The representative. [volume] (St. Paul, Minn.) 1893-1901, 1897-11-17
WHITE ON THE CURRENCY.

Horace White, the editor Of the New
York Evening Post, in his deter of advice
to the monetary commission, reiterates his
well-worn demand for the redemption, re-
tirement and cancellation of all legal tender
notes. He thinks the notes might be re-
tired without an issue of bonds by cancel
ing all that are received at the treasury for
taxes or presented for redemption-or at
least all SO received over and above the
governments necessary disbursements. 1t
is admitted that this would naturally tend
to contraction Of the currency. Being
asked how, in that case, provision could
be made for maintaining an adequate
amount of currency available for purposes
of business, Mr.. White replies:
Provisions will be made automatically in va
rious ways, viz: D by retaining the gold pro-
duced by our own mines; CD by importing gold
from abroad; 90 by the issue of national bank
notes. Prior to the civil war the government
gave itself no concern about providing cur
rency for purposes Of business, yet the supply
was rever deficient.
1t is difficult to see how the govern
ment could control the output of gold
from our own mines without resorting to
'Paternalistic'' methods, which Mr.. White
so much abhors, or how it could influence
the importation Of gold from abroad. The
movement Of gold into or out of the coun-
try is something that is controlled by COM
mercial conditions. Mr.. Whites allusion
to the condition prevailing before the civil
war seems most unfortunate from She
standpoint of security Of the note holders.
1t is true that government then gave it
self no concern about providing currency
for purposes of business, and usually plen-
ty was provided-such as it was-but what
was it? A large percentage consisted Of
the notes Of wildcat banks which ulti-
mately proved entirely worthless. Surely
Mr.. White would not have the country
return to that condition.
Mr.. White gives as his reason for insist
ing upon the retirement of the government
notes the ground that there is no GER
tainty, and be no certainty, that the
government will always redeem them in
gold.' The best answer to this is the
fact that since the resumption of specie
payments in 1879 the government has main
tained gold payments and that it pro-
poses to continue to maintain them. When
he speaks of a certainty, of course, we
must admit that there is no absolute GER
tainty in human affairs. Is 1t absolutely
certain that the banks would always re-
deem their notes in gold If the burden Of
gold resumption were thrown upon them:
Would not the same causes which might
compel government to suspend gold re-
demption also compel the banks to sus-
pend it? Did the banks continue to re-
deem their notes in gold after the general
suspension of specie payments in war
times?
Mr.. White has the reputation of being
a strong writer upon financial topics, but
his argument for the retirement Of the
greenbacks, in his letter to the commits
sion is singularly weak and illogical His
whole case is apparently based upon tie
contention that the banks would be strong
er to maintain gold redemption than the
government and that their paper issues
would be safer than the government issues.
This is a contention which is falsifed by
the whole history of finance in this coun-
try. The national bank mote is safe, but
it's safety is based upon government cred
it. There is no more danger that the
United States ever; would, in the future,
repudiate it's legal tenders than that it
would repudate it's bonds. If wave of
reputation should, unfortunately, sweep
over the country. it would sink in its vor-
tex the bonds as we'll as the government
notes. But there is not, and cannot be,
so much danger that the government will
default as there is that banks will de-
fault