20. Postal
Savings Banks
Source:
Republic County Freeman (Belleville, KS), April 7, 1892
These
proposals were designed to reclaim control of banking and currency policy from
bankers and facilitate the transfer of money between the various sections of the
nation. Farmers saw the efficient
transfer of capital to the agricultural sections of the nation (West and South)
at harvest time as essential to raising commodity prices.
This flexibility was a major feature of the Federal Reserve System, which
replaced the National Banking System in 1913.
An added benefit of Postal Savings Banks would be government
responsibility for the safety of deposits, the importance of which would become
obvious between 1929 and 1933 when more than 5,000 American banks defaulted,
wiping out the savings of millions of Americans.
Afterward, the federal government established the FDIC to insure bank
deposits.
The subtreasury
plan of the Southern Farmers' Alliance was another part of the money plank to
the Omaha Platform. The plan called
for the federal government to establish warehouses (called subtreasuries) to
store farmer's crops. Instead of
dumping their crops on the market at harvest time when it was glutted, farmers
could store their crops in a subtreasury and use them as collateral for
government loans of up to eighty percent of the market value of their crop.
The resulting warehouse receipts could be used to pay debts.
This would expand the money supply at harvest time when more money was
needed, and contract it as receipt holders sold their crops.
For
more on the subtreasury plan, see:
Goodwyn, Lawrence C. Democratic Promise: The
Populist Moment in America. New York, Oxford U P, 1976.
Abridged as The Populist Moment: A Short History of the Agrarian
Revolt in America. New York, Oxford U P,
1978.
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