The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1894-11-21
A FINANCIAL POLICY.


The announcement that President Cleve-
land is engaged in preparing a message
dealing especially with the currency is
one that viii arouse general interest
There is probably more general considera-
ton Of the currency question by the peo-
pie now than of any other subject, and
special discussion Of it by the president
and by congress VIII probably clear the
atmosphere somewhat. 1t is very COM
monty conceded that something should be
done to simplify our paper currency sys-
tenn and bring the various forms of paper
currency to a more uniform condition. But
after passing that point there is an almost
hopeless conflict of opinion. Broadly, it
DIVORCES in two lines. One lass favors
relieving the general governn mt of re-
sponsbllity for paper currency and throw
ing the burden on banking institutions
to as large an extent as possible. The
other favors an increased responsibility
OF the national government. We imagine
the latter to be the more popular with
conservative men, though the former GER
tainly has strong support.
OF the first division of plans the most
prominent has been the removal of the
tax on state bank issues. This plan orig
mated in New England. and has the sup
port of many able men. 1t is very clear
that the tax is unconstitutional in spirit,
at least, and that is enough justification
for its repeal, but on the other hand is the
fear of wildcat money, which is very
much exaggerated, but which still is suf
ficient to cause much intelligent opposl-
ton to that remedy. The Baltimore
plan" is also of this class to large ex-
tent. 1t practically gives to all the sound
state banks the privileges of national
banks as to issue of money, and repeats
the requirement of United States bonds
for security. Each bank is allowed to is
sue to the amount of so per cent. of its
paid-up capital under a tax Of per cent.
on the amount outstanding. and an
amount equal to % per cent. more under
a larger tax The United States is to re-
deem these notes at par on demand. and
look TO the property of the banks for Sc
curlty This plan has very strong sup
port in the East. but viii certainly meet
strong opposition. And Notwithstanding
the backing the scheme has. it seems
plain that in time of such a panic as ex
listed last year it would prove very dan
gerous.
OF the second class of systems one Of
the oldest is the proposition for an uni
form greenback currency. This, too, will
meet much support and much opposition.
as will also the convertible bond PROPOSE
ton. which is of the same class. The
weakness of the greenback proposition is
that it adds nothing to the elasticity Of
the currency, and elasticity is the prime
requisite for the prevention of or relief
from panics This is the great recon-
mendation of the convertible bond sys-
tenn. Under it the currency can be in
creased to any desirable extent under
pressure. and not only increased but also
put into circulation by exchange for the
bonds. With the pressure removed it will
naturally shrink to the normal demands
of commerce.
What the president will recommend is
not known, but it will be interesting to
have a formal statement of his views.
There has been much controversy as to
his real position on the currency. and the
probability is that he has been doing
great deal of thinking without saying