State Convention—Finance. 
131 
fact that the issuer is indebted to the amoumt of the circulating 
promises issued. The larger the amount of circulating notes issued 
and maintained in circulation, the greater is the profit arising from 
the issue. Hence, under the British system, we have the whole 
power of the banks of issue, interested in getting into debt, re¬ 
maining in debt as long as possible, by keeping their circulating 
notes out, and in getting others in debt to them, in order to get' 
their notes into circulation. In considering systems it is not nec¬ 
essary to condemn the individuals who operate those systems. 
Active, enterprising men will use such systems as they find and 
make the most out of them. Every bank of issue drives out its 
notes into circulation as fast and as long as it can get any one to 
take them in exchange for what it calls good paper, which paper is 
the evidence that they have induced some one else to go in debt. 
This inflation of circulating notes, and of bills and notes made by 
individuals in exchange for circulating notes, indicated by the line 
of discount, goes on until the country becomes so saturated with 
bank-notes that the limit is reached; no more can be absorbed, and 
the bank-notes begin to be presented at the counters of banks for 
redemption; as the calls for redemption increase, the banks are 
obliged to demand payment from those that owe them. This 
makes a contraction of credit and a contraction of the circulating 
medium at the same time. Whereas, for several years, the banks 
and their customers have been getting in debt as fast as possible, 
now they are all striving to get out of debt as fast as possible. 
Whereas, on the inflation wave, all were buyers, now on the con¬ 
traction wave all are sellers. Whereas, with the inflation wave, 
prices of everything went up, on the contraction wave the price of 
everything goes down. 
The fact is that, during the last century, we have been chronically 
afflicted with the financial chills and fever, and we will never be 
permanently relieved from the affliction until we take the issue of 
the circulating medium from those whose interest it is to inflate the 
issues until the country is in a raging financial fever owing to too 
great and too active circulation. Then comes the chill; the circu¬ 
lation is drawn in from the extremities and congested and absorbed 
at centers from whence it was issued; and the chill or panic occurs 
and then comes the sweat, the weakening emaciating process, the 
result of the fever and chill, after which the patient slowly recov- 
