The Iola register. [volume] (Iola, Allen County, Kansas) 1875-1902, 1898-01-07
A FINANCIAL SCHEME
The Monetary Commission Makes
Public It's Report.
A SYNOPSIS OF THE DOCUMENT
Government Demand Obligations Danger
ous-Good Words for the Bank Note I
National Banks Recommended
for small Towns.

WASHINGTON, Jan. 3.-The report of
the monetary commission appointed
under authority of the convention OF
business men held in Indianapolis last
January has just been msde public.
Following is a synopsis of the docu-
ment:
1t retains practically unchanged the existing
metallic money. The existing gold standard
on which business has been done since 1879 10
maintained, on the ground that the Industrial
interests demand certainty as to what the
standard shall be To this end 1t Is urged that
the United States shall remove all uncertainty
as to the meaning OF coin" in its obligations,
thereby saving the taxpayer by the ability TO
borrow OF a low rate OF interest No attempt
is made TO remove the existing silver dollars,
nor to change their leRal-tender quality; on the
contrary, place is provided for them In the
circulation by forbidding the issue Of any paper
money other than silver certificates in denom-
nations below 10.
1t is regarded by the commission as danger
GUS to maintain the present practice OF using
government demand obligations as money.
They were issued because there were no re-
sources In the treasury; and so they depreci-
ated, drove out gold, furnished u fiuctuating
standard, increased the national debt enor-
mously. caused change in prices whenever
the credit Of the paper standard huctuated, and
| by causing unexpected changes in the level OF
prices gave rise to extraordinary speculation,
Increased the severity Of commercial crises,
and placed the small producer at disadvan-
tage with the large operator
| For these and other reasons the commission
| strongly urges the government to withdraw It's
demand obligations now used as money, decline
to provide gold for exporters and put the bur
| den and expense of maintaining redeemable
paper circulation upon the banks In order to
meet the demand obligations, the present re-
serves OF gold in the treasury furnish SUM-
| OF ont ann 70 ha mt oil n division
| issue and redemption and to meet possible
| contingencies the secretary of the treasury
| Is authorized to sell bonds whenever the re-
serves need replenishment In this way,
or from surplus revenue, the demand obi
| cations chat is. United States notes and
treasury notes OF ls90) can be removed in such
way that the cost to the country can be re-
duced; while this will also give the inestimable
| advantage Of eeasing to use demand debts as
money, simplifying our currency, and adding
| to confidence in the certainty Of our standard
| by the plan Of the commission the withdrawal
| of government paper is so arranged that con-
traction cannot possibly take place; II United
| States notes are Cancelled their place Will be
taken by gold paid out for them, or by the ex-
pansion OF bank notes (under the new system
| proposed).
The demand obligations OF the United States
we're not a money based on property; they were
only q debt On the other hand, bank note IL
never issued fraud, OF course, excluded) ex-
| cept for q consideration in negotiable property
| OF equal or greater value The bank note
| comes forth as the sequel to n business trans
| action, and is based on the active property Of
the country which is passing between producers
and consumers This property is always neRo-
table and always equal to the duty OF meeting
the note liability Rank notes are as sound "a
the business transactions OF the country Tho
currency OF the country, moreover, should in
| crease as the transactions OF the country in
crease; hence the rigid unchanglng issues OF
the government make them an inelastic part OF
the circulation while by the very process of
their issue bank notes alone can be automat-
ically adjusted to the changing transactions Of
the business community.
| In amending the present national banking
| system. the commission was actuated by de-
| sire to secure absolute safety to the note-hold-
err; to make the notes uniform and OF equal
currency in all parts Of the country, to create
an elastic system. which, while expanding in
response TO increasing transactions, should
healthily contract when transactions diminish;
and which would help in a better distribution
OF banking facilities throughout the western
and southern states.
In view Of the scarcity Of United States
bonds they cannot long be regarded as q basis
OF circulation Moreover, any bond security OF
q high character yields low rate OF interest;
and in time OF stringency, when borrowers
need loans and the market rate OF interest is
high there is no inducement to buy these bonds
ent system when notes should be most needed,
it is least profitable TO issue them.
While providing for partial use OF bonds for
securing notes t25 per cent of the capitaD the
commission proposed that notes beyond this
should be issued on all, instead Of part Of, the
resources OF bank; and within few years
that no special bond security should be
CURED Banks may issue notes up to 90 per
cent OF their capital without restraints for is
sue beyond 90 per cent and up to 80 per cent.
they pay tax Of two per cent; for those be-
yond 80 per cent and up to 10 per cent
they pay tax of six per cent These notes
would be prior lien upon all the resources OF
the bank and, in addition, upon the stoclIhold
ers' liability. Moreover, all banks issuing
notes contribute five per cent Of their circula-
ton ms n permanent guaranty fund. For daily
redemptions, banks should keep five per cent
redemption fund In the hands OF the comptrol-
Ter of the currency. Banks OF s25, 900 capital
may be established in places OF 1900 inhabit-
ants or less and branches OF banks are also