The Black Hills union. [volume] (Rapid City, Pennington County, Dakota [S.D.]) 1889-1904, 1898-07-08

The Objectionable feature of this bin
is the ISSUANCE of longtime bonds,
which I regard as entirely Unnecessary
and as a departure from the traditions
of the country from the foundation of
the government.
For all the time previous to 1862, when
emergencies of this character arose,
such as the war of 1912 and the Mexican
war, short-time bonds, running usually
for one year, called treasury notes,
were issued. They were not bonds,
but they were treasury notes drawing
a low rate of interest, and were re-
ceivable for government dues. They
were convenient to be used in the pay
ment of taxes, and kept the United
States out Of debt.
HOW WE USED TO DO 1T.
When the civil war broke out we
had the treasury notes under the law
as it then STOOD. such notes were first
used. Finally there was issued legal
tender money, the greenbacks, but there
were no longtime bonds issued; they
were all short-time bonds, and were
under the control of the government,
to be funded or disposed of as it pleased
at the option of the government when
the war closed.
No system of longtime bonds or in
~debtedness grew up during the war.
After the war closed, the clamor was
to strengthen the public credit, and
the mode of Strengthening it was to
increase the interest-bearing obliga-
tions. longtime. bonds were issued un-
der the act of July IA, 1870, but they
were largely retired. Previous to the
extra session Of 1893 there had been
retired II, 000,0 600 of these bonds. The
government paid them off, INC contin-
ued to pay them off, as long as the
circulating medium was sufficiently
great to stimulate production and
create business to be taxed.
DEEPER AND DEEPER IN DEBT.
If the debt had been paid off at the
same rate for the last five years as it
was for the five years previous to the
repeal of the purchasing clause of the
Sherman act, we would now nave no
national debt. The debt a paid off
for the five years preceding 1893 at the
rate of over SIP, ZOO, 900 a year II the
conditions had continued as they then
were, we hould nave had nc debt
now.
Since the repeal of that act and the
putting out of nc more new money we
nave been increasing u public in
debtedness about $50, 900, 900 a year. 1t
is now proposed to d $500, 900, 600 to
the bonded debt. The hundred millions
of short-time bonds, redeemable at the
option of the government, will remain
a permanent loan. No goldite secre-
tary Of the treasury will be likely to
redeem them.
OUR GREATEST INDEBTEDNESS.
The bonded Indebtedness will be
raised by this scheme to about thirteen
hundred or fourteen hundred million
dollars, which, measured by the burden
Of labor required 10 pay it, will be
much larger than any debt ever sad
died upon the country and will be much
larger than the debt was when the
war closed. 1t appears to be the de-
sign or determination to depart from
the traditions established by Madison
and followed until the civil war and
to repudiate the traditions of Lincoln's
| administration when ~greenbacks and
short-time ond were issued to avoid
the establishment of a permanent debt.
What are the Influences demanding
a permanent debt? Fortunately, under
the present system this permanent deb,
enables bankers to invest their money
at a rate of fully 20 per cent per annum
This offers them 20 per cent per annum
interest. You may ask how I make
that out.
HOW THE MONEY IS MADE.
A bank deposits 100000 Of 8 per ent
bonds and receives from the United
OldLSS &0U,VVV VI 6oVCA A1AA1CAAS I!oAiSJ
called national bank circulation. Ten
thousand is the full extent of the in
vestment of the bank. The government
pays $1,000 interest on the bonds, from
which must be deducted l per cent on
the $50, 600 of circulation, which is $500.
The department charges would be about
500, which must be added to the 5000
tax, making $1,000. The $1,000 deducted
from the 50, 600 interest leaves $1,000 as
the net return for the investment of
$4,000, which is 20 per cent on the
money invested. The government pays
this interest semiannually and the bank
used the $50, 900 received from the gov
eminent in it's business.
EXCUSE FOR THE SWINDLE.
Fol VIA reason does the United
States pay bankers 20 per cent per an
mum for the use of their money? Is
it because government money given to
banks and issued directly by the gov
eminent? This appears to be the ex-
cuse for the swindle. 1t is proposed by
! Mr.. Gage to give back to the banks
the entire cost of the bonds deposited,
dollar for dollar. In that case the
banks will receive from the government
500, 900 for which they will pay no con-
s%ideration whatever except the bank
tax, which under the law as it now
stands, is / per cent, but which Mr..
Gage proposes to reduce to o~ne-fourth
Of 1 per cent. If Mr.. Cages recon-
m%ehdations are adopted, the govern
ment will loan money to banks for
one-fourth of l per cent and issue bonds
to borrow money at 8 per cent. 1t may
be very good for the banks, but it is
bad for the people.
Is it to be wondered at that there
should be a special effort, a strong
lobby, to get out bonds? You say that
the government may issue bonds under
existing law. Why not use those bonds?
Because it requires a large invest
ment. Those bonds are worth 120, and
L snIact 3QQ 600 fo-aot