| Show silver it s I 1 importance F 1 I 1 to the whole world I 1 ARTICLE VII AMERICAN REFORM AND AID international REFORM willi regard to our banking system till depre depression clon should have taught us to lessons lesson erst ve ie should ime haie learned that depositors are not sufficiently protected tills this protection should bt be given ghen by those who seek to profit from banking not lot by the public through government guarantee of deposits unless the lie government Is going to take over the operation or of banks our present banking laws lavis th that at a certain percentage ot of deposits must be kept lit in cash they also provide double of the stockholders in cose case of failure of the bank and also that a percentage pei of tile the capital and surplus must be kept lit in a liquid form they do not holi however eer that there shall be any relation between the capital of a bank and the amount of loans anil and discounts outstanding there should be a retention of the double liability ability clause and a safe bate ratio provided between capital and loans and discounts in ili this may liay it if a bank accepted acce ted larger deposits than were nere warranted ranted by their capital they could coma not loan these deposits beyond a certain amount unless they increased inear capital and thereby increased the protection to depositors through the double liability clause many of our banks have failed because their investments were not diversified branch branchi banking would appear to be the best remedy tor for such a condition another great fault with modern banking Is the type of report which must be published quarterly so that the public may know the condition of the lie bank lilt whom they do busin business eSq these reports do not give ancone a very levy clear idea of the saliency soli ency of a bank the items loans and discounts and bonds bond and other securities conveys no idea to the depositor as to how holy collectable these loans loam are or how low salable are the bonds and securities it if banks were compelled to pub publish listi not only the book value out but also the present market value of such resources as Is done in canada many banks would never hale gotten into the condition which lead to failure the second grent great lesson vie lie should have learned from tills this depression Is that while mille banking Is a business carried on for private profit they really perform a great public function with very little public control of that function at the height of alie lie boom in 1929 the outstanding tank bank credit in the united states vias aas slightly more than thirteen times the amount of gold in tills country at about the beginning of 0 1932 outstanding bank credit was vas a little more than selen and a halt times the amount of gold we thus see sec that private business Is able to fluctuate the amount of the medium ol of exchange and credit functions just the same game as money in any manner they may see fit for their own olin best interest when we further consider that many of our largest banks especially those in new york are not doing a strictly banking business but are promoting the sales of stocks and ana bonds speculating lit in tile the market through pools speculating in real estate and in the large industries of the country their to manipulate credit could very easily be used to their own oun adan advantage tage and against the welfare of the country it seems ridiculous that the united states government should use the alie most meticulous care in ili coining money of a uniform weight and fineness so that it would not vary one hundredth of I 1 per cent and then permit business to manipulate the credit system so that the entire medium of exchange could in fit a little over two tio bears ears time be shrunk more than 40 per pec cent it was as found that from 3 up to the time of the civil war the wild cat banking era state control of the issuance of currency by state banks brought on art chaotic financial conditions during the civil war this power palter to issue currency was placed lit in the hands of national banks and only under very cry strict and rigid control since which time our cu burrene cur rrene a after after fter the lie from greenback das and the resumption of specie pa payments lias has never neer been questioned we must corns collie to a strict control of credit for credit functions the same as currency it would seem that the best control could be exercised by means of the power to tax ta just as the power to tax state bank currency is still empl employed oled reform of american banking practice would not answer ansler the need of a greater world monetary base we lie need banking reform to insure greater safety to depositors and greater stability to prices in fact it if we ue do not liae have regulation of credit international monetary reform would bring few permanent benefits for we lie would find our banks kiting credit to still greater heights in times of booms and shrinking credit to corresponding deptris in depressions international MONETARY BEFORM the pr previous ellous articles have hate off all been the building of a foundation tor for tills this conclusion we hale haio attempted to show the following article 1 I to show that in all history an increase of precious metal used as money