The Topeka state journal., 1897-12-07
CURRENcY REVISION.

Carefully yelled as it is, there is in
the message of the president submitted
to congress yesterday a distinct pur-
pose of permanently retiring a large
portion or the whole of the government
paper currency. While any attempt
along this line is likely at first to eX-
cite storm of opposition the plan sug-
gested win probably be considered
much less Objectionable than that Of
substituting for these non-interest
bearing obligations. interest bearing
bonds. which has previously been advO-
Gated in some quarters. In fact, if the
present currency system is to be MAIN
tained in the main there is much to be
said on the side of the presidents sug-
gestion.
What he proposes is that government
notes when received into the treasury
shall be kept there except when paid
out in exchange for gold. 1t is improb-
able that there would be any call for
greenbac6s in exchange for gold, but
if a considerable amount of idle cash
is to be held in the treasury why
should it not be in government notes
as well as in any other form. When
they are in the government vaults they
cannot be used to withdraw gold and
as the amount Of notes increases the
necessity for gold reserve diminishes.
A gold reserve is only maintained
for the purpose Of redeeming the gov
ernment's notes. If there were no
notes to redeem there would be no ne
cessity for a gold reserve and therefore
no necessity for an issue of bonds, in
the future, for its maintenance could
arise.
One of the prime requisites to the
carrying out of this plan however, must
be an excess of revenue over expenses,
which shall be almost or quite continu-
Gus. affording the treasury forms of
currency other than government notes
with which to meet its expenses. AS
said before, whatever money is held in
the treasury may as well be held in
greenbacks as in any other form.
A law, however, which declares that
these notes shall be paid out only in
exchange for gold, must prove extreme
ly Objectionable in the present state of
the nations financial affairs, in which
a constant deficit is shown, and ulti-
mately lead to the necessity of another
bond issue just as would be the case if
the cash under the present system ran
so low as to necessitate drawing on the
800. 100000 gold reserve to meet the ex-
penses. In that case there can be little
doubt that the people would prefer to
have the greenbacks again placed in
circulation and take their chances on
the endless chain' That would at
least be a postpOnement of the evil day
The presidents other suggestion.
that the national banks be required to
redeem their notes in gold. apparently
could serve but one purpose, which
would be to hasten the retirement of
the greenbacl1s which the banks would
be forced to exchange at the treasury
for gold to make up their redemption
fund. Such a law might easily become
exceedingly embarrassing to the gov
eminent.
In times when a demand for gold for
export should arise, the greenbacks be-
ing locked up in the treasury vaults,
at could only be obtained by the pre-
sentatiOn of national bank notes for re-
demptiOn- When the supply of the
banks was exhausted, they could not
sell bonds for more as the government
does and it is not improbable that
under such an agreement panics would
become more frequent and more violent
than they have been heretofore.