THE SUB-TREASURY.
AN UNBIASED ANALYSIS OF THE BILL
By a Succesfn1 Business Man Who Is a
Financial Authority-A Strong Docu
ment Upon an Important Subject.
The effort to blittle the subtreasury plan pre
sented by the F..rmers' Alliance has failed. No
nie.-ure ha, in years contianled so much atten
tion in thi tate. In spite of the denunciation of
those wih, pronounce it undemocratic class legis
lation, wild, i:ipracticable, revolutionary and cal
culated it passed to debase the currency, and the
ridiculeo those who declare they want no inmoney
based on "*-unpkins and corn shucks," it has won
the support 01 the fariners to a remarkable de
gree. Neither denuniciLtion nor ridicule has
weaki ned its sulrters. No mere absurd and
ill-titued prov,-i, i cot0d make such he!.td
way. Tne ncery reclption of this
measure e in a high degree that the con
ditions surrounding the Iarming class <emand
itnprovemneit. But we.have nolnted for evidence
on this subject.
ENILS OF CONTRACTION.
That the bu-iness of the whole country
Is suffering through the contraction of
the currency is admitted by all parties. The re
cent silver egislation is the direct outgrowth of
this adiris-ion. Froni the very nature of their
business tii contraction of the currencv bers
with spelial weiai:t upon the fariwnrs. The
leading products o1 their labor are harvested dur
ing a 1ew months of the year, while the whole year
Is necessary to their consmiption. The year's sup -
p:y of the.r pritduets calot be drawn out day
after day, as with the manufacturer, but they
must prepare ai sow and cultivate and harvest.
and then force their crops upon the markets of
the country at a tiue when evt ry line of bu-mess,
sutimulated'bv the marketing of these very crops,
is most a'etive. Thus the great bulk of
their crops, gatliered within three or four months,
must b sold by the farmers. owing to the neces
sities ot their conditionts, at a time when
money is tiost in deimani, to those who are able
to <'arry them until required for actual
consuliptiol. The result is a string
encv in the nmonev market, high rates of
rates of interest and a corresponding depression
in the price of the productions of the Jartm and of
nearly all classes of securities. in the nid-t of an
er.. oh great prosperity we have seen imionev lend
ing within the last thirty days, in the'city of
New York. the finaicial center of the
country, at the rete or 188 per cent per annuni.
The couiitrv has I een saved Irom a panic, and
thousands o1 honest business men fron baimk
rupt-y. only by the secretary of the treasury
*h eriig to pay or .10.'0.oiul of 4i. per cent bonds,
prine...l and interest to date of maturity, more
th.n twelve months belore they fall due,
and by ofering to prepay a year a in
terest 'on all the pubde debt, aggregating
m,.re than $.000Kt,((10. Several times durin
the past three years the secretary of the treasury
ha- only prevented a panic by the purchase of
gov, rmnent i:onds at enorious prenmums. Think
01 i . more than .50.0(ww.(XK), in round figures, of
the lpeop:e's money have been paid as premiums on
4 and 42, per cent bonds, and this paynment
rendered itecessary by the scarcity of money, in
ord, r to prevent lankrupotcy!
To meet the evil. -ro,4n which thevsuffer in com
mon with all produce rs. the fariers have pre
sented a rmedv. Neither rd.cule nor denuncia
tion is the proper weapon tor its disciission, but a
careful. patient and Thorough investigation,
a caln and unprejudiced study. As I understand
it. the farmers - are allied to no spe
cial details; they want a flexible cur
rency. issued by the federal governiieit, that can
be made to inm-t the inmcreaed demands of busi
ness mue d:rectly to the great staple crops being
forced upon the mar-et within a short period of
tinie. Tiiss is the great principle for which
they contend. Thie iethod they suggest
for" carrying this ptinciple iitto prac
tice, is to ba-e any increased issue of currency
tipoir the great stapie crops, and to issue it, not
ar: r i:y by the coveintuent, bat onlv upon the
demand of th-e who wdi; deposit aiple security
for it. They simiply demanid a safe. staile and
flexible currency. I that wild. or visionary, or
impracticable'? The umetihod by which this cur
rency shall be issued, the way in which it shiall be
secuired, they have ex pr-s-ly declared a willing
me.s to leave to the best sense of the whole couin
trv. Is that extreme, or radical, or undemocratic?
'Now, as the evils of contraction eo-nfessedly
exist, as every intelligent nian admite ik m. and
every business suffers froim them. the I._-? of wis
dom is to stop denunciation and ridicule, to quit
carp.ng over and criticising ucre details, and to
un:te ail classes with the alliance in a cordial
eilort to provide a remiedy. As the tight against
the tariers' tea:sure has been directed chieily
against the methods they have suggested, I will I
pass to their consideration immediately. ierely
noting that I will reoly later to the arguments
again't the principle of flexibility.
'hhe important questions which underly the
ni tiods proposed are:
THE PRINCIPLE OF THE S'BTREASURY PLAN.
1. Can a safe, sound and flexible currency,
which will readily pmass on a parity with gold, be
based upon the great staple crops?
2. Is it possible to devise a method for the is
su nce of this currency that will be constitutional
aini in conisonance with the genius and spirit
oi our tree and dlemocratic institutions,
which are opposed to all forms of
paternal goverinment, and to an increase beyond
due limits of federal patronage?
h'ause atnd rerlect tipon these propositions.i I
these iietlmods propom-ed by the farmiers cannot be
maade to conforni iuliy to thenm, they should not
lbe ado~pte d; if they can, do they not deserve. and
shou~ilm they not receive, the support of all classes~?
