The Goldfield news. [volume] (Goldfield, Nev.) 1904-1911, 1908-02-22
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which they enJoyeu eiH
year. Never before were there SO
many farms yielding such generous
harvests. never so many mines pro-
dueing such an abundance Of treasure
never so many and various mills ana
factories all running at their utmost
capaci.y yet unable to supply the de-
mands Of their customers. never SO
uanv railroads. never so many banks
and shops and stores and homes. These
ara facts. But there is another and
seemingly very strange fact IL Is this'
In the widst Of all this material pros
perity we are in want. During the last
trimester OF 1907 we experienced q
financial crisis. 1t is true that there
have been other periods Of financial de-
pression when far greater losses nave
been sustained: as the panic OF 1873
! followed by the so-called little pan
of 1879" These stirred and staggered
and shook the financial system OF the
country until there was hardly a bust
ness which survived and few. II any,
could meet their obligations. Or the
panic of 1898 in which hundreds OF
banks ana mllllOnS III CofAN
wiped out. But the recent panic dif-
fered from any that preceded 1t in tina
IL came during a time OF universal
plenty, in the midst Of an abundance OF
material things which measured by or
binary standards means wealth ana
prosperity.
1t ought to be worth while to analyze
and explain the causes which produced
his anomalous condition. to ascertain
what lessons are to be learned, and how
they are to be turned to the best ac-
count. Much has been said and writ
ten on the subject, which has occupied
the attention of some of our greatest
fnanciers. heads of departments OF the
government, and even the chief execu-
tive of the nation. and the consensus
/ of opinion seems to be that there Is
something radically wrong with the
financial system of the government.
though Just what the trouble is has
not peer agreed upon. The president
recommended legislation which would
furnish a safe and elastic circulating
medium, and the congress is now con-
sidering a bill providing for the issue
of national bank currency to be guar
anteed by a deposit with the department
of the treasury of bonds other than
those of the United States.
Speaking in general terms there are
two kinds of money in our country and
these are gold and silver coin. There
are many. forms Of credit among which
are the various issues of government
bonds aggregating some $3.50, 600, 900;
there are three forms Of notes, namely.
United States or legal tender notes. and
certificates of the treasury department
payable on demand in gold or silver;
and there are the notes of the national
banks, which are payable on demand.
and such payment is guaranteed by a
deposit of the bonds, above referred to.
with the treasury department at WASH
ington. These national bank notes
amounted on December 1. 1907. to
1856. 21s.196 1t al thus be seen at a
glance that the principal circulating
medium of our country is based upon a
vast credit system; and it is equally APP
parent tha it has been due solely to
the general confidence of the people that
this national bank credit system en-
joyed ever temporary success. In
times Of financial depression. when the
great industries of the country have
really needed money. this national bank
system breaks down and has only been
made to run when aided by the illegal
use of clearing house certificates which
rave been resorted to half a dozen times
since this kind Of currency was au-
thorized.
If, as experience hath shown, the
national bank system cannot withstand
the conditions 1t has had to face in
time of peace and plenty what would
be the situation If the nation had to
enter upon a costly foreign war? Why
national bank currency was ever based
on bonds can be explained only by re-
viewing the history Of the republican
party during the past forty years.
Since the close of the civil war. the
policy Of that party has been to favor
the few at the expense of the many.
Only a few years before the legislation
which authorized national bank notes
was adopted. the government bonds on
which hat currency is based had sold
in front Of the capitol at Washington
for 43 cents on the dollar; then 1t was
tina it took about $270 in United
States notes to buy 500 in gold. What
would this national bank currency be
worth at such a time? But If the Is
sue of national bank currency was ever
justified the system has become anti
quated. And it is perfectly clear that
the solution of the financial problem
does not consist in the expansion of this
credit system by issuing such currency
on bonds other than those Of the
United States. The banks and 1nan-
ciers of Wall street could c~onjure with
those bonds in future as they have in
the past and they would do it at the ex-
pense Of the GENERAL public.
What. then, is the remedy? It is sug-
gested that an act Of congress requir-
ing national banks to substitute silver
coin, or bullion of an equal degree of
on deposit with the treasury department
would permanently relieve the financial
situation. The present national bank
notes should Their be retired and can
celled. A new national bank currency
would then be issued payable on de-
mand in silver and guaranteed by a de-
posit Of silver with the treasury de-
partment. Gold would then be the basis
for the circulating medium Of the gov
eminent. Silver would be the basis
for the national bank currency. 1t
would seem that national bank notes.
so guaranteed. could be issued in
amounts sufhcient to- meet every de-
mand: in fact. the only limit for the
issuance Of such currency would be the
amount OF silver coin or bullion which