New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1885-12-15
TIE LATEST DEMOCRATIC PLAY.

Representative Scott proposes to retire all the
| ST., So, and 50 notes now outstanding, whether
| issued by the Government or by the banks
! About $50, 600, 900 of the outstanding notes
at present are of bank issues, and about
| $3.50. OOO. 900 are Government notes. In place
of the 1912 600, 900 of such notes now III use,
| he proposes to issue new notes redeemable IN
silver only, and without limit as 10 amount,
excepting, it is presumed, that such notes shall
be represented by silver in the Treasury. In
order to compensate the banks for the loss OF
circulation of $50, 10000 in small notes. he
proposes to retire all Government issues OF 80
and 500 notes. so that the banks can increase
| their circulation of that kind. But the plaster
is much too large for the cut. The legal
| tender notes of $40 and 500 denominations
amount to $12S, 100000; the silver certificates
| to S1O4 ,OOOOO and there are %12,OOo,OOO
of the 500 gold certificates; making III all
| $244, 900, 600 of such notes now outstanding
which it is proposed to retire.
In place of these it is supposed that the
National banks might largely increase their
issues of corresponding denominations. But
| the National banks have not found that part of
their circulation the most profitable. The
| division of circulation by denominations has
! been the result Of natural selection, so TO
! speak; the b nks have issued notes OF such
denominations y they could in practice keep in
! circulation, and the demand for notes OF other
! denominations has been mainly met by the
! Government. The banks want to issue small
notes The other part of their circulation Is
! less valuable But the circulation of the banks
| as Il whole is rapidly diminishing and the
political associates Of Mr.. Scott have thus far
refused to make any provision calculated to
| prevent the surrender of circulation. 1t Is
! therefore not unlikely that, il the banks were
deprived of the privilege of issuing notes below
$40 each, many would retire altogether from
the rotc-is,ung business which now find their
circulation barely profitable
| But in some way the lack of circulation
caused by the retirement of 50 100000 of
! Government issues of $40 and $50 each is to be
made up. Undoubtedly it will be, if ever such
! a plan as that of Mr.. SCOTS should be adopted.
| There is no limit, under his scheme to the
issues Of small notes based on silver Instead
! of 5000, O0O, 600 of such notes therefore, there
might be issued $50, 900, 900 based on silver,
! provided the silver could be procured and de-
posted with the Treasury. But there would
be no difficulty on that point. Mr.. Scott would
be obliged to make these new silver notes u
legal tender in order to get them INTO use at
all. If any person could get legal teldcr notes
| in exchange for silver bullion at the United
States coming late, a large part Of the surplus
silver of Europe would quickly find its way into
the Treasury. Somebody would make a great
profit on the transaction, but not the Govern
ment or the people OF the United States.
Mr.. SCOTS plan, like Mr. Warmers, is called a
compromise. That is not its right name. 1t Is
a surrender. If 50 modified as to work at all,
it would involve unlimited paper imitation based
upon deposits of silver with the Treasury.
Has the country so soon forgotten the reason
ings upon which the Republican party PIE
vailed in 1876 and 1875 If we are to have
imitation at all, silver coin is better than paper.
If we are to have a deprecated currency at
all the possible depreciation of coin i'll actual
use is limited, but the possible depreciation OF
paper, whether theoretically rtdeemabc III CON
or not, is almost unlimited. The effect of de-
probation, in circulation composed mainly Of
small notes. would be vastly greater, and to the
people vastly more harmful, than in a crcula-
ton of large notes. The shrinking purchasing
power of the notes is more quickly felt, and the
shIinkage is more likely to be exaggerated,
when the proportion of small notes that are
used in retail purchases is excessive. 1t cannot
be said that Mr.. SCOTS plan promises any i'm
pIovement. The fact that such a plan is
seriously considered is an evidence that the
county has taken step back ward in transfer
ring power to the Democratic party.