The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-01-02
SCIENTIFIC, CURRENCY PLAN.
The One offered by Prof. Commons
Not Likely to Prove satisfactory.
Louisville Courier jour


Among the contributions 10 the currency
discussion is one from j, r. Commons.
in Indiana University. If it serves no other
purpose 1t gives at least an insight into
science in some of the institutions of learn
ing.
Prof. Commons, in recent article, reviews
and finds both detective; but there is
nothing novel in his objections we. pass
that, part of his article. Having demol-
ished all other plans, the Professor pro-
poses to redeem all cur, paper currency
treasury notes, greenbacks and silver Ger
tifcates--in silver bullion, at its market
value in gold. That is. the Professor pro-
proposes to use silver as a redemption
agent. He puts the amount of paper cur
silver in the treasury at 1885, COO Coming
value, or $4,000, 900 market value. He thinks
this would be entirely adequate. to support
basis. He admits that the effect of this
plan would be to drive our $500. 100000 OF
gold to Europe and he contemplates that
with equanimity.
This. however. would leave US only $780,
considerable part of it were redeemed In
silver bullion. which would not be avail
0G0 of paper could be redeemed in silver
worth S27o, 1900, SO we must assume that
general demand for redemption, which is
quite conceivable SO long dis the volume
But the Professor proposes to supplement
this currency by the issue of United States
notes: To regulate the issue of these, he
would have recourse to monetary COM
mission, with power to expand or contract
the currency. To expand it, the commission
should be empowered to purchase bullion.
or simply issue notes on the bullion al
ready on hand, to be deposited call
with the banks. To contract the currency
the commission could sell bullion call
in the notes deposited with the banks A
commission of this kind. representing both
debtors and creditors, could, he thinks,
make the currency elastic.
AS to the flight of our gold Prof. Com
mons thinks that would be a good thing.
1t would, he says add 20 per cent to the
foreign stock and thereby reduce its value;
feasible an agreement with other debtor
nations and would relieve us of the Indian
and ostrich method of appeal to our cred
itor-England.''
If this is the best that science has to
haps we shall have to worry along a good
while with ineastic currency. Mr..
Commons would preserve the gold standard,
but would redeem in silver at it's market
value He evidently means to treat the
silver dollars in the treasury as bullion, or.
perhaps, to have them melted and cast into
bars. They would, if not. melted. pass by
weight and not by tale. The number of
ounces of silver to be obtained for a $50 or
$50-bill would therefore vary from day to
day. according to the market price of sill
yer, which is fixed in the London market.
and fiuctuates greatly. This does not seem
good plan to get rid of the influences of
England ever our finaneial Ian aa df crrene
reform the government would have con-
tinually fiuctuating stock of silver bullion.
a note. and the next week re-
issue the same note for ninety
or uo ounces of bullion, as the
case might be. Under the purchase clause
of the Sherman act the government sus-
tanned the loss of millions of dollars by the
depreciation of silver If Professor Com
mons's plan worked as he expects it to
do, gil would be deprecated 20 per cent.
and all debts would be scaled in like meas
ure. If, however, the contraction resulting
from the loss of $500, 000, 600 in gold had the
effect which many fnanciers anticipate, it
would reduce prices still lower, and make
debts harder to pay. Without any gold,
the money Of International commerce, we
should be greatly embarrassed in settling
international balances and foreign debts.
In fact however, all the gold would prob
ably not go away some of il would stay,
and be sold at premium to such persons
as were obliged to have il.
1t seems rather superfiuous to add that
the loss of $500. 600 900 OF our gold would not
add 20 per cent. to the gold of foreign coun-
tries. The worlds stock Of gold is about
four thousand Millions of which 500. 100000
millions is only l2I2 per cent. The produce
tion of gold for the year 1894 is estimated
to have been from sl75, 00G0 90 to SIS. 600 000
so that $500 00O0 would be less than three
years production at the present accelerat-
ing ratio.
For these and many other reasons Prof
Commons's plan will hardly commend itself
to the people of the United States If doc
trineS as crude his extensively
taught in the schools of the United States
il is not surprising that our people general
ly are not competent to solve currency
r,rr,hlefns