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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