159 



Thirdly: That Elevators with warrants and cre- 

 dits on warrants will put much money into circulation 

 that otherwise would have to lie idle in the banks, is 

 the consummation of all desires; evidently it cannot be 

 used as an argument against loans on warrants. 



The circulation of money due to the advances on 

 the crop unsold and stored for sale by the farmer at 

 -the earliest convenience, impossible under ihe circum- 

 stances to-day, will normalise credit locally and act ad- 

 vantageously on local business and on local prices gen- 

 erally. 



WARRANTS CIRCULATE MONEY IN THE CAMP 



The "almaceneros" and other local trades people 

 will be the first to admit ?he disadvantages of the pre- 

 sent system, and to appreciate what it would mean to 

 them to have money circulating freely the whole year 

 instead of, as at present, for a month or two in the year. 

 By helping to put into circulation the paper money al- 

 ready issued, warrants will achieve more towards giv- 

 ing life to. our wayside towns and villages than any 

 other measure yet proposed. As a powerful adjunct to 

 stimulating their progress, there is nothing comparable 

 to money in circulation among farmers. 



The dangers of inflation of credit attributed to 

 the emission of value-bearing paper and similar docu- 

 ments are unfounded. The same outcry was raised over 

 cheques, yet cheques, by avoiding the use of paper mo- 

 ney, have obviated crises. Warrants greatly resemble 

 cheques in regard to the function of obviating the emis- 

 sion of huge sums of paper money. Once the security 

 iv withdrawn so is the document and, unlike paper mo- 

 ney, warrants cannot be re-issued. Warrants based on 

 -an annually liquidated security prevent the injury from 

 over issues of paper money. 



The very ephemeral nature of the warrant has 

 been used as an argument against it it is not worth 

 while establishing a complicated system of credit for a 

 few months. Even if in existence for a few months the 

 utility of the warrant as a source of credit is undeni- 

 ably one of the best regulators of the money market; 

 it does not obviate the use of paper money nor unduly 

 facilitate the use of credit. 



The issue of warrants covering the total cereal 

 crop to the value of 1000 millions of pesos would not 

 ^affect the money market. In the first case the warrant 

 not attribute any definite value to the article it 



