Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1880-02-20
THE CURRENCY,

The report IF the committee on coinage,
weights and measures, submitted in the
House on Wednesday, is indicative of the fact
that no action on questions of currency will
be taken at this session. 1t was called forth
by a memorial from the Bullion club of New
York asking that legislation be had forbidding
the issue of paper currency OF lower denom-
nation than twenty dollars, SO that silver and
gold of less value might be forced into circu--
lation. The committee recommends that the
petition be laid upon the table, and for rea-
sons which, it seems to US, are all-suficient.
The report says that, under system like
ours, which permits the issue of money of all
denominations by banks, with no other re-
strictions on the amount issued but security
of final redemption in government legal ten.
der paper, metallic money cannot be expected
permanently to be held in circulation, for it
is a primary law of currency that larger
volume of paper currency cannot be kept in
any country convertible into coin, or even
permanently at par with metallic money than
that country would have as distributive
share of the worlds supply of metals, The
greater convenience of paper money over
coin is held to be one of the principal reasons
for the use of paper at all, and that convent
ence extends to a point below the denomina-
ton of twenty dollars. The committee holds
that the only way in which paper money can
be regulated so as to maintain its equivalent
with coin and permit at the same time con-
current circulation of coin is by combina-
ton of these two plans:
l. By due limitation of the total volume
of paper, leaving denominations to be deter
mined by the convenience of trade. Suppose,
for instance that in the course of its inter-
national trade, a country would possess, at
given time, as its proportion of the worlds
money supply, say $500, 900. Then if the
total quantity of paper be strictly limited
within that volume, or, say, to $500, 100000,
S600,000,000 or 800, 0O0, 600, coin would flow
into various channels needed to supplement
paper circulation. In that case paper and coin
together would circulate and vary a purely.
metallic currency would vary-that is, with
the course of exchanges or the tide of lnterna-
tional ira lie. Metals in that case, in response
to trade oscillations, would flow to or from a
country in settlement of balances the same as
if the whole international circulation were
coin.
2. BY the establishment of purely metal
lie currency, with true paper representatives,
dollar for dollar. which might then be of all
denominations which convenience required.
That is, let gold and silver coin, and gold and
silver bullion, be made the foundation of
much paper and of such denominations as
might be in demand of such paper, which,
beng the actual representative of and title to
metals there could never be initiation, if there
were no restrictions, as there should never be-
placed upon the use of metals.
1t is deemed iniudicous at the present
time, however, to attempt such changes as
back action system, and whils Its advant
ages are admitted there is an argument en-
tered in favor of doing nothing until such
time as experience shall have demonstrated
not only its feasibility, but its necessity in
order to assist in maintaining the stability
of our business interests. They recommend,
however, 'that the volume of paper money,
which is now nearly S7OO,OOO,oOO, be limited
q least to its present volume by prohibiting
any additional issues of paper founded on
credit only: and it further recommends that
metals alone shall hereafter be relied upon
for needed increase in volume, with pro-
vision for bullion certificates with auto
matte regulation through free coinage and
deposit of metals" The recommendations
ara wise and timely, and there will be little
difficuIty, we apprehend, in carrying them
ont. for Congress is almost unit in favor
of Going no further than these propositions
10 maintain the present status of the cur
rency system.