The daily morning journal and courier., 1898-12-30

currency as a whole. Further, the re- lative strength of these opposing forces is largely determined, as it should be. by the needs of business. If more notes are wanted in the ordinary circulation, they will be swifter in going out and since they will not naturally get into the hands of bankers, slower in being sent home to the issuer. If, on the oth- CT hand, fewer notes are needed, they will be slower in going out and more prompt in coming back; since, when idle, they will naturally accumulate in the banks, and by them will be sent home. It is thus evident that a reason able degree of profitableness is a most important requisite of an elastic cur rency Now it is a commonplace that
 our bank circulation is not a profitable
 one. Most banks deposit bonds to the least amount permitted by law and do
 not always issue even the quantity of
 circulation corresponding thereto. It is
 true that conditions have in this respect
 measurably improved, the lower. price
 at which bonds are now available hav-
 ing rendered the conditions of issue
 somewhat more profitable, but it is
 practically certain that this process has
 not been carried sufficiently far to fur
 nish the necessary conditions for an
 elastic currency.
 But again, even an increase in profit
 ableness can not avail unless the ma
 chinery of issue and redemption is eff
 cient The forces which work respec-
 lively for expansion and contraction
 must have easy and unimpeded action.
 At this point our present law is not only
 inadequate, it is positively evil. It linn
 it's the amount of circulation which may
 be retired during any one month, and
 prohibits reissue for six months after
 retirement, thus actually putting a pre- mium on inelasticity. Further, the ma
 chinery if issue and redemption is un-
 necessarily slow and clumsy. Even if
 bank decides to expand it's circulation,
 the process can scarcely be completed
 till the special need has passed In like
 manner, contraction can not usually be
 brought about till long after a plethora
 has worked much harm.
 The foregoing describes the expert
 ence of ordinary times; fer the case of the monetary panic, when there arises
 a demand for an immediate and cry
 great increase in the stock of current
 moneys, absolutely nothing has baen done. We thus have every reason to
 expect that, should another crisis as se- rious as that of 1893 overtake the ra-
 ton, we should experience a monetary famine of equal severity, and should again be obliged to resort to numerous extemporized devices very doubtful as to their legality and still more doubt full as to their efficiency.
 l What has been said concerning the continued lack of security and elastici- ty applies in substance to every other recognized need of the monetary svs- i tenn. Almost no progress has been { made. It thus becomes evident that the only method by which we can in- sure that when less favorable conG:- of the disasters formerly experienced l is to bring about some more or less fun | damental changes in the monetary sys- 1 tenn itself.
 II. THE SECURITY OF THE STAND ARD.
 Under existing conditions, the only | wise and consistent policy for the Uni l ted States is the frank recognition ot 1 the fact that the actual monetary l standard is now, and for sorne time tc
 come will be. gold, and the adoption ol l legislation which shall insure the entire ] stability of that standard, until such time as the nation may have decided to i establish some other. Assent to this | statement does not commit any one tc ] the position that the gold standard is abstractly considered, the most desira. 1 ble one As is well known, a large number of economis sts hold to the cppo- | site opinion But, as is also well known, the particular substitute which such economists favor, i. e., interna- tional bimetallsm, is at present, and fo1 a long time will be, out of the question In consequence, the precise form which the question of standards now takes ir the United States, is as to whether the | currency shall rest on gold basis, ol
 on silver or paper bass. Thus stated it can have, to the majority of econo- mists, but one solution. Under exist ing conditions the gold standard is. for the United States. the best available This being the case, it is the duty of
 the nation to render that standard as stable as possible and to remove all un- certainty as to it's maintenance and easy working; for uncertainty as to the
 basis of the currency must always be a | menace to prosperity.
 With respect to the means through which increased stability for the stand ard shall be insured, it is hardly to be doubted that much would be gained by it's explicit defnit on in terms of gold Still more important would be the en-
 acting of such legislation as shall insure that the task of maintaining the stand ard, or, in other words, of maintaining the convertibility into gold of other forms of currency, shall be efficiently performed. At this point, your com,
 mittee find themselves in accord with
 the commonly received opinion that un-
 der normal conditions, the task in ques- tion can most advantageously be de- volved upon some institution or institu- tions of a banking nature. We are also agreed. though perhaps less positively that, even under the conditions which must prevail in the United States, this same solution of the problem is, on the whole best. If, however, this plan shall prove impracticable-if the task of maintaining the standard of value is still to rest upon the treasurJ every thing calculated to make that task an easier one should be done, and the de- partment should be specially organized with reference to the duty thus devolv- ing upon it. and provided with such ad-