New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-03-12
.r,prNGTH IN GREENBACKs.
80 NAVE NOT BEEN AN ELEMENT OF
vrAxNEss TO THE TREASURY.

rur EXPERIENCE OF THE RECENT CRISIS
v.s ppovrp-rHE GOLD RESERVE.
,..ue OF United States notes. commonly
=, ereenbacks. has originated two oppo-
...o-,ss-one TO the effect that they are
addition to the available money OF the
F"1 n,hose benefits can and should be ex-
eoo".', r.o,,v increasing their amount II, in
80 q .hould be limited at all; the other tnat
oesu' "a ALWAYS have been pernicious, and
80. continued existence is menace 10 the pros
"'' ,.,. ~ the country. The frst we need not now
V,..- Tho second demands our attention
statement is repeated often enough
,~.rs,s,ad in long enough, people come to be-
VIZ . u,s,hsr il is actually true or not. and
,n. seems 10 be the case with the latter OF these
. cherries The present Administration has
Looted u and thereby given 1t prominence and
,,spectability Apparently because OF It's itera-
.,or alone II has secured hold among certain
s,.rc,ers The recent convention at Indianap-
~. .aop,ed resolutions again repeating it. and
evidently there is a large portion OF the COM
r,un,y. including many who claim to be experts
:, Nnance who are inclined to take it for grant
"A and whose favorite remedy for the financial
en-, ~ the country is the retirement OF the green
backs.
,.rsn TO change our financial system, we should
no sure we are right 1t is doubtless OF the
.rss,est Importance 70 remove from that system
ha,eyer is bad but 1t Is certainly of no less i'm
,o,,ance TO hold fast that which is good. Let us
therefore consider the question. whether 'ne
ereenhacks really constitute or ever have con-
.,,tuted en- element Of danger
We find at the outset two very important facts
%1a n
van. was greater than its expenditures, so that
here remained a balance in the Treasury 10
sanger appeared from this or any other quarter
The other. that Notwithstanding the constant
.,a increasing deficit Of the last three years
orrlod with a mos. serious attack upon our
srarcial system and general feeling OF dis
,r,s, the greenbacks have never for one moment
los, the smallest fraction Of their value as COM
,.-sd with gold. and not only they but the
whole Of our vast volume of paper circu'at'on
- haen maintained at par upon a smaller gold
-...r,s than has ever been considered safe in
INV banking system. even in periods o. pros
,sr.v and general confidence. In round mum
~ ,here hava b,en constantly in circulation
u,.,A more than 100000 0G0 in United States
notes redeerable in gold on demand. aboNt
sq-o 00o GOO in silver certificates. and nearly
goa on1 O00 in National bank notes. In all aoou'
e. 100 600 600 Of paper money. NIL Of which mas
hasn sustained at par by the retention IN inc
rreasurv Of reserve which has only averaged
~ ner cent and az one time was not more than
f rer cent How was this possible?
--ha dsarlt was certainly an elemen. OF weak
mes The silver agitation was also an element
~ weakness No intelligent person VIII doup'
either 81 these assertions. Were the green
hocks also an element of weakness This Ger
family is not 80 self-evident. but remains 10 DE
rrcvcd Is II net possible tina. they MAJ nave
been an element Of strength"
There certainly must have been an element OF
strength somewhere TO compensate for THESE
Two tremendous adverse agencies ma lhis
element Of strength in The confidence teit py an
the people in the United States Government IL
stood behind the whole volume OF currency i0a
faith was pledged TO the task OF SUSTAINING all
a, = volue eoual TO that Of the best currency in
the world and its ability TO do so was uhques'
tionable Here was the solid rock on whlch the
confidence Of the people rested and which sus-
tanned the whole structure in spite Of all the
adverse storms which beat upon it. and the only
means by which the power Of the United states
Government became available was through the
fac, that so large A proportion Of the circulating
medium consisted of notes which ii was bound
to redeem in gold on demand
u has been the fashion TO speak Of this haoiiity
Of the Government to pay out its gold as II IL
were disadvantage and a danger, put 'he
merest tyro in finance knows that a paper cur
rency must be redeemable somewhere or II VIII
Geprecia,e until II possesses no value Whatever
The redenptive quality is essential TO It's use
fitness Had there been no greenDacKs' inc
currency in circulation would have been oohgeo
10 depend upon some other prop than the Chi'eo
States Treasury and all its admirable agehc! III
maintaining confidence would nave Deeh aOSo-
lu,elv wanting Could any other foundation
have been furnished as efficient? III Is quite 'lue
that the outstanding greenbacks could be pre-
sen,ed 20 the Treasury and the goid ora""
,berAfrono on demand but was this an element
Of weakness? Was II not rather the chiei tower
NJ strength? II was necessary in order to main
tain the Daper circulation of the country at par
that there should be gold somewhere that could
Ne had on demand IL that gold were not in the
Treasury It must exist in some private institu-
t,on where il could be made available for the
same purpose-the redemption Of outstanding
paper currency Is there anybody SO snort
sighted as to imagine that the transfer OF the
yo,d reserve from the Treasury Of the Govern
ment 10 the vaults Of the banks would have IN
creased the feeling Of confidence among the
neonle or that It would have been possible 10
maintain our paper money az par without either
a very great increase in the amount OF gold or
very great decrease in the volume OF circuia-
ton?
Under the National banking system the coun-
try banks are required TO keep certain proper
ton Of legal-tender money as their reserve
but a part of this nay be on deposit with re-
serve agents in the principal cities. and these in
turn are required to keep only certain per-
centage Of their deposits as their reserve The
whole is thereby sustained by smaller aggre-
gate reserve than would be necessary If each
bank stood by itself and retained its own: but
everybody understands that this is not an ele-
ment Of weakness-it adds greatly TO the
strength Of the system. In like manner, while