THE POPULIST MOVEMENT 687 



the value of the security decreases, the borrower must increase 

 his security or give up the loan. In this way the government 

 is to be made secure and can indorse the notes with safety. Such 

 is the sub-treasury plan. It will naturally necessitate a greater 

 number of warehouses, clerks, and complicated accounts than 

 was at first assumed. The whole plan is based upon the hypoth- 

 esis that farm products are a safe basis for loans, and upon the 

 old ideas of a cheap currency, the need of the people for money, 

 and the inelasticity of the prevailing system. 



The sub-treasury plan is neither more nor less than the appli- 

 cation of the national-bank system to the individual. That is, the 

 individual is to be allowed the privilege of the banks to make a 

 deposit and to receive in return a certain amount of money based 

 on the value of the security. In principle the sub-treasury plan 

 is much like the so-called " Land Bank " in Massachusetts in 

 1 7 14. There is, however, considerable difference as regards the 

 details. The sub-treasury scheme is broader in its allowance of 

 securities and the borrower pays a much lower interest. The 

 " Land Bank " was periodical : the issues were made for a period 

 of years ; while the later plan proposes continuous issues at all 

 times and in any amount. In this way the money system is 

 not disturbed and the fluctuation caused by the redemption of 

 all notes at one time is, at least to some degree, avoided. The 

 mistakes of the Massachusetts " Land Bank " are to be avoided 

 by this continuous currency at a low rate of interest, but the 

 basis of the plan is not a stable one. At times real estate fluc- 

 tuates greatly ; the same is true of corn and the various products 

 of the farm. This is met by the provisions for additional se- 

 curity or the redemption of the loan. The whole theory is fairly 

 plausible, but the cumbrous machinery required to make it prac- 

 ticable would in time destroy its usefulness. Then again, the 

 plan extends only to farm products and to real estate as securities. 

 The natural consequence would be a boom in these two things, 

 since those desiring loans would have to possess one or the other 

 to give as securities ; and at the present time it would be almost 

 as difficult to obtain them as to get money. The government 

 would be compelled to have warehouses in which to store its 



