The Cape Girardeau Democrat. (Cape Girardeau, Mo.) 1876-1909, 1898-01-08
IT PRESENTS ITS PLAN.
Main Points in the Report Of the
Monetary Commission.
Presents What 1t Considers to Be Defect
In Our Present Currency System,
and Suggests How 1t May
be Reformed.

the monetary commission appointed
under authority Of the convention of
business men held in Indianapolis last
January has just been made public.
Following is a synopsis Of the docu-
ment:
1t retains practically unchanged the existing
metai!tc money. The existing gold standard
on which business has been done since 1873 is
maintained, on the ground that the industrial
interests demand certainty as to what the
standard shall be. To this end, it is urged that
the United States shall remove all uncertainty
as to the meaning Of coin in its obligations,
thereby saving the taxpayer by the ability TO
borrow at a low rate OF interest No attempt
is made TO remove the existing silver dollars,
nor to change their legal-tcndcr quality; on the
contrary, u place is provided for them in the
circulation by forbidding the issue Of any paper
other than silver certificates in denominations
below ten dollars.
A Dangerous Practice.
It 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 deprecated,
drove out gold, furnished "A fiuctuating stand
ard. increased the national debt enormously,
caused l change in prices whenever the credit
OF the paper standard fiuctuated, and by
cai>ing unexpected changes in the level of
prices gave rise To extraordinary speculation,
increased the severity Of commercial crises,
and placed the small producer at u diSadvant-
aye with the large operator.
Should be Withdrawn.
For these and other reasons the commission
strongly urge the government TO withdraw its
demand obligations now used as money, decline
to provide gold for exporters and put the bur-
den and expense Of maintaining q reGecmable
paper circulation upon the banks. In order to
meet the demand Obligations, the present re-
serves of gold in the treasury furnish Il sufi-
Client 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 rcpleniShment. In this way. o.
from surplus revenue. the demand OBJ
legations chat is, United States notes and
treasury notes OF $500 can be removed in such
q way that the cost TO the country can be re-
duced; while this will also give the mcstimable
advantage Of ccaSing TO use demand debts as
money, simplifying or currency, and adding to
confidence in the certainty Of our standard. BY
the plan OF the cJmni>>i n the withdrawal Of
government paper is 50 arranged that cOntrac-
ton cannot possibly take place; if 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
~prOpOsed).
Good Word for the Bank Note.
Tie demand obligations of the United States
were not u money based on property: they
were only u debt. On the other hand, 4 bank
note is never issued fraud, of course, excluded
except for 4 consideration in negotiable prop
erty OF equal or greater value. The bank note
comes forth as the Sc Iuel to 4 business trans
action, anu is basel on the active property OF
the country which is passing between pro-
du 'erS and consumers. This property is
always negotiable and always equal to the
duty of meeting the note liability. Bank notes
are as sound as the business transactions of
the country. The currency Of the country,
moreover, should increase as the transactions
of the country increase; hence the rigid I'M
changing issues If the government make them
an inelaStic part of the circulation, while by
the very process of their issue bank notes alone
can be automatically adjusted to the changing
transactions of the business community.
To Secure Absolute Safety.
In amending the present national banking
system, the commission were actuated by n de-
sire TO secure absolute safety to the note.
holder; to make the notes uniform and o. equa
currency in all parts of the country, to create
an elastic system, which, while expanding in re-
Spouse to increasing transactions, should
healthily contract when transactions diminish;
and which would help in Il better distribution
of banking facilities throughout the western
ard southern states.
In view of the scarcity of United States
bonds, they cannot long be regarded as a basis
Of circulation Moreover, any bond security OF
a high character yields a low rate of interest;
and in Il time of Stringency when bOrr ,werS
need loans and the market rate of interest is
high. there is no inducemcnt to buy these bonds
to increase circulation. Hence, under the pres
ent system. when notes should be most needed,
it is least profitable to issue them.
Plan of The Commission.
While providing for 4 partial use of bonds
for securing notes (25 per cent. of the capitaD
the commission proposed that notes beyond
this should be issued on all, instead of IA part
of, the resources Of a bank; and within a few
years that no special bond security should be
required. Banks may issue notes up to 90 per
cent. Of their capital without restraint; for
issue beyond 90 per cent. and up to 50 per cent.
they pay a tax of two per cent; for those
beyond 50 per cent. and up to 100 per cent.
they pay a tax of six per cent. These notes
would be a prior lien upon all the resources of
the bank, and, in addition, upon the StOckhOld-
erS' liability. Moreover. all banks issuing
notes contribute live per cent. of their circula-
tion as 4 permanent guaranty fund. For daily
redemptiOns, banks should keep a five per cent.
redemption fund in the hands OF the cOmptrol-
Ter of the currency. Banks of 81. 900 capita
may be established in places of 400 inhabi-
tants; and branches Of banks are also per-
mitted.