St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1896-01-10
MIR. KENYON ON FINANCE.

Mr.. M. D. Kenyon the Minnesota
state superintendent of banks. has is
sued small pamphlet entitled "a
Study of National Finances" This is
an expansion and elaboration of a plan
presented some time ago to the public
through the press by Mr.. Kenyon, for
q comprehensive revision of our mon
etary system. There have been so
many of these currency plans, and
congress has so obstinately refused to
lend an ear to any rational suggestion,
that their practical effect is limited to
their educating influence upon public
opinion. In this field Mr.. Kenyon's
views may accomplish some good,
though he yields something to preva-
lent fallacies, whose favor in his sight
is all the more surprising because his
general comprehension of the subject
is above the average of those who
have attempted to discuss it, Mr.. Ken
yon considers that a policy which
should cure the financial troubles of
the nation ought to cover four points:
to remove the necessities of bond is
sues; to secure the more extensive use
OF silver; to provide an elastic cur
rency, and to prevent currency con-
traction. OF these four propositions,
two are wise and two must be con-
sidered, from the point of view Of
sound finance, as either harmful or
entirely unnecessary.
To do away with future bond issues,
Mr.. Kenyon's plan, as formerly stated,
is to enact that the greenback cur
rency should bear interest at the rate
of per cent per annum. This, he be-
lieves, would secure the absorption Of
the legal tenders by bank reserves to
such an extent that very little of it
would be presented for redemption.
This is only a modification of the plan
to issue bonds to redeem the green
backs; and how 1t would work in
practical operation must remain an
open question. Considering the wider
use of silver, Mr.. Kenyon makes a
long and extraordinary argument in
s
that silver dollars shall be legal tender
Except when otherwise expressly
stipulated in the contract" The idea
that this is a discrimination against
silver is an incomprehensble one to
us. The freedom of contract is not
likely to be abridged. The courts
would not permit it even if our legis-
fators tried to. A man has a right to
contract for the delivery of any OBJ
5ect or substance that he pleases, and
such agreement will not be satisfied
by the delivery of anything else.
AS to the third proposition, for an
elastic currency, Mr.. Kenyon's plan is
simply a modification Of that upon
which all high financial authorities are
practically agreed; namely, the issue
of a bank note circulation against
banking credit, secured by safety
fund. A graded tax on circulation, to
permit its increase and secure it's de-
crease according to the demands of
business, is necessary feature
Whether the scheme of taxation Of
fered by Mr.. Kenyon would secure
this result or not, we cannot, Of course,
say. Coming to his final proposition,
to prevent contraction of our present
circulation, Mr.. Kenyon surprises and
disappoints his reader by accepting
the ancient idea of a fixed relation be-
tween money circulation and popula-
ton. That is abhorrent to the sim
plest principles Of sound finance AS
we have stated so often, and as it
ought not to be necessary to state
again. the volume Of nations cur
rency, provided that its monetary sys-
tenn be natural and sound, is thorough
ly self-regulating. The exact amount
cuts no figure at all. We have seen
the greatest prosperity coincident with
q heavy so-called contraction Of the
money in circulation, and have also
seen the volume Of money expand
enormously in connection with periods
DE the greatest depression. When we
have provided for an elastic credit cir
culation, we shall have done all that
necessary. The natural forces Of