At the fore-lront of the argunment it is de
man ded that the proposed currency must be sound
aid stabile, and that it shall pass at all times on a
goid basis; this is lundamoental. The biody politic
in.hors a depreciated currencey. Business con
ge-t- beneath its blightiing inuhuence, aiid serious
tuiunciai catastrophes niust follow in its baneful
wamke. No paper iimney can permianeiitly perform
usm iiul service in the present condition of com
mntrce and finance throughout the world that
does not pass readily on a parity with gold. if,
theref ore, it can be shown that money based upon
thi great staple cropms will not so piass, there is no
lutum r roomn for argunment, and the whole fabric
nilist fill; there would be no use to consider
ways aiid mieans5, tovernnent warehouses and fed
er, patronuige. The whole fabric being viciously
de. etive, it wouldamake no difference how simple
were the umeans of its execution, they ought not
to . e set in iimotioni. But, on the contrary, if it
caii lie shown that a sound and stable currency
can lbe biased upon the great crops which will
readii-y pas-s on a parity wi th gold, then we shomild
louna fir tue mneans by which it might be safely
aiim wi-c y issued, even if tiue search were arduous
aiim t'- best miethods difficult to ascertain.
It w-. 11 be poor statesmanship to de-,
noum-s a whole measure, the correctness of;
who- painciles were amhuitted. simply because
the ma .i suggested for its executioii were clumisy
or mde etive. Thie wisdom and correctness of the
prmteple once adltmitted, it becomes the duty, of
tie b' .:.i atonr tio finid sonme proper iiiode by which
it may be carried out. During this part of the
disen sion, therefore, I ask my readers to dismiss
ent~rely all iuestions as to whether or not the plan
prome'ud by the allianice is practical, but simply
to ,deteriniine whether a sound currency can be
ba-,d on the great staple crops. If they can
be coiivined of this proposition.
the task of showing how it can be issued
is easy. The iain question, therefore,
to repeat myself, is:
CA N A PAPERt cURRENCY BAsED UPON TH E GREAT
STTPLE Citol5 B i sSUED) BY THE GOVERNMENT
That w~ili readtily pass on a parity with
gold'? To deteriiiine this we must consider the
essent ial ehenients of paper umoney. Every mine
now concedes tlhat it is not only iiiore convenient
than 'i. pc inbt in imnodern tinies absolutely
nec..-sry :or the conduct of business. A great
part mi tae inioney in the country today, exclusive
of gomd and -ilver cert ficates, consists of paper,
ano thme sdver certificate passes more readhily than
the si.vert dollar. There has been since 1878, in
roiinii ligures, $3m.mm00.000 treasury notes in cir
cuiation. and during thuit whole period they havc
readmy passed on the gold basis. Ini adiditioni,
there are millions of national baiik
notes, which in the final analysis, are
chitiy baseid on the governmnent's promiise to) pay ;
and these, to,,. readily pass on a piarity with gold.
it is true that beind the nationau bank notes
stands the bank issuing them and the govermiiett
bmonmls deposited for their redenptiomn, tmt behind
th- treasury notes stands siiply the plighted
Ia i bmf the government to pay ini coin on deiand,
and the cin reserved in the treasury. Why do
these n tens pass on a parity with gold'? F'irst,
because the public has confidei"-e in thme gov
erninenit- :lbility to redeeiin then, in c'n af t any
timme; sem-ond, because they are receivale 10r pu
liec doe's. ixcept duties on imports, and arc a he gal
tent e -. fr priv'ate debts. The annuam <1enanuds
(ii mi .. oernient for wehich they' amre
remir tb ' at liar with gold are very
great. Thi y uominme ini time hi ghiest
dere ie I e e-etntialh eleumiettspubtmllic cinnidence
ini t. e:r convertability into specie, aind receiva
bilhty at pa wvith gold in mayment of enormious
aimmima dumeis. Time fir-t elemiemnt of stremngth is
diii tes iimimonded ~in a large mieasure uponm thme
-cecimuit. ut tm w'hit extent could they' lbe im
cr.ased-: Wou(ild an arbitrary inireaise o1 One
tihiui,. id niiiionis so shmake pliic cionmid ece and
.icl pubilic demiands that they would mall bielow
m'iid'" 4 rtainly there is sioine point at wi i
v'iiu ld he time ease. If this i- ':. ican it be said
tht .u.i0,(5* --r Cen.um 00um womuld nimt exceed
pubimamnd anti qhike pblic conitidence' If
there is a poit i eymond whichm public coid ence
andi thei mdetmnd- of buisiniessmewould miot go. howm~ is
ti-at plint toi he ascertained-i? hler lis the great
es't dumituty ini time issue of piller Itmoney. shiouth
lthe :.s irnIwnt arbitrardyl is-ue so miany
mi I ii , *: t t-trea ury itites andi tru it tom ituk n:. ti
excm the :eimindm or -liiu I it idevi-m some pI~in
l;v wiinii :he -upp.ly cani be re:.u!:tedh by the dhm
nt'amp: Th le latter is undmoubtImedhly mthe corirec-t
met lio. -'('urrenmcy." says de'vmns, ini hi woi k mon
"Mimnev :ial thle .\echanism or E-'eanige,' "muitst
to the i ri e tioni of the iaws of suilpty anti ie
inaand." [P'age 237]. In this view Johno C.
tial elements of paper money were never
miore clearly stated than by him in
his speech in 1 on the bill to estabhlisn
the subtreasury. He said: "On what, then, ought
a paper currency to rest' I would say oin demand
and supply -imply, which regulates the
value of everythiini else-the constant demand
which the governilient has on the commumlitity
for its necessary supplies. A nediun resting ioi
this demand, which simplV obiigates the govern
ni-nt to receive it in all of its dues, to the exclus
ion of everything else. except gold and silver, and
which shall be optional with those who have de
mands on the government to receive or not, would,
it seems to me, be as -table in its value as those
metals thenselves, and be as little liable to alise
a, the power of coiining. It would contain within
itselt a sef-re-gulating power. It could only be
inslevd to tho.-e who had claims on the govern
meint and to tho-e only with their consent; and,
of coursi, only at or above par with gold and
silver. which would be its habitual state; for, to
far as the governmeit is concerned, it would he
equal in every respect to gold and silver, and
superior it niany, particularly in regulat:ng the
diu-tanc exchanges of the couiitry."
PAPER cURRENcY REPREsENTS DISTRInITtvE
MERciHANDSE.
An important fact that is frequently overlooked
is that paper currency. when sound and stable,
must in its fi-al ::r- y r:'pr nt the distribu
tion of nercaliniime. 'Mr. Poor, in his work, 1
er. it Lvaw. and im-tory." states this prop
osition most adiiirably. The fact is so important 1
and Poor is so cl-ar and forcible on the pont, that -
I quote from him at some length, even at the risk I
of being tedious. In discussing the operation of
a bank in the conduct of its business and the is- I
suance of its notes, lie says: "The pivot upon
which all these onerations turn is merchandise.
That provided. the instrumevnts which represent I
it. and which entitle their holder to a
corresponding aiiount of the saie value, or 1
to the proceeds of the s:ame, and which. by their
transier. transfer that whicl they repreent, are
paler moneT currency. As soon as they are is- t
sued their mioveiient edinmences automatically in
their appropriate spheres. and continues until
they have accompilihed their c:rcuit and work.
It i. merchandise that call- thei into being; it is I
merchandise that giv-s thiem their value; it is i
merchaniise that igive- thim their impulse. and it I
is merchandise th. by it' pureha- lorconsimp 1
tion, returns thi-i to-'ho c who is-te them. nit to ;
be reissued. but .n akini. new loan-. So far as 1
nierchandise is proviled, they proiced noiselessly 1
and beneficently In their proper orbits. So far as 1
it is not provtied, their cou -e isaserratc and de- I
structive as would be that of the planets without
the guidance and cont-l of that central mass
around which they now so hariilesslv tiove.
e-A1l local currencies.thireiore, are i--ie .noton
gold and silver coin. hut on merchandise, for
which thev serve i the place of coin, as instru- 1
ilieits of di..trib.utini. Cuini is :tselt mioiney, And i
needs no viibol for its transfer or di-trihution. I
Except a siall quantity by w.ay of change. the I
precious Metals are no lone-zr used as curri ncV.
They :ire held antd used clii ly as reserves for the 1
iseliarge of suhil p:liper curr. ;i-s a' :.re not dis- i
charged biy er h:tse in the:aner d-scrilied." I
As long a- tie notes isu d by the bank repre
sented merhanie. he show tiat they would
pIs on t piarity ith] specie : "The holders of imer
chandise, tuer-er., wo)uld receive theim equally
with coin in its sale. as they would pay their bills
eually with coin. As they woul 1c accepted in
the saie of ireliandi c equally with coin, they
would b-e taken 1-v thi pubic. the consuierz. of 1
mer.-hadise. eqitally with coin. As the oji..ect of 1
all curiencies, no matt-r toe forui or a -terial of I
wh:ch they may be c.-ili-osed, is to reach iv their I
exchange -Oei other article or artie-e, th. hod- I
ers of the note- and credits of a liank wouil iave t
no adequate motive to exchanre, nor vould theiy
exchange them for coin to Ire used a- curr niy. vo
long as they would i eriort. *- curreiicy ali tle
functions of coin. :roduticer- in-equientiy. in
whose favor the hills were licouetnted, wouli. fro:ni
tile greater convidiene- .i their us, preier to re
ceive in their di-counit. liotes ald credit- to coin,
as they would pay ' them out equally .wyth coin il I
the viurchase or laior and iatirial. i the pro:e- I
cuti-in of their imidiistries, to the very parties who t
would lie the consunersof the inreh-n;lise which o
they had produced aid pit upon ti- mnarket."
Again, alter diseussi:ig ,he caise= of the failure f
of all banks which lave i-isued i-rreney based t
upon real estate.hle says: -rromi wiatt has ire
ceded, the reason of tlt- failure of a!0! ban:s, tic I
capital or recerves of which have con,i -ted or real I
estate or securities, will have been inade su1i
ciently evident. All curriecies. to be accepted as t
such. must lie iinstrunemts for represent:ng and i
serving for the dt-:ribiition of nercha-lioe. I
tht y will not secure to their owner ierchandise. t
tie .-euvalent in value to coin. they will always
be iiiediately drawn. or attenprteil to be drawn.
in coin. The hoider it. a note issuedi
by a real estate b.iik does not
,ant that which it represeits. but iier- <
candise. or in the ab.,elnee of mrcland-e. coil.
