The White Pine news. [volume] (Treasure City, Nev.) 1868-1906, 1899-12-28

Ponds upon the cash Wlhillu bOtlf Vaults
and the increase of five hundred mil
lions in two years of bank credits auc
the eOnseq uent multiplication OF eX
changes through bank checks is direct
~ tracable TO about oso nuudfed mil
ions OF additional cash deposited ii
/ the national banks.
Though no accurate data can be OBJ
tanned as to State and private banks, II
IS safe to say that their credits had in
creased to nearly the same extent as
that of the national banks, aud il is fair
( to assume that within two years the
/ bank credits have been increased at
/ least eight hund red millions by the de-
posts with the banks Of less than two
| hundred millions of additional money,
secured by a favorable balance OF trade,
4 for it must be recolected that OF the
/ three hundred millions Of Increased
money secured during the past three
years at least one hundred millions has
\ gone into the federal treasury and II Is
/ therefore not basis for bank credits.
/ The increase of prosperity during the
/ past two years demonstrates the cor
rectness of the theory entertained by
himetalists viz, that all other things
being equal, prices will depend upon the
QUANTITY of money ia circulation; that
an increase of the money volume meant
higher prices and elimination Of the
money volume meant lower prices
The demonstration Of silver was
started in 1873 at time when the pro
duction OF gold was lower than it had
been for twenty years. There was no
expectation at that time of an increase
In the production of gold OF the con
trary. the general opinion was that the
output of gold was steadily diminishing,
and yet, when more metallic money was
constantly required to meet the increas-
ing wants of business. it was proposed
to demonotize the metal which was in
creasing in product aud to give none
tary efficiency only TO the metal which
was diminished in product. The grad
ual fall in prices from 1873 to 1897 ac-
companed the gradual and progress
i've reduction in the use Of silver, until
the whole world, suffering from the APP
probation of gold and the depreciation
of property and products started out
in a search for gold. The result has
been tremendous increase in the pro-
duet of gold, the annual product to-day
being nearly treble the annual product
when the process Of silver dem0aetiza-
ton commenced.
THE CLAIM OF THE BmEIALISrs.
The Increased production of metallic
money had relieved the situation and
proved the contention Of bimetalists as
GO the quantitative theory All that
intelligent bimetalists claimed WAS that
the world needed more money: that all
the gold and all the silver thus far pro-
duced had not been sufficient TO meet
the world 5 demand for money that the
world was more likely to get "a sufficient
supply from two sources than from one;
that the vital question was a sufficient
supply; that the rise Ia prices and the
increase OF prosperity consequent upon
the larger production Of gold Turing the
last two years and the increased pros
perity in this country consequent upon
the addition to its money volume OF
nearly three hundred millions obtained
by favorable balance OF trade, have
proved the contention of the bimetalists
and indicated their theory.
BASIC MONEY CONTRACTED.
The vice of the proposed action was,
Mr.. Newlands claimed, that the Repnb-
liean party now proposes to take advan-
tage of the increasing production Of
gold for the elimination of the existing
stock of silver In this country from use
The metallic stock Of the country con-
sists of about nine hundred millions Of
gold and six hundred millions Of silver,
fifteen hundred millions in all. This Is
the only basic money, the only money
of final redemption.
II is true there are greenbacks and
national bank notes In existence, but
these are merely promissory notes pay
able in metallic money, issued either by
the government or the banks. While
they aid in the exchanges they form no
part OF the money OF the country: on
the contrary, they themselves are re-
deemable in money. The metallic mon
ey needed no redemption; gold needed
no redemption: silver needed no re-
demption, but the purpose OF the DOM
inant party was to make the six hun
dred millions of silver redeemable in
gold by the treasury. It was true that
they used the term exchange that
is to say the treasury was TO exchange
gold for silver, but If gold was to be
given for silver, clearly silver would
i turn into a debt redeemable il gold and
thus become liability of the treasury
/ BY this process the basic money of the
country was TO be contracted from fif-
i teen hundred millions to nine hundred
millions, and unless relief was given in
some other way the contraction would
/ be disastrous.
FUNCTIONS OF CHECKS.
To Justify this great wrong, the dom
inant party claimed that the great bulk
OF the business of the country was con-
Quoted upon credit basis, and that
credit involved absolute security as to
the standard. 1t was claimed that
checks and bills of exchange had large
i ly taken the place of money No greater
fallacy existed than this. Checks and
bills Of exchange had not taken the
place of money. Their use was merely
supplementary to that of money: their
general use involved the necessity for
more money instead Of less money
PRACTICE OF BANKS.
OF the money of the country, about
two-thirds was now in the pockets Of the
people, used in the current exchanges;
the rest was in the banks, and furn-
ished the basis Of credit. II was the
custom of banks to loan to their Gus
toners, on the average, about iivo times
as much money as they had. the loans
being turned into deposits, against
which the depositers were accustomed
TO check. The amount OF the depos-
tiers accounts therefore, depended
upon the amount Of loans made by the
bank, and the amount of loans depended
upon the money that the bank had
Country banks were required to keel
a reserve of Is per cent of their deposits
in cash, banks in reserve cities were
compelled to keep % per cent. As