Saturday news. (Watertown, S.D.) 19??-19??, 1916-02-03

q
rs, WATERToWN, B. b.
builds their structure npon ii by pro.
yiding an entirely new and very ex:
pensiye system Of administration.
with q vast army Of unnecessary new
officials. %s8 u
BY adopting the system / have sug.
gested OF using our present political
units. we reduce the expense to the
minimum. and increase the security
to the maximum. For the federal re-
serve board. duplicate, say, an assist.
ant secretary OF the treasurer. inter.
,ior and agriculture, as an investment
bank board. Duplicate the state unit
for the federal reserve bank, and the
county unit for the member hank,
and duplicate the power to issue fed
eral reserve bank notes on the secur-
|ity Of commercial paper by the power
ito issue federal investment bank
notes on the best security in the
world-produotive landy That Is
what ] would call duplicating.
Federal reserve bank notes are now
obligations Of the government for
which the government receives no
compensation.
The federal investment bank notes
will be guaranteed by the several
government units. for which they
will be amply paid by the borrower.
So far as the state units are con-
cerned, we have the system in sue
cessful operation in a number OF
states, in the loaning of our school
land funds. Why duplicate these?
The only additional help needed
would be some celerical. Not much.
If congress cannot do better than
6 or Z per cent it is a waste Of time
to bother with it. We can do better
by state legislation, as South Dakota
is now doing, thanks to the foresight
of the good old Farmers Alliance.
We have now over 5000, 900 loaned
on farm mortgages at S per cent, and
over $6,000,000 on deferred payments
at 6 per cent. AS fast as that is paid
in it is reinvested at 5 per cent. This
has had a very important bearing on
interest rates for all farm loan in
vestments, as evidenced by the fact
that we now have $27, 000,0 Of life
insurance funds loaned at a shade
less than 5R per cent. We could do
better, but unfortunately the United
States constitution provides that no
state shall make anything but gold
and silver coin a legal tender for
the payment of debt.
A serious defect in the bill is that
the committee u that there is
now and will be in the future an
abundant supply of money for invest
ment in farm mortgages. They over
look the fact that we are rapidly de-
|veloping a complete change in our
whole financial system as advocated
lby the National Bankers association,
and provided for in the federal re-
serve and other laws during the past
five or six years. The change issbased
on the theory that we do not need
money for the transaction of bust
ness; just credit and a cheekbook.
We have already had a decided con-
traction of money both by increased
demand and decreased supply, by re-
tirement and decoinage. This pro
Icess will continue until the few men
lnow in control will have completed
their monopoly. The lawful money
remaining will be boarded in their
vaults, until drawn out by q pre-
MUM.
They want to loan their credit in;
stead of money. .The school teach
Ter, clerk, minister, and wage Garner.
etc., will not be paid in money. hui
by a check against a credit.
A Dangerous Trap.
Section IL provides that: Funds
transmitted to farm loan association
by federal land banks to be loaned
to its members, shall be in eurreni
funds, or farm loan bonds"
Section &c provides: "Wheneve
any farm loan bonds, or coupons. q
interest payments Of such bonds, arr
due under their terms, they shall b.
payable at the land bank by whicl
they were issued. in gold or Lawful
money.