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

bookkeeper can scale the same up or down almost at will, but the gross earn ings stand for their fullamount. They are the true index of the value of tie railway and also of the increase of the value of the franchise. An investor sees something tangible in the gross earnings and always inquires concern ing them. Increased dividends can come by increased gross earnings, and the companies strain every nerve to in crease them.
 Taxes on excess dividends and in crease of capital were also discussed. MT. Curtis showed by comparison of figures how street railway earnings in this country greatly exceeded those in foreign.
 A paper on "The Nature of Municipal Franchises by pr. Max West of the United States department of agriculture concluded the session of the associa- ton.
 The following were elected officers of the American Economic association for the ensuing year:
 President-Professor Arthur T. Had ley of Yale.
 Vice presidents-Stuart Wood, Ph. D., of Philadelphia, Professor David Kinley of the University of Illinois and Profes- sor w. z. Ripley of the Massachusetts Institute of Technology.
 Secretary-Professor Walter F. Will COX of Cornell university.
 Treasurer Charles H. Hull of Cornell university.
 Publication ommittee-Professor F. w. Taussig of Harvard university, chairman; Davis R. Dewey Pn. D., w l. lard C. Fisher, A. B., w. H. Scott, Pm. D., Sidney Sherwood, Ph. D., and F. M. Taylor, Ph. D.
 These nominations were unanimously ratified by the convention.
 The report of the committee on cur rency reform in the United States was as follows:
 To the Amercan Economic Assoclatlon'
 Your committee to which was as signed for consideration the subject ol Currency Reform in the United States beg leave to report that they nave agreed upon a series of statements with respect to the need, the objects and the methods of such reform Whlch it is believed would command the as sent of economists generally. They are submitted, with the recommendation that they be printed as part of the pro ceedings, but with the express dlsa- vowal of any responsibility on the part of the association for the views therein set forth.
 I. THE NEED OF REFORM.
 Despite the fact that much improve ment has taken place within two or three years, there still exists real need for monetary and banking reform in the United States. The standard Of value upon which the whole system rests is by no means as secure as it should be-. The circulating note system is still greatly lacking in elasticity. Adequate banking facilities for newer, or more backward, districts are still wanting. In the system as whole, there is a mo- table lack of unity and organization,
 In citing the first particular, i. e.. the insecurity of the monetary standard, as a proof that currency reform is needed, your committee do not mean to imply that the existing standard is the only possible one, or even the most des rable one. It is merely assumed that, so long as that standard is retained, it should have the utmost possible security; since the unprecedented security of the none tary standard is indispensable to high degree of industrial prosperity.
 It is possible, however, to argue that the defect in question no longer exists, that the stability of the gold standard is now substantially assured. There is unquestionably much force in this con- tention Besides number of tempora- ry circumstances, such as full treasu- ry. a large gold reserve and favorable trade balance of exceptional amount, several changes of more permanent character have contributed to the i'm provement of the situation. We cite particularly the repeal of the provision in the act of 1890 to issue treasury notes in purchase of silver, and the insertion in the war revenue bill of clause which authorizes the secretary of the treasury to make loans at his own dis erection to meet temporary deficits. In fact, under the laws now in force, a sec- retary who desires to maintain the gold standard need have no difficulty in do- ing so. But, in the absence of an ex- plicit legislative mandate with respect to the duties of the secretary in this matter, it is possible for an executive so disposed to overthrow the gold stand ard even though no change be made in the law. There thus remains in the sit uation an element of uncertainty which is needless, and which cannot but prove harmful.
 As respects the need for elasticity in the note system, next to nothing has besn gained. In the first place, We still retain for cur bank circulat'o on the sys- tenn of bond security. and under that system it is in the nature of the case ex- tremely difficult, If not impossible, to secure in the currency that prompt and easy adjustment of volume to need which constitutes genuine elasticity. In defence of this statement much might be said, but it may suffice to call atten- tion to a single consideration. If bank circulation is to be elastic. the assets which are required as security fer that circulation must be such as a bank ordinarily has in it's posse ssion; since, in a stringency when expansion is needed, the bank already has it's resources locked up, and consequently can not without great difficulty get hold of new assets. But government bonds are not a kind of assets which banks will, or usually ought to, have on hand in con- siderable amounts. The special office of banks is to provide funds for the every day business of the country, i. e.. to in- vest their resources, not in a supply of