The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1896-09-07

with the increase of population, and
have congress pass a law fixing the
| number of coats additional to be
turned out every year by the factories;
neither ought we to pursue any such
policy with reference to money, the
ade by decade, year by year, and even
month by month, and which no polit-
ical body can possibly measure. 1t is.
| a question of fitting demand to sup
| ply, exactly as In the case of steam
engines or watches or boots and shoes.
/ or anything else.
Lastly, even if all the rest of our
| correspondents propositions were
sound, and his conclusions were ac-
| cepted that there is need to admit
! of currency. he omits to show any
reason why that metal should be ad-
mitted at ratio utterly at variance
with its market standing. There is
no more sense, even on the part Of
| those who believe that our currency
! NOluIlc OuSHL W ne i1CISdScQ, III QC-
manding free coinage at the ratio of
| Is to 1, when the market value stands
! at 80 to l. than there is in demanding
/ free silver at to 1, or rs to 1, or the
free coinage of nickel or copper, or any
other metal, at a purely arbitrary val
uation.
We comply very gladly with our
correspondents closing request to sug-
gest a remedy for present conditions.
While we do not agree with him as to
the nature of the evil which requires
a remedy, we heartily assent to the
assertion that an evil exists. That
| evil, to our minds, is the complete
separation between the volume of
money supply and the needs of trade;
| artificial in its nature and unlike any
| thing else in the economic world; to-
! gether with a continued attempt by
| governments to make forced loans and
create values artificially through legal
tender acts. Briefly, our idea of
| correct monetary system is this:
The government should do only two
! things. 1t should fix a standard for
! deferred payments. This unit, in
our opinion, ought not to be a dollar,
! but an index number representing the
! average price of a large number of
| commodities over a considerable peri
! cd of time. Thus the borrower would
! obligate himself to return to the lend
er the equivalent in commodities of
what he borrowed. This is and should
! be a matter entirely separate from the
| currency. The other thing which the
government should do is to receive and
stamp the precious metals in coins of
a convenient size and weight, mark
ing upon them the weight and the
| finenesS of their contents, and nothing
more Every act of legal tender
should be abolished, and then such
coins might be turned out in unlimited
| quantities, and would pass from hand
to hand as convenient medium of
exchange for actual value without in
jury to either party.
Coming now to the supply Of an
available currency that should ex-
! pand and contract with the demands
of trade, we believe in a modification
of the plan proposed by Secretary Car
sued by the banks, because they alone
! can measure the demand for them.
| When a man wants calico he goes to
! the dry goods store, and not to the
blacksmith's shop. When he wants
| money he goes to the bank and no.
where else. The bank, therefore, can
measure the demand and is the only
natural agency through which notes
can be furnished. But, on the other
| hand, the banks should not receive
this valuable privilege without paying
for it, We think that If all banks
We're allowed to issue circulating notes
to the extent Of such portion of their
capital as was deemed safe, these notes
being a first lien, with full stockhold-
| ers' liability; If every bank issuing
such notes was obliged to put
itself under federal supervision
and control; if each had to pay a GER
tain per cent of it's outstanding notes
to guarantee fund, that should in
sure the holders of all the notes against
loss; if a redemption fund were to be
kept in the treasury, so that these
notes would be kept as good as gold;
and if, then, graduated tax were
imposed upon all such Issues, increas-
ing with the amount put forth, and
leaving to the banks themselves moth
ing but reasonable compensation for
their trouble in doing the work, then
the plan would answer our needs.
When there was a great demand for
money, as in times of financial
stringency or when the crops are to
be moved, the borrower would offer
| higher rates and the banks could af
| ford to increase the issues and nav the
heavier tax. The moment that such
a demand fell off, and merchants and
others paid their notes at the bank
these, instead of being piled UP use
lessly or sent to the monetary centers
| to longest, would be DESTROYED:
the bank, in order to get rid of the
tax, would get rid Of the notes. Thus
| the currency would contract and ex-
pand automatically and indefinitely in
response to every need of the business
| community The tax should be such
! as would leave t0 the ha ,olray. ,,nJ,v +1,o