The Brookings register. [volume] (Brookings, Brookings County, S.D.) 1903-1971, 1915-09-30

should bring prosperity not only to
the producers but to the whole nation,
disaster is threatened"
Mr.. Window was working on a plan
for a flexible volume of currency that
would automatically respond to the
demands of trade, but was called from
his early work a day or two after de-
l~ivering that address.
He had noticed the fact that these
paniCs had always occurred at one
certain season Of the year, and under
certain well defined conditions.
If spectators wanted to corner the
market, that was the %opportune time.
Hoard, engage, tie up as large a vol
ume as possible; scare %depositors who
would withdraw their deposits, and
timid investors refuse to invest to-
gether with the increased demand,
made the manipulation of the market
easy.
The crop of 1890 was a record break
ing one both in yield and farm value,
and no provision had been made to
increase the medium of exchange. 1t
remained fixed. The money of the ma
ton was fully employed in other i'm
dustries; the farmers had to have
,,,npu IN ,naa} thnir Dh1inot;o~- NIy;+h
a big crop, creditors are persistent col
~lectors. What was the result? The
farmers bid up in pounds of produce,
and wheat dropped 80 cents per
bushel. The business men bid up in
interest, and on August 2Sth it was
bid up on Wall Street to $50 per cent;
stocks fell in value and a disastrous
panic was barely averted.
How? Mr.. Window says, Had it
not been for the peculiar condition
which enabled the United States to
disburse over $751; 00, 900 in about two
and a half months last autumn. I am
firmly convinced that the stringency
in August and September would have
resulted in widespread financial ruin"
In 1898 we had a secretary of the
treasury without Mr.. WINDOWS vision,
and the panic was on.
We have had several near-panics
since then, and n real n in 1907,
called "the bankers panic" The press
reports indicated that the spectators
were the only ones affected.
| know better from personal exper-
fence. | was selling my barley for
80 to 95 cents. Without warning and
over night there was no money to buy
with. The eastern bankers refused to
honor drafts, in violation of the Ma
tional Bank act, and barley fell to As
cents. My obligations remaining the
same, I could pay less than half. In
other words, it took twice as much
barley to buy a dollar.
We are 10 having another annual
emergency CD object lesson. How
many more will it take to wake the
people up? There has been an enor-
mou expansion in manufacturing,
more especially in wal munitions, that
has required a vast amount of capital,
an increased demand.
A record balance of trade in our
favor, estimated for the year at over
81, 900, 00O, 600; a record breaking crop
also; wheat alone estimated around
1000, 00O, 900 bushels and the market
ing of that immense crop is now on.
What provision has been made for an
increased volume of "the medium of
exchange" (money) to meet this in
creased demand?
From the monthly reports Of the
secretary of the treasury we find that
from December LIST to July LIST the total
volume of money in circulation had
decreased $4,000, 900. The volume of
gold had increased by $91, OOO, 900 (pre-
sumably from imports.) Our national
bankers have absolute control of two
kinds Of money; national bank notes
and federal reserve bank notes.
During this same period, of this
money of which they have full con
troll, there was a net decrease in u
culation of SITS, ,13S. Great in.
creased demand met by a greatly de-
creased supply! This brings us up to