The times. [volume] (Richmond, Va.) 1890-1903, 1899-10-17
TUESDAY. OCTOBER IT, 1902


The Bureau Of Publicity Of the uniteo
states Treasury Department has sent us
a most interesting communication rom
Washington which we will employ as an
editorial article The correspondent says
that the action OF the Treasury Depart
ment. in anticipating the interest on the
public debt IN order TO relieve the money
pressure. is attracting a good deal OF at
tention In Washington among those VINO
believe that the currency system OF tho
country should be made more directly re-
sponsive 10 business. And then proceeds
as follows:
The rigid limit put upon all United
States currency by existing conditions
except for the obb and flow Of god has
already contributed towards very high
rates for money i'm New YORK, and mas Ted
the Treasury TO exhaust al Us ordinary
resources for relieving the money market
The pressure Tor capital and currency III
Europe has been equally severe and has
led all the great commercial banks 10
raise their rate Of discount within few
weeks War in the Transvaal viii agra
waite this situation and may be followed
hy a discount rate I'm London running 10
eight or ten per cent The United states
would he to some extent relieved from
this tension. II is declared by financial eN-
ports. if the banks Of issue were autho-
riZed TO issue limited volume OF notes
under careful restrictions 20 meet the
special demand FOR money during the crop
moving season. II is feared that If no
means Of elasticity Is provided beyond the
International movement OF gold, the sit
uation In this country Will grow worse
every autumn, as the crop moving season
O %. a. nHa0
To the Bryanites, who will point TO the
demand for money as proof OF the neces-
sity for the free coinage Of silver.
The advocates Of an elastic banking
currency recognize the fact that there is
prