The weekly intelligencer. [volume] (Lexington, Mo.) 1891-1901, 1898-01-08
NEW FINANCIAL PLAN.
1he Monetary Commission fAekes
Public an interesting Report.
Cos eTnInent Demand Obligations Danger
ous-Good Words for the Bank Note
National Banks Recommended
for small Towns.

WAsHISGToN, Jan. 3.-The report of
tine monetary commission appointed
Under authority of the convention Of
business men held in Indianapolis last
January has just been made public.
Following is synopsis Of the doeu
ment:
1t retains practically unchanged The existing
metallic money. The existing gold standard
on which business has been done since 1879 Is
maintained, on the ground that the industrial
interests demand certainty IS 10 what Inc
standard shall be. TO this end. it Is urged that
the United States shall remove all uncertainty
s to the meaning Of coin ln its obligations.
thereby saving the taxpayer by the ability 10
borrow at a low rate OF interest No attempt
& made TO remove the existing silver dollars.
nor to change their legal-tender quality; on the
contrary place IS provided for them In the
circulation by forbldding 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-
eted, drove out gold. furnished nuctuatlng
standard. increased the national debt enor-
mously. caused change In prices whenever
the credit OF the paper standard fluctuated, and
by causing unexpected changes in the level or
prices gave rise to extraordinary speculation.
increased the severity of commercial crises.
tage with the large operator
For these and other reasons the commission
strongly urges the government TO Withdraw Its
demand obligations now used rs money. decline
TO provide gold for exporters and put the bur
den and expense OF maintaining q redeemable
paper circulation upon the banks In order to
meet the demand obligations, the present re-
serves of gold in the treasury furnish sum
cIent sum to be set aside In the division OF
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 obli-
cations 0hat Is. United States notes and
treasury notes OF 1900 can be removed In such
O way that the cost to the country can be re-
duced: while this viii also give the inestinable
advantage of ceasing 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; if United
States notes are Cancelled their place Will DE
taken by gold paid out for them. or by the ex-
pansion of bank notcS (under the new system
proposed).
The demand obligations OF the United States
were not money based on property; they were
only debt On the other hand, q bank note IS
never issued Qraud OF course, excluded) OK
cept for q consideration In negotiable property
of equal or greater value The bank note
comes forth as the sequel to a business trans
action, and Is based on the active property OF |
the country which Is passing between producers
and consumers. This property is always nego-
table and always equal to the duty of meeting |
the note liability Bank notes are as sound "a
the business transactions OF the country. The
currency OF the country, moreover. should in
crease as the transactions OF the country in !
crease; hence the rigid unchanging issues OF |
the government make them an iuelaStic part OF |
the circulation, while by the very process of
their Issue bank notes alone can be automat- !
icallv 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- |
er; TO mike 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 I
healthiiy contract when transactions diminish;
and which would help in 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 basis |
OF circulation. Moreover, any bond security of :
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
TO increase circulation. Hence. under the pres
ent system. when notes should be most needed,
IL Is least profitable TO issue them
While providing for partial use OF bonds for
securing notes t25 per cent Of the capitap the .
commission proposed thnt notes beyond this
shoulo be Issued on oil. instead OF part or the
resources OF bank; and within few years
that no special bond security should be re-
quired Bunks may issue notes up to 60 per /
cent Of their capital without restraint; for iz-
sue beyond 60 per cent and up to sO psr cent
they pay tax OF Two per csnt; for those be-
yond 81 per cent and up to Ito per cent
they pay a tax OF six per cent These notes
would be o prior lien upon all the resources OF
The bank and. in addition. upon the stockhold-
ers' liability. Moreover all banks issuing
notes contribute five per cent Of their circula-
ton as o permanent guaranty fund For daily
banks should keep i've per cent
fund in the hands OF the comptrol-
Ter OF the currency. Banks OF SIS 0G0 capital,
may be established in places OF 1000 inhabit-
ants or less; and branches OF banks are also
Had