The Breckenridge news. (Cloverport, Ky.) 1876-1955, 1894-12-12

wagc-Ea Needs sound Curren-
cyAs We'll As Capitalists.

Wage-Earuer Needs sound Curren-
cyAs Well As Capitalists.
1t is not the capitalist alone whose in
terests are affected by the use or threat
ened use OF deprecated or fuctuating
currency and the consequent derange-
ment and dimnution thereof. A paraly-
sis of business, whatever may be its
cause, strikes first the wage-earner, and
the man of modern means and lastly the
capitalists, who has accumulated sur
plus store Of goods or money. Arbitrary
regulation OF the volume of circulation
to be kept outstanding is wholly incon-
sistent with the maintenance of healthy
financial conditions, and is the exercise
OF a function which does not properly be-
long to the Government OF the United
States or any other public authority.
The effect is to force paper currency up
on the people when it is not needed and
deprive them Of it when it is needed,
thus establishing and maintaining an i'm
proper and unwarranted connection be-
tween the Government and the private
business affairs Of its citizens, and max
ing their successful prose cution largely
dependent upon the judgment and cap
rice Of a superior authority having no in
terest in the transactions, except, per-
haps, partisan interest not in harmony
with sound fiscal arrangements.
Under our present currency system, so
far as 1t consists of notes issued by the
United States Government, the volume
OF circulation was intended to be and is,
in fact, Interchangeable: it is unalterably
fixed at certain amount, and no matter
how great the emergency may be, it can
be neither enlarged nor diminished. The
only part of the currency possessing in
any degree the quality of elasticity is that
issued by national banking associations
and it is now generally conceded, l be-
lieve, that, in this particular at least, it
has failed to meet the requirements OF
the situation at some OF the most critical
periods in business affairs OF the country.
Its failure is creditable, in my opinion,
to three principal causes
First-To the large volume of United
States currency of various kinds kept
constantly outstanding making the con-
traction or expansion Of the compare
lively small national bank circulation
less effective than it would otherwise
have been.
Second-fhe difficulty and delay in
procuring and to some extent in retiring
circulation.
Third-And mainly the provisions of
the law which require the deposit OF
United States bonds to secure circulation
and restricts the issue OF notes to 80 per
cent. of the par value OF the bonds
With 5000, 900 in United States notes.
Treasury notes OF 1890, silver certificates
and gold certificates, besides about $685.
100000 in gold and silver coins, constant
ly outstanding, none OF which can be
lawfully retired by the Government
without the substitution of other cur
rency in its place, the national bank
notes, which amount to only $207 500, 900,
or about IL per cent. OF the whole, can
not exert very effective influence upon
the volume of outstanding currency at
any time, and especially at times when
large contractions or expansions are most
needed.
But the greatest difficulties are en-
countered, and the national banking sys-
tenn, as now organized, is least effective
when the business OF the country de-
mands quick expansions OF the currency
to meet sudden emergencies.
In addition TO existing distractions to
the prompt increase and decrease Of cir
culation, the ninth section of the act OF
July ~, 1892, which provides for the ex-
tension OF the corporate existence Of
national banks, expressly prohibits them
from retiring their notes 10 a greater
amount than s3,0OO,OO in the aggregate
per month, and advocates that no bank
which made depost Of lawful money in
order to withdraw its circulation shall be
permitted to make any increase in
It's circulation for period OF six months
thereafter These provisions are so man
ifestly in conflict with the dictates OF
sound policy that they require no com
ment