred by us on account
Of imports, our foreign debt, etc and
20 obviate the movement Of gold. At
least this is the theory. it is the theory
Of British banking and a very smooth
theory, too.
But it is not at all certain that we
could put this theory into practice
Suppose the banks found it ont Of the
question to contract so as to depress
prices to the required level; suppose
they found that such contraction would
mean general bankrupting Of their
customers, such as they dare not in
vite Then the banks would have to
suspend gold payments, then we would
have an irredeemable bank currency,
and then we would have q measure of
values regulated by the banks, not the
gold measure of values that we are told
the plan now presented for our con-
sideration would assure to us. But. on
the other hand, suppose the banks could
and would contract so as to maintain
gold redemptions Then we would
have contraction, would have lower
prices, and we are told that this plan
would assure us against contraction.
We would learn that the mere proviso
that national currency should not be
retired faster than bank currency was
substituted would not insure against
contraction, that the bank currency
would be contracted after issue
Now, it may be urged that though
the volume Of bank currency would
have to be so regulated as to prevent
serious gold exports and an appreciable
drain on the gold reserves Of the banks
that such regulation would not mean
contraction, that the banks would not
find it necessary to contract in order to
keep gold. But one thing is clear. The
only way to keep gold is to make it
worth less than our produce to foreign
creditors, and to make it worth less we
must hold our produce at lower prices
than other peoples from whom our Gus
toners can draw supplies That is. we
must sell our grain for less gold than
the Argentinian, or the Russian, or the
Indian or Australian. Otherwise our
creditors will take gold from us and buy
the grain they need from our competi-
tors.
So the question of keeping gold with
out contraction and without forcing
down prices is simply this: Are we
selling our produce, our food-stuffs and
our cotton cheaper now than our
competitors will offer such produce in
the future? If not, we must have con-
traction, must force down prices in or
der to prevent gold exports. And obvi-
ously we are not. We are, it is true,
offering our produce at present at lower
prices than our customers can fill their
wants elsewhere and so at present we
keep our gold. But this is merely be-
cause misfortunes, crop failures, have