688 READINGS IN RURAL ECONOMICS 



farm securities, and an army of expert clerks to keep accounts 

 of the various transactions. But more objectionable than all this 

 would be the ease with which this currency could be controlled 

 by the capitalist. Farm products would be bought up by the 

 capitalist, dumped in the warehouses, and a loan of astonishing 

 size would then be secured. Moreover, there would be every 

 incentive for the capitalist to do this, since he would be able to 

 get money at 2 per cent instead of at 4 per cent or 5 per cent 

 as he now does. Any plan now advanced by the People's Party will 

 probably be one which involves the same principle, that is, of 

 cheap money, unlimited in amount, and issued on land and other 

 securities. But paper currency cannot be issued against land, for 

 land has no adaptability as money. Nor can mortgages on real 

 estate, government, state or railroad bonds, perform the same serv- 

 ice. Paper currency is but a "promise to pay on demand," and 

 the thing in which it is payable must have the qualifications of 

 money. Consequently if the borrower fails to meet his note, the 

 government takes the security which the note holder does not 

 want. He demands gold or silver ; but this the government 

 does not possess for the purpose. Thus gold and silver coinage 

 manifestly fails to fulfill its proper function in a money system. 

 The demand for more money per capita has usually come 

 from the South and West, where the conditions were such as to 

 cause a scarcity of money. A new country always needs capital. 

 It is the comparatively poor who emigrate, and they require 

 everything, from ploughs and machinery to household furniture. 

 The consequence is that the capital which goes into money is 

 begrudged more than anything else. They do not want to hold 

 anything in the form of money, but spend it for tools and neces- 

 sities brought from the older parts of the country ; thus the cash 

 goes out of that section, and when they are ready to sell their 

 products, they find that they must wait for the money to return. 

 Meanwhile prices are apt to decrease, and thus the whole system 

 works to their disadvantage. Realizing that such is the case, 

 a cheap money is demanded, sufficient in amount for all practical 

 purposes. Any plan tending to secure such a result is at once 

 joyfully accepted by a large number of people. Most urgent in 



