The Providence news. (Providence [R.I.]) 1891-1906, 1894-11-19

suit the most extreme Populist, as Its
volume would be controlled and limited
by the amount and value of the assets OF
banks, and their disposition 70 issue
notes. There may be some provision in
the bill when drawn TO insure equal
stability TO every banks issue.
but maximum limit will not
do il, because while some banks
might issue up to the extreme limit
others mi ght not issue over one-half or
two-thirds the volume legally possible.
Despite all guarantees, this would create
discriminating valuation. The South
ern and Western banks would be Pretty
certain 10 put out ali the currency possi-
bic, while the banks located in the great
money centers would be more likely
10 pursue conservative policy
that would give their notes
an unquestioned precedence as a
general circulating medium. This
elasticity" of the currency, that 80
much stress is laid upon by some con-
servative and thoughtful financial
writers and by great body of unin-
formed and irresponsible newspapers,
would be likely to work in such
manner that the bills Of cer-
tain banks would be accepted with
hesiiancy for purposes that involved
wide dis ribution of currency. Even If
1t is known that the bills Of banks
located in "boom" territory, and sup
ported chiefly 10y "boomers," are uli-
mately redeemable, the fear Of period
of uncertainty and delay pending settle
ment of bursted banks affairs must
operate 10 give the notes issued by
certain banks in certain cities or sec
tions very materially enhanced value.
In order TO give a new currency per-
feet circulatory value it must be passable
for its face everywhere. at all times and
under all circumstances. The mere
fact Of the total assets of bank being
security for even one fourth their volume
in currency cannot be depended upon to
give its bills circulating value. They
must be issued under a redemption ar
rangement whose operation cannot for
moment be interfered with by the in
solvency of the issuing bank, or by any
sort of mishap to it.
The matter of redemption equivalent
is of much greater importance than is
apparently to be given to it. 1t is be-
ieved that the President and Mr..
CARLISLE think it -iMtAHteFisl WI W RE her
the notes are made redeemable in "coin"
or "gold coin" It will be found to
make very great difference in
fact, and in practice. Notes made re-
deemable in 'coin" would of necessity
have a fuctuating value. In times of
great money stress they would be at a
discount as compared with gold. and at
all times they would be practically con-
fined to the United States. if not to
sections of the United States, for cir
ealating field.
II is to be borne in mind that silver
has no established parity with gold, and
that the silver sentiment of sections Of
the United States is wider apart than
the silver sentiment of the great fiscal
nations. There is no silver
sympathy between the east and the
south and the west, and notes issued
by Georgia, Alabama or Colorado banks.
redeemable in "coin," would not be OF
equal circulating value with notes
issued by Eastern banks, where the
probability Of "coin" being interpreted
TO sometimes mean "gold coin" would
be very much greater.
This one feature may easily wreck
the whole currency reform scheme, as
it is plain that the conservative Eastern
sentiment cannot tolerate the notion of
a national currency redeemable in silver
or gold, at the pleasure of
banks Of issue, nor the idea of
forcing q gold-believing section
to throw its solid redemption
capacity into the scales to help balance
the balloon of the silver-faith sections.
Neither is it possible 10 conceive that ttlAatast
currency backed by bank assets and re-
deemable i'm "coin" could be made to
answer the needs of the country, or be
forced upon the country.
What the result of releasing the
Government bonds now held to secure
circulation would be is not easily
predicted nor of very great consequence
so far as this currency scheme is con-
cerned. There would be a large amount
of the bonds thrown upon the market TO
be taken up for investment; though in
the present condition Of the
money market it is not likely
that the banks would press them upon
investors. as they can just now do no
better than hold them themselves, unless
they desire to enter fields that are in
some degree speculative. Bonds might