Such a bank has neitiher. Shotd it !-(e, te d -
count nothing ut lusiiess paper, imi-i ssible
supposition klor a! such bank; *ri- -ot upt to .-up
ily the lack of liii-ss paler, that is, of mer- t
chandir-e. th-- basis of buime-. laper). no one A
would take its notes and cr-t- to any conidr- I
able exten', as it would lie . ni by al ihlt no t
proper provision had bet-n n:1l to iarry lorwar:1d
its operations or to meet the : ises to whilh it '
would be subjected. Such i-anks therclore. t
from the very nature of things, have never t
been able to make even the fir.-t -ue-sil start. 1
The moment they have at-emlit -d to i-une noi-tes t
and credits as currency, tih-se b:ive 'dwiys Le ccl
presented for immllediate reilempton inl oim. As
they can pay neither mercha::iie not coin, they
ae no other alternative b:ut to go mntl ilie
diae liquidation..1
"That a curri-ncv may at all times be co-inverti- 1
ble, the n:eans for itr redheinioni liusit a.lway nie t
provided pirevi-us to Its issue, oit by tlii iank, t
but byv the pii ic, the -riodui-r:- oh melr hants,. I
With'such priovision, the ciurrenry irom~i the 111-4
ment of its issue would take care of itself. Thet
attemplt to -aake -lich proiion a~i:lte-r issue woubil I
be certain to deheat itself. Whlen mierchianise- is
provided, the iiecesities of cionuiers comel i
them to4 purcha-e It. pnic liy piece. b r consmup.
tion. Their nece--irtwoin purchases wiil have
the effect to maintaini it- prce so ias to reurder at
dequate to the disc-harie oi the currenicy issued
gaistit. Butneither re.d st-rte nor secuirltlie
aan be taken for consumpllltionl. piece by piece-;
they must be sold in gross, or not at all."
Real estatZe and secuirities, ii-: ally shows, can Ibe
neither eaten, drunk nor worn, aiii cannot, there-t
fore, form so safe or stabile a bia:-is tor currency ;as<
:ierchandlse, which is daily'mu and ioriy distribted t
throughout the country lot consumipt ton.
ESSENTIALs OF soUND P-AI-ti-C e lRREYcY.
Nowy, let us tirietly sumi up the essential elemencita
of a sound piaper currency:
1. it must be backed by the public contidence
that It is at all times conlvertible in specie or its
equivalent.
2. To secure this cotidirence there must be sueii
onstant puiblic demands for which it is receivable
on a par with specie as will enaeble its protiiit
onvertiility into specie, or its eqiiivale.nt.
3. To inure this, it-. viilute mullst be regulated
by supply and demnand; and n
4. This can only be accomplished by nnking it
the re-presenutati've iof the distributtin of mier
chandise for consul:npitioin, which woulud prevenlt
its volume from ever reaching a p-dnt bieyomiil
which it could not I.e immhiediatiy conve-rt ed int"o
specie or some necessary article of me-rch;.imiise
on a specie basis.
TREASURY N(OTEs sEeCRiED BY STAPLE cittPS.
The plan of having the fedceral government issue
treasury notesbased upon the great staple crops
fully mecets these prereqmuisites to an increasedl
issue or paper money.
For every dollar of treasury notes to he issued
by the governiient, the farniers propiose, ini some
form, to pledge their cotton or wheat to the extent
of only 80 per cent of its actutal miarket value.
This creates a 1ebit on these staple crops, the"
whole, or nearly the whole o1 which is coinuined
within each y'ear. For the payment oif tis debit
the treasury 'notes isnued by~ the giovernmnent
would be accepted biy the gove-rnmen-t in a parity
with gold. The iiotes which would lbe i.suied upon
the cropis could be made simiilar in all re
s~ects to the present treasnry motecs.
They would performn all the functions
pierormed by the pre-.ent trea ury notes, would be
receivable for the samie cla-ss o1 pubie~ and pri- 1
vate dues, with the additional strength that. by
their very issuance, another use for thenm wouildl
have hi-en created, to wiit: the piayiemnt oif the
debt created by their iue. Noiw. rte great staple
rops are sold iipo n a gold basI-is. Whleat anid cotton
spiecially form our i inig artcles it exhport; their I
ruc is tixed on atio i ba is in Liverpool and
Lodon, aiid. thie-refore, a. the produit on which
the treaesutry note' wouti ei i-ssued. wiiould have to
be sld tin a gild bai. Th~ e notes ineil -in them,
whinu wouild lie acce-pteid by thle g..-rinenmt oni a
parity with go ld. would nece-sarils )iar iin' a gold
Liasis. Ainami, as the-ir issuanice woii not Cicarbi
r~ry oni the p-art 01 the gove-rnmient, miit ionly upon
leiand and tue piedge of tile cropi ino noite wiould
lass (rut 01 the treasury exceplt irn a gold ha -is. tf
it could be conceiveid that tntwse not-s would de
preciate at all, their depreciationl would nlecessar
xlv occur at the pioit of time when mio.-t of them
were outstanding. aiid as thlere wouldh be- a graidu-d
i ntrationl ol the ciirrenicy as the yearly conup
tion oif the cr405 rook place, noi manii wouldr
ie tol enough to take freon the goiverilmit on
hiis crop a 'depri-ciated currenicy-a doil:r thietc
wol n~tot pass on a parity with goiid-when~ his<
ittin or wht-at ia ; ti e stld in the miar:xets oh
the- o-rid on a giobl biasis, andi the iteblt lie owed
o i te gov'ermmetnt paid after the vi lnme iof cur- 1
ri-net- iutstammdiniz nadl bieen cintracte-d by thei
:onsmption of thle very crops theiielves
lirON AND) wilEAT 5AF~ER THlAN SILvERt
Which is die saufer tumrrency, that biased upont
otton and wiheat, which must he consumed
within a year, oii a gold basis, to onty 80 per cent
of their value, or that based upon silver, pur
chased in the open miarket at the fixed rate ofi
tiot 50.4iii,iu annuallhy, aiid stored ini the
tra-urv. whlere it call tie mneither consumied nrit
istibiltei-: It 1s clear that ini the case of the
:irecy biased uploni cit toni or wiheat. an eqtuiva
lnt ini gold 'it the currencry it-niI issued-i iin the t
wijieat or corttoni wouiild itrw brack inimo the treasulryv
as the wt-eat andi cittonl were inisimmied. andit
tat grihual e-xnaniiionl and -i conrmition woiild
result ; while in the case of silver, an arbritrary :
i-xpasi -n takes prlace yearly while the com- '
iody acetiiulatesin the treas- 1
rv. At the end of a decade there will be I
outstandin about $700,00,00 onf miyer certin. -
cates based upon a commodity whose price has
been advanced and regulated by the government'
own purchase's, and which. if the govern
nient undertook to sell, would enorniously
dlepreciate. In the one case the holdt'r
of the iroverninwnt's note would know
that within a short time co'd or its equivalent
would pass into t!- tre:.,iirv; in the other, he
would know th- ill r - was:c commodty steadily
acemulating t.- n treasury. which, by the very
law under which the noe lhe held w is issued, was
scarcelv any i:rther alvanced towards consump
tion or distribution th::n it was when uninined in
the western iii:3.
