Kankakee Valley Post, Volume 2, Number 45, DeMotte, Jasper County, 23 March 1933 — THE BANK CHECK AS OUR MEDIUM OF EXCHANGE [ARTICLE]

THE BANK CHECK AS OUR MEDIUM OF EXCHANGE

By “Mid” Hart, of Bank of DeMotte

A banker or a money changer once said: “In the opinion of many students of finance, until we have found it expedient or necessary to use our Federal Reserve System’s--note issuing power to the limit--of legal authority, we do not need additional means of expanding the amount of money in circulation.” With the passage by Congress and the signing by the President a short time ago of the new banking law, the currency can now be expanded to meet the present emergency wilhout abandonment of the gold standard in fact, and in the broad sense without undue inflation of the currency. With all due respect to the outworn and obsolete dogmas of classical economists and financiers the chief medium of exchange in the United States has for many years been the plain, every day, honest-to-goodness, bank check, secured by the bank deposits of its drawer; and under the new regulations these same deposits may now be used in the form of Federal Reserve Bank Notes issued against the liquid assets (Deposited money that has been invested in sound securities) of the banks, and together with checking facilities restored will provide an elastic Medium of exchange to meet current conditions. With the gradual modification of restrictions, bank deposits will be found the most convenient form to keep funds liquid, and slowly but none the less surely the bank check instead of actual currency will return to its place as the actual vehicle of exchange for services and goods. We must all remember that present difficulties in the United States are technical rather than fundamental and can be corrected by improved management in the conduct of our financial institutions. If the present trouble brings about the reforms needed it will have served a “painful” purpose. In the meantime gold and gold certificates are again flowing back to the banks, and newspapers are daily featuring the struggle of almost every nation in the world to obtain gold thru the medium of new discoveries. The great potential mineral wealth in gold that lies within the borders of the United States should be and will be further developed to the enrichment of the nation and the property of all peoples.