The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1898-12-30
REFORM Of THE CURRENCY.
REPORT MADE TO THE AMERICAN
ECONOMIC CONVENTION.
Goassaer the ssbJeca Points 0sk
the Needs Of Ref0ro. Calling At
tentssn to Pr<seat OeAei~oesss.

sF3ET@UxACn tkEE k&xDfE Oh tI@ Sx%A$@+ ~@ss<'-
Snsffee on banking and currency Was pre-
scented by committee essns sting Of Prot
r. III. Taylor, OF she University o. slicnf-
gar. chairman. Pross. r. w. Taassg. Har-
ward. j. w. jerks. Corrsai. SsGnsT fer'
wood. Johns Hopkins, and Dave hsaslsy,
University Of Illinois. Tas report 10 suA
fo,iows:
To the American Eeoaosnse Azsosissssa.
Tour committee q which was assigned for
consideration the. subject Of currency re-
form In the United sgatss begs ieays 20
report that thy have agreed upon . Sc
rifA OF statements with respect ~ ire need.
tie objects and the methods 81 siea re.
form which II ~ beissyes would COMMAND
the assent of economists generally. The
following propositions therefore. are sssp-
r:s..fe9 with the recommendation that they
be pranfed ~ part OF the rrossetinxs, cut
v.th the empress d.sayowai Of any re=pon-
ability on the part 81 the association Tor
the views therein set forth.
The Need Of mefosm.
Despite the fact that much improve
ment has taken Place w! ,.i swo
or three years. there ssAi ea@ts
. real need for monetary ana
The standard Of value upon which ths
whole system rssis Is ~ no mems rs. As e.
cure a. IL should be- The circulating n1ts
AdeasIste banking facilities for newer, or
more backward dissrsetE, are sstJ want
Ing IN the system az whole, b,fe -
I'm cling the FIRST particular, !. e., the
insecurity 81 the monetary standafg, AZ
proof that currency reform y Hse1ens you.
committee does Rot mean 70 linpis 1nat
the existing standard In the only possible
one or even the most desirable one. Il
h merely assumed that, 80 long a. thA
standard liz retained. Il should have fne u,~
most possible security. since ms nSa,sfs.
t5osed security Of The monetary standard
r. ind sp~nsahle to high degree OF indus
trial prosperity.
the defect In question no longer exists
thst the stability Of the gold standard ~
now substantially assured. There ~ IN.
QUESTIONABLE much force In sh-s consef-
ifon. besides d number Of temporary cir
cumrtsncex, such as a fuli treasury. a
large gold reserve and favorable trade
balance Of exceptional amount, $500
have contributed to the Improvement or
the situation. Wa cite particularly ihs re-
peal OF the provision In the act OF iss' 20
Issue TREASURY notes In purchase OF silver.
and the lsissrt.ou In the war revenue ntil
OF clsuse which authorizes the secretary
az the treasury To make loans AT nis avn
discretion TO meet temporary deficits. In
fact. under the ftws now IN force. sec-
refary who desires 10 maintain the gold
standard need have no difficulty ~ Doing
no But In the absence OF an explicit leg
isiasiye mandate With respect 10 the du-
ties OF the secretary in shis matter, Il IL
possfbis for an executive go disposed 10
overthrow the gold ssnfdsfi. even sn9agn
no change be made In the law. There
thus resuilps In the situation an element Of
uncertainty which II needless and which
cannot but prove harmful
"Ao respects the need for siassieity In he
note system next To nothing has been
aatned In tho fret place. we s'ih retain
for our bank circulation tho system OF
isond security. ard under thar system -
Is in the nature OF the care extremely DIFF
Yculf. II not impossible. to secure In the
currency that prompt and easy adjustment
OF soiufne 10 need which constitutes gen
-
uIns elasticity. In defense OF this state ate
Zee 10 ca7 attention TO n single consider
alton n hank circulation Is "a ba elias
tic, the axsets which are required rs a
sss-,rffy fer that circulation must be such
a. a bark ordinarily has In It's possession;
since In n sfringeney when expansion ts
needed, the hank already has It's resources
locked M, and consequently cannot WITH
out great difficulty get hold of new as
sets Rus government bonds are not "a
kind OF assets which hanks wtil or usually
ought TO- have on hand IN considerable
amounts The special Office Of banks II
10 provide funds for the everyday bust.
ness of the country. that II. 20 invest
their resources not In u supply OF bonds
10 furnish The basis of possible issue OF
notes. but In commercial paper. grain bil,s
and the like. As a result ~ all this. the
amount az notes which under our system.
must banks issue ~ tat amount which
can - kept in circulation substantially
nfl of the time. Fluctuations in the need
~ meet.
I'm the second place we have not attained
ia our circulation even that degree of elias
tietty Of which IA hond secured system is
capable. At the ssifset, we disregard the
fundamental principle that. Ia order 20 tse
c,assie. circulation should Re prufila HE
That this IL a fundamental principle.
nresis little proof. The necessity Of prof
itahieness To sssEurr expansion. IL seif-eVt-
dent In securing contraction on the 9TH
er hand, proftaiseness III less necessary
ts not less effective for. In making each
banker anxious IN expand his own etfru-
Iafson. II leads him promptly To send hafue
the issuca cf his netghhora in order 10
make room FOR his o&n. Thus. from she
single fact that the circulation ia fairly
profitable ate derived two opposing
forces whists work respectively fay tha ex-
pausien ard sor the contraction Of the
currency as a whole Further. the reia-
tive strength nf these opposing forces ts
largely determined as 1t should be- by the
needs OF business. IL more notes are
wanted in the ordinary slrgsEation. they
VIII be rwigtsr IN going eat. aff since saoy
vii. not naturally get atn the hands Of
bankers. slower in being sent home -
the tsSaer- H. IN the ether aah8 fever
NOTES ara ns*sted thev xiii he slower in
geing esat and more prompt in coming
back ssGce when tdie. they will natural
~ accumulate In the hanks sat ty thers
VIII be seat home II IL thus evident that
. reasonable degree 81 rrpafah5eness IS 3
most important requisite ~ Ae sisss e
currency Nav if Is commonplace that
our hank gtscald jfan Is NOT a vfrs;5t a HE
one Asoss hanks sivpasis isses.iz go the Ysa=i
amount permitted by raw aa,f On net al.
ways issue essN the quantity % ese.assla-
tsssz corresponding thereto, Il s tue taA;
conditions have In EsfS gTsrrct e3Vaaslrff.5 <
improved. the lower price 81 shich bond.
ar. available having rendered shp essssdg-
fsens or tsssfe somewhat u4.aFe pro STA fsis
tast u - practically certain thar thts prs,-
cess has net been carried suFs4gienflv far
furnish