It ma:iy lbe safely assumed that -no p:eper cur
renev in the world would he more stable. more
sound, er more certain to pas oin a parity with
spiecie. than th- treasury note's o the Uniteil
States goverument based wl on the great stale;
crops, provided the imethodi ot their issuarce was
properly hedged aleut and protected.
it is iupossib!e to present all the aruriinents iml
uplpolrt of tlik poition in an article nece
S:Lrilv limited in epace, but before pa-Aing: from
this branch of the -ubject under dis--us-ion, there
is one other point to which attention should le
called. As has been before stated, more
than $3h,000,000 of treasury notes
now pass readily at par witu gold,
with nothing behint' them hut the govtern
nient's prmise to pay. Why then wotild not ad
ditional notes of the saine eharacter. secured on
the gr-e crops, representing their de'triiitioin
ror e-n a .:ption,:md issued only tO theC who ac
epteu e ,eei vol utntarily oil the g-4l basis, coni
Anue to pass readily on a parity with gold'? That
ninent Georgian. .ludge Crisp, who hasso a.y
,epresented the state in congre-S,
n his letter to the fariners on the stil
:reasurv plan. deciared Ihim-elf ulqualifiedly
n favoi oi ain increase of trea-ury notes. To this
ositioin the democratic leaders have been com
nitted for more than twenty Veat:. How is it
mre conservative and moire safe to issue these
;reasury notes arbitrarily, and without any se
urity ptedged for their payment. than it is to
ssue them voluntarily on demtand with the great
taple crops pledged for their paymcut'
FLEXILE cURRENtCV DESIRED.
But it has 1en contented that flexibility in the
otiie ef currency wiuld tend to distire butsi
less interests ;id render uncei'rtamn I hu1,;mess obli
:ations . The1-re is an alparent pciilility il tlis
irgumient. But it is based i a ieuntonception.
mld evidencs great i.:norance. of the real -icndl
ions suerrstinsin c m-ree. Net ing wul
end to rener prices so stable or busine oliga
ions so sure, as the certainty that. the supply of
noney woiuld x"''t.y corre-pond at all times to
he volume and ri ejuireients of trade. if it
-ere possible t. perfect a svstlm o
tinance mi:ei.- whh- this would ble le
_ase, the co'rt lof imioey. iiitcre!st. would alway!
em:ii the ain. , a' -- t co import::nt eleunients of
mnertainty po- le strint 'ency in the money
i.-rket anid v::rying rat-, of intereSt-woud tie
-eeetd froim ceium r:ev. St.il-ility in ;rics,
;erefore, is prmeetv--d iy -I titv in the 'eolumit:
Af eurrency, and n-1i by retildity,
:hat allows Ier nO e p lan ilian cointractions in
teeordance with the demnd oftell' trade. I reco
ize that it is impoeibe t-, - adjutt the ldelicate
intncial m-,ery if a great gvernilment thLt
t will work n:omii ti alvly in ex:act relatii- to the
equireitnn- w: cemnei-r, tlbt i do insist that it
the duty ei the geoveritOent te perfect the ma
4hiierv :e ti:lL it Imcay at least allroxf
el-I aipreleeicih the desired resuit. To
tta-k the ih-xibility of the I-roposed
arreiney, i to ;eta-k the propoteition that the
iuance oi p. Ii airt it-y hoiuld be regulated
'v the laws oW inp nle id- meiand. This is to Iy
'i tlit face of the best wiiers ein the subiject and
ie i-r-t principlc if ciinon nse. The -trong
,t artuent. .t ita been ii ade ag;ist p;ie-r
ione is. a t ted ley .lcvons. "the impeesibility
11 va'irvinr t- ateoune' in acceordanceawith the r-e
iuiri.enzi - t.:.lI." Specie, it ias leeu argued,
iuid be caled Ireoi lone pertioen eet the
;unil to:.n :-r in aerdance witli the deiand
.:rne .: p -i-er c-ir:-ulatincg oly in ionce eetuntry
voli d net yit*te i r--ecrve- 'tipli in other por
oni 01 the w(-.! te dr:aw etpin inl ierioids o ac
var or ke n. etiet jetr investiment m ;criods
if ep re- t. T'e*e.xiliity of' the proposed
turr, iv i- ti - r-st .rgeinient tli.it cali le
dvane de in iie f-laver. 'ie di:enger ari:,es, not
ri it tiexibI:te. but rit'l-cue it may not be
exibie eogieti i m t h et-l icelemti:itds 0t tr-de in
ie spor;ng wievi tile gre.it staie croles
lave I eer lar-'evy cin timed. But when
t is rt eeiem-.:red that tihere is
in enormous el-i.nd upon tie entire currency of
lie country d: I the fall month< when the
r'pse -'e m mee ari - ted : that a greater volnie
a is.ness is ne.essarily condiueted at that tinic
hLi at any other in the a'-yr. aied that the Inn ey
if tht!e country is e nori:eouly stpleinented under
-reslent buestinces :ethldi by dratis, lids ef ex
.::re end every torini of eoiiintercial er-dit, it
vill i;e seen at 4en-i that the increase of currency
uring this pecried 01 activity would take the
lac eeof tie e.; v-t;ottr 14orims or credit, wniich now
upt-menlit W v M.u:ie : Ivytey, and that, f
lie iwiereast- i ecurrenty cctubl le iade to beair an
pyeroxiieate rlat!.el tee the in,-reased volune of
rade. evera ietri,-s in the whole country
vtiutd lee' l--eiehed. Perhaps the mno-t
miortatt'tt advantage to the coun
rv woud ::ri e fromi the greater cheapness with
wich the er-s gre:tt artieles of merchandise -
re distibuted e o r cotsntiltiion. This advan
ewoud pinetipaiy manitest itself in lessening
he rate o' intere-st .nd in enhancing the price of
he cros, it it would be a great error to suppeose
it all bu-ne.- iiterest- would not also reap a
ore~peendtn-g teniehit.
