Weekly independent. [volume] (Elko, Nev.) 1887-1914, 1899-12-22

prices and the increase Of prosperity
consequent upon the larger produr-
ton Of gold during the last two years
and the increased prosperity in this
country consequent upon the adj
ten to its money yolumt Of nearly
three hundred millions, obtained by u
favorable balance Of trade. have
proved the ]con.cu;ion OF the bimetai-
lists and vindicated their theory.
BASIC MONEY CONTRACTED.
The vice Of the proposed acted was
Mr.. Newl6nds claimed. that the Re-
publican party uow proposes to take
advantdS Sc OF the increasing produc-
ton OF gold for the elimination Of the
existing stock OF silver in this conn
try from Use. The meia-ic stock Of
the country consists OF about nine
hundred millions O! gold and siI hum
dred millions OF silver, fifteen hun
dred millions Ill all. This is the only
basic money, the only money Of final
redem ptIon.
Ii is true there are greenbscks aud
national bank notes in existence. but
these are merely promissory notes.
payable in metallic money. issued
either by the government OF TIE
banks. While they aid in the ex-
changes they form no part Of the
money Of the country; on the con-
tra.y. they themselves are redeem
able in money. The metallic money
needed no ~redemption; gold needed
no redemption; silver needed no re-
demption. but the purpose Of the
dominant party Vas 10 make the six
hundred millions ot silver redeem
able II gold 10y the treasury. Ii WIS
that they used the term Eek
change that Is to say, the treasury
vas tC exchange gold for silver. but il
gold was to be given for silver, clearly
silver would turn INTO a debt redeem
able IN gold and thus become a la
biliiy OF the treasury. BY this pro-
cess the basic money of the country
was TO be contracted from fifteen
hundred millions to nine hundred
millions, and Unless relief WIS given
in some other way the contraction
wonld be disastrous.
FUNCTION OF CHECKS.
To justify this great wrong, the
dominant party claimel that the
great bulk OF the business Of the
country was conducted upon a credit
basis, and that credit involved ab-u-
lutte security as to the standard. 1t
claimed that checks and bills Of
exchange had lagely taken the place
OF money. No greater f~aIlacy exis,cl
than this. Checks and bills Of cx.
change had not taken the place OF
money. Their use was merely sup
Elementary 10 that OF money; their
general use involved the necessity Of
more money instead OF less money.
PRACTICE oy BANKS.
or the money OF the country, about
twO.thirds wills 10 in the pockets Of
the people, used in current exchanges;
the rest WAS III the banks aud furnish
ed the basis Of credit. II was the
custom ii banks Ia loan their custom.
ers on the average, about live times
rs much none! as they had, the loans
being turned into deposits, against
which tile depo,itors were accustom.
Ell to check. The Imonn of the de-
positors accounts, therefore depend
ed upon the amount Of loans mad. by
the banks, and the amount Of loans
depended upon the amouut Of money
that the banks had. Country banks
were required to keep a reserve Of II
per cent OF their deposits in cash and
banEs In reserve citIes were compell-
ci % keep ii reserve 81 - per cent.
Assuming, therefore, that the banks
OF the country today had loaned out
as much money rs they could upon
their present serve Of cash. it is
Impcss Die 10 understand how they
could loan out more money as bust.
ness and population increased with
u an increase Of cash. An increase
OF cash IN the banks woull enable
them To loan o money: a dininu.
i:lon OF cash III the banks would
cause them to loan less money. \
contraction Of bank loans meant a
contraction Of deposits, and = con.
traction OF deposits meant a cOntwc.
ton OF bank checks; so there WAS au
intimate ina 'hemathical relation DC.
tween the cash on hand, the deposits.
the bank loans and the aggregate OF
bank checks.
because the nature Of the use o!
money had changed it did not follow
that there WIS need OF less money. II
Is true tia; the proportion Of cash
transactions To- check transactions is
not 70 great as it formerly was in thi:
county. and IT is not So great "a in
DtAer countries where the cash sys,
ten prevails. but tie credit system
rneaDs a mUltiplicity OF exchanges
and ~!pc-.as-I hank credits must In
yOiye an increased bank reserve.
TEUFTIS0 TO CHANCE.
What folly Il vas then. when NOR,
basic money WA teiuR constantly re
CURED. to mauzuTats a system which
would graiusily retire six millions o.
silver dollars nov part OF the mono,