Jasper County Democrat, Volume 1, Number 28, Rensselaer, Jasper County, 22 October 1898 — REPUBLICAN CURRENCY REFORM. [ARTICLE]

REPUBLICAN CURRENCY REFORM.

House bill No. 10,289. which embodies the ••comprehensive aud enlightened monetary legislation” declared for in the Republican platform, is framed upon two principles. The first is to make gold our only money, strictly speaking; and the other is to give national brnks the right to issue all currency and the power to control its volume. In my last letter I discussed their proposition to make oar silver redeemable in gold and tn 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 $450,000,000. 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, amply noninterest bearing demand notes, which Will be our sole currency for the transaction of business. Tnesethey 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 wbirit they do not now have. At 6 per cent, the interest secured by the national banks on tho $450,000,000 of their currency, which will supplant tho currency of the government, will be $K,000,000 annually. Beridee, this currency is to be issued on their ‘l—err." in the beginning the bank is required, before being parrel ttod to issue its currency, to exchange greenbacks with the nattonal treasury nr “reserve notes,” to aa asoount equal to one-fourth of its cupitaL This is to offset the caaceUauon of tho greenbacks, and the “reserve” notes are to bo nkU mntoty redeemed by the government to gold, thus indirectly securing tho gold redemption of the gwretarb* and their leoir notion.

The tank is also roqsdrod to deposit tawfa with ths national txvaauiy to an aroownt eqnal totbecomncy ttay Imm on their “assets.** hot on these beads ttay assy tone. as they do now (nnd to addition to their “asset** onmney). their nntionnl back notes; and the bond* may be withdrawn at the end of eight yaara. leaving their iasae of notes sadcuxrsaoy Hraitad and bached only by their paid ap and unimpaired capital. In the end the revolt is this, that they have been allowed to create currency on their assets toning money up to 80 per cent their capital without paying a cent of tax or interest on it, and issuing to the fun amount by paying 6 per eent on all money toned over the 80 per cent 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 there bank notes. (M A 5 per oentguiantee fund of gold, which each bank stall keep on deposit for redemption of its own notes. But 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 current, will be accepted to business, being the sole currency to use, end their practical redemption is not anticipated. (2.) A “reserve” fund of gold is held by the netjnnal trosvnry intn which each bank will pay an amount equal to 5 per cent of its circulation, and this is. to be used to redeem a bank’s notes only on failure of the bank. It is, in fact, not expected that the banks shall redeem this currency. They are to be given the right to issue practically an irredeemable fiat money. Why, the banks would dose their doora 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 yet they say the government cannot maintain redemption, that the greenbacks are a menace to our national credit, and that “the government must go out of the banking business.’’ And to teach the public and to prepare them for a “comprehensive change,” a conspiracy has been formed between the recent treasury officials and the banks, the first establishing the policy of gold redemption and the latter cornering the greenbacks and with them raiding the government and robbing it of its gold. And now, having demonstrated that the government, with all of its inexhaustible resources, cannot maintain gold redemption on a 20 per cent reserve fund, they propose to do it on a 5 per cent fund! Neither can do it. They simply propose a system under which gold will be the sole money and bank notes the sole currency—gold to pay the public debt and to measure and fix the value of a dollar, and their currency to circulate irredeemably among the people. And this currency ia to be issued on their “assets.”

The average man usee his assets to borrow money on; by what right shall these corporate failings of the Republican party nee their Meets to create money on? Ton want money—currency. You take your note, secured by your assets and bearing 8 per cent interest, go to tits tank and. with “bated breath and whispering humbleness.” ask them to giro yon their notes backed by their assetsand bearing no interest. And why? Simply because the law will make these highly engraved noninterest bearing bank notes our sole currency; because the government will surrender to these institutions the constitutional privilege of toeing money. It is impoetible to discuss bare all the evils contemplated in this measure. A consideration of the bill will suggest them to the thoughtful ettixen. Yet this is the “currency reform” inaugurated by the Indianapolis monetary convention. introduced in congress by Overstreet of Indiana, reported favorably by the committee on banking and currency as house bill No. 10.289. and the meatUro that H. EL Henna, chairman of the Indianapnlis committee says, a careful poll of the house shows will bo supported by ths Republican majority in congress. Are you really to favor of each “comprehensive and enlightened monetary legislation?” Hxnx Wambv*. ,