i'Ti-n5s5INGO THE MARIKETS.
The finaneitt repoert in TfilE ATLANTA CONsTI
eieex foe we eie'ed..y, .ly :a!3dt, wahichi was cer
diia'in t enot iteld~ ai an-ll arr'tontent in fav<,~r eel
ie l:n:crs subltr.atury p-ii i. :::y- in di-scussing
e linlanial situ .ltin int N: w ork: "'The heears
vi beeni leee-i;. 'tit .ee , :he title. wheni eel,
ill mn::ke sue-I di -I: .ti-- uponlt tile tinaenei:e re
eouce, ofi the co emtry that there will
C ileothing left in Newt York beanks with
cihih to c'arriy een lull speteulation." In other
nrd,, the i-ears were theni preparing to
eze upone tile tihittness of the ioeya
narielt iciet tee im::rket:ntg the cropes, to dee
eress thteir pria a atent the hrice's eel all other se
urites. Hieoa well th.-'y have succeeded has he'en
ienltated byV tile dectline' in prices of nearly all
ee urities 'awtl the adlvaitc ot interest to the rate
The coneitractinn unei - tti'-.ih popeosed plan during
he sperin mln' h< t ree:a the gradual ce11nenmptein
i he't-l.iet'e. cr e wei ed be ttil mu hle's strm -lte
:han the cell r e-'t ''ni 'vit-nt to the fail motenthis
nder exis' n' t- :dt'ens. it wotiuld about celual
lie le.ssening e.:::.nde. At the woreeet, it wituld
'a.'er tice per 0d eel contraetei comlparedt
ith aveueeee eti tr~eele frome the fall to the sprtimt.
verav hetsine's imant weeuid know that stringeincy
4untevdy iurin;;toe I al woeuld lee inipeossile:
nel he wocuit am -etimiee. c-veni if there awas sonic
eti'ctie'n durmgiii : a.- spring, cornpedlte witht the
elme of curt' it--a' te..t c-aice litoe use ini the fal.,
:hat it woenie take lee at a timne when the lde,
mi n-Is oh' business arc- leess thacn thea' are ini the
BEST NlETiioD OF PERFEcTING BILL,
The peropoesitio:: htavicntr been established that a
atfe, seeuslll, andc stale cutrrencey that will pass on
laity withi geeld, can be issued 01n the great
ttie c-reops,: nd t:: tlexibility or elasticity in
ie avoluntee of Lteturreincy ofi the country will
en tee prinite' the stablility o-f prices anet
wepel downe thie'irate ef interest. awe lease next to the
:insiereatiten o: thie lest mtethod ofl accoetpi-hi
ne this iiutch diesireed re'uit., it woeuld not beC dif
icult to devi- a syste'n based on the line sug
ested by the' Farmers' Alliance that
eul re.ptire no largre expenditure of
ovrnin..enit funds and nio great chlange in
the eenit ime'tnitdc ofl conductinig butsines.
It wouldl lee easy e'neetgh to permtit any responsi
el e'cno.mvl tee e stabelish a waareouse, and to give
>ned tee'the aou'ernenet tat it would issue no re
eipt without havmng the product represented hby
t actumilly in its possession. Th'e
rovennment ~could appeoint an inspector,
ust as it noaw apitis a governmeent
:-auter for the boneldedl awarehiouses for whiskey,
vhoe busiiness it weould lee toe verify the state
icclt, mtade on thle lace ofl the warehouse receipet.
lie imprpereln issuiance eel any receipt by the of
ues ofl this bocndedl warehouse could be made a
-riminati ofenzse. In fact, without ainy
--cah chatnge in the conduct of business,
cvit a fan tc'ss numbeher of fedenal officials
hn arc neiw emiploeyed in the collection of tile
nLcinteeus tait taxes, it would be easy to secure
it" 15-Iance eef a wacrehouse receipt that would lie
cett ill guiranly that the proiduct it purported to
pre'hen5~it u-as actuatlly withina the wails of aL per
eetly re'sponsi ble ware-house. Without anty oh' the
alt' uards and restrictlins which the government
nid tthrowau aroundl the issuance of these ware
cutse re-ceipete. th1ey nowle pass as good collateral in
h. e anks of tht'eaunttry. After this warehtouse
'ec-tt had becen isstued it could bee epjesited with
stubtrasurv,. tee bee esaibishedl in each of the
ttts cof thie union, and 80 leer cent of the
*alue of' the perodluct it represented
'euld lee issued in treasucry notes.
