The independent. [volume] (Lincoln, Neb.) 1902-1907, 1904-04-21
An Elastic Currency

A few words concerning the de-
mand of Wall street for an elastic
currency in the shape of notes, to be
issued upon the ''assets" of private
(nationaD banks. AS for the en-
bryonic bankers who echo this inn
pudent demand at their annual gather
ings and support the legislative bills
designed to give it effect, it is doubt
full if they understand it's import.
If, as all admit and as all must al
nit, for there is no way out OF it,
money is measure of value, then an
elastic money must mean an elastic
measure of value, 1t requires no great
exertiOn of the intellect to recognize
the gross inequity of an elastic meas
ure of length or of volume, such DIS
an elastic yard stick, or bushel basket.
Why should it need more to see the
injustice Of an elastic measure of VAL
ue? Is it not evident that the peo-
pie who make this demand also mean
that they shall alone have the right
to use the unjust measure? They
surely cannot mean that anybody else
shall use it. Let us suppose, for the
sake of illustration, that the govern
ment of the United States issued and
employed an elastic currency and the
bankers had to submit to 1t, would
it be quite as popular with them as
now it seems to be? Were the elastic
issues of greenbacks during the civil
uyar rop,tIar xuifh hankarc2
The principal argument which has
been advanced in favor of an elastic
currency is the necessity of providing
for money to move the crops and the
advantage of keeping the stock mar
ket steady during the time that money
is withdrawn by its western owners
from the eastern banks for such crop
purpose; in other words, during the
harvest season But this is mere pre-
tense. Who is it that moves the.
crops? The railways; whose charges
are only due and payable when their
freight is delivered. Who is it that
buys the crops? The country store
keeper; whose funds are deposited in
the local bank, which bank has loaned
them at a low rate of interest to an
eastern bank and which latter has
loaned them at a higher rate of in
terest to Wall street The stock mai
ket is therefore supported in cer-
tain measure by borrowed funds,
whose owners are sure to require its
temporary return during the harvest.
An elastic currency means that some
body shall supply Wall street, Or tie
banks of the stock market, with
funds, in place of the western funds
thus temporarily withdrawn for iegitl-
mate use. No prudent person will do
such thing without ample security
and profitable rate OF interest, the
latter of which Wall street is averse
to paying. Therefore it asks the gov
ernment to furnish it the funds free Of
interest! Such is the nature of the
demand for elastic money, and such
is one practical outcome of the bills
to authorize an asset currency.
IT, instead of conferrlng upon the
bankers the power to issue such an
additional volume OF private bank
notes Endorsed by the government as
elastic currency, the government were
to establish non-elastic, but stable
and steadily but slowly increasing
currency, the stock market might sui
fer little; but the farming. manu-
featuring and commercial interests
would profit greatly. In the fluctua-
tions of the stock market the govern
ment should take no interest, while
in the prosperity of the industrial
classes II should feel the deepest con
cern. A stable currency, by affora
ing encouragement 10 manufactures
and merchants. would vastly extend
our foreign trade; and by thus In
creasing the demand for our farm and
manufactured products raise their
prices and increase the reward OF the
producer. The present system of
money deprlves the merchant OF his
proper employment and the farmer
aud manufacturer Of wider market.
whilst II surrcnders both classes to
the manlpnlations of a gamblers
stock exchange. An honest money
requires no elasticity. Elasticity IN
not a function ot money. but of credit.
The periods when money Ii required
tot moving the crops. or for any otha
great commercial PURPOSE. are we'll