The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1898-01-07


and our currency system put in working
order upon IA gold basis it would be en-
tirely possible for Us to go through a
war without suspension OF specie pay
ment or amy arrangement of our mOno-
tary system. If war should come, the
value to the country Of the ability to
thus avoid the indirect losses following
from deprecated currency, inflated
zs.ce. and financial disqualification
would be so great that the burden O
paying off now our demandJobligatiO
would be as nothing in comparison.
We have a total volume of paper and
silver in circulation amounting to $90S,
72S, 087, all resting for its value on the
credit of the government, less only the
bullion value Of the silver. That credit
is maintainubIe 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 keepa large reserve fund in
gold Such fund in the hands of the
government is defeuseless against at
tack. In countries where the govern
ment has n0 demand debt outstanding
and the gold reserve is held by banks
the nations stock ofagold is capable OF
some degree Of PROTECTION through the
rate Of interest charged f1r loans. Eat
our government has no such resource
Its great gold reserve is an omen mine
free 10 All who bring its notes And as
the entire monetary system of the coun-
try haugs upon tlat one reserve the sit
uation Is GLe Of uncertainty and hazard
against which no Insurance is possible.
AS against the serious disadvanta ecs
there is no advantage which can pos
sibly be claimed for paper money IL the
form of government notes over any-o5'i-
er form of paper money equally good
except the saving OF interest on so much
of the public dcbt as is represented by
the notes Bat 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 III 1879, bonds
We're sold to the amount OF 500. 009.0 $50.
During lS94-6 $500, 315, 400 more were
sold to protect the same reserve. The
situation WAS then complicated by a 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 upen that question closely, it is
clear that with interest to pay Oh $685.,
600, 900 of indebtedness incurred chiefly,
if net wholly. IL consequence Of the exist
ence OF the government notes and 800, :
900, 900 of reserve lying idle in the
treasury, the saving in interest by the
United States notes is small gain COM
pared with the unending burden of pro-
yiding for their redemption. We have
already redeemed them in gold nearly
twice over-$54S, 6S1, Ol6-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 upper
ceived. 1t may go long unnoticed, like
friction il machinery on malaria in the
air, but it has its effect nevertheless,
and when it reaches an acute NANTES
tation, such as we have experienced
within ihe last five years, the loss occa-
stoned is beyond computation.
The Silver Currency.
We have 1891, 800, O31 of notes Of So
and under and $50, 1876, 7SS Of silver dol
lars in actual circulation, making to-
tai Of S4I4. 80 /, $40 of current money in
use, exclusive of gold, III denominations
of 81, 81 and So. Our total stock Of sill
yer dollars is S452, 113, 1872. 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 rs
they are than to attempt a final solution
at this time of the problem which they
present. BY withdrawing all silver GER
tifcates over So and all other notes I'M
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 in
their maintenance.
Banking System.
The chief difference of the proposed
from the, existing system of bank notes
is that it gradually does away with the
requirement. that there shall be a de-
post of bonds with the government as
a condition for the issuance thereof. AS
now the notes are to be first lien upon
all the resources of the banks, includ-
ing the stockholders liabilities. This
change is necessary because of the
scarcity Of United States bonds, and the
attempt to substitute other bonds would
lead to many evils The change is wise
because it permits the issuance Of notes
in the way and at the time when and
for the PURPOSE for which they would be
issued under natural conditions if no
law prevent4d Such system would
more perfectly than any other give the
country circulating medium. 1t would
readily and quickly adjust itself from
season to season to meet the wants OF
the business of the country requiring
bank notes forits convenient transaction.
Under the present system the problem