The San Francisco call., 1899-11-22
FINANCIAL LEOISLA ION.

THE statement is made that the contemplated
legislation TO affirm the gold standard and to
base thereon the credit OF the Government will
PASS and become the law before the holidays In De-
oember
In his speech at Cedar Falls, Iowa, the President
said: I'VE are on a gold basis and we mean to stay
there" This declaration added to the utterances OF
Senator Allison at Cedar Rapids and OF the next
Speaker Henderson, at Waterloo, seems to put the
matter beyond doubt. Allison will probably be chair
man OF the Senate Finance Committee and Speaker
Henderson will appoint the House Committee on
Banking and Currency. The bill may originate with
either OF these committees and their probable
stitution IS reassuring.
1t is expected that the bill will provide for the
tire refunding OF the national debt on a gold pay
ment basis lower rate OF interest. Il will be
membered that Mr.. Cleveland when compelled TO is
sue bonds 10 maintain the gold reserve and keep
the treasury from sumping to q silver basis asked
Congress TO do practically what is contemplated
by making the bonds payable in gold, and that he
pointed that the saving in interest would amount
10 great many millions OF dollars.
The legislation on standard and refunding OF
stands by itself Il is fundamental 1t is the begin
ning OF reform in whole body OF financial legis-
laton which is confused result OF either partisan or
national emergencies. The country will be gratihed
if Congress will follow the gold standard and re-
funding bill with the enactment OF the banking and
currency legislation recommended by the commission
elected by the indianapolis Monetary Conference. 1t
must be remembered that while the standard is OF
prime importance as the foundation the country will
still suffer for an adequate and well guarded banking
system which will furnish safe currency and by its
exibiity will distribute the surplus capital the loan
fund OF the country where it Will be accessible
the farmer and planter as il now is to the merchant
and manufacturer 1t is an old and wise saying that
any good business always use prohtaby
more money than he owns. For this reason the boz
rowers OF the country always its enterprisng
men, who make money by the use OF their credit.
When 4 farmer or planter has to his credit in
indirect and roundabout way he IS hampered and hurt
Through the tendency now send surplus funds
from country banks into the financial centers of the
country there IS produced famine OF the loan fund
in the country conourrently with gut in the cities.
farmer needing 10 his credit between seed time
and harvest generally compelled do It by grace At
the country store The country merchant indemnfes
himself from risk by raising the price OF his goods 20
his debtor and transfers the wholesaler or jobber
in the distant city the risk he is assuming Thus 4
second credit Is created and is insured by the jobber
by advancing the price OF what he sells the coun-
Try merchant The wholesaler or obber then goes TO
money on which to conduct his business 1t will
be seen that this method OF using credit is burden
some and disastrous. Every wholesaler and retailer
familiar with the percentage on prices thrown of
for cash which the difference between the normal
and the raised price required by this unscenthc
OF the first credit required by the farmer. 1t will be
seen that the whole accumulation OF two raises in
price and the final interest paid the bank by the
wholesaler flows back the farmer who has il to pay
when he liQudates his debt at the country store We
should have a system OF banking that would discour-
age such wastefu OF credit II the farmer had ac
to the loan fund secure what heneeded norder
pay cash at the country the country merchant
could pay cash 10 the wholesaler and in each
fer OF the merchandise the discount of for cash would
appear and there would be no margin OF raised prices
for the farmer TO pay His credit would cost him only
the one interest charge at the bank which accommo-
dated him. AS the credit would be used at the right
instead OF the wrong end OF the series OF transactions
the city wholesaler would less frequently resort to the
loan fund in the city bank and that fund would flow
to the country where the farmers necessity for credit
offered use for il
The present accumulation OF money in the fnan-
cia conducive its speculative use in such
centers and the speculation thus stimulated is one OF
the causes OF currency panics Or this we have lust
had an illustration in New York City where specua-
tion in the stocks OF the many trusts recently organ
lied produced loss OF confidence which very nearly
caused panic that only averted by the Treas
ury offering TO buy S25ooo,Ooo OF unmatured bonds
The friends OF the gold standard see very clearly
that until the whole system OF financial reform is es-
tabshed the danger remains that the uneven dstri-
button OF the loan fund may bring on conditions
which the unsound money cult will teach the people
70 believe are due 10 the standard itself
The Americans seem TO have captured everything
belonging 10 Aguinaldo except his reputation They