Democratic Sentinel, Volume 22, Number 42, Rensselaer, Jasper County, 29 October 1898 — REPUBLICAN CURRENCY REFORM. [ARTICLE]

REPUBLICAN CURRENCY REFORM.

House bill No. 10,289, which embodies the “comprehensive and enlightened monetary legislation” declared for in the Republican platform, is framed upon two principles. The first is to make gold our only money, striotly speaking; and the other is to give national banks the right to issue all currency and the power to oontrol its volume. In my last letter I discussed their proposition to make our silver redeemable in gold and in this I wish to draw attention to the change proposed in our currency. The object which the bill seeks to attain is the retirement and cancellation of the United States notes, or paper currency, and the substitution of national bank currency in its stead. The paper money of the United States, consisting of their noninterest bearing notes, amount to about 1450,000,000, and by the plan proposed these shall be retired to let the national banks issue an equal amount of their noninterest bearing notes. That is what their bank notes will be, simply noninterest bearing demand notes, which will be our sole currency for the transaction of business. These they will loan at the usual bank rates to the people who, in borrowing money, will have to give the banks interest bearing notes for notes that bear no interest. The government will, by the change, thus enable the banks to reap the interest on the currency which they do not now have. At 6 per Cent, the interest secured hy the national banks on the $450,000,000 of their currency, which will supplant the currency of the government, will be $27,000,000 annually.' Besides, this currency is to be issued on their “assets.” In the beginning the bank is required, before being permitted to issue its currency, to exohange greenbacks with the national treasury for “reserve notes,” to an amount equal to one-fonrth of its capital. This is to effect the cancellation of the greenbacks, and the “reserve” notes are JSo be ultimately redeemed by the government in gold, thus indirectly securing the gold redemption of the greenbacks and their destruction. The bank is also required to deposit bonds with the national treasury to an amount equal to the currency they issue on their “assets,” but on these bonds they may issue, as they do now (and in addition to their “asset” onrrenoy), their national bank notes; and the bonds may be withdrawn at the end of eight years, leaving their issue of notes and currenoy limited and backed only by their paid up and unimpaired capital In the end the result is this, that they have been allowed to create currenoy on their assets—issuing money up to 80 per cent of their capital without paying a cent of tax or interest on it, and issuing to the full amount by paying 6 per cent on all money issued over the 80 per oent of the capital. This is the “enlightened currency” of the Republican party for which our greenbacks are to be destroyed. It is true that two funds are established for the redemption of these bank notes. (1.) A 6 per cent gnrantee fund of gold,which each bank shall keep cm deposit for redemption of its own notes. Bat the notes of each bank are to be payable only at its office, and once issued they will be scattered far and wide over the country. They will pass ourrent, will be accepted in business, being the sole currency in use, and their practical redemption is not anticipated. (2.) A “reserve” fund of gold is held by the national treasury into which each bank will pay an amount equal to 5 per cent of its circulation, and this Is to be nsed to redeem a bank’s notes only on failure of the bank. It is, in fact, not expected that the banks shall redeem this currenoy. They are to be given the right to issue practically an irredeemable fiat money. Why, the banks would close their doors at the suggestion of actual redemption.

The government maintains a “gold reserve” fund of $100,000,000 —often more, never less—more than 20 per cent of its demand obligations, and yst they say the government cannot maintain redemption, that the greenbacks are a menace to our national oredit, and that “the government mast so out of the banking business.” Ana to teach the pnblio and to prepare them for a “comprehensive change,” a conspiracy has been formed between the reoent treasury officials and the banks, the first establishing the policy of gold redemption and the latter oornenng the greenbacks and with them raiding the government and robbing it of its gold. And new, having demonstrated that the government, with all of its inexhaustible resources, oannot maintain gold redemption on a 20 per oent reserve fond, they propose to do it on a 0 per cent fund! Neither oan do it. They simply propose a system under which gold will be the sole money and bank notes the sole ourrency—gold to pay the public debt and to measure and fix the value of a dollar, and their onrrenoy to circulate irredeemably among the people. And this onrrenoy Is to be issued on their “assets.” The average man uses his assets to borrow money on; by what right shall these corporate darlings of the Republican party use their assets to create mo:: ey on? Ton want money—currency. Yon, take your note, secured by your assets and bearing 8 per cent interest, go to the basik and, with “bated breath and whispering humbleness.” ask them to give yon their notes backed by their assets and bearing no interest. And why? Simply because the law will make these highly engraved noninterest beariug hank notes our sole currency; because the government will surrender to these Institutions the constitutional privilege of issuing money. It is impossible to disonss here all the evils contemplated in this measure. A consideration of the bill will suggest them to the thoughtful citizen. Yet this is the “onrrenoy reform” inaugurated by the Indianapolis monetary convention, introduced in oongress by Overstreet of Indiana, reported favorably bv tii6 committee on fa&zikinjf and omrenev “■“ss.** "b %«». wiCwml ?v e S - ,?• Haaa »- ohefrmau of Hie IndiapapoUs committee savs, a earsoongress. Are jdvT reefy lhof such “comprehensive and •ahxbtened aenetarylsgiilntt***’ MMUr Warbitm.