The midland journal. (Rising Sun, Md.) 1885-1947, 1890-12-05
A NEW CONVERTIBLE CUR
RENCY BOND PROPOSED BIZ
THE ADMINISTRATION.
fits Objections Are ALI Met by "The
Currency of The Future
BY JOHN N. BATcHELoR.

The dispatches from Washington during
the past week or so have given distinct hints
that the President and Secretary Window
would like to recommend TO Congress the
creation Of a new currency that shall, if not
replace the existing confusion, be added to
the currency in existence. Secretary Win
dom names mis- new suggestion "conyert-
ihle bond currency and if he is reported
correctly he recommends the issuance OF a
bond bearing fixed rate of interest at 2 per
cent against which any sum ofpaper money,
like our greenbacks, may be issued.
This is movement in the right direction
and closely resembles the currency method
| recommended in these columns the 2lst
ult., and it must be confessed that Mr..
WINDOWS suggestion is marked stride in
advance OF any currency now in use.
The greenback alone, not convertible into
anything, supposiug that it was adopted by
the government to replace coin is insult
able for international trade as its value
huctuates with the country 3 credit, and in
London ii might drop below par II anything
should occur to unsettle the stability of what
is termed conservative administration.
Rumors of war within or without our
borders would affect sreenbacks when used
in payment of foreign commerce; as $500,
900 900 of that class of trade is in existence,
it is not to the profit of the dealears that
fluctuations in currency should take place;
for when it occurred it would .nnsettle
market prices and more of less put our
importations upon speculative basis. Be-
cause Of this weakllness..in greenbacks, as
an exclusive currency in this country, Pres
ident Harrisons and Secretary WINDOWS
new suggestion is a long stride in overcom-
ing the difficulty mentioned, for greenbacks
that could be at will converted into 2 per
cent bond, aud that bond at will be recon-
verted into greenbacks, would make such
greenbacks very desirable to hold 10 any
foreign exchange for the purposes of inter-
national trade. But there are objections TO
even this suggestion by the Administration,
objections that are fully and completely
overcome by the plan had the honor to
present to our government during the month
Of October of 1889. These objections have
in part been made manifest in several of the
celebrated banks of history. Years ago
when studying up this subject learned that
some Of the most noted banks in Europe
during the middle ages and preceding the
organization of Bank of England, had
adopted and put into operation for many
years precisely the same kind of converti-
BILE bond. paper currency as is suggested by
Mr.. Window these banks were among the
8 or 10 most celebrated of their day and the
particulars | refer to can be easily learned
BY any one looking up the history of bank
ing. Not having my cid reference books
handy am only able at this moment to
speak about them without giving their
names. But their experiences were quite
uniform and our fnanciers must see that
ours would be the same if we adopted the
same method.
The Bank of Venice was organized abou:
the year 1892, If / remember rightly, and,
although the historical accounts of the
doings of that great institution in its earlier
days are somewhat meagre, it is pretty con-
clusively shown that il offered for many
years an interest upon its funds. But the
interest upon these funds, which were DIFF.
ferent from our greenback currency, yet
practically embodied the same idea, soon
put them at premium. This premium
INSTRUCTED commercial transactions and
prevented the conversion of the funds into
merchandise at par rates which result was
opposed to thy Venition governments pol
icy of keeping the funds on par with gold.
Finally this interest rate was reduced, and
again reduced, until it was abolished, yet
these funds were SO much in demand that
after the adjustment of the interest, the
premium upou them was above par from Is
TO 80 per cent without single break for six
hundred years, as this wonderful bank did
not close its doors until 1892 or about, at
the time of the invasion Of Napoleon I. Yet
during all this 600 years of unimpeachable
record of honesty and square dealing, doing
business that was in its day equal to that
Of the Bank Of England, recognized by
merchants as the greatest Bank in the world.
and the Bank of exchange for the great
trade between Europe and Asia, during all
that long period, it never paid back to a
deposition one cent of the thousands of mil
lions OF dollars deposited 10 it. This state
ment may startle some iof the JoURNAL's
readers, yet it is perfectly true, and the
most astonishing example OF what cons,i-
tutes banking, on record. When depos-
itor deposited money in the Bank OF Venice
he never saw 1t again, he was credited on
the Banks books with the sum deposited,
and that credit was called '.funds in the
bank !" he could not Withdraw cent of IL,
for the bank was like board fence with
hole in it, the money went through the hole
into the Golfers of the government which
guaranteed without redeeming the deposit.
Yet as said, these funds were during all
that 600 years al premium OF from Is to
80 per cent. Depositors could pay creditors
by transferring sums to such creditors on
IL L.. D.. L. - r.