DECEMBER 29, 1
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. Vat YVT . .. - LINCOLN, NEB., DECEMBER 29, 1904. ' No. 32
Secretly But Persistently At Work J Financtalg? Zd"
Editor Independent: There is no
doirtt about it being one of the pur
poses of the "financial group" to se
cure the complete adoption otthe gold
standard of payment by the destruction
of .every form cf legal tender except
gold coin. It is equally certain that
another purpose is to destroy every
other form of currency,' and to supply
its place with a bank currency that will
give the banks complete control of the
entire volume of currency upon which
the business. of the country will be
compelled. to depend.
Both purposes will be advanced by
the retirement of the government legal
tender currency. The proposition to
maive saver aouars leueemauie iu gum
Will, as I have already pointed out,
convert the whole volume of silver cur
rency into a debt against the govern
ment (according to the view of the "fi
nancial group") and will be follewed,
portal nlv as nle-M follows dav bv the
demand from the "group" that it be
paid and retired. In the end this will
be done and the metal sold in foreign
markets. The retirement of silver dol
lars will, of course, destroy them as a
basis for the silver certificates, and
this form of currency will go out pf
existence. ' -. ;-
At this point it is well to call to
mind the economic purpose and result
of bimetallism. There is an economic
difficulty that Inevitably attends the
use of the metals as material out of
which to make money. Silver and gold
are commodities and are not in any
economic sense money. They are, un
der law, materials out of which money
is made just a3 lumber Is material out
of which chairs, tables, etc., are made.
Lumber has an exchange value in the
market as lumber, -but. when it is con
verted into furniture then it has tan
other economic or exchange value as
furniture... Just so silver and gold have
an exchange value : in the ; market as
metals. - When -made, by authority of
law, into money they have another ex
change value as money. The value of
money, no difference out of what the
money is made, ha3 the same economic
origin as the value of commodities. If
money is a legal tender then the money
value is increased by the demand for it
as a-standard' of payment and the
value of the material outof which it
is made will be increased just as the
value of lumber will be increased by
an increase in the price of things made
out of it. The difference between lum
ber made into furniture and silver and
gold made into money is that in the
process the value of the lumber as such
is destroyed, but the exchange values
of silver and gold as metals are not de
stroyed by coinage. When lumber is
converted into furniture its market ,
value as lumber is gone, and can not
by any process be restored. When the
metals are converted into money vtheir
values as metals remain subject to the
fluctuations occasioned by supply and
demand, because no difference what
form they take they can be restored to
their original form as metals, A silver
dollar when coined is the equal of a
gold dollar as a debt-paying money,
but the commodity values of the metals
are not equal. This presents the econ
omic difficulty. It is impossible to
make money out of a metal so that the
money value is not subjected to such
control of the commodity value that a
fluctuation occurs in the exchange
value of money.
The best device that experience has
suggested to overcome this difficulty
ha3 been the use of two metals at a
ratio fixed by law; treating them ex
actly alike under the law, so that when
the demand for one kind of metallic
money increases the value of the metal
in the market, that demand turns to
the money made out of the other metal.
As might be expected, it has been con
tinually observed that, 'during all the
time when the metals were, for money
purposes, treated , most nearly alike,
there was always fluctuation in the
market value of the mejtals. ';? Some
times one Vashigher and sometimes
the other, but the use of both, at a
ratio fixed by law, as maerlals out of
which to make "standard of payment"
-fdebt paying .money resulted in re
ducing the range of fluctuation to the
minimum. It is this control over the
range of fluctuation that the "financial
group" want to get rid of, because It
reduces the range of speculative and
debt robbery. r
At the time when the act of 1873 was
passed, the metal In a silver dollar
wa3 worth more in the market than
the metal in a gold dollar. When by
law we ceased to treat the two metals
alike, that moment the range of differ
ence in market value increased, but the
effect of the law has been to hold the
equality of standard of payment mon
ey. This the "financial group" want
also to e:et out of the way. This is
expected to be accomplished by the
pending legislation. Bimetallism has
been the effort of experience to avoid
the -economic difficulty, but, while It
reduced the difficulty to the minimum,
it could not wholly avoid It. It did,
however, prevent any serious evil, re
sulting from the conflict between the
exchange value3 of the metals and the
use of the metals as standard of pay
ment money. When this safeguard was
taken away at once the market value
of the metal favored by law controlled
the money value, while the market
value of the less favored metal sank
much below its value as a standard of
payment. Leave but one metal, as de
sired by the "financial group," out of
which to make standard of payment
money, and the value of that standard
will be controlled by , the value of the
metal. This is the goal to which we
are urged by the "financial group" and
when they have succeded in forcing us
to it. the law as it has stood for more
than three-auarters of a century will
favor their scheme. That law comes
verv nearly making the gold standard
by coinage. A gold coin ceases to be
a standard of payment by coinage the
moment it loses the one- eighth part
of . one grain on each dollar, and 13
then only legal tender by weight. ,
.The purpose of the 'financial group"
the holders of large credits, the man
ufacturers of credits and dealers in
prfeditK is to remove every possible
governmental control over hot only.the
naner currency but of the metallic cur
rency. To accomplish this and make
gold the standard ; of payment by
weight and the only standard win be
greatly to their advantage. It will
not only enable them to profit by the
increased demand, but will enable them
to Increase the demand, for the metal
out of whichr the "debt, paying money,
with which to pay their debt3, must be
made.
