The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1898-01-05


lieved Of it's existing demand obligations
and our currency system put in working
order upon gold basis it would be en-
tirely possible for us to go through a
war without suspension Of specie pay
ment or any arrangement Of our none
tary system. If war should come, the
value 10 the country of the ability TO
thus avoid the indirect losses following
from deprecated currency, inflated
prices and financial decentralization
would be so great that the burden OF
paying off now our demand obligations
would be as nothing in comparison.
We have total volume of paper and
silver in circulation amounting TO $685.
1928, 0S7, all resting for its value on the
credit of the government less only the
bullion value of the silver. That credit
is maintainable only as whole. The
paper of the United States could not be
dishonored and its silver upheld. 1t is
necessary, therefore, that the govern
ment should keep large reserve fund III
gold. Such fund in the hands OF the
government is defenseless against at
tack. In countries where the govern
ment has no demand debt outstanding
and the gold reserve is held by banks
the nations stock of gold is capable OF
some degree of protection through the
rate of interest charged for loans. But
our government has no such resource.
It's great gold reserve is an open mine
free TO all who bring its notes. And as
Al Of
try hangs upon that one reserve the sit
uation is one of uncertainty and hazard
against which no insurance is possible.
As against these serious disadvantages
there is no advantage which can pos
sibly be claimed for paper money in the
form of government notes over any 9TH
er form of paper money equally good
except the saving of interest on so much
of the public debt as is represented 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 $95, 900, 600.
During lS94-6 $500, 315, 400 more were
sold to protect the same reserve. The
situation was then complicated by def
icit 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, it is
clear that with interest to pay on 1857,
600, 900 of Indebtedness incurred chiefly,
if not wholly, III consequence OF the exist
ence Of the government notes and 500, :
600, 900 of reserve lying idle in the
treasury, the saving in interest by the
United States notes is a small gain COM
pared with the unending burden of pro-
viding for their redemption. We have
already redeemed them in gold nearly
twice over-$54S, 6S1, 016-since 1879,
and they are all outstanding yet.
Worse than this, however, is the in
jury which results from the element of
uncertainty which is inseparable from
such currency. Such injury is none
the less real because it may be unper-
ceived. 1t may 60 long unnoticed, like
friction in machinery or malaria IN the
air, but it has its effect nevertheless,
and when ii reaches an acute NANTES
tation, such as we have experienced
within the last five years, the loss occa-
stoned is beyond computation.
The Silver Currency.
We have 1854, 1856, 031 of notes of 81
and under and $50, 1916, 7SS Of silver dol
lars in actual circulation, making to-
tai of $414. 55l, $40 of current money III
use, exclusive of gold, in denominations
of 81, So and So. Or total stock of sill
yer dollars is $4j2. i13, 792. This is an
excessive quantity to have at the exist
ing discrepancy between their legal and
actual values. But with further coinage
of them discontinued and their parity
assured by the exchange of gold for them
on demand it is better to retain them as
they are than TO attempt final solution
at this time of the problem which they
present BY withdrawing all silver GER
tificates over So and all other notes un
der $40 place will be made for nearly
all the silver dollars in way which
will give the country the full benefit Of
them for current use without imposing
upon the treasury any serious burden il
their maintenance.
Banking System.
The chief difference of the proposed
from the existing system of bank note,
is that it gradually does away with the
requirement that there shall be de
post of bonds with the government al
a condition for the issuance thereof. Al
now the notes are TO be first lien upor
all the resources of the banks, includ
ing the stockholders liabilities. This
change is necessary because of TIT
scarcity of United States bonds, and thu
attempt to substitute other bonds would
lead to many evils. The change is wis,
because it permits the issuance of notes
in the way and at the time when anC
for the purpose for which they would b.
issued under natural conditions if NJ
law prevented. Such a system would
more perfectly than any other give thu
country circulating medium. 1t woult
readily and quickly adjust itself from
season TO season TO meet the wants o
the business of the country requiring
bank notes for its convenient transaction
Under the present system the problem
presented to bank when it's customer
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