The Black Hills union. [volume] (Rapid City, Pennington County, Dakota [S.D.]) 1889-1904, 1898-07-29

The committee On banking and cur
rency of the house of represe4t atives has
reported favorably a bill the object of
which is, as they declare, "the@limina-
ton Of government paper money from
circulation" and ''the issue Of a bank
ing currency, based purely upon assets
without either bonds or reserve notes.
which they have the audacity to assert
"will involve no risk Of undue initiation
or of loss to the note holder"
The same fanatical faith in the eff
cacy Of banks to remedy every financial
evil, which resembles more the rever-
ence of the savage for his fetch than
the conviction of rational men, was
shown in the senate in the debate upon
a bill to incorporate the International
American bank, an institution designed
to facilitate and increase the M
of this country with the countries Of
South America. At present u imports
from that quarter of the globe amount
in value to about $110, 600, 900 yearly,
whereas our exports thither amount to
only about $35, 900. 900. Consequently,
in order to pay to our South American
creditors the difference due them Of
$75, 600, 900 yearly, our merchants are
obliged to buy from the European cred
itors Of those same debtors claims to
that amount, in the shape of drafts
arising out Of the sale Of European mer-
chandise. We send to Europe agricul-
tural products, Europe sends to South
America manufactured goods, and we
take our pay from Europe, in ele coffee,
india rubber, hides and met.,ls which
we import from South America.
Evidently SO long as we do not sell
directly to South America enough of
our own products to pay for the products
we buy, we must, Of necessity, draw
upon our credits in Europe. Some of
our senators, however, fancy that by
establishing a great bank, under a char
ter from congress, we shall in some
mysterious way change the present
condition Of things. Senator Frye re-
marked: "We paid Great Britain last
year for exchange alone on what little,
miserable business we do with South
America over 81, 900, 900. Why should
this great nation Go that? Why not have
our own bank" Why, indeed, except
that ''our own bank" cannot create the
exchange which we now buy from Eu-
rope. So long as we buy from South
America SIS, coo, 600 more in mer-
chandise tLan we sell to it, no bank
here can furnish the drafts needed to
pay the $75, 600, 600. 1t is pure FETCH
ism to suppose that a bank can reverse
the laws Of trade and supply the means
OF paying debts to people who have
nothing to give for them.
The same superstitioust faith in the
omnipotence of banks dominated the In
dianapolis bankers convention Of Janu-
airy, 1897, at which We're adopted the
resolutions out of which, by gradual
steps, the currency scheme now before
the house of representatives has been
evolved. The grievance which that con-
v~ention was specially called to redress
was the lack of money in the west and
the southwest, and the measure requir-
ed for the purpose was unanimously de-
clared to be all increase in the number
Of banks and their wider distribution.
1t being admitted that banks in these
destitute localities could not make a
living by legitimate banking alone, the
privilege was demanded for them Of is
suing, more literally than is now per.
mltted, notes to serve as money, and
this demand now takes the form of one
for liberty to all banks to issue circu-
lating notes upon assets without either
bonds or reserve notes." The supporters
OF the measure do not seem to consider
that if the notes issued by such banks
are good they will not stay in a Door
neighborhood and that if they are not
good they will be only instruments for
swindling the ignorant and the unwary.
1t used to be urged in favor of banks
that they are indispensable agents in
procuring money for the government by
buying it's bonds when it needs to sell
them, and that without their help no
bonds could be sold. This superstition
has received it's deathblow from the ex-
perlence we are now having. Instead Of
the government being obliged to beg as
slstance from the banks in selling it's
bonds, it is the banks which are begging
the government as a favor to let them
have the bonds to sell. They never in
deed bought bonds with their own mon
ey, but used for the purpose the money
OF their depositors, and now that the de-
posltors are permitted to do it directly
they are buying the bonds without pay
ing toll to the banks.
The legitimate function of banks is
to receive money III deposit and lend it
out. The issuing Of notes to serve as
money is a usurpation Of a prerogative
which properly belongs to the govern
meDt only, and which should never be