The Breckenridge news. (Cloverport, Ky.) 1876-1955, 1898-01-05
METALLIC
MONEY.
AS il Now Exists Should Re-
main Unchanged.
SUCH IS THE RECOMMENDATION.
Monetary Commission Would Have
Demand Obligations Of The
Government
Discontinued as Money Because, II is
Argued, They Are an Injury to
The Nations Credit.


commission appointed at the business
mems convention in Indianapolis, i'm
q report just made, retain the existing
metallic money unchanged ON the
ground that industrial interests de-
mand certainty as to what the stand
ard shall be.
For the steady employment Of labor, fac
tories and mines must be constantly oper-
ated; and constant operation, in the judg-
ment of business men, Is impossible so long
rs there Is uncertainty as to the standard
on which prices Of goods and orders are
based. And to this end, 1t Is urged that
the United States should remove all un-
certainty as to the meaning of "coin" In
Its obligations, thereby saving the tax
payer by the ability to borrow at a lower
rate Of interest.
No attempt-is made to remove the exist
ing silver dollars, nor to change their legal
tender quality; on the contrary, a place is
provided for them In the circulation by for
bidding the use of any paper money other
than silver certificates In denominations be-
low $40. The silver currency which will be
in the hands of the people must be kept on
a parity with gold, as is now provided by
law, and this should be done by requiring
the treasury to give gold for a silver dol
lar on demand.
Consequently, when II Is known that q
silver dollar can be exchanged for gold IL
will circulate freely lin the form of GER
tihcates), and our metallic money, with
out being diminished, will be united on a
certain basis. And, as all this silver eur
rency will be needed to meet the demands
for large change when other paper below
$40 is retlred) II will not be presented for
redemption at the treasury, and It will cre-
ate no strain on the gold reserves. But no
more silver dollars should be coined.
The commission contend that the 10 diff
ferent kinds Of money now In use create an
anomalous and confusing situation. More
over, the whole --1ric rests on too slender
a reserve Of gold. 1t Is urged that the de-
mand obligations Of the government should
not be used as money, because they may be,
and have been, presented for gold to the
Injury OF the nat on's credit.
II the demand obligations of the govern
ment are used as money. reserves must
always be kept ON hand to redeem them.
They are not, therefore, loan without In
terest; and the expense of keeping up these
reserves has made the paper money a very
great burden to the taxpayer by an increase
of the public debt These gold reserves
are necessary, unless the government per-
mits Its notes to 90 to protest.
The mere credit Of the United States be-
hind its notes Is too vague thing, Its pow.
or to tax Is too remote, to provide cash
on hand for instant use. SO far as ex-
pense Is concerned, this debt could have
been more easily borne by changing IL into
low interesting bonds.
For these and other reasons the commits
sion strongly urge the government to with
draw Its demand obligations now. used as
money, decline to provide gold for export
tors, and put the burden and expense of
maintaining a redeemable paper circulation
upon the banks In order to meet the de-
mand obligations, the present reserves of
gold In the treasury furnish a beginning
TO be set aside In the division OF Issue and
redemption; and TO meet possible contin-
gencles the secretary of the treasury Is
authorized to sell bonds whenever the re-
serves need replenlshment =
Can he Removed.
In this way, or from surplus revenue the
demand obligations (that Is United States
notes and treasury notes of 1900 can be
gradually removed, and the COST to the
country can be reduced; while this process
viii also give the lncstimable advantage Of
ceaslng to use demand debts as money, of
simplifying our currency,s and OF adding
to confidence In the certainty Of our stand
ard.
By the plan Of the commission govern
ment paper Is withdrawn In the frst five
years only so fast as the banking currency
bly, take place; II United States notes are
cancelled their place will be taken by the
gold paid out for them, or by the expansion
Of bank notes under the new system pro-
posed; and In the following Ave years all
the remaining United States notes are to
be retired.
The demand obligations of the United
States were put forth solely because ,nere
were no funds In the treasury to redeem
them. The notes were only evidence that
property had been received and used up
fer services or supplies or public build
ings mo longer available assets). The gov
eminent by the nature OF the operation did
not retain, as the notes went out. any
property Immediately convertible into coin
with which to redeem Its demand Issues
They were not a money based ON property;
they were only debt.
On the other hand, a bank note Is never
Issued fraud. OF course, excluded) except
for a consideration In negotiable property
of equal or greater value The Dank note
comes forth as the sequel OF business
transaction, aud Is based on the active
property Of the country which Is passing be-
tween producers and consumers
In view OF the scarcity OF United States
bends they cannot long be regarded as a
basis for circulation. Moreover, any bond
security OF higher character Yields a low
rate OF Interest; and In time OF string
ency, when borrowers need loans and the
market rate OF interest IL high, there IL
no inducement to buy these bonds to In
crease circulation.
Hence, under the present system, when
notes would be most needed. II 10 least
profitable 10 Issue them. While providing
Tor partial use OF bonds for securing notes
Go per cent OF the capitaD the commission
proposed that notes beyond this should be
Issued on all, Instead OF a part OF, the re-
~ - nna alf khaf
no special bond security should be required.
Banks may issue notes up 70 90 per cent
OF their capital without restraint for Is
sues beyond go per cent and up to 30 per
cent they pay a tax OF 2 per cent; for
those beyond 30 per cent and up 10 100
per cent they pay a tar OF per cent
These notes would be prior lien upoa
All the resources OF the bank. and, In ad-
dltion, upon the stockholdere liability.
Moreover All banks issuing notes contrib
ute per can't Of their circulation AZ per
uansnt guarantee fund. Fer daily redsmp-