Audubon Republican. [volume] (Audubon, Iowa) 1894-1925, 1897-12-30
IT PRESENTS ITS PLAN.
Main Points In the Report Of the
Monetary Commission.
Presents what 1t Considers to he De.
fects In Our Present Currency
System, and Suggests How 1t
May BE Reformed.

Washington, Jan. 3.-The report of
the monetary commission appointed I'M
der authority of the convention of bust
ness men held in indianapolis last jan
uary has just been made public. Fol-
lowing is synopsis of the document:
1t retains practically unchanged the ex-
listing metallic money. The existing gold
standard on which business has been done
since 1879 Is maintained, on the ground
that the Industrial interests demand GER
tainty as to what the standard shall be.
To this end, 1t is urged that the United
States shall remove all uncertainty as to
the meaning of COIN in it's obligations,
thereby saving the taxpayer by the ability
to borrow at a low rate of interest. No
attempt Is made to remove the existing
silver dollars, nor to change their legal
tender quality; on the contrary, a place
is provided for them in the circulation by
forbidding the issue of any paper money
other than silver certificates in denomina-
tions below ten dollars.
A Dangerous Practice.
1t is regarded by the commission as dan
gerous to maintain the present practice
Of using government demand obligations
as money. They were issued because there
were no resources In the treasury; and
so they deprecated, drove out gold, fur
nished fuctuating standard, increased
the national debt enormously, caused a
change in prices whenever the credit of
the paper standard fiuctuated, and by
causing unexpected changes in the level
of prices gave rise to extraordinary spec
ulation, increased the severity of COM
mercial crises, and placed the small pro-
Queer at disadvantage with the large OPP
orator.
should BE Withdrawn.
For these and other reasons the commits
sion strongly urge the government to with
draw it's demand obligations now used as
money, decline to provide gold for ex-
porters and put the burden and expense of
maintaining a redeemable paper circulation
upon the banks. In order to meet the de-
mand obligations, the present reserves of
gold in the treasury furnish sufficient
sum to be set aside in the division of issue
and redemption; and to meet possible con-
tingences the secretary of the treasury is
authorized to sell bonds whenever the re-
serves need replenishment. In this way,
or from surplus revenue, the demand OBJ
legations Chat is, United States notes and
treasury notes of 1880 can be removed in
such a way that the cost to the country
can be reduced; while this will also give
the inestimable advantage of ceasing to use
demand debts as money, simplifying our
currency, and adding to confidence in the
certainty of our standard. By the plan
of the commission the withdrawal of gov
eminent paper Is SO arranged that con-
traction cannot possibly take place; II
United States notes are Cancelled their place
will be taken by the gold paid out for them,
or by the expansion Of bank notes (under
the new system propDsed).
Good Word for the Bank Note.
The demand obligations of the United
States were not money based on prop
erty; they were only debt. On the other
hand, bank note is never issued fraud,
of course, eXcluded) except for consdera-
ton in negotiable property of equal or
greater value. The bank note comes forth
as the sequel to a business transaction,
and is based on the active property of the
country which is passing between pro-
ducers and consumers. This property Ia
always negotiable and always equal to the
duty of meeting the note liability. Bank
notes are as sound as the business transac-
tons of the country. The currency of the
country, moreover, should increase as the
transactions of the country increase; hence
the rigid unchanging issues of the gov
ernment make them an inelastic part of the
circulation while by the very process of
their issue bank notes alone can be au-
tomatically adjusted to the changing trans
actions of the business community.
To Secure Absolute Safety.
In amending the present national bank
Ing system, the commission were actuated
the note-holder; to make the notes uni
form and of equal currency in all parts of
the country, to create an elastic system,
which, while expanding in response to in
creasing transactions, should healthily con-
tract when transactions diminish; and
which would help in a better distribution
of banking facilities throughout the west
ern and southern states.
| In view of the scarcity of United States
bonds, they cannot long be regarded as a
basis of circulation. Moreover, any bond
| security of a high character yields low
rate of interest: and in time of stringency,
| when borrowers need loans and the mar
ket rate of interest is high, there is no in
| ducement to buy these bonds to increase
| circulation. Hence, under the present sys-
! tenn, when notes should be most needed,
| 1t is least profitable to issue them.
Plan of the Commission.
While providing for a partial use OF
| bonds for securing notes (25 per cent. of the
| capitaD the commission proposed that
| notes beyond this should be issued on all,
| instead of part Of, the resources of a bank
| and within a few years that no special
| bond security should be required Banks
! may issue notes up to 60 per cent. of their
| capital without restraint; for issue be-
| yond go per cent. and up to so per cent
| they pay tax of two per cent; for those
| beyond so per cent and up to 100 per cent
| they pay tax of six per cent. These notes
| would be a prior lien upon all the resources
| of the bank, and, in addition, upon the
| stockholders liability. Moreover, all banks
| issuing notes contribute five per cent. OF
| their circulation as permanent guaranty
| fund. For daily redemptions, banks should
keep a five per cent. redemption fund in
| the hands of the comptroller of the cur.
rency. Banks of $4,000 capital may be
| established in places of 1900 inhabitants