Virginia free press. (Charlestown, Va. [W. Va.]) 1832-1916, 1895-12-25
NEEDED CHANGES.
TO GIVE AMERICA COMMERCIAL AND
FINANCIAL SUPREMACY.

% Retire Our Greenbaciss and stop Gov.
ernmcut Eankirg; 81 Tut ouictus on
the silver c-aze-.I. Leroy -BeaulIeu's
Powerful Arcu,nca; on These Two oues-
tioas.
Paul Leloy-Beaulieu has an article in
the December Forum entitled "Condi-
iions Fm American Commercial and Fl
nancial Supremacy" This great writer
ana authority ON economic subjects says
that hut two things are necessary to IN
sure American commercial and financial
supremacy-C) ;he withdrawal Of the
government from the banking business
aud (2) firm declaration in favor Of a
gold standard and against bimetallism-
that j., against further special favorS 10
lver. His discussion on both Of these
points Is clear and convincing TAX Dg
M point one, he find, that while ether
great countries have issued or caused 10
be issued considerable amounts Of paper
money duriuy criJi al periods ours Is
the first 10 reiu.. g.. '.'- up ard cancel
It's notes rs ,.r.f. tla This was a
great and vii CO. ch we did not
repair entirely Nl,. aele>umed specie
payments in .a s government,
he saws, els il t..cH uad I'll equipped
to maintMu ul...v in circulation,
even If thalc is .rcua5io in ,pe-
Gle. The redG.rt.ua a1ue is in itself
great trouble arda Continual embaTass-
ment. BE- mink, hat the function
aries of government "whomust act by
fixed and always identical rules, can
not make a flexible aud safe currency
ont Of government paper The greatest
inconvenience aud danger from it is in
regard 10 the specie reserve which every
government must keep on hand either
in public or private banks.
IF the government were ont Of the
banking business aud private banks
were lefc 10 deal with the expectation
If gold problem they would, when
harmful cNrortation begins raise the
tate Of discount uutil such CxportatiOn Is
checked. This is what European banks
do in similrI emergencies. When the
cold movement is controlled in this
way. IL produces "only q light and
momentarv embarrassment, not to be
con,pared with the shock and the dis
credit resulting from an outgo Of gold
the srd Of which cannot be calculated.
Continuing on this point NJ Leroy
Beaulieu says:
"In most countries the
banks, either public or private, main
tain the specie reserve Obliged 20 pay
their notes in specie on demand, it is
their permanent interest that the specie
reserve shall not le exhausted. More
over, they have very eiIectual means for
protecting il. Gold must always be fur
nished for export. Otherwise business
with other countries viii be restricted
and al Times rendered impossible, and
tho credit Of The country will DO i'm
paired. But when gold exports become
too extensive, ard particularly when
they seem caused by speculative move
ment, and threaten the metallic reserve
of the country, the banks have an excel
leut means Of obyiating and removing
the eyil-an advance in the rate Of dis
count. e
IAN advance in the money rate in
order 60 arrest The ouigO Of tpecie, par
ticularl7 gold, is suro 10 succeed if tho
government d. s lct disturb the natural
course Of operations by artificial meas
ureS. Such IN advance checks The i'm
ports Of merchandise, and, oD the other
hand. stimulates exports. 1t draws cap
ital from abroad TO ek the better re-
turns which are the G. sequence Of this
advance 1t induces certain number
Of The holders Of public and other Sc
curities to- part with them and influences
foreign capitalists to purchase them.
"Thus whenever the banks, public or
private, arc charged with The protection
of the metallic reserve Of the country.
they accomplish it with certainty by
this sovereign method Of raising the
money rate. q On the contrary,
when the state issues the fiduciary cur
rencv, as in the United States, il has no
real means Of protecting the metallicre-
serve. Ii cannot raise the discount rate,
for it does not discount commercial pa
per it Is under obi cation to pay gold
TO all who demand it, without any pow
CT 10 regulate or reduce the demand. IL
is absolutely tisarmed. Its sole resource
Is 10 aecure specie by loans abroad But
as these loans have no effect Oh the gen
cral current Of business, their proceeds