The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1932-02-22

III we Will respect Such requests. We
III OF letters as may be necess
! AGREES WITH COxEY
| Bismarck N. D.,
I Feb. II, 1882
Editor, Tribune:
After reading your item Of Feb.
with reference to General" Coxey's
appearance here in Bismarck as a
prospective candidate for president,
conclude that letter setting forth
the facts as they appear to a sympa-
thizer is in order.
1t so happens that the generals"
views coincide quite completely with
those expressed by the writer in a
former letter. To understand the
generals" plan one must first know
some of the facts with reference to
money as we have it today.
Mr.. Lemke says there is not
enough money to do the money bust
ness" That is true. Most of our bust
ness is done with bank balances, that
is, by means of checks. Some folks
| think that check represents money
on deposit at bank. That is not the
case. There is In circulation less than
s, five billion dollars in actual money,
outside the national treasury I'm
circulation" means that the money is
in the banks. Money in your pocket,
in teapot, under board, or in your
private safe. is said to be "hoarded"
If it is locked up in hank safes to
form part of the bankers reserve
fund, it Is in circulation. There is
very little money except the bankers
reserve.
Bank deposits aggregate about 45
billion dollars while money aggre-
gates only about five billion dollars.
That means that something other
than money is back of bank deposits
That something is notes and mort
cages debit. If you do not under
stand that, you cannot understand
General Coxey's plan to have
money issued on non-interest bear
ing bonds.
Today money, except gold, is issued
only on an interest-bearing debt. It
is a case Of no debt, no money. Let
me make this point plain. First,
there is Az billion in gold, practi-
cally all OF which is locked up tight
In the banks as reserve. If you de-
mand payment in gold you can get it,
but very little gold is ever demanded.
It all the depositors in banks should
demand payment in gold, they could
not get more than 10 cents on the
dollar The gold is all cornered by
the banks. The general use of paper
money has placed the entire stock of
gold in the hands of the central
banks in the form of gold reserves.
1t is they who control the market for
gold"-Enc. Britannica.
Paper money. federal reserve notes
and national bank notes, is issued
only on interest bearing debts such
as state or municipal bonds, real es-
tate mortgages, or other debts. Money
is not issued on all of these debts,
because the bankers have the say-So
as to whether or not money shall be
printed They may simply hold the
bond. OF course. the public must pay
interest on all these debts anyway
But the banker does not want much
money in circulation. His interests
are bestGerved if there is not enough
to do the business, because the laws
are such that banker may loan out
tive to ten times as much as he has
IN money. Then, if there is not
enough money to do the money bust
ness. folks will have to borrow at the
bank and pay the banker interest.
When bank balance gets on the
books, it stays there to the credit of
somebody, not always the borrower,
until the debt is paid that brought it
into being. When the debt is paid,
deposits to the amount of the debt
paid will vanish into thin air. Paper
money issued on debt does the same
thing. So If all debts were paid there
would be no money except the gold
reserve and little silver. and no bank
balances. We pay interest on all the
money and bank balances we must
use. Figures prove that we turn over
an amount in interest every year
greater than the value of the entire
agricultural crop. And yet the presi-
dent and congress want to get us out
Of the depression by loaning us more
money.
Bank balances in national banks
advanced from So billion dollars in
1910 to 1872 billion dollars in 1880.
If the presidents reconstruction plan
works, 10 to 20 billion more will be
added to bank balances, and also to
the interest bearing debt. It is hard
to see how this can work out bene-
ficially because we cannot pay the
interest on the debt we already have.
Because we could not pay, there were
2.290 bank failures in the United
States last year, with deposits aggre-
eating IL billion dollars. It is a safe
guess that there will be still more
failures next year.
Now for the generals" plan. It is
as follows: The issue of money on
non : interest bearing. tax exempt
bonds, instead of on interest bearing
tax-exempt bonds as we have it now.
These bonds would be voted by the
people and the people would have the
Say-So as to whether or not money
should be issued. instead of leaving
that to the bankers. These bonds
would be for Is years and would be
paid off at 4 per cent per year to
retire the money. When more money
was needed more bonds would be is
sued. We would always have debt,
but the debt would not hurt anybody
because it would not bear interest.
The debt can never be paid anyway,
so why not dehorn it by taking away
its Understanding feature?
Then there would be enough money
to do the money business. Money
would take the place of bank balances
50 that instead Of As billion in bank
deposits we would have that amount
in paper money, or, if we still had the
balances, we would have enough cur
rency back Of them to pay them out
in full.
Then the banker could not collect
interest on rnOnov hn y,ovnr hod ord