Askov American. [volume] (Askov, Pine County, Minn.) 1914-current, 1939-02-02

a dependable circulation of money
that will do away with the economic
peaks and valleys the road ahead of
us will continue stoney and rough,
and we will continue to have depres-
sions, recessions and panics.
At present, there is deposited in
the banks in excess of So billion
dollars, owned by the people, which
is a liability of the banks in favor
of the people. Twenty-Five billion
dollars of this is represented by de-
mand deposits, thirty billion in time
savings and other types of deposits.
The currency in circulation at the
present time is over $6,856, 900, O0O
The currency in circulation, plus the
% billion dollars of demand deposits
represents our present "stock" of
money.
If the individuals to whose &C
counts these credits stand were doing
a large volume of business, that is,
freely buying, selling and trading
with each other, the % billion dollars
of demand deposits would be turning
over at minimum of 20 times per
annum. The national income would
easily be three times the "stock" of
money-demand deposits, plus cur
rency in circulation. For years our
national income was about three times
the amount of our "stock" of money.
Therefore, we should have on the
basis of that formula minimum of
sc billion dollars national income in
1899.
Probably one of the greatest diff
ficulties in our whole banking struc-
ture is due to the fact that the pow
er to tissue" money is lodged in the
hands of the private banking system.
When that private banking system is
seized with fear, whether it develops
within the system or originates with
out the management of the system,
credit is Immediately contracted and
the price level begins to sag and
break; fear grips the people, the whole
money system goes into reverse and
operates against the economic in
terests of all. If our banking system
were so organized and operated that
a government monetary commission,
or authority, could expand credit
whenever the private banking sys-
tenn begins to contract credit, and do
SO without creating more tax eX-
empt, interest bearing bonds, then
the flow of money could be syn
chronized to production and consump-
ton of commodities and bring about
sterilization of agricultural prices as
well as prices on manufactured goods.
Amendments Can be Made.
Any time majority of the mem
bers of Congress desire to do So,
simple but far reaching amendments
can be made to the Federal Reserve
Act, changing the present procedure
to a manner whereby the Federal
Banking authority, as an agent of the
Congress, can become the issuing"
authority and thereby carry out the
powers set forth in the Constitution
and in the interest of the general
welfare. Of course, if Congress pre-
fers to let the private banks operate
as the issuing" agencies and con-
tinue the creation" of tax exempt,
interest bearing bonds, for the pur-
pose of financing governmental &C
tivities in the form of "pump-prim-
ing programs" and otherwise, in that
event, the people will have to con-
tinue to bear unnecessary burdens
which the founding fathers, in the
drafting of the Constitution clearly
sought to avoid.
There is a general impression that
the present system was inaugurated
in 1862 and that it grew out of the
necessities imposed by the Civil war.
That is not correct. AS a matter of
fact, the present system has been in
operation since the inception of the
Republic; primarily, because of the