At the same time they are planning
to secure for themselves a special prlvl-:
leee under law by which, under the
stimulation of an enormous inflation of
money equivalents, they can manufac
ture credits, that must In the end be
naid by a standard money contracted
to such volume as can be furnished by
the production of one metal.
The mistaken belief that some how
seems to have taken hold of the minds
of Mr. Bryan and Mr. Towne is play
ing into their hands. lias anyone
heard of any effort on the part of the
"financial crouD to disprove the claim
that an increased production of gold
demonstrates the', "triumph or the
Quantitative theory" of money? Of
course not. They are entirely willing
that the -public should remain unaer
such mistake, as a cover for their pur
poses. ;-v -
Bimetallism is but a mitigation of
the inherent evil of a metallic cur
rency made by law a standard of pay
ment, and the moment the volume la
increased, and (with other demands)
increases the demand for standard
money until that demand exceeds, as it
does now. the volume of money pos
sible by the use of both metals to the
limit of their production, then the evil
return3 in SDite of bimetallism, ana.
to avoid that evil, the amount of
standard money must be increased in
some other way. During the civil war
the demand exceeded the metallic sup
ply, and the volume, was increased by
government legal tender paper. . It WR3
a currency based on the faith and credit
of the .cation but it is now proposed
tdmakft -C.ilfrehcy. based on the as
sets of national banks. Let tra examine
the asset currency, proposition and see
what it really is, and what It really
means, i - - ' x:--- - .
i . (To be continued.)
' . FLAVIUS J. VAN VORHIS.
Indianapolis, Ind.
The One Important Issue
', , Your editorial in the last Independ
ent, "New " Party Alignments," seems
to indicate that you have but little
hope of accomplishing an y thing until
the democratic, party shall have gone
to pieces which is not likely to occur
until after : Gabriel's trumpet shall be
worn put. Parties of negation never
die. It is several times as likely that
you will live to see the republican
party go to pieces than the democratic.
If the plutocracy has as firm a grip
on that party as. I believe it has, Mr.
Roosevelt, La Follette, et al, will Irre
vocably divide it during the next four
years, and I still expect that the plu
tocracy will fight its last battle under
the democratic banner. As you well
know, the plutocracy aud proletariat
are generally found working together
in economic crises, ; M , .
. What ; the populist, party needs is
a bugle blast from a real leader, sound
ing a charge upon the enemy's works
at some ; point x which appears to be
most vulnerable. For a year prior to
July last the Nebraska Independent
(and I have always supposed that you
are practically it) was such a leader.
But for the ability with which it was
edited, the vigor with which it fought
the idea of fusion and the feeling of
hope with which it: reinspired many
of us there would have been prac
tically no populist party today. To
Thomas Tibbies is mainly due the reT
organization of the populist party on
a "no more fusion basis." -;
W'e are now at the threshold of the
campaigns of 1906 and 1908. I have
been, looking anxiously over every
.issue of your paper ,to see if The Inde
, pendent is to be the leader in the com
ing campaigns that it, was in the last
vone. The need of the times is a clear
cut issue. In the last campaign At
was "no more fusion. The. issue pre
sented by Mr. . Watson is "no more
race issue" and "the revival of Jeffer
sonian democracy." The general trend
of the expressions that I have heard
from the populists of the country gen
erally during the past six week3 is
more hostility to the democratic party
than advocacy of any special measure
or policy. But no party can win by
mere antagonism to. and denunciation
of, a minority party. No new party
ever came to the front except as the
aggressive advocate of some vitally
Important measure or policy not ad
vocated by an existing pary.
