Money order

“ What is the standard of order-money? Does order-money really exist, or has it ever existed?' The livre of order-money is considered worth fifty per cent. more than the livre-tournois; and the distinction is supposed to be derived from the Order in Council of the year 1729. But that Order in Council did not establish that difference: it did not change the relative value of the sou and the livre. There was, in fact, no such thing as order-money, except for liards, and thus it did not apply to sous or livres. ”

“ In order to raise money by way of loans most easily and cheaply, it is clearly necessary to give every possible support to the public credit. To that end a uniform currency, in which taxes, subscriptions to loans, and all other ordinary public dues as well as all private dues may be paid, is almost if not quite indispensable. Such a currency can be furnished by banking associations organized under a general act of Congress, as suggested in my message at the beginning of the present session. ”

“ The rise of the banker to his present commanding position is due, primarily, to his control over money, and to his power to issue or to withhold credit. A producers' society may lay far less emphasis on money and its derivatives than does the present system, yet the money function will remain and the money forces will doubtless play some part for a very long period in the new economic order. ”

“ The lenders receive a certificate of indebtedness, and have the right to buy each year a quantity of my books at half the retail price. Thus, if you lend ten dollars, you can get $5 worth of books for $2.50. These books must be ordered in one shipment, so as to save handling costs; under the Loan Plan you may place one such half-price order every year. The saving takes the place of interest on your money; it amounts to 25% interest—a pretty good rate, but not so high as millions of poor farmers are having to pay to national banks all over the country—see my “Letters to Judd”! ”

“ Through the medium of banks,—which are really institutions for the exchange of credit,—and by means of checks, drafts, notes, bills of exchange, letters of credit, post-38office and express money orders, etc., the great bulk of the world's business is transacted. ”

“ The custom of keeping the spare cash reserved for immediate use or against contingent demands, in the hands of a banker, and making all payments, except small ones, by orders on bankers, is in this country spreading to a continually larger portion of the public. If the person making the payment, and the person receiving it, keep their money with the same banker, the payment takes place without any intervention of money, by the mere transfer of its amount in the banker's books from the credit of the payer to that of the receiver. ”

“ We may each one of us counsel our active and enterprising countrymen to be constantly on their guard, to liquidate debts contracted in a paper currency, and by conducting business as nearly as possible on a system of cash payments or short credits to hold themselves prepared to return to the standard of gold and silver. To aid our fellow-citizens in the prudent management of their monetary affairs, the duty devolves on us to diminish by law the amount of paper money now in circulation. ”

“ No other adequate cause has ever been assigned for the revival of government credit, the renewed activity of trade, and the facility with which the government borrowed, in two or three years, at reasonable rates of interest, mainly from its own citizens, double the amount of money there was in the county, including coin, bank notes, and the notes issued under the legal tender acts. ”

“ In that event the check and the promissory note and the bill of exchange, operating as orders to the book-keepers of banks and clearinghouses, would effect transfers of debits and credits the world over so that all Trade would be barter systematized—plain barter freed from the obstructions incident to barter in primitive Economic circumstances. Except for the use of “pocket cash,” Money pieces of every kind, whether metal or paper, would be like children’s toys to grown-ups. ”

“ At the adoption of the National Constitution, the people, to their wide-spread cost, had become familiar with bills of credit and their incidents, while all conversant with Colonial history must have known the part which bills of credit played for nearly a century, not only as a help to currency, but as a tender, constituting paper money. ”

“ You cannot create the necessity of a bank, and then plead that necessity for its establishment. In the administration of the finances, the bank acts simply as a payer and receiver. The secretary of the treasury has money in New York, and wants it in Charleston; the bank will furnish him with a check, or bill, to make the remittance, which any merchant would do just as well. ”

“ Even in the little bids we made we had to deposit with the Government some twenty-six or twenty-eight thousand dollars, and I do not know but more, in cash, or what is the same as cash, for the bank certifies that the money is there. That is another reason they bid on smaller routes. What is the next? The Government asks such frightful bonds, such terrible amounts, that a man must be almost a millionaire, or else there must be a confidence in him that is universal, before he can give these bonds. ”

“ Without the right of issue a bank must, at every one of its offices, hold the whole of its balance of cash in the shape of coin, or of notes of other banks, which, as far as it is concerned, are as unprofitable as coin. Such balances entail a complete loss of interest which can only be borne where the amount of business is of considerable extent. ”

“ The operation is carried on between a nation and a banking corporation. The nation, through the channel of its members, exchanges a thing called credit, reduced to the form of bonds or notes for the payment of money, with the corporation, giving a boot, profit or difference, of about eight per centum per annum, which the bank bond, note or credit, is arbitrarily made by law to be worth, beyond the national bond, note or credit. ”

“ It enables the banks to sell their credit and make a gain, to use a part of their money deposits to buy mercantile paper with, and so get a bank interest on them; it enables dealers in commodities [302] to realize in cash minus the discount the sum of what they have sold on time; and by means of accommodation notes or bills, which only differ from the others in that there is no actual debt between the parties, business men may swell the volume of their business temporarily, and non-business people may borrow small sums for convenience or emergencies. ”

“ The doctrine that bank bills are a good tender, unless objected to at the time, on the ground that they are not money, only applies to current bills, which are redeemed at the counter of the bank on presentation, and pass at par value in business transactions at the place where offered. ”

