The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1898-01-13


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 in
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.
Its great gold reserve is an open mine
free to all who bring its notes. And as
the entire monetary system Of the coun
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-
| quired for resumption in 1879, bonds
were sold to the amount of $95, 200, 000
During 1896 $262, 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,
900, 900 Of indebtedness incurred chiefly,
If not wholly, IN consequence of the exist.
ence of the government notes and 500,
900, 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-$5lS, ,GSl,0lG-since 1870,
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 go long unnOticed, like
friction in machinery or malaria in the
air, but it has its effect nevertheless
and when it reaches an acute NANTES
tation, such as we have experience
within the last five years, the loss occa
stoned is beyond computation.
: The Silver Currency.
We have $364 ,355, OBI Of notes Of S;
and under and $50, 1916, 7SS Of silver dol
lars in actual circulation, making to
tai of $414. 551, Slg of current money il
use, exclusive of gold, i'll denomination
of 81, So and So. Our total stock of sill
yer dollars is $452, 7l3, 1872. This is al
excessive quantity to have at the exist
ing discrepancy between their legal ant
actual values. But with further coinag
of them discontinued and their parit
assured by the exchange Of gold for then
} on demand it Is better 20 retain them q
they are than 10 attempt a final solution
at this time of the problem which the
, present BY withdrawing all silver Ger
tificates over 30 and all other notes un
der $40 a place will be made for nearl
all the silver dollars in a way whic
will give the country the full benefit G
: them for current use without imposin
upon the treasury any serious burden i
their maintenance.
? Banking System.
, The chief difference of the propose
from the existing system of bank note
i is that it gradually does away with tn
, requirement that there shall be dc
posit of bonds with the government a
a condition for the issuance thereof. A
, now the notes are To he first lien upo
all the, resources of the banks, includ
ing the stockholders liabilities. Thi
change is necessary because of th
scarcity Of United States bonds, and tn
attempt TO substitute other bonds woul
, lead tc many evils, The change is wis
because it permits the issuance of note
! in the way and ut the time when an
9 for the purpose for which they would b
!, issued nnder natural conditions if u
law prevented. Such a system woul
r more perfectly than any other give tn
country circulating medium. 1t woul
q readily and quickly adjust itself fror
season to season to meet the wants q
: the business Of the country requirin
/, bank notes for its convenient transaction
Under the present system the problel
presented to u bank when its customer
q call for currency is not the amount G
, Its own assets, but its ability and desir
to make AN investment in somethin
quite apart from its usual business as
bank in order that it may be in posi-
tion TO provide man who wishes /
! move property or employ labor with tn
tools most convenient ut the time fu
his purpose. Notes secured as herei
provided cannot fail - be safe because
\, being based upon ull the resources of al
q the banks issuing them, they are base
upon the whole business Of the country
a and that business is the thing whic
] gives life and value to all securities
government, municipal, railway and in
q dividual obligations. Should all the re
sources of the banks ever so shrink il
, value as not to be ample security fo
. the amount of notes that could be issue
S under this plan, then all other securi
. ties, even government bonds, would be
} come yalueless. The banks are boun
D together for the security of these note
Q to accomplish the same purpose that tn
Y deposit of bonds is intended to accom-
{ plish-namely, to guard against los
through the misfortune or bad manage