The Columbian. [volume] (Bloomsburg, Pa.) 1866-1910, 1896-03-26

of 1890, the total value of all the prod
ucts of manufactures, agriculture min
ing and tho fisheries was $12, AGA, ,052,-
913, or about $19S per capita. while the
aggregate wealth of the country amount
ed to $50, o37, 091, 1877, or an approxi-
mate wealth per capita of moro than
1000. History nowhere presents
more wonderful picture Of progress and
development Of country's resources.
CARROLL d. WRIGHT.
How TO MAKE OUR CURRENCY ELASTIC.
The greatest defect in our present cur
rency system is its lack of elasticity.
1t does not expand and contract with
the regular normal expansion and con-
traction of business. Again, during
times of panic, it fails still moro COM
pletely to meet the unusual demands
upon it.
This was forcibly illustrated during
the panic Of 1893 At that time many
millions of currency that had been in
the channels of circulation were sud-
denly withdrawn and locked up. At the
same time there went up from thousands
of business men demand for currency
that could not be met. Men were sacri-
ficing property or offering government
bonds as collateral, but currency could
not be had. Do you ask why? Simply
because there was none to be had. That
which had been locked up by panic
stricken owners was no more available
than if it had been sunk to the bottom
Of the sea.
DIFFICULTY OF BANKS IN A CRISIS.
In England or Canada the crisis
would have been met Immediately by
the creation of an enormous volume Of
bank notes leaned on approved CONNER
cial paper. In this country, however,
such action was impossible. Only a
small part of our currency, about one
eighth, is issued by banks, and their
machinery is 20 bungling and clumsy
it takes so long to get it running-that
it was impossible for the national banks
to do anything TO relieve the situation.
1t would have been very profitable for
them if they could have done so, and
many of them made the attempt to ex-
tend their circulation; but as has been
shown by Hon. John De Witt Warner Of
New York, they could not get their
clumsy machinery at work soon enough.
The national bank system utterly failed
at the critical moment. The clearing
houses came to the rescue as best they
could. They calmly ignored the stupid
statutes of the United States, and saved
thousands from ruin. Thousands more
might have been saved if little SIM
pie, practicable device had been in oper-
alton. What is that device? Nothing
more or less than to permit any holder
| of government bonds to convert them,
principal and accrued interest, into cur
rency at his pleasure, and TO reconvert
the currency into bonds at pleasure.
BONDS AND CURRENCY CONVERTIBLE.
Under this simple plan millions Of
bonds would have been converted into
currency at the time of the panic and its
worst evils avoided. After the scare was
! over-when the panic stricken hoarders
began to unlock their currency and let
it into the channels of trade-much of
the currency issued to tide over the cri-
sis would have been returned to the
| federal treasury and bonds taken ont
again.
In putting forward this plan l make
no claim 10 originality. 1t has been
urged by many eminent statesmen,
from Lincoln's great secretary in the
sixties to the able and clear headed
member from Ohio, Hon. Tom L. John
son, but because of overconservatism
nothing has been done.
There can be no valid reason why the
holders of government bonds should not
convert them into noninterest bearing
currency at will, nor why the holder of
government currency should not be al
lowed to convert that currency into low
interest bearing bonds.
GOOD EFFECTS OF THE PLAN.
Simple as this plan is, it would bring
about the following very desirable re
suits:
First. .-Impart to our federal currency
a degree of elasticity enabling it to ex-
pand readily with the demands of trade,
or at the time of panic, and to con-
tract when business fell off or when the
scare of the panic had subsided and the
locked up currency was let out to take
its place i'll the channels of trade.
Second. Save to the people the inter
est on all bonds when converted into
currency, until the currency should be
reconverted into bonds.
Third. Cause the national banks to
yield up their circulation. There would
then be no profit for them in maintain
ing a circulation. Perhaps this is one
of the reasons why the plan has not
been adopted.
Fourth. Enable the federal treasury
to cease running a gold warehouse for
the benefit of exporters. Nobody but
gold exporters would ever ask to con-
vert currency into gold if they had the
option of converting it into low inter
est bearing bond.
In conclusion permit me to ask why
the government should run free ware.
house for the benefit of gold exporters
any more than wheat or cotton ware
house for wheat and cotton exporters.
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