The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-11-25

The gift that rises from the land,
The growth of valley, hill, and plain.
Bank Notes or Government Notes?
Out Of the multitude of conflicting
schemes Of currency reform which are now
urged upon the people, a fundamental issue
Is shaping itself, which will have to be de-
cided before any measure of permanent
utility can be arrived at. 1t is this Shall the
paper money Of the nation be issued ex-
clusively by the banks, or shall 1t be issued
exclusively by the Government At pres.
ent, both agencies are in operation, and
each one is struggling for supremacy over
the other. This condition of things cannot
last. One or the other of the two rivals
must surrender to the other, and leave to it
the function of supplying the people with
currency other than coin.
On behalf Of the banks are enlisted not
only the small army of bank stockholders
and officers, and Of borrowers of money who
look to the banks for accommodation, but,
also, the whole tribe Of Mugwumps, who
insist that the mass of our citizens are not
to be trusted to manage their own affairs,
but ought to turn over the duty to the
UcbtcT CldSb, u liz Ohly ihch COulpctSuO
to perform 1t. Thus, the Secretary of the
Treasury, Mr.. LYMAN J.. GAGE, who re-
signed the presidency Of a great Chicago
bank to accept his present office, spoke on
Tuesday evening at the Chamber of Com
merce dinner in this city of 1.-THE national
Treasury awkwardly performing an Office
entirely foreign to its proper functions"
and, on the same occasion, that superla-
lively eminent MuRwump, Mr.. ALEXAN-
f Z. ORR, said:
ct think we are all of one mind, that there cannot
be two great banking systems successfully operated
ht the same time in this country, one by the Govern
ment and one by the people. and that that which 10
not legitimate must ultimately stand aside. and there
cannot be much difference OF opinion that sooner or
later the Government must be that one"
In the same spirit, the Mugwump Times,
yesterday morning, editorially denounced
the issue of currency by the Government
exclusively, as n scheme of initiation des-
tined to bankrupt the nation, because under
1t the currency would he controlled by Con-
gress and not put in charge of the banks.
The Times, however, omits to mention that,
four times within twelve years, namely, in
1884, 1890, 1893, and 1895, the banks of
this city defaulted OF their obligations to
their depositors, and that these depositors,
In order to get currency with which to
carry on their business had to sell their
checks to Wall street brokers at a consid.
cradle discount. To vest in such weak in
situations, and in the less responsible banks
Of the rural districts, the exclusive function
OF issuing paper money, is an act of folly
which our people will never commit.
pronraao foSvar1 ahoninD tha Rpa1 ao,,n
we have mentioned, has already got so far
rs that the advocates Of bank currency are
divided into two parties, one that desires
to have the bank currency guaranteed by
the Government and redeemed through the
Treasury; and one that desires to have it
independent of the Government, and is.
sued, as it was, t~hirty-five years ago, by
each bank against its own assets, and re-
sSdeemed only at the counter of the bank
Issuing 1t. The advocates of a Govern
ment guaranteed and Government redeemed
currency do not differ in principle from
those who advocate the issue of currency
by the Government direct. The diff
ference is, that the partisans of the
banks contend that the profits of
the issue shall inure to the banks
and not to the Government. The Govern
ment is to print the notes, take charge of
the hui for their redemption, redeem them
when presented, and pay them when the
banks fail to pay them. That the Govern
ment might as we'll do the business on its
own account n for it's wi benefit, is too
plain to need demonstration. AS for al
lowing the thousands of little banks all
over the country to issue notes at pleasure,
and let the people take the risk of their
being good, that Is an absurdity, which
needs only to be seen to be rejected.
The Mugwump advocates of bank cur.
rency, seeing that 1t will be impossible to
get the people to consent to the extinction
by direct measures of the Government cur.
rency they now possess and the substitution
for 1t OF bank currency, aim at accomplish
ing the same object by indirection. They
accept the measures which The SUN has
long urged, namely, the separation of the
Issuing of demand notes from the Other
business of the Treasury, the establishment
for the redemption of those notes, of a gold
reserve not liable for other Government
requirements, and the reissue of re
deemed notes only against fresh de
posits Of gold. With this measure
adopted, and with the enlarged priv
ileges of issuing circulation which the,
demand for the banks. they intend that the
banks shall gradually turn into the Treas
ury all the Government notes they can pro
cure, hoard the gold obtained for them in
their W vaults, and fill the vacuum in the
circulation thus created with bank notes
To defeat this scheme it is indispensable,
That the banks be deprived, as soon as II
can be done without infringing upon theil
vested rights, of the privilege of issuing
circulation altogether. The Government
notes would thus eventually be the sol,
paper money of the country, and theiI
volume would never be reduced by redemp
ton so as to Inconvenience trade.
In the present conflict The SUN take,
the only logical and sound position. 1t is
that all the paper money of the countr
shall be issued by the Government directl,
and redeemed by 1t directly, without EN-
nlnvIn0 tho hanLa 10 10 ~ a,l II