The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1883-12-09
The Currency.

congress must UcNlNt new rtsttiH va
banking as good as the present--a difficult
task indeed-or else the Government must
itself issue circulating notes in abundance.
II issues notes already; not only In the
shape OF grcenbacks, but in the shape OF
gold certificates and silver certificates.
These certificates are Just as good as gold.
They are based upon the precious metals.
Their basis has real value-intrinsic Value
a quality not possessed even by Govern
ment bonds.
In bis annual report, just out, the Comp
troller Of the Currency says that expert
ence has shown that II 800 OF circulating
notes had been issued upon every so OF
United States bonds deposited, "there
would not have been any loss 70 the Coy
ernmeni or to the holders OF the circulating
notes OF any OF the national banks which
have failed during the last twenty years,
but there might have been an additional
loss TO The depositors." This is "A signif-
cant fact. Acting upon ii. the Secretary
OF the Treasury recommends that the ma
tionai banks be allowed TO issue circulating
notes up 10 90 per cent. OF the market value
o.thc bonds deposited with the Government
10 secure the holders OF bank notes against
loss. And why not? Experience has
proved that il would he perfectly safe TO
do so. The Comptroller also says that
Notwithstanding the fact that 2G2 new
banks were organized during the past
year, with a capital Of S2S,Gji,3j0, de-
posting S9,375,5j0 OF bonds as security
for circulating notes, the aggregate amount
on deposit for that purpose has diminished
fIom S3G2, 490,6jO to $685., 907, 300, reduc-
ton Of S9,5S3,350." This. too, is signiii-
cant. 1t points to reduction in the vol
ume OF the bank-note currency which
would cause disaster If not counterbal-
anccd 10y an increase OF currency in some
other form. Again: He says:
"Unless there shall be legislation by the
present Congress which shall reduce the
receipts Of the Government it is probable
that the United States bonds will continue
10 be paid al the same rate rs during the past
year, In which event the 3's VIII be called
for redemption within the next three years.
This will reduce the bonds held by the
banks from S353,000,000 to sl5l .0OO,-
600. and cause contraction in the ma
tional-bank circulation Of about 100000
600 per annum. This large contraction
will be somewhat reduced by the action OF
those banks which substite and ~ per
cents in place OF the 3's."
This is not only an argument Tor the
abolition of all internal taxes, but forci-
BILE reason why Congress should be study
ing up the currency question.
What. we again ask, shall be the remedy?
What sort of currency shall supply the
threatened deficit in the channels in which |
so much currency must move!
A western congressman has suggested
that instead of constantly deploring the fact
that there is so much silver in this country, |
the mono-metalists would do better to re- |
view their theories and see whether or not
they can find place for silver. Silver is
a. much a product OF American industry
as any other product OF labor. II has, as
we have said, intrinsic vaIue-unlike the |
Government bonds. Now, why cannot it |
be used rs basis for currency, now that |
the banks are likely to be found una
BILE TO supply enough? These certificates
would represent real value. This real
value would consist OF silver bullion.
The note-holders could not possibly lose
ANYTHING. The silver would be in the |
Treasury vaults ready to be returned to
anybody who might become doubtful rs to
the value Of the certificates. This western |
adds that the Government |
might in this way furnish not only per-
fectly safe paper-currency, but furnish it in
such abundance as to prevent any contrac-
ton Of the volume Of the currency, at the |
same time that, being based upon metal OF
real value. it could not result in any infa-
lion OF the currency.
The Brooklyn Eagle proposes not to base
Tie Government issues upon silver bullion. |
but upon gold bullion either accumulated |
b. the Government itself or deposited by |
it, owners. Surely this, too, would be an
unobjectionablc currency. Unless, how
ever. the Government should issue two or |
three dollars in paper for every dollars |
worth OF bullion there would not be paper |
currency enough. 1t would be better TO |
call in the assistance of silver than TO issue |
notes not absolutely worth their face
valuc-not secured by intrinsic value, dol |
lar for dollar. As TO the proposed gold
certificates the New York Journal Of Com |
merce says:
"There is not only nothing obiectiona- |
bic. but there would be nothing really |
novel in such ISSUES. Gold certificates |
have been paid out by the Treasury against
deposits OF gold for many years. and on
the Isl OF this month there were upwards
OF eighty million dollars Of these remain
Ing uncancelled, thirty millions OF which
were held among the Government assets.
Ii II is deemed desirable TO substitute for
the grcenbacks such gold certificates, the
volume issued representing only actual
coin and bullion, and TO give them the
form OF the legal-tender notes for common
currency. there would be no serious oppo-
sition 10 such measure, and IL would be
free from constitutional objections"
II this is true of gold certificates. 1t is
true Of silver certificates. There is no pos
sible difference in principle between the
two schemes. Every dollar OF the silver
certificates will not, like the standard sill
yer dollar. represent only about So cents
in real value, but will represent full dol
lar-even a full gold dollar; for The certi-
iicates viii be based upon the actual value
Of the bullion, whether this be gold or sil-
yer. Such currency would not represent
a debt, as the present greenbacks do, but
would represent intrinsic values. The
journal Of Commerce further says:
''The perfect theory would be to have
no currency but actual money, or paper
-. \.