Iron County register. [volume] (Ironton, Iron County, Mo.) 1867-1965, 1898-08-11
DEBT IS ENTHRONED.
ThePower Which Fosters Debt Should
BE Broken Five Years
of Panic.

y
of panic-fve years of unexcelled bust
ness depression and universal suffer
ing-five years OF the suspension of
general prosperity.
Why? Our banking system secures
a minimum volume of money in the
country. This requires business to be
done upon a credit rather than a cash
basis. Its greatest profits are real
lied from loaning deposits-money not
it's own. a nominal capital only is
thus required.
What has been the effect? When the
panic of 1898 was precipitated, from
the best estimates, the bank and saw
ings credits amounted to over eight
times S5OO,OO0,OOO actually held by
these institutions. The whole business
and industry of the country rested
upon about four billions of confidence
currency, or, in other words, of credit.
This must inevita bly, follow under a
narrow, limited supply of money. Debt
becomes a necessity.
What was the result? The expan-
sion became so great that banks failed
to pay their depositors. The whole
system, through it's clearing house as
ISOLATION, refused accommodations
and demanded payment of its call
loans. The supply was thus cut off,
and the debtor could not respond. The
high tension of credit, snapped sud-
denly, causing panic. What saved the
whole system was the issue and use
among the banks themselves of clear
ing house loan eertifcates-a species
of currency. which would not have
been tolerated by individual merchants
in failing circumstances for a single
day. The people went under and are
still down. The same thing will occur
periodically under such a system.
What gain, but years of hard times?
We see what power there is in such
a system to expand and contract the
currency. Then inflated to it's highest
capacity, now, curtailed to it's lowest
limit. When the banker speaks of ''re-
stored confidence" he simply means
the restored ability of the people to
commence this deceitfu1 scheme of
borrowing again. The system ''is a
Banking Pharaoh" as oppressive, in
it's ability to create and continue pan
les, as that old Egyptian king was who
would not let his people go. When it
has brought us to the danger line of
credit 1t might properly be character
lied as ga National Faro Bank"
The great question then is, shall we
foster this morbid system of credit,
based upon a limited supply of money,
or shall it be radically changed so that
there can be a volume of money ade-
quate to carry on all business upon a
cash basis, as in France, where gen
eral panics are unknown.
If the latter policy, the supply money
must not be limited in amount by
statute law. 1t must be governed by
the economic law of supply and de-
mand. The coinage of the money
metals must be equally free at the
standard ratio. The government must
issue all paper money direct. This is
progressive. Private corporations
must not usurp the money functions
of the government. This is retrogres-
sive. There must be no monetary al
liances with nations not in full sym
pathy with these theories. There must
be no compromise upon these vital
points.
If these principles had been in oper-
alton, the present panic would not
have occurred. Why? Because we
would have had the full per capita of
money required. 1t would have been
more evenly and justly distributed. It
could not have been monopolized by
banks and capitalists as now. We
would not have been all over in debt.
Tho r1anr1la on1 ha hon1zC
have boarded the money. If the panic
had been a speculative furry as might
occur, the effect would have soon been
over. The people would have unlocked
their boards and the temporary strin-
gency would have been soon relieved.
Now, there is about 500, 100000 of
money and currency in the treasury,
and most of the balance is tied up in
great bundles in the vaults of the
banks, leaving a small per capita in
actual circulation. In the meantime
the panic is still on, sitting enterprise.
and making laggards and towards of
the people.
Under the gold standard of credit
the terms investment" money to
loan," have siren charm. They are
very pfOiuSeIy duueu III our news pa
pers and show windows. We have been
educated to the notion that the deeper
we are in debt the mere prosperous we
are. The government is most foolish
~ run into war debt of hundreds of
millions, really in the interest of the
banks. They talk about a popular
loan. Nine-tenths of the people have
no money to invest in bonds. What
they desire is money-not bonds. They
ask for bread and arc offered stones.
But many with fixed incomes cannSt
realize this, unless they study the
question, which many of us do not do.
The government might have in
creased its present volume of over 49,
100000 legal tender demand notes.-the
best money ever created by this or any
other nation-and thus have relieved
the country from the panic.
Surely it might have coined $780,
100000 of the seigniorage, monthly,
and added about S45, 900, 900 to the vol
ume of money within year. But no!
It would have brought a little more
money into more immediate circula-
ton and eased up the money market;
raised wages, and furnished work for
the unemployed. Bat niggardly ST.
500 900 a month will not effect a change
of present hard conditions. But then,
we must remember that we are now
managing our finances upon the prin-
eiples of sound currency and main