The record-union., 1897-11-15

WASHINGTON, Nov. 14.-Horact
White, whose book upon Money ant
Banking" has attracted SO much atten
ton, has submitted some clear-cut an
swers to the interrogatories of th'
Monetary Commission regarding i'm
provements in the currency system o.
the United States. Mr. White is al
OutSpoken advocate of the retirement o.
the greenbacks and the adoption of al
elastic banking currency based upor
business assets. He declares that ths
silver dollars should be redeemed II
gold and that in a financial sense there
is no difference between the severa
forms of fiduciary circulation, o
which silver dollars are a part. Th'
latter, he declares, are metallic green
backs.
He does not believe that the amount
of circulation presented for redemp-
ton would be any greater than at pres
ent if silver We're redeemable in gold
In answer to the questions regarding
the maintenance of the gold standard
MIR. White says:
Il would recommend the redemption
retirement and cancellation Of all lesa
tender notes as a first step. Probably
the silver certificates and silver dot
lars would thereafter remain at pal
with gold, like the outstanding thalers
of Germany, and would not be present
ed for redemption in any considerable
amount, being needed, like the smaller
silver coins, for circulation in retail
trade. After the retirement of the le-
gal tender notes we should be able tC
see better what to do next"
Question-For the purpose of facili-
tating the use Of existing silver car
rency, what do you recommend as the
smallest denominat ton of United States
notes and bank notes which should De
put into circulation?
Answer-The ten-dollar at first, but
this should be made a matter of exper-
iment, the object being to determine the
demands of circulation which will alb
sorb the currency, leaving the rest tC
bank notes
In regard to the legal tender notes
Mr.. Whites views are as follows:
Question-On what grounds. If any
would you favor the gradual but entire
withdrawal Of the treasury notes oi
1890 and of the United States notes.
Answer-On the ground that there is
no certainty, and can be no certainty
that the Government will always re-
deem them in gold Redemption o;
non-redemption is a political issue te
be fought over in elections and must
remain so as long as this kind of paperis
outstanding. Mere uncertainty is always
drawback to business property. Fail
ure of redemption would be bankruptcy,
public and private.
Question-If it shall be decided to re-
tire the United States notes, how car
it be done without adding to our bond
ed debt?
Answer-By cancelling all that are
received at the treasury for taxes or
presented for redemption, or also re-
ceived over and above the Government
necessary disbursements.
Question-How in that case can pro-
vision be made for maintaining an ad-
equate amount of currency for purposes
of business?
Answer-Provision will be made auto
matically in various ways, viz: First
by retaining the gold produced by oul
own mines; second, by importing gold
from abroad; third, by the issue of ma
tionai bank notes. Prior to the civi
war the Government gave itself nc
concern about providing currency fol
purpose of business, yet the supply was
never deficient.
Question-If It be thought inexpedi-
ent to fund the United States notes, how
can they be redeemed with an assur-
ance that bank currency will take their
place?
Answer-The assurance is found II
the fact that in every case where a cur
rency vacuum has existed it has beer
filled by bank notes. This was the case
in the panic OF 1895. The process o,
taking out notes might be more expedi-
tious 1t is perfectly certain that il
there is a profit in issuing bank circu-
lation il will be issued. If there is nt
profit in IL we must conclude either thai
the law needs amendment or that the
demand for currency is slight.
Mr.. White believes that in process oi
time ii viii not be possible TO rely upor
national bonds as security for bank
note issues. because of the extinction o1
the public debt.
In reply TO the questions whether any
safe and practicable plan can be de-
vised for using other securities, he says
that he thinks not
Il should not like to be charged witt
the responsibility of selecting the Sc
curfties or choosing between the differ
ent kinds offered
He believes that 20 per cent. of the
paid up unimpaired capital of the bank
should be the limit of the note issues
and that cash reserve should be held
for the redemption of others, the same
as now provided by law for deposits
viz: - per cent. in reserve cities and
u per cent. elsewhere, with the right
TO keep three-fift of the said Il
per cent. in the reserve cities. There
is no difference between deposit liabili-
ties and note liabilities. so far as the
bank itself is concerned. and no reason
why the reserve should be greater oil
less for the one than for the other. The
reserve should consist OF gold and
should be in the vaults of the bank OF
,n a clearing house depository.
other questions regarding the best
plan for establishing and regulating a