THE SUB-TREASURY PLAN. 343 



violent contraction. This regular and unavoidable contraction is the 

 true cause for the depressed condition of agriculture. 



The methods of the proposed sub-treasury system are such as will 

 exactly meet this condition, and thereby benefit all classes of society. 

 It is the settled and just policy of this government to forbid any issue of 

 money except by the government itself. The government, therefore, 

 either coins or prints all the legal-tender money. There are at present 

 only two ways for the government to get it into circulation; one is to 

 sell it, and the other is to lend it to the national banks and let them 

 lend it to the people. As a modification of this, persons having a com- 

 modity called silver bullion are now authorized to deposit it in govern- 

 ment warehouses, and the government lends them money on it. Now, 

 if the sub-treasury system will enlarge one of these channels for the dis- 

 tribution of money, and provide for an emergency issue that will increase 

 the volume, so as to keep pace with the suddenly augmented demand, 

 created by dumping the year's product of agriculture upon the market, 

 without increasing the relative volume of money above what is the nor- 

 mal mean average, and provide, also, that such emergency volume shall 

 be of such a character that it will always pass current, on a par value 

 with gold coin, then the sub-treasury plan must be admitted to be a 

 conservative and efficient remedy for the financial question ; otherwise 

 it is not. To this severe test the advocates of the measure are ready 

 and willing to yield. Surely an intelligent public will embrace so liberal 

 a proposition. 



The sub-treasury system is an enlargement of the present national 

 banking law, the only modifications being that the loan of the bills by 

 the government is not restricted to certain corporations, but is extended 

 to all people who have the required collateral to deposit; and that 

 the collateral so deposited, instead of being restricted to government 

 bonds, a simple evidence of debt, is extended to a few leading products 

 of agriculture that form the basis of the export trade of this country, 

 notably wheat and cotton, the most potential forms of value to man, 

 because the entire product is every year demanded by him for con- 

 sumption, and therefore it \ positive evidence of wealth. Surely nothing 

 can suffer from such a conservative extension of the national banking 

 system. The warehousing is not essential; it makes no difference 

 whether the government or the people own the warehouses, or whether 

 private warehouses are used under suitable guarantees ; the object is to 

 base this emergency issue on those products which make such a sudden 

 and augmented demand ; because by so doing the violent contractions 

 of the present system will be avoided. The best money now put in 



