The herald., 1898-12-30
THE CURRENCY REFORM
ADVOCATED BY COLLEGE
PROFESSORS
The Committee of the American Econ
omists Seems Timid About Ex-
pressing Its Views

NEW HAVEN, Conn, Dec. 29:-At the
annual meeting OF the American Economic
Association held at Cleveland in December
of 1897 it was voted to appoint commit
tee of five to consider and report upon the
subject OF currency reform IN the United
States The committee appointed consists
of Professors Taylor Of the University OF
Michigan, Tausig of Harvard University,
jerks of Cornell University, Sherwood OF
Johns Hopkins University, and kinley OF
the University of Illinois. The report OF
the committee was presented at the meeting
of the association in New Haven today.
In the report the committee states that
they have agreed upon series OF state
ments with respect to the need, the objects
and the methods OF such reform, winch 1t Is
believed would command the assent OF econ
omsts generally. Their propositions are
submitted with the recommendation that
they be printed as part of the proceedings,
but with the express disapproyal OF any
responsibility on the part of the association
for the views therein set forth.
DESPITE the fact that much Improvement
has taken place within two or three years,
there still exists real need for monetary
and banking reform in the United States,
saws the report. The standard OF value upon
which the whole system rests is by no means
as secure as it should be. The circulating
note system is still greatly lacking in elias
ticity Adequate banking facilities tor
newer, or n.sre backward, districts are still
wanting In the system as a whole there
is notable lack of unity and organization
Under existing conditions, it is said, the
only wise and consistent policy for the
limited States is the frank recognition of
the fact that the actual monetary standard
is now, and for some time to come will be,
gold, and the adoption Of legislation which
shall insure the entire stability OF that
standard, until such time as the nation may
have decided to establish some other. As
sent to this statement does not commit any
one to the position that the gold standard
is, abstractly considered, the most desira-
Bile one. As is well known, a large number
of economists hold to the opposite opin-
ion. But, as it also well known, the par
ticular substitute which such economists
favor, i. e., international bimetallism, is at
present, and for a long time will be, out
Of the question. In consequence, the pre-
else form which the question of standards
whether the currency shall rest on gold
basis, or on silver or paper basis. Ihus
stated, it can have, to the majority OF econ econ,
omists, but one solution. Under exls.aLhs
conditions, the gold standard is II tor 1ne
United States, the best available. Inls LIE; "
ing the case, it is the duty Of the nae,oi 10
render that standard as stable as poss'?;s ;te
and to remove all uncertainty AZ 70 iIs
maintenance and its easy weih,ns, , ioa WI
certainty as to the basis OF me currency
must always be menace to prosperity,
Whatever decision may be reached. with
reference to the much disputed question as
to whether United states iegal tender notes
of ofalh the naper currency of the country. it is
contain that the maintenance of some sys-
ten' Of hank issues will be Indispensable
This system should, without doubt. be under
federaI control and should take such form
rs to insure much greater elasticity than
exists in the present system, provided al
ways that the security of the issue shall be
in no wise impaired.
AS already remarked, there is real need
for increased banking and currency facili-
ties in the newer and more backward parts
of the country, and legislation could do
something towards satisfying this need. In |
the Judgment of the committee, the most !
effective as we'll as the safest expedient for
accomplishing this object is some system
of branch banking similar to those in vogue |
in Canada, Scotland, and other countries.
Under such system, banking facilities can
be furnished to communities too small to |
support even the smallest independent bank |
OF issue; and capital can be most cheaply |
and easily transferred from districts over |
supplied to those needing it; while, at the |
same time, the dangers of fraud or mi sman- !
aEement incident TO all banking are lar less |
serious than under system of small in
dependent banks. There are doubtless OBJ |
jections to the plan; but the experience OF
other countries has shown that they are
not of great moment.
In the light of the facts the committee is |
of the opinion that what is most needed at
this juncture, is disposition on the part of |
the friendi of reform to sink individual
preferences as to details, and to insist that
Congress shall enact such legislation as it |
shall be possible to agree upon. Undoubt ed |
ly, there is room in this matter of currency
reform for honest differences of opinion. but
such degree of persistence in ones opinion
as makes a working compromise impossi-
BILE has no justification in monetary prin-
ciples or in the conditions prevailing in the
United States. 1t is safe to say that. cf the
five or six currency bills that, during the
last twelve months have been in any serious
sense before the country, the passage of any |
one would have resulted in great improve
ment and would have measurably satisfied
the demands of reformers
The other papers read at the morning
session were one by Prof John D. Clark |
OF Columbia, Economic Standards of Wages |
and Interest and one by Prof. Charles A. |
Tuttlc of Wabash College on "a Fundamen-
tai Error of the Classical Economies"
The committee on nominations brought in