The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-06-05
THE CURRENCY QUESTION.
What Is the Best Form of Money for
Universal Use:
Sound Money

Y.
Next to the maintenance of the gold basis
for the currency of the United States, the
most important public question now before
the people is. what is the best kind of pa
per money for universal use? Paper money
is credit money. 1t is not actual money,
but is a promise to pay actual money. IN
all civilized nations actual metallic money
serves chiefly as a measure of values, while
the great volume of exchanges is effected
with credit money. -
Our present system is a mixed one, in
volving two inharmonious principles, and is
a legacy from the civil war. We have two
kinds of credit money in circulation. One
kind is iSused by the national government,
rests solely on the credit of the govern
ment, and is forced into general use by a
legal-tender law. The other kind is issued
by banks, and rests upon the actual prop
erty of the banks. 1t is not legal tender.
Government paper money is resort of
nations in time of war when their credit is
strained. All nations have not resorted to
it, however. England did not issue govern
ment notes for circulation as legal tender
money during her long struggle with Napo-
leon. Napoelon did not resort to this eX-
pedient during his long struggle with all the
powers of Europe Our American govern
ment paper money consists of five kinds
the original greenback war circulation,
which is redeemable in gold; the treasury
notes, which are on their faces made re-
deemable in coin, which may mean either
gold or silver; the silver certificates issued
against corresponding deposits of silver in
the treasury; the gold certificates issued
mostly in large denominations and used
chiefly for subtreasury transactions at New
York, and the currency certificates, issued
only to national banks
The best opinion of the commercial world
holds government paper money to be an
imperfect and Objectionable form of cur
rency. There are many reasons for this
conclusion. We will cite only a few: In the
first place, the government has no property
tor the redemption of its credit money 1t
mas the taxing power and can accumulate
a surplus in its treasury by securing a
larger revenue than it has occasion to ex-
pend, ana can thu; create fund for re-
demption purposes, but this fund is liable
TO many eXiSencies, such a change in
the tax laws and a falling off in receipts
ana appropriations by Congress in excess of
current receipts, which will exhaust the re-
serve 1und. In the second place, govern
ment credit money has no principle in it of
elasticity and can only be issued in a fixed
amount, as provided by vote of Congress.
a body necessarily made up chiefly of poll
tlclans ana not of prudent men of business
In the third place this form of money car
ries no power of distribution to meet the
varying needs of different parts of the
country. The government can only paw it
out in localities where it has disbursements
to make. It's tendency is to longest in the
money centers, leaving the remoter districts
or the country scantily supplied with circu-
lating medium.
The general experience of the commercial
world leads to the conclusion that safe
ana elastic bank currency is the best form
OF paper money Such a currency has the
very principles of excellence which govern
Inent paper money lacks, namely, elasticity
dlstrlDutlon from a multitude of Centers of
population, large and small, and a basis in
aclual capItaI pledged for its redemption on
demand. thoughtful students of our finan-
clal situation do not believe it will be Drac-
tlcable TO at once shake off a legacy of thir-
" years or error, and abandon our mixed
system OF government and bank money but
tney 90 DeHeVe that steps should he
promptly taken by Congress in that dire
ton. Ihey hold that it is not the business
OF government to supply the country with
our daily bread. pP''