“ It is the exclusive function of the general government to coin and create money and regulate its value. All bank issues designed to circulate as money should be suppressed. The circulating medium, whether of metal or paper, shall be issued by the government, and made a full legal-tender for all debts, duties, and taxes in the United States, at its stamped value. ”

“ The government would loan a command over immediate goods (represented by its promise to deliver such goods on demand) in exchange for a promise to return such command over goods at a future time, and secured by a deposit of collateral; and in payment for the difference between the value of present and future goods it would charge interest. This is precisely what the loan department of every bank does. Every man who accepted the money in payment for goods would deposit, for the time being, with the government178 the command over commodities in general which he owns ”

“ Of all such pretences, banking resorts to the least intricate. It gravely tolls nations that it enriches them by taking their money; that by emptying a quart bottle of half its contents, the residue will become three pints. If a nation possessed a certain quantity of bread, would it be increased by depositing it in the hands of a corporation, and paying ten per centum for receiving the residue on the credit of the corporation bread notes? ”

“ But any estimate of the currency needed, or to be needed for the transaction of business, founded upon the amount of deferred payments, is wholly fallacious.
It is equally wrong to suppose that the bankers are the principal money-lenders. The real lenders are those who have sold their produce, the use of their tools or their time, at a price to be paid next week, next month or next year. Every man who has wages due him is as truly a money-lender, to the extent of the wages due, as any banker who accepts a promise to pay in the future for service or value given in the present. ”

“ When we seek a principle, we must of necessity disengage it from its consequences, however clear and direct they may be.
“The object of a bank composed of partners en commandite, like the caisse d’escompte, is to furnish assistance to commerce by bringing together336 funds to be applied to discounting good bills at a moderate rate of interest. When bills are presented for discount at this bank, the directors, provided they agree to give the accommodation, grant a bon, or order, to receive the cash at their treasury. ”

“ Speculative debtors, on the other hand, always thrive on depreciating currency, paying their debts in what costs less exertion. Under appreciating currency, the creditors gain, be they bankers or workmen.
Banking.—The peculiar convenience for saving found by experience in the use of each of these methods of settlement in exchange leads to a natural commingling of all. Coins serve some purposes best, and accounts have a limited range; notes of hand are often desirable, and paper money, if safe, is universally convenient. ”

“ Resolved, That the Secretary of the Treasury did not consult the public interest in negotiating a loan with the Bank of the United States, and drawing therefrom four hundred thousand dollars, at five per cent. per annum, when a greater sum of public money was deposited in various banks at the respective periods of making the respective drafts. ”

“ On the first of June the regent issued a decree, permitting persons to have as much money as they pleased in their possession. Few, however, were in a state to benefit by this permission. There was a run upon the bank, but a royal ordinance immediately suspended payment, until further orders. To relieve the public mind, a city stock was created, of twenty-five millions, bearing an interest of two and a half per cent, for which bank notes were taken in exchange. ”

“ The seventeenth section gives power 'to receive money on deposit and pay away the same free of expense, discount bills of exchange and notes, with two or more good and sufficient names thereon, or secured by a deposit of bank or other public stock, and to make loans to citizens of the States in the nature of discount on real property, secured by mortgage,' &c. ”

“ A dealer who has sold goods, for which he is to be paid in six months, but who desires to receive payment sooner, draws a bill on his debtor payable in six months, and gets the bill discounted by a banker or other money-lender, that is, transfers the bill to him, receiving the amount, minus interest for the time it has still to run. It has become one of the chief functions of bills of exchange to serve as a means by which a debt due from one person can thus be made available for obtaining credit from another. ”

“ Substantial import of the third question is whether the complainants are liable under the internal revenue acts to pay a duty of one-twenty-fourth of one per cent. per month on the average amount of money which they receive and invest or loan, as described in the statement of facts exhibited in the record.
Their powers are set forth in their charter and the other acts of the legislature to which reference has been made. ”

“ By these laws it is made penal for a man to receive more than six per cent. interest for the use of any sum of money which, by a loan, he puts at hazard, and the use of which he deprives himself of. Now, sir, this bank is permitted, contrary to those laws, to draw an interest on twenty or thirty millions of dollars, when, in truth, the whole extent of its responsibility, the whole sum which it puts at hazard, and the use of which it foregoes, is only its original stock of ten millions. ”

“ Congress has authority to issue these obligations in a form adapted to circulation from hand to hand in the ordinary transactions of commerce and business. In order to promote and facilitate such circulation, to adapt them to use as currency, and to make them more current in the market, it may provide for their redemption in coin or bonds, and may make them receivable in payment of debts to the government. ”

“ Purpose of the charter as described in the preamble is to encourage in the community habits of industry and economy, by receiving and investing in government securities or in Federal or State stocks, such small sums of money as may be saved from the earnings of tradesmen, mechanics, laborers, minors, servants, and others. ”

“ We perceive no connection between the express power to coin money and the inference that the government may, in any contingency, make its securities perform the functions of coined money, as a legal tender in payment of debts. ”

“ The unique powers of commercial banks to accept demand deposits, provide checking account services, and lend against fractional reserves permit the banking system as a whole to create a supply of 'money,' a function which is indispensable to the maintenance of the structure of our national economy. ”