The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1898-01-03
PLAN OF CURRENCY REFORM
Continued from First Page.) \

5" Continued from First Page.) sa
imperfect. development of clear concep-
tons on the subject of money in the
minds Of the people--without suspen-
sion of specie payments and resort to
further issues of government notes.
There is no doubt that if our govern
ment We're relieved of It's existing de-
mand obligations, and our currency
system put in working order upon a
gold basis. it would be entirely possible
for us to go through a war without
suspension of specie payment, or, any
arrangement of our monetary system.
If war should come, the value to the
country of the ability to thus avoid
the indirect losses following from de-
preciated currency, inflated prices and
financial decentralization would be so
great that the burden of paying off
now our demand obligations would be
as nothing in comparison.
We have total volume of paper and
silver in circulation amounting to $685.
12S,087, all resting for its value on the
credit of the government, less only the
bullion value of the silver. That credit
Oilf G0 Ct NlAoiCs A4iS
paper of the United States could not be
dishonored and it's silver upheld. 1t is
necessary, therefore, that the govern
ment should keep large reserve fund
in gold. Such fund In the hands Of
the government is defenceless against
attack. In countries where the govern
ment has no demand debt outstanding,
and the gold reserve is held by banks
the nations stock of gold Is capable of
same degree of protection through the
rate of interest charged for loans. But
our government has no such resource.
It's great gold reserve is an open mine
free to all who bring its notes. And as
the entire monetary SYSTEM of the coun
try hangs upon that one reserve, the
situation is one of uncertainty and haz
ard against which no insurance Is posi-
BILE. N
AS against these serious disadyant-
ages there is no advantage which can.
possibly be claimed for paper money in
the form of government notes over any
other form of paper money equally
good, except the saving Of interest on
SO much of the public debt as is repre-
sented by the notes. But 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
required for resumption in 1879, bonds
were sold to the amount of S95,0o0,00
During 1894, '95. 96, 62,3l5. 400 more
were sold to protect the same reserve.
The situation was then complicated by
a deficit In the revenue, and 1t may be
said that the necessity for the latter
sales arose partly from that cause.
Not to enter upon that question close
ly, it is clear that with interest to pay
on 1857 900, 900 Of Indebtedness incurred
chiefly, if not wholly, in consequence Of
the existence of the government notes.
and $500, 900 of reserve lying idle in
the treasury, the saving in interest by
the United States notes is a small gain
compared with the amending burden of
providing for their redemption. We
have already redeemed them in gold
nearly twice over s54S.6 S1 0l6 since
1s79-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 be long unnoticed, like
friction in machinery or malaria in the
| air. but ii has its effect nevertheless;
| and when it reaches an acute NANTES
| tation, such as we have experienced
within the last five years. the loss oc-
casioned is beyond computation.
! The silver Currency.
| We have $354,355,o3l Of notes of S.
and under. and $50. 196,7ss of silver dol
! lars in actual circulation, making to-
| tai of $414, 55l, $40 of current money in
use, exclusive Of gold, in denominations
| of 81. 2 and SIS. Our stock of silver dol
lars is s452, 713, 1872, This is an exces-
| sive quantity to have at the existing
! discrepancy between their legal and
| actual value. But with further coinage
| of them discontinued, and their parity
assured by the exchange of gold for
them on demand, 1t is better to retain
them as they are than to attempt final
solution at this time Of the problem
which they present. BY withdrawing all
silver certificates over SIS, and all other
notes under $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 on 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 graduallysdoes 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 in
Guiding 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 p0taS in thp waV and at tho tip,e