Sithi tile present banking facilities of the country
iid a law pr perly drawn, a single subitreasulry in
-ae-he state could be ms'le etnply sulicienit for all
reoses.
SINPLE AND coNSTITUITIoNAL.
There would he no difficulty in getting
noney upheon the warehouse receipt at the
itareet hank simply forn the ecst of ex
:bange. 'That a simeple, safe and exple
hitions mthlod eef getting these treasury notes
lt cireciatton can be peerfected, there Is no
lubt. tnor i- tiiere any con-titutioneal reason why
te goera'nnmetnt should not have the right to
-sue its treasury notes based upoen
ii waredhoucse ~receipet. At the propeer
me and ini the prereei forum I wouldi
m er':ake toe deeteinstraite tha~t there Is less con
titutinai ed.j.>tion to the issuance of these
resry niotes than the-re is to the banks issuing
eities aedi on the dieposi. of government bonus,
en tee the purtchae-e hey the geeatnmienlt of silver
ullion. To deifrayvanyaddhitionial exj~er.:e that the
overm~lent Imighit le put to, a sittple tax could
cie levied uipeen the iseute of every note, a tax dsmall
mough not to lee hburdensonme to the peolple, and
ct thii sanietimle large einough toe hereve'nt any one
-romt drawing moeney friom the governmilent unless
e ad innuledciate u-e fien it. It is salhe to predhict
hat ne mor~e monley wcotild lie dlrtawn thlan was
w -e-'-arv to chea pely anld econoemically' di-tribunte
he -tapile cu feor e con-umnptioni. I do noct he
leve that tat anly perhiecd of time uroing the year,
-yen the busiest in tile fail, $300)Oe,00.00 of addi
:Iciinch notes wvould bee brounghit into use.
Lhis estimeate is liberal. It must be remeni
seeed that 7,000,000 teaites of cotton at S45 per
ta1 onlyequnals S915NOn faOO, and that AfO per tcent
of this value only equals $-52,0(
entire crop could never at any ti
the government. Consumption I
on and has made considerable pro
days of December, by which time
on-halif of the crop has come into
bale of cottoin and every bushel of w
more be pledged to the governme
bale of cotton and every bus
is now pledged to the b
the marketing season: but i
dang:-r of too great an increase
noent could limit the amount of its
to lie aiivanced upon the pledge of t
hunJred millions of dollars would
ample to secure a very low rate of
an easy tinancial situation durin
nonths." But can not a safer, m
cious and more direct m
devised that will effectively and
accomnlish the ends in view without c
givriient building or bonding wareho
simply an extension of agencies now in ex
limit lefore submitting tiie plan, let us c
Ior a moment what would he accomplished
::overnnient issuing money direct upon the
hionse certificates. It would not prevent the pric
of the great staple crops from being regu
lated by the universal law of supply
nd demiiand. It would simply, by reducing the
cost of carrying these products until they were
distributeil piece-imeal tor consumption, enhance
their v:ile to the extent to which their cot of
c:trria;ge was dininishei: or perhaps to be more
accura'e. by a universal law of trade,
this decrease in cost would be shared
both by the producer and the consumer,
neither moo.nopolizin:a the full advantage of it.
It would :lsf,. by furnishing an abundant and
tfexible curr-ncv. render stalble the rates of in
tere-t, lirevent artificial stringency in the mofney
market tand manipulations to depress the price
of coinmodities, and leave the laws of demand
and -uonly -o work more evenly and without
artificial obstructions.
A NEW SUGGEsTION.
Now, if it can be demonstrated by discussion
that all this can be done through acurrency issued
on the great staple crops without carrying the
go ernment into either the warehouse or banking
biusiness, I am satisfied the farmers would
prommtptly accept sich a modification of their
views. and every productive interest in the whole
countrv coulil be broiht intoW accord
and harmony on the subject. The short
road to this end is for the govern
ment to establish at least one subtreaury in each
state of the unim. It now has subtreasuries in
New Vork, St. Louis. Chicago, San Fr.inei-co,
Bi-ton, Cinciunnati and New Orleans, and to es
tablih them in each state would require but little
time, very little increase of governmental
patronage. and the mere exten-jon
of a systemn that has been perfected through years
of use. National banks now exist all over the
country, and any number can be chartered under
the general law. If these two agencies were
brought into close and harmoniousi relations, and
the national banks of each state were given a
credit with the subtrea-urv to lie establi-hed in
each state to an a iount equal to the
whole or some portiin of their
fully paid-in capital stock, and
the use of the increased currency th -y obtained
thronurh the subtreasury was confined, under
prolier -estrictions, to advances upon the great
state crops. an abundant currency, as stable as
:aiy in existence, could be brought into use -ad
the rate of interest on money material.y lowered
throughout the Union. Any stringency in money
Iroai moving crops wou:d be eliminated Irom
the vonditions surrounding commerce, and a
i a thful method of cxpansion and contraction in
:.c -ordance with the volume of trade inaugurated.
The governiment would take no part in the busi
oress o the country; it would have no voice in
banking or the fixing of credits; the whole ma
chinery of gov arnment banking and commerce
would move on .iust as it does now, and the only
chan:e would be that the national banks, instead
of having to draft ioin the great money centers of
the ciountry, would tind ample funds~ for moving
and handling the great staple crops in the sub
trea:uries established practically at their doors.
