Evening star. [volume] (Washington, D.C.) 1854-1972, 1899-12-23

tuteS. IN the FORM OF DOCK credits, noleS OF
hand. checks and drafts. and what is pop
u-arly named paper money. 1t is, of course.
vitality necessary to economic health and
soundness that all these substitutes and in
termediaries should have such a relation
to real money-standard money-as to be
certainly convertible into such money at
the will of the holder. Thus qualified and
secured. they add enormously to the power
of society. and become a vast economizer
in the use of real money. Money-real
money-fs form of real capital, and like
all capital, must be produced at the cost of
sacrifice and labor. Credit and credit in
StrumentS, on the contrary, are created
without cost. and within the limits of a
prudent safety, are agents of the highest
social and commercial value. 1t is the prov
ince of credit to transfer capital, without
the condition of an immediate equivalent
in exchange. Without the function which
credit performs the use of capital would
not be possible except to the man who had
capital One form of capital could indeed
be exchanged for another form of capital,
but 1t would still be on even terms of so
much capital for SO much capital. First
get your capital, then exchange, If YOU
please. Credit gives to character and abil-
ity the use of capital, upon the promise of
payment hereafter, and thus the tools of
production are passed into the hands of
the capable and wise, who could not other
wise enjoy their use
have INDUCED in this too brief analy-
sis of credit in order that the principles ex-
hlDited may be applied to what have still
TO say. Since men entered upon civilized
ana orderly society these principles have
influenced their action.
Our own trade with foreign people ap-
gregates two thousand millions per an
mum. Is it carried on with money? Ger
fanny not. The fact that only S122. 900 900
IN money has crossed the oceans to and
from our shores (S37 900 600 going out and
Ss'.hD,OO coming I'M within the wear
proves absolutely that it was not money
t moved the commerce: 1t was effected
by the mechanism of exchange. under the
varying forms of credit: the gold passing
TO and fro represented only the final adjust.
ment in the credit settlements
Banks May Loan on Notes.
Many have been led to believe that the
issue of circulating notes by nationa, banks
Is monopolized privilege. from which thew
deriVe enormous profit. The facts may be
orleny presented. and they best refute the
common error. Under the most favora BILE
circumstance the profits now deriyab(e
from thls source to a bank with a CAPITAL
say. OF Slo9,oo. using 4 per cent bonds as
a basis for circula ton is less than s295 ner
annurn. where the loanins rate for money
Is per cent per annum. Where the rate
OF interest Is g per cent the result is
loss OF S9s per annum- Where the rate of
si95 ''sS 10
Do not these results sufficiently account
Tor the fact that banknote circulation has
gradually diminished in volume. while the
general needs of the country have steadily
grown: We may congratulate ourselves
that majority of the people are gaining a
comprehension Of the truth, and that both
houses OF congress appear to be ready to
amend the laws.
Measures have already been introduced
INTO both Senate and House which have
Tor their clear purpose the placing of Sc
cure FOUNDATIONS under that money stand
ard which, practically for more than sixty
ears, ana by expressed statute for