Los Angeles herald., 1890-07-10
THE NATIONS CURRENCY
THE PLAN OF A WELL-KNOWN
LOCAL TINANCIER.
Judge r. M. Widney, of the University
Bank, Outlines His Ideas in the Shape
of Bill for Currency Reform.


mistaken features of the present system
and the reforms necessary to make it
conform to the needs of the people. As
the result of much labor and calculation
he has prepared bill which embodies
his views, and which he believes could
be wisely considered and acted upon by
the legislative powers OF the nation.
This bill is based upon the act of June
8, 1868. The full text of the proposed
bill appeared in the Los Angeles Times
of last Monday.
Judge Widney outlines his plan in the
following propositions:
Every civilized nation must have
sufficient volume of circulating medium
of one kind or another to fully accom-
modate the business of the nation. The
volume will vary generally in proportion
to the population and the bulk and ac-
tivity of business, herein including the
development of the resources OF the coun-
try. If the circulating medium is kept
in volume to meet the above demands,
the business of the community will
be steady and finances will be free
from what is known as tightness of the
money market.
1t may be safely asserted that gold
and silver cannot be controlled or OBJ
tanned in sufficient quantities to fully
meet the demands of the commercial
world for circulating medium, and the
same is true of each nation. Hence each
nation is forced to supplement the rise
of gold and silver by an issue of cur
rency.
The proposed bill is limited to the cur
rency department and does not affect
the gold and silver question before
the nation. AS nation we have
reached point where we should,
in harmony with the natural laws OF
business, establish our circulating me-
dunn on permanent basis, so that the
whole country may know what to rely
on from century to century with only
slight changes for adjustment.
Arbitrary legislation, in violation of
natural laws of business, must sooner or
later break down. Therefore the only
solution of this question is national
system of finances that, based upon a
natural law, is applicable to the case.
The present bill recognizes that the
nation alone should be the bond of issue
OF all circulating medium, gold, silver or
paper. In this way all the property of
the people in the nation is the security
for the money issued. Every inhabitant
owning money is interested in the sta
bility of the money and of the govern
ment.
The proposed bill adopts the present
organized department of comptroller
and clerks, so that no noticeable change
will occur in this respect, neither will
%1noy. ho Il Il
ployees-
The peculiar provisions in Judge Wild
ney's bill differing from the original are
principally in sections @ 4, g. s, 9, p,
Is, II, 18, p, %, 33, "a, So and &c. The
about as follows:
Section provides for a circulating
medium in currency additional to gold
and silver OF 500 per inhabitant. The
amount of coin in circulation June 80,
1889, was $3.50, ,662, 1856; in the treasury.
$244, ,050,0 Total, 81, ,1OO,712 ,432. An
issue of $40 per capita in currency, dis
per this section, would give on the CEN
sus of 1890 81, ,2S0, 900, 900, making total
of coin and currency circulating medium
of $2 $50, 712,432 The volume of coin
and currency would be nearly equal, and
the exchange of one for the other would
be perfectly safe. AS population in
creased between census takings from
year to year an additional issue is pro-
vided for annually. Section also makes
it legal tender for all debts. This pre-
vents corner on gold when needed to
pay government revenues. When
needed for foreign use it can be had as
easily as at present.
Section provides for new issue
every twenty years. This is for the pur-
pose of placing in circulation notes to
replace the volume of those lost and
destroyed; also to check incidentally
counterfeiting or the use of stolen plates.
etc.
Section 7 is very important This
provides for returning to circulation
among the people the money that is first
issued, and as it returns in revenues and
taxes to the government. This is done
by taking up all outstanding notes of
the nation also by loans to states, cit
les, counties, etc., on bonds issued for
public improvements. This will, at one
stroke, reduce interest on all such bonds
to per cent. per year. This, of course,
reduces taxes in all such cases for the
masses, and is a sweeping public bene-
faction to all.
Sections 8, 8, IL, 13, II and Is provide
that real estate may be used as surety
by which banks can obtain capital at a
low rate of interest of per cent. per
year on real estate security, and in re-
turn must loan it at not to exceed per
cent. per year.
Section 21 provides that the rate of
interest shall not exceed per cent
The profits Of a bank are not regulated
alone by the rate of interest it charges
but by the difference between the cost
of the money to the bank and the rate
charged by the bank. If the govern
ment furnished capital to the bank at
per cent. and the bank gets per cent,
the gross profit to the bank is 3 per cent.
In addition to this the bank receives the
current income1 from the real estate
pledged to the government as security
for the capital issue. This plan substi-
tutes, in the present system, real estate
for United States bonds as security, and
leaves no deap capital lying idle in the
United States treasury as collateral Sc
curity for bank notes, as at present.
This one plan will of necessity cheaper
money by removing dead capital, in
United States bonds, from an interest
drawing condition.
Section 33 introduces a matter of verv
vital Importance to all the people. It
provides for the publication of all the
valuable financial news of the nation in
n national hul1ptin Of financae Eroro