As consumntion took place the increase of cur
rency would flow back into the treasury,
only to go out again as demanded by the
exigen:-ies of trade iorced up.n the country by its
enormous anLintul productions. Each state would
have one or mnire financial centers. and would be
rendered independent (if th-: great financial cen
ters.
PRAcTICAL WORKING OF BILL.
To better understand the plan, let us consider
for a moment its practicil working. Suppose a
subtreasury was e:tablished in Atlanta
and in Savannah, and with one or the
other of tiese subtreasuries the national banks of
the state had a credit equal to their capital stock,
and that they could use the currency derived
from this source only for the purpose of advances
upon the great staple crops. In
stead of sending to New York
for currency, as they are now compelled to do with
which to pay for cotton, they would be able, on
the very class of security which they now accept,
to obtain the currency directly fron the sub
treasury, instead of from their eastern corre
spondents. There would be no drain
for this currency upon tne finan
cial centers. Cotton would move just
as it moves now, and when it finally reached the
-reat markets and was paid for an amount of cur
rency equivalent to that advanced in Atlanta
'ould tiow back into sonie (ne or other of the
ubutreasuries. So conservative are the national
banks of the country that it is probiable they could
lie sat ely allowed an increase of currency, to be
i-ed in handling merchandise generally, but so
delicate is the tinencial m.:chinery and so eusdty is
it thrown out of gear, that any increase of cur
renev should be based on'y upon such great staple
articles of merchandise as moust be consumied
within a limited period. To renider thesr.:te ol in
terest uniform throughout the conntry, and thus
to piropierly reguilate the value of money, congre-s,
as liy the constitution of thre United states
it i,. authorized nd empowered to dii,
could, in con-ideration of the adit.onal
cincursio~ns made to the barks, provide a low and
tixed rate of interest
nIsTORY OF SU~rREAsURYt.
The plait proposed will run contrary to the
view- and prejudices of those who have for a
quar ter of a century made war upon the national
banks; lint, in spite of every attack, these
bianks have continued to exist and to
furnish this country with as safe andh stable a
system of banking as ever existed anywhere at
any periodh of the world. There are leature in
regard to the natioinal banks which I have never
approived, but I have never piarticipiated in the
senseless denunciation so often .huriled at them.
Thle iien who mianage themi are the
miost able and skilliul financiers in the
ciutntry; they are men who have maide a tI o:
(iugh stuidy of banking, and who are I chter
prepiared tha~n any other people in the country to
handle sa fely and conservatively anv increased is
sue of currency. Each state would secure all it
coulid hole to secure through state banks
of issue, and, what is much more, the
currency of the country would h4 uni
form, and would have behind it the entire
credit of the government and a soundness and
stability that could not lie obitained in any other
way. In the early history of our ciiuntry we tried
tihe United States bank; at that time it was
argued that the government would
lie compelled to delegate the puowers of
issuing currency to a banking insti
tution that could "meet the requiremients of the
vrying diemands of business. We tried the ex
perment and abandoned it half a century ago.
We triedl the state banks of Issue, and sp~eculatlin
overran the country, and bankruptcy was briought
upoin thousands and thousands of honest peopi C.
The federal government turned its hack upon
both systems and established the "inde
pendent treasury," as It was then called,
or the "sbrasr, as it Is now
called. At the time of the establish
ment of this system It was gravely argued with
great force by nmany of the ablest nien in the
country. that'it would nit lie succc:i.ful. tt has
stoiod 'the test of half a century. At the timie
of its establishment it was argued by
John C. Calhoun, its great supporlter and
defender, that an elasticity should be.
given to the Issue of paper money by the govern
meat, ini order that the currency might be sup
plied in accordance with the laws of supply and
demand. This feature has never been engrafted,
as it should have been, upon the subtreasury sys
temn. Without it, it Is inciimplete; with it,
it is the most complete system
that ever has been devised or probably
that can ever lie devised. Like all i':her systems, .
it needs amendmnt, Irom time to tiene, to make
it correspono with the requirements of business,
but in all amendments one cardinal principle
should always govern the peiple of this union
the federal government shuuld issue the money of
the country and r gulate its value, and
the recognition, credit and power of the
federal government should be behind every dol
lar that comes into existence. The danger of ex
pansion is that it tends to create reckless specula
tion: but an isstie of currency limited In Its use to
han ding the great staple crops would always have
behind it commiodities that are a bsolutely essen
tial to the existence of civilizeid man. If It Is safe
for thme banks to handle these commodities now to
a very large extent upon diafts, hills of exchange
andl artificial currency manufactured thronr gh the
necesities of conmmerce, It would be equally safe
for the same banks to get this currency directly
fronm the government.
In an article ol this character It Is Impossible
to point out all the limitations and provisons5
that shiould surround such an increase of cur
rency, l:ut these are mere details which can bie
eail perfected. If I have succeeded in causing
those who read it to pause and conider well the
most vital question of the hour I shall be more
thani satisfied.
ALLIAYCE PLATFORM ENTTrLED TO sUPPORT.
May not every business man in the country put
himself squarely upon the alliance platlorni, the
subtreasumry bill or something better, relying with
confidence upon the correctness of thme gre'at
primciple that underlies the measure and trusting
to enlighitened discussion to so modify the muethmids
and details that It will fully conformi to the spirit
and genius of oumr institutions and secure for all,
without injumry to any, the relief demanded by the
ixieincies or . qr tinancial and commercial conl
dtina? QZoBGoz-r