Omaha daily bee., 1897-11-15
HORACE WHITE ON FINANCE
Well Known Student of Money Testifes
Before the Monetary Commission.
FAvoRs RETIREMENT CT THE esEENsACKs
Would Make Ten Dollars Smallest De-
nomination of United States
Notes to Facilitate sil-
yer Circulation.

some clear-cut answers to the interrogatories
OF the monetary commission regarding i'm
provements in the currency system OF the
United States Mr.. White Is an outspoken
advocate of the retirement of greenbacks
and the adoption OF an classic banking cur
rency based upon business assets. He de-
clares that the silver dollars should be re-
deemed in gold and that in financial sense
there is no difference between the several
forms Of fiduciary coins of which dollar coins
are part. "The latter" he declares, are
metallic greenbacks."
He does not believe that the amount Of
circulation presented for redemption would
be any greater than at present if silver were
redeemable in gold. In answer to questions
regarding the maintenance Of the gold
standard Mr.. White says:
CANCEL LEGAL TENDER NOTES.
II would recommend the retirement and
cancellation of all legal tender notes as first
step. Probably the silver certificates and
silver dollars would thereafter remain at par
with gold like the outs .anding thalers of
| Germany, and would not be presented for re-
demption in any considerable amount. being
| needed, like the smaller silver coins, for
circulation in retail trade After the retire
me1t Of the legal tender notes we should be
able to see better what to do"
Question-For the purpose of facilitating
| the use of existing silver currency, what do
| you recommend as the smallest denomination
of United States notes and bank notes which
should be put in circulation?
Answer-Ten dollars at first; but this
should be made matter of experiment, the
object being to determine the dimensions of
| the field of circulation which will absorb the
| currency, leaving the rest to bank notes.
In regard to the legal tender notes Mr..
Whites responses are as follows:
r,yrrSN mar a
Q.-On what grounds, If any would you
| favor the gradual but entire withdrawal of
| the treasury notes of 1890 and Of the United
States notes?
A-On the ground that there is no GER
tainty and can be no certainty that the gov
eminent will always redeem them in gold.
Redemption or nonredemption is a political
issue to be fought over in elections and must
remain so as long as this kind OF paper is
| outstanding. Mere uncertainty is always a
drawback to business prosperity. Failure of
redemption would be bankruptcy, public and
orlvate.
Off 1t shall be decided to retire the
United States notes how can it be done
without adding to our bonded debt?
A.-By canceling all that are received at
| the treasury for taxes, or presented for re-
| demption and also those received above the
| governments necessary disbursements.
| Q.-How, in that case, can provision be
made for maintaining an adequate amount
of currency for purposes Of business?
A.-Provision will be made in various
| ways viz: First, by retaining the gold
| produced by our own mines; second, by i'm
porting gold from abroad; third by the Issue
| of national bank notes. Prior to the war
| the government gave itself no concern about
providing currency for purposes of business
| yet the supply was never deficient
HISTORY MAKES AN ANSWER.
| Off it be thought ineXpedient to fund
|
| be redeemed with the assurance that cur
rency will take their place?
A.-The answer is found in every case
that where a currency vacuum has ex-
listed it has been filled by bank notes This
was the case in the panic OF 1895. The pro-
cess of taking out mates might be more eX-
| pedient That is matter of machinery and
of legal regulation 1t is perfectly certain
that If there is a profit in Issuing bank cir
| culatiOn 1t will be issued. IL there is no
profit in it we must conclude either that the
dw needs amendment or that the demand
| for currency is slight
Mr.. White believes that in process of time
1t will not be possible ia rely upon national
bonds as security for banknote issues, be-
cause If the extinction of the public debt.
In reply to the question whether any safe
and practicable plan can be devised for
using other securities, he says that he thinks
not. II should not like to be charged with
the responsibility of selecting the securities
or choosing between the different kinds Of
| fered."
He believes that so per cent of the paid
up and unimpared capital Of the banks
should be the limit OF the note issues, and
| that a cash reserve should be held for the
redemption of other liabilities. The same
as now provided for deposits viz: 25 per
cent in reserve and Is per cent elsewhere
with the right to keep three-ffths of said re-
serve in the cities. There is no difference
between deposit liabilities and note lisbili-
tics as far az the hank itself Is concerned
and M reason wbv the reserve shnula he
greater or lees for the one than for the
9thnr Tho roeerye ebould consist NJ onI6
ana should he in Tho voI,Its NJ The hank or
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- 0,bar omesiiona rsgsrdinG tho host nIon
,o o'ner questions rSsrpune me pes Pin
oi atu u,,sI. - a 3
SuI Ilenoy "e'e "H@"eieu ny MI "ni'e es
ioiiows: - ~. .,.
IN general approve t ot @ tile pan auoPteu
by the American bankers assoeiation ION al lhe
meeting IN Baltimore octoDer H. 1889. COM
monty known as the baltimore plan' All
banknotes should be redeemaole at the com
mercal center OF the country, and also al
their own counters PERHAPS an exception
should be made OF the Pacific coast on ac-
count of distance, The requirement OF re-
dempti,n at the banks counter was found