Suppose that your feelings and mine
about Mr. Bryan are very much alike,
but I submit that.it will be best for
our, party to discontinue. making him
a central figure on the political chess
board, but to begin the vigorous agi
tation and advocacy of the funda
mental populist principles, pressing
them with such determination and per
sistence as to compel attention. Mere
denunciation . of republicanism and
President Roosevelt will bring us no
recruits from the republican party.
They will have no more effect , than
water on a duck'3 back unless it be
to intensify the present prejudice
against us. Mere denunciation of the
democratic party and of Mr. Bryan will
in like manner repel more than it
attracts. Millions of people looking
anxiously to the future are asking, not,
"Who and what are you opposing?
but "What are you advocating?"
"What will you do if we give you the
power?" ; 4 -
No one is in a position to answer
these inquiries as you can. . Your bugle
(The Independent) goes to more pop
ulist homes,, than any two or - three
other periodicals. The people read
what you say, and think over it. They
have absolute confidence in your sin
cerity ; and , they recognize your su
perior ability Doubtless many-thou
sands of them have for six weeks been
catching jup the Independent as soon
as it came, running over page after
page, a3 I have done, to see if the
issue of 1906-08 has yet been formulated.
This issue should not be any of the
propositions that have been long be
fore the country and continuously de
cided in the negative, ' It should not
be any of the propositions heartily
approved by a few but unalterably op
posed by very many more; It should
not be something entirely new and
disconnected with those already dis
cussed. On the contrary, it should
be one that will appear to those we
hope to reach as of transcendental Im
portance. It must aiso appear to be
attainable and in a reasonable time;
and it must not be something that
leaders in other parL.es can not make
their followers believe can be secured
by putting them into power. , Such an
issue is the populist presentation of
the money problem with an addition.
From its organization to the pres
ent time populists have inslsed that
(1) All money must be made by the
government. , 1. , ,
(2) That 'all money shall be full legal
ender.
(3) That no money shall be redeem
able in any other kind of money.
. (4) That enough of it must be pro
vided to enable all the people to read
ily exchange their services and prod
ucts, and
,(5) That its value shall be kept a3
unchanging as is possible. . . . i
Every populist in the land will heart
ily endorse each and all of these prop
ositions. Millions of members of other
parties would have done so long ago
but for, the fact that their leaders
made them believe that "thi3 Idea of
money Is impracticable.". The first
reason : for this Is that the bankers
have with practical unanimity, fought
this populistic- idea -of money, mow
virulently than they ever have any
thing else.' But an even stronger rea
son is that the populist leaders them
selves did not generally recognize the
fact that what is called "bank credit"
Is really money and must be recog
nized and treated as money by law
makers just as it always has been
by the courts. Had they understood
this a3 well as you do and have done
they could nqt have ' been so mys
tified and misled. . -
It therefore seems to me that all
that is needed Is to add to the five
populistic monetary propositions above
stated something like this: ;-
(6) Everyhing that actually does the
work of money and has the same ef
fect as money and does nothing else
must be recognized and treated as
money.
(7) As expanding and contracting
the value of bank credits has exactly
the same effects on business prices and
values a3 expanding and contracting
the volume of ! real and recognized
money, has. the government has . the
right, and is In duty bound, to so con
trol it as to prevent It, from affecting:
the exchangeable value of the differ
ent kinds of money that may be issued
by the government.
f8H That as the contraction of bank
prodifa at times when industrial con
ditions really v require expansion is a
principal, if not the sole cause of com
mercial panics and long periods of In
dustrial depression these bank credits
which have been rightly called hocus
pocus money should be steadily and
UprsIv contracted as the ouantitr
of real money 1s expanded; and that
this elimination of the hocus pocus
money part of our currency 3hall be
coninued at least until what remains
will not affect the exchangeable valua
of real money.
I believe that your judgment will ap
prove of this proposition (for I esl
dom find myself seriously disagreeing
with you), but I am aware that your
position as the head of the IndepelcJ
ent puts on you a great deal ct
sponsibility. It is right for you to con
sider well the vlew3 of the friends who