The Indianapolis journal., 1897-01-07

even defy a like wretched period of March
1. 1898. to Dec. /. 1896. which IL likely 10 Toe
a sufficient object lesson TO avail two gen
erations. A per cent. OF the duties paid on
imports i'm gold would accumulate IL I'm
the great central institution in quantities TO
meet foreign demand.
EFFECT OF EXPORTING GOLD.
1t should be further considered that II
is the excessive exports of gold. whether
it be drawn from the national treasury or
from other sources in this country. which
unfavorably affect the business and pro-
ductive industries. The retirement of GER
tain forms OF our national currency by
which gold is drawn from the treasury
would of course leave none OF il for the
Nation to redeem, and therefore make IL
necessary TO keep gold reserves. But that,
as already suggested. would only shift the
methods of obtaining it for export. as the
motive of profit TO do so would still be as
potent as ever, and so the loss would go on.
and the productive and business interests
would feel the effects of il just as they
do now.
The building and Improvement of our
system TO be of permanent effect must
touch and affect change AT the point
where the trouble begins. If there is any
way TO bring permanency to the CONNER
cial condition which existed for the ten
years from 1878 to 1857, when our exports
were greater than our imports and when
we increased our stock OF gold instead of
losing il, then certainly that wants to be
made chief part of the change. How that
is to be accomplished is not SO easy a prob
lem. but il invites the expenditure OF the
best thought of the strongest builders. IL
is we'll TO get "A clear view OF the causes
which bring around the periods of busi-
ness embarrassment and depression for no
substantial building can proceed till solid
ground is found. The light of the past and
a fair analysis of the facts may enable us
TO discover II. Building upon such a con-
dition as accumulates rather than loses
gold, could easily bide the time for the
agreements with other commercial nations
for an international plan and a larger use
of silver and go on prospering. with con-
stant accretions of the worlds metal. not
only in increased annual production at
home, but in balances in commerce, the
sterling exchange quotations abroad OF S4.&
would awaken little alarm here.
UNITED ACTION NEEDED.
All of these considerations certainly
point to the conclusion that only very gen.
eral and therefore very strong cooperation
can meet the condition of stability which
is so essential to permanent prosperity.
The germ and something OF the method
of this was in the mind of Alexander Ham
ilton when he urged the participation of
the United States government in such CO.
operation, in the organization of a great
central monetary institute. in which other
capital and capitalists should also partic-
ipate. We have the branches of such an
institution now in the national banks 1t
Is objected that the government should
not be in the banking business. With the
greenbacks and treasury notes retired II
would still be in the banking business, for
by shifting could the present superVi-
sion or All the national banks be avoided
and their credit standing maintained. Ii
has, however. been iii the business since
1888, when the second attempt at carrying
out Hamilton's idea was defeated by the
of he rflr mr.
by the establishment of a banking depart
ment in the subtreasury system. Unfortu-
nateiy our form OF government banking
at present. takes and keeps s2e00O0,0O0 to
$500, 900, 900 permanently out of circulation.
This is avoided in every other great COM
mercial nation by having one great CEN
tral institution. AS already stated we have
the branches of such in our national
banks. What is lacking is complete CO.
operation of all the banhS and all Jnat may
yet be organized. equally, according to
their capital stock. sharing in it's advant-
ages. and the government pecoming a de-
bonds. and thus putting into circulation
part of it's great reserves Under proper
organization and management such an in
stirution could get together and hold the
gold of the country sufficiently for the
redemption and protection of the whole
system, with its branches as now ramify-
ing the country, and issue the circulation
notes to each according to their respec
tive capital stock I'm bonds With such
system supplemented by revenue system
that would keep the balance of trade i'm
our favor, and thereby bring TO us more
gold that we exported except in extraor-
binary periods already mentioned. would
put both the government and the business
interestst upon permanent basis that
would grow and expand with the Increase
of international trade and commerce.
EFFECT OF SILVER.
Furthermore, with such a system our sill
yer coinage could readily be held at
parity with gold and used in our great
volume of $4,000, 900 of domestic trade.
and larger coinage of il could proceed
when there was domestic demand. whether
other nations acceded to a common basis
or not. For with silver kept at a parity
with gold there would be no domestic de-
mand for redemption of bank paper, and
the entire stock of gold could be held by
the central institution TO meet all foreign
demand. when on exceptional occasions
the flow abroad might for a year be larger
than ordinarily and during the normal con-
ditions, which are the rule. The extraor-
binary occasion of gold export. while the
balance of trade was yet in our favor i'm
1891, WAS brought about by the Barring fall
ure. But the excess of gold exported over
the gold imports that year was but Sos. .l30.-
0s7 and the next year only $4s9.SlS. During
these two years the balance of trade i'm
our favor was S2i2. i40 800. viz: in 1881 S39,
5646l4 and in 1882 $2O2 S15.6S6. Thus ii is
seen how quickly the balance of trade
righted the condition and made business
safe. That was followed. however, in 1885
with a balance of trade against of SIS
737 12S. and an excess of gold exports over
gold imports OF $s7 500, 463. and trouble be-
gan again. accelerated by treasury deficits
and rene we'd silver agitation.
| do not presume in what | have said as
to methods and plans TO do more than
offer IL TO the accommodating stock of sug
gestions. Much i'm this regard must be
held as tentative for more time and ma
turer thought. At the same time IL must
be recognized that il is easier TO critcse
and tear down than il is TO construct. The
present system was slowly developed. Ii
Is the best this Nation ever had. The
country will desire TO be and see
clearly before any of IL is displaced. The
foundations may need to be strengthened.
and what seems fractional united. made
symmetrical and strong. given great CEN
tral head. whereas ii now only has branch
es: eliminating with fuller and free CO.
operation of the Nation, whose supervi-
sion, regulations and watchful care now
alone make the national bank notes issued
in Bangor not only current I'm San Fran
cisco, but everywhere on the continent
JOHN B. CONNER
Indianapolis. Jan. o.