The morning news. [volume] (Savannah, Ga.) 1887-1900, 1894-11-18
The Currency Question.

! 100000 Of government bonds for the pur-
pose of raising the gold reserve to 800
100000 has had the effect of bringing about
a discussion of our currency system. The
opinion is quite generally expressed by
financiers that the time is ripe for
radical change in the system. it being
wholly inadequate to the demands upon
it. Being dependent upon the treasury. it
is dangerous system, because it is liable
to be disturbed by whatever affects the
treasury. The whims of politicians, the
financial policies of political parties and
the schemes of Spectators are likely to
have a good or bad influence upon it.
The understanding is that it is the pur-
pose of the President to devote a consid-
cradle part Of his message TO the cur
rency question. If he does not himself
propose a plan for taking it out Of pol
itics and making such a disposition of it
that it would not be affected by changes
in the political complexion of the gov
eminent, he will urge upon congress the
necessity for legislation to accomplish
that object. The advisability of appoint
ing a currency commission has been dis
cussed, but it is not likely to meet with
much favor. Congress would be apt to
say that non-partisan commission could
do no more than it can do, and that as it is
its duty to do such work. to delegate the
task to a commission would not have the
approval of the people.
The cause of the bond issue is the fear
that the gold reserve may be drawn upon
to such an extent as would cause a lack
of confidence in the vast amounts of paper
money now in circulation. This paper
money is maintained at par by the policy
of the government to redeem all of it, or
any part of it, in gold. Some months ago,
when the gold reserve fell to nearly $780,
100000 there was great uneasiness through
out the country and bonds were issued to
increase the gold reserve.
The new issue of bonds that has been
determined upon is not for the purpose of
providing funds for the expenses of the
government although the revenue falls
short of the expenses, but to build up the
gold reserve. In financial circles the be-
lief is expressed that If the gold reserve
were increased to $100, 0OO, 900 the effect
would be to hasten the return of pros
porous conditions. 1t would be an an
nouncement to the world that the policy
of keeping all the currency on an equal !
ity with gold is to be continued. belief
that the soundness of the currency is TO
be maintained would encourage the in
vestment of money in various enterprises
and would increase the market for our
securities abroad.
1t is apparent, however, that the practica
of issuing bonds to keep up the gold re-
serve cannot be carried on very long. The
last issue of bonds although it brought
$685. 100000 in cash, only yielded $8s, 100000 in
gold. Much of the gold that was paid for
the bonds was drawn out of the treasury
The government has to pay gold for notes
when there is a demand for it.
There is good deal of speculation as
to the amount of gold that the new issue
of $50 600 of bonds will bring into the
treasury. 1t is possible, of course. to get
the gold to pay for the bonds out of the
treasury. 1t is not believed however
that it will be obtained from that source
1t Is said the Secretary of the Treasury
had assurances before he decided to Issue |
bonds that new gold would be paid for
them. Otherwise, as far as building up
the gold reserve is concerned, the issuing
of bonds would be of no benefit to the
government.
The only plan for currency reform vet
suggested that commands approval is that
known as the Baltimore plan. Thus far
1t has stood the test of criticism wonder
derfully well 1t provides paper curren-
cy that would be as safe as national bank
notes. Indeed it would have the same
guarantee-the guarantee of the govern
ment-and it would, at the same time.
be entirely Independent of the federal
treasury and political influences. 1t would
have wonderful elasticity-it could be ex
panded when currency was needed, and
contracted when currency was not wanted
1t is possible of course. that as it is
more carefully considered, serious obtec-
lions to it may be discovered. At pres
ent, however, it is being regarded with
a great deal of favor.