People's Pilot, Volume 3, Number 32, Rensselaer, Jasper County, 26 January 1894 — THE CURRENCY QUESTION. [ARTICLE]

THE CURRENCY QUESTION.

Tbe Only Monetary Belief foe the People Is a Return to Bimetallism. A greenback promise to pay represents something borrowed and something which the people must set aside money to replace. A bond is likewise an evidence of money spent, which the people must replace out of their individual earnings. A greenback is legal tender; a bond is not. A greenback is to be paid on demand. A bond fixes a future date for payment and bears interest. A greenback is expected to become a part of the circulating medium; a bond is regarded as an investment Greenbacks add nothing to the wealth of the country, to the debt-paying power of individuals or to the activity of trade, except as they supply a need for convenient symbols of money. It is the climax of humbug to proclaim that because a large supply of currency appears on the government books an individual can get a large supply. What is the history of a treasury note? The government pays it to an employe. The employe takes it to a store and buys goods. The dealer puts it in bank to pay his notes. The bank lends it out again if there is a demand from business. It is held in idleness if business does not want it or if the business men who do want it cannot furnish adequate security. If there were no banks, the history would be in effect the same. The quantity of legal tender notes business could use and needed would be circulated. The rest would be stored away for safe keeping. No man would have any more than the condition of his business or occupation warranted, and no sensible man would expect any more. Legal tender currency keeps on traveling if business is active. It quickly piles up in places of deposit if business is dull. Currency does not create business Business creates currency—at least the uses for currencj' which make legal tender notes a practicable form of government debt.

A government which becomes a bank of ijsue must obey the rules of that kind of banking. It must guarantee to all holders the convertibility of its demand paper into actual money at all times. It ha 3no resources beyond the willingness of the people to pay taxes. It has no credit beyond its record. Its promises to pay are no more actual money than the promises of a private business house. The legal tender laws will not prevent the depreciation of its promises if their convertibility is seriously questioned. And when their convertibility is questioned, the government is dishonest or its resources of taxation are impaired. To support $84(5,000,000 greenbacks and over $150,000,000 treasury notes we have a gold reserve which the treasury is unable to keep up to $100,000,000. If the government's ability to redeem its notes becomes a matter of doubt there will be a run on this bank of ours. In the present condition of the treasury the bank cannot get gold for redemption purposes without borrowing it To keep even with the rush, of noteholders for gold we might be compelled to issue within a year a vast amount of bonds. The issue of SIOO,000,000 in greenbacks might, coming upon the heels of a period of strained nervousness in business circles, force the issue of $200,000,000 in bonds or a suspension of specie payments. Issuing bonds is bad enough. Issuing greenbacks may be infinitely worse. The spectacle of putting out greenbacks when they are certain to travel instantly into places of deposit already stuffed full of paper money may well excite distrust of the policy of the government. If distrust is excited, then more panic, mors gold grabbing and more stagnation of trade. The only monetary relief for the people is a reform standard—a return to bimetallism. There is no relief in overloading the coin reserve under a gold standard with paper promises to pay on demand. It is devoutly to be hoped that a turn in the affairs of trade or a method of cutting down expenses may avert the necessity of contracting more federal debt in any form. But if government collections are not equal to obligations and a debt must be contracted, our congressmen will be unworthy of the trust reposed in them if they do not take into account the dangers of a new issue of demand notes.—St Louis Republic.