has been me like a blood transfusion to a wasted aisted invalid imalle invigorating the human buman race spiritually intellectually and and comer sely a loss of pre lous falls metal money has been like a disease and man mail has ills sunk to the status of it a domestic an animal article 11 II was to show that the substitutes for money currency and credit tend to become founded on oil capitalized debts and that debts are destructive destruct lie ile of progress further that credit exaggerates the peaks of booms and tile the depths of depressions and that a reliance on credit to make up the deficiencies of 0 our money base bae ba e Is but sowing the seeds of I 1 future depressions article ill III dealt lilt substitutes for the lie need of mono that is by doing away allay with alth tile the capitalistic system by substituting socialism socialism Is the com compounding compound pouncing ng of two tile errors first that man Is an ati linal who will breed himself into degre depredation dation and secondly that lie li superior than we lie know him to be and will ili work more effectively and intel intelligently H gently for the common good under socialism than he be lias ims under tile the system for the benefit of himself and family article IV was to show that as a insult of this oils depression both alie velocity of circulation of money and the expansion of credit are arc going to be less in future than they hi have a v e been lit in tile past hence to determine the same price level in the future we ile must have hale a greater volume of money assuming that the velocity of circulation and expansion of credit will be the same lit in future as lit in the past ucb unbiased I 1 a s ed estimates of statistical bureaus all agree that the future production of gold will aill fall by a large margin to meet future business requirements article V enumerated a few of the hopeless palliatives and pain hi killers lifers suggested and applied to the econ economic omle body in the past three ears it should haxe have been added to tills this article that the government guaranteed expansion ot of credit of tile the past bear ear should bring some beneficial results but bill it Is not a cure it Is simply appling first aid to tile the injured article VI stated that we lie are suffering front from technical improvement improti of our methods of production forcing ment on our industrial population and farmers tile f tanner t enter Is stiff suffering cring from ment at a ill living ing wage the cure for unemployment Is a 11 greater teater production of 0 chlell means 9 A a gy greater ea ter call consumption s u mp of nil all luxuries by all classes which means higher wages and prices which means nil an increase lit in the lie worlds money base it if tile lie steps step lit in tills argument are sound and logical then we lie have hale praed the need tor for international monetary reform and the problem 1 uli whether ether a 1 system can call ie 1 e cleil devised ked that teat Is workable or kable several bears ears ago it wai proposed lit in england that platinum be for numerous practical reasons this was net taken un of because the alie financiers fro frow neil ned on oil any ally foil as liei esy oler hns has been tile out only v metal considered as worthy and practical to be used 1 as 19 a 1 supplement to gold it lias has been proposed to indrea increase e our ittin number iber of dollars by decreasing the number of grains in ill the dollars doll doli irs tirs if such a plan were likely to pass pas gold would nt at ence dice disappear in hoar boar dings I 1 we lie should luie hase a real money panic and then theil it if suii nuh a measure pash vil d the lie gold boarders hoarders hoar ders aiho had caused the panic would come collie for with their gold and claim their bonus bonns such a method world not net offer a to producing and sillier oil owning ning countries neither would it cheapen tile the test cost to tile the consumer of tile alie useful metals metal 3 copper lead and zinc the of siller as Is SO 80 per cent produced as a uy by of copper lead and zinc mining would deduct any increment of value nine it might receive from the cost to the fon con of these thene useful metals silver ilbo also has the advantage odian adian tige tage of increasing as the demands lor for topper copper leid lead and ranc increase Is it a fair buea urs ure of the increase of all business so it Is to a marked extent far more than Js is gold a metal itrich increases as need for more money increases and decreases as tile the demands of business decrease for eor ears the world orld has been by every subtle sul tle means to inculcate the belief that bimetallism Is impractical as a money base find and that gold li 14 the only metal that crin can be used as such a base we hate bale been trained to belfer that gold aiono ineta elsm goes back to the hoary beginnings of 0 time and li it credited with off all tile the advancements that man mail lias made since the beerse Is true gold mono Is only sixty ca cars rs old in 19 guld gold bimetallism goes back te be and recorded history in ill tile sixty jears ears of life of gold mono tile the has produced more than alian two thirds of all the gold produced lit in alie past five thousand bears ears in tills this sixty ears there lum has been the greatest expansion of 0 credit to greatly magnify the eff iclene of money in carrl carrying ng on bics business this has increased increase the efficiency em clency of money many times cihat it ever before enjoyed lu lit this period too there has been the greatest colonization and settlement of the waste maste areas ot of the earth which was carried on with a on the money estem it can be said in short that gold lias has never neier had a I 1 continued on page four silver its if s importance to the whole va world orld continued facin page one more favorable opportunity to prove prole ls its merits than in tile lie past sixty 5 3 cars in these past sixty veers there have been greater advancements mide than lit in any other ollar like period but these advancements here made because there then was such sub a great increase or of money certainly not mot soloy solely because that money happened to be gold hut but we vie fill giitl another side to this ills under older gold mono and the credit system based upon it ic e find tile the greatest fluctuations or tile the ailee level of any other like period the lie greatest number of bankrupt bankruptcies cles tile the greatest greate t losses suffered 1 y y the average man iran trying to improve its ills economic condl condition Hon we find in III abse sixty bears ears that III miny illy commodities touched tou clied prices lower than eer cier lipford reached in fit history and that twenty four ot of these sixty beirs ears are arc classed a as being vears bears of extreme et reine economic di lit in short these sixty years ears of gold ilione metal cism and unrestrained credit have hale been paradise paradie for the money speculator and tell hell for the average small niall producer lit in the thousands i of ants of ihor gold there is recorded the worlds longest anil and severest depression the depression of the middle ages tills this depression was not caused by bimetallism but in spite ot of it it was vias caused caused by the lack and loss of practically all precious metal tunney money for a period of eight centuries to the eer everlasting lasting credit of silver it was mainly the he front from the Anic america ricas that pulled the out of this depression during fill tills long period of tile price level mas far more table stable than since because credit was vas not exaggerating the business ciele cecle of fluctuations from tills this and weighing neighing neigh ing all tile the different factors we lie f feel er I 1 that silver gold bimetallism ni coni compare pare very iery faor favorably ably lit in its service to mankind with gold mono one of the stock arguments against bimetallism Is 14 that debts debt in fit the alie united states are all made pai p avable in III gold that would place 1 n I prel premium illum on gold and make such payments more difficult tills this argument was ties adian advanced ced by president hoover during tile recent campaign debts are arc really paid in fit goods there Is already a premium on gold old 1 a I premium of about 1 62 I per cent and if bline bimetallism mould raise tile the prices price of goods good even eien if a debtor were tere forced to pay lit in appreciated gold which Is iq a disputed question lie e fall to see sec how low lie he could be worse vorse off than at present it Is a disputed question a matter of great concern and controversy lit in our financial journals whether our delts in the united states could be collected in gold gohl if chang cli anges were made lit in our money system the highest burts of other countries england france Gerni germany any and italy have ruled that even een it if a debt Is contracted to be paid in gold it Is really coll clabie in the he money units of lie country and the lie government of that countley deftness how law much gold there Is lit in the money unit in the united states a pr provision ollon of the constitution says sas that tile be of contract cannot be set pet aside alde by court or legislative action our bankers hope tills this will pre prevent lelit a debtor paling other than in it with the terms of tile the contract that hat Is lit in gold this question lias has never neer been decided by the supreme court there has been no cause for action because the united states has never liener been off tile lie gold standard since our financiers president hoover homer illas never mellon et all al of course adhere to the pound of flesh theory of debt payments it Is a viell bell defined principle of common law that a contract Is to be interpreted as being the intent not the lie letter or of the parties to a contract and that it must be settled lit in fairness to both parties on oil both the he board of trade lit in chicago Cli leago and the lie new york stok stock Eh exchange ange a broker who ullo has u sold grain or a security short and cannot make delhery dell iery because someone lias has cornered the aal available lable grain or the security ti cannot be squeezed by the one holding the corner the board of governors of both these institutions have haie ruled and have haie been upheld by the courts court that the short trader must pay only a fair price for the lie grain or the security lie he cannot deliver defiler it Is doubtful it if our supreme court nell set a loner loiter standard of ethics rind |
