The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1899-10-20

return to the treasury only for Gus
toms, for taxes or miscellaneous re-
ceipts. The system does not provide
for an ebh and flow according to the
tides Of business The height of wis
dom fixes bounds within the field OF
safety, of necessity.
GOVERNMENT NOTES.
Although not strength itself, fitness
for use in any direction is its foster
brother. That quality government
notes possess. because one denomina-
tion can readily be changed for smaller
or greater, kind for kind. Exchange
Of one kind for another is prevented
by the limitations OF volume. Bankers
well know the convenience of securing
81, 81 and 81 notes for those so large
that they do not serve the convenience
of customers. BY redemptiors Of un-
fit currency and direct exchange the
denominations are adjusted to the
varying demands of the different busi-
ness seasons This process causes a.
constant flow of notes in and out Of
the treasury. II affects every year at
least one-half of all the government
paper A certain elasticity Is thus
produced, for the large notes are used
more a S reserve than for current pay
ments, while the smaller denominations
arc active CurrenCV.
The treasury during the past two
years has always held available de-
nominations suitable eithor for division
or concentration as business has re-
quired. The appeals for exchange OF
one class OF notes into another OF diff
ferent size, are constant proof of the
advantage of such transactions kind
for kind.
Weakness is fundamental in our cur
rency from the very nature Of un-
! III VI.
debtor must respond not at his pleas
ure but at the will of the creditor.
In the case Of government paper. the
notes go out for disbursements. as they
come in for redemption OF exchange
The whirl is that of a merry go round
Except for this rapidity OF movement
government paper does not differ from
bank notes or the obligations of in
| divdnals.
| With banks the putting out OF cur
| rency is a profession, a trade. It is
/ practiced for direct profit or for in
direct benefit in the service of the
| community. In the case of the gov
ernment 1t can be justified only by
such necessity as led to the original
issue Of tho legal tenders. Borrowing
on demand is a make shift, outside Of
stock operations. Strong, wise gov
/ ernmentS take time for their obliga-
tiOns and thus guard against the peril
of pressure and of panic.
DEBTS OF GOVERNMENT.
Plain words are best. We need to
see clearly that government notes are
debts of the government. payable on
demand. Current names have become
so familiar as TO hide the meaning be-
hind them. United States notes and
treasury notes in spite of their legal
tnn6pr hlHr0d l.
dividual promises to pay on demand.
! Without resources immediately avail
able, no person has right to put out
his demand notes. Governments arc
bound by the some principals as in
dividuals With actual coin behind
them worth their face in the worlds
markets, gold certificates can safely
he issued indefinitely. AS standard
dollars can not be sold in large guam
titles at par the volume of silver GER
tihcates is properly limited. For
other paper an adequate percentage In
a guarantee fund at once available in
all markets, can not be dispensed with.
With the present supply of gold the
| treasury can easily meet any probable,
even any possible demand for the re-
demption of it's notes. Yet even the
great resources of the government do
not give guarantee that the inflow Of
gold into its vaults will continue at it's
present rate or ma not turn into a
serious drain. Such experiences are
not so far in the past as to be forgot
ten, 1t Is the part not only OF good
financiering, but of common sense to
~, guard against their possible recur-
renee. The war in the Transvaal can
hardly fail to cut off for awhile entire
ly the contribution from that source
to the worlds supply OF the yellow
metal. which was last year nearly $780,
0OO,0 900.
Two obvious steps are necessary to
prevent a serious weakening of what
is really a safety fund. First, the vol
ume OF unsecured demand obligations
should be guarded against increase or
even should be reduced and second, {
sufficient reserve of gold coin should
be set aside for their redemption. to
be used for no other purpose. Exist
ing laws effectually limit the volume
of paper currency
THE IMMEDIATE NEED.
The immediate need is to set apart
and fortffy an adequate guarantee
fund for both classes OF legal tender
notes. This is the wise recommends
tion of President Mckinley. Just now
no inconvenient contraction would fol-
low an increase Of the gold reserve
A fund OF $3.50 100000 could be spared
| ana lnat WOulu provide ratio OF q
little more than one-third of all out
standing United States and treasury
notes. By definite statute this coulC
be rendered as secure as by locks and
bars. Without additional officers, ol
separate vaults in Washington or other
treasury offices, this fund could be
provided and preserved The mini.
mum of 800. 900 900 was trenched upor
in past years on several occasions be.
cause no positive statute shielded II
The certificates OF June 8, 1872, the
gold certificates and the silver certifi,
Gates have always had back OF then
every dollar OF the funds pledged %
them.
increased reserve can be protected alb
solutely. It can be made self-sustain
ingy by the requirement that notei
once redeemed in gold shall never b
paid out except for gold. That Il
President McKinley's suggestion, anC
II can not fail to be effectual.
As bankers, you have a right to say
that another problem arises; How
shall more currency be provided fl
periods of acute demand, for the move
ment OF the crops, for transaction
concentrated into special seasons? Thi
! should be a question of public con
| venience and not merely of direc
profit. Aside from considerations o
immediate earnings, the door is wild
open for the national banks to act
Under the laws as they exist, thes
banks can by the deposit of bonds ad,
| NQAE non Al 40 THAR nntas