The record-union., 1898-01-03
would be greatly Handicapped by large

given to this consideration by the fact
that it would be scarcely possible for
this ration to engage in war in its
present notwithstanding as a part
Of the situation the imperfect develop
ment of clear conceptions on the sub
ject of money in the minds of the peo-
ple-without a suspension of specie
payments and a resort to further issues
of Government notes. There is nc
doubt that if our Government were re-
lieved Of it's existing demand obliga-
tions, and our currency system put in
working order upon gold basis, it
would be entirely possible for us to go
through war without suspension OF
specie Payment, or any arrangement of
our monetary system. If war should
come, the value to the country of the
ability to thus avoid the indirect losses
following from deprecated currency,
inflated prices and financial demoraliza-
ton would be so great that the burden
of paying off our demand obligations
would be as nothing in comparison.
We have a total volume OF paper and
silver in circulation amounting to
S9OS..2S, 0S7, all resting for its value
on the credit of the Government, less
only the bullion value of silver. That
credit is maintainable only as a whole.
The paper of the United States could
not he dishonored and it's silver up
held. 1t is necessary, therefore, that
the Government should keep a large
reserve fund in gold. Such a fund in
the hands Of the Government is de-
fenseless against attack. In countries
where the Government has no demand
debt outstanding, and the gold reserve
is held by banks, the nations stock of
gold is capable of some degree of pro-
lection through the rate of interest
charged for loans. But our Govern
ment has no such resource It's great
gold reserve is an open mine free to all
who bring its notes. And as the entire
monetary system of the country hangs
upon that one reserve, the situation is
one of uncertainty and hazard against
which no insurance is possible
AS against these serious disadyan-
tageS there is no advantage which can
possibly be claimed for paper money
IN the form of Government notes over
any other form of paper money equally
good, except the saving of interest on
so much of the public debt as is repre-
sented by the notes. But this supposed
economy is more apparent than real.
Indeed, when we consider all the facts
such notes are an extremely costly form
of money.
In order to create the gold reserve re-
CURED for resumption in 1879 bonds
were sold to the amount of 800, 900, ,000
During 1S94-95-96, S262, ,315, 400 more
were sold to protect the same reserve
The situation was then complicated by
deficit in the revenue, and it may be
said that the necessity for the later
sales arose partly from that cause.
Not to enter upon that question closely,
1t is clear that with interest to pay on
S3o4 100000 Of Indebtedness incurred
chiefly. if not wholly, in consequence
of the existence of the Government
notes, and S100,000000 of reserve lying
idle in the Treasury, the saving in in
terest by the United States notes is
a small gain compared with the unend-
ing burden of providing for their re-
demption. We have already redeemed
them in gold nearly twice over-$54S,-
6S1, ,016 since 1S79-~3ind they are all
outstanding yet
Worse than this, however is the IN
uncertainty which is inseparable from
such currency. Such injury is none
the less real because it may be upper
ceived. 1t may go long unnoticed like
friction in machinery or malaria IN the
air, but it has it's effect nevertheless;
and when it reaches an acute manifes-
tation, such as we have experienced
within the last five years, the loss oc-
casioned is beyond computation.
THE SILVER CURRENCY.
We have $354 ,355.03 of notes of s.
and under, and $50, 1876, 7SS of silver
dollars in actual circulat ton, making
total of $414, ,551 ,S19 of current money
in use, exclusive of gold, in denomina-
tions Of 81, So and 50. Our total stock
of silver dollars is 1852, 113, 1872. This
is an excessive quantity to have at the
existing discrepancy between their legal
and actual value. But with further
coinage of them discontinued, and their
parity assured by the exchange of gold
for them on demand, it is better to re-
tain them as they are than to attempt
a final solution at this time of the prob
lem which they present. By with
drawing all silver certificates over So,
and all other notes under SO, a place
wifi be made for nearly all the silver
dollars in a way which will give the
the full benefit of them for
current use without imposing upon the
Treasury any serious burden in their
BANKING SYSTEM
The chief difference of the proposed
from the existing system of bank notes
Is that 1t gradually does away with the
requirement that there shall be de-
posit of bonds with the Government as
a condition for the issuance thereof
AS now, the notes are to be first hen
upon all the resources of the banks, in
,luding the stockholders liabilities. This
change is necessary because of the
scarcity of United States bonds, and
The attempt to substitute other bonds
would lead to many evils. The change
IS wise because it permits the issuance
cf notes in the way and at the time
when, and for the purpose for which,
they would be issued under natural
conditions, if no law prevented Such
a system would more perfectly than
any other give the country a circulat-
ing medium: it would readily and
quickly adjust Itself from season TO sea-
son 70 meet the wants of the business
Of the country requiring bank notes
Tor it's convenient transaction Under
the present system, the problem pre-
sented &c bank, when it's customers
call for currency, is not the amount
Of its own assets. but its ability and |
iesire to make an investment in some
thing quite apart from its usual busi-
ness as a bank, in order that it may be |
IN q position to provide man who
wishes TO move property. or employ la
,or with the tools most convenient at /