The representative. [volume] (St. Paul, Minn.) 1893-1901, 1896-04-01
m 100000 Readers Push Friends Until there Copy Every House
A REDuNANT CURRENCY.
CRAFTY LEADERS AND THEIR
BLIND FOLLOWERS.
Only Government Currency is ere
dundant"- Note Issues,
Say the Bankers, Cannot
be Too Plenty.
(The PHILADELPHIA American).

comment of the gold-men in congress, and
of the gold -monometallc press in general,
on the bill favorably reported last week
to the House by the Committee On Bank
ing and Currency. providing for the issue
to national banks of notes up to the par
value of the bonds deposited with the
United States Treasury as security for
circulation, instead of only up to 80 per
cent of the par value as at present. The
general approval with which gold-mol-
ometallists have received this bill, de-
signed to facilitate the issue of notes by
national banks, and to lead to an increase
of national bank currency, is an exhibit
ton, on their part of marked inconslsI-
ency
The gold-monometallists have harped,
they still harp. on the evils of ''redund-
ant currency" To redundancy of the
currency" they have attributed all our
financial Ills. the export of gold, the drain
on our gold reserve, the difficulties that
have confronted the treasury, ''losS of
confidence and general trade depression.
AS remedy they have urged the cancel
lation of the 'greenback' and treasury
notes, they have insisted ON contraction
of the currency as panacea for all our
ills, and they have regarded as one OF
the greatest benefits expected to accrue
from the recent bond issue, the piling up
of gold and treasury notes and green
backs in the treasury, and the enforced
contraction of our currency. Yet now
they turn around and advocate an eX-
pansion of our currency by the issue OF
bank notes.
Their prophecies of better times to fol-
low such enforced contraction of the cur
rency as that occasioned by the last bond
issue, have miscarried, as similar proph-
ecies, made before each Of the preceding
bond issues, and before the repeal OF the
Sherman Act miscarried, for their diagno
sis of the disease was wrong, ard they
applied the wrong remedy. They as
sumed we were suffering from 'redund-
ant currency, and they prescribed con-
traction, whereas it was from an insuffic
iency, not redundancy of money that
we were suffering, and what we needed
was more money, not less. Consequently
the remedy prescribed was worse than
the disease We were suffering from
low and falling prices, unmistakable evil
dences of a growing scarcity Of money,
not from high prices, and high prices are
synonymous with a redundant currency.
A redundant currency means high
prices, and surely we have not suffered
from an imitation of prices during the past
twenty years. But in a redundant cur
rency the gold-monometallsts find the
cause of gold exports and the cause of the
drain on the gold reserve. and their one
cry has been contraction. They have
easoned-cOntract the currency, make
money scarcer, prices lower. and cODse
quently exports will be increased and i'm
ports decreased and thus by the accumu-
lation Of large merchandise balance of
trade in our favor. exports of gold pre-
vented. Our farmers and manufacturers
would be impoverished. but no matter,
our sacred gold would be saved!
And in their demands for contraction
the gold-monometallists have been logical,
for only by contracting our currency and
forcing prices to lower and lower level
can the single standard be maintained.
Consequently the general approval with
which gold-monometallists in general
have received the proposal to increase the
national bank currency is an exhibit of
marked inconsistency. While urging
contraction of our currency by the retire
ment of greenbacks and treasury notes is
sued by the government, they advocate ex-
pansion by the issue of bank currency.
yet they propose to add to the "redund-
ancy" of the currency by increasing bank
circulation They have favored the issue
of bonds and they have regarded bor-
rowing and piling up money in the treas
ury as a covert but effectual way Of con-
tracing the currency, yet on top Of this
costly proceeding they propose to issue
bank notes that will fill up the place made
vacant by the boarding of currency in
the treasury; to check the contraction for
which they have longed by expanding the
issues of bank currency.
No benefits can be derived from increas-
ing the issues of bank currency. We aeed
more money, but we must broaden the
basis of redemption money before we can
safely increase our issues of paper. The
narrow gold basis is not wide enough to
support the paper fabric that now rests
upon it that is tottering as it is and only
kept from collapse by artificial support.
To increase the issues CT paper redeemable
in gold is only to invite suspension of gold
payments. Our stock of gold has already
more paper based on it than it can well
carry Our first step must be to restore
silver to its place as money and broaden
the basis on which to rest our credit fab
ric. Then it will be safe to increase our
issues Of paper but not before.
The purpose of the contractionists in ur
ging increased issues of bank currency
while urging contraction of the issues of
government paper is evidently covert.
Failing to secure the adoption of such
plan as the Baltimore Plan" by which
the government would surrender the SOW
eregn power to issue and control the vol
ume of paper money to the banks, and
there being no prospect of the adoption of
such a radical plan in the near futare, the
contractionists no doubt deem it wiser
to push their schemes for getting control
over the currency. step by step, SO as not
to awaken opposition. Hence their pur
pose in increasing the issues of bank cur
rency, not to strengthen the government
or it's ability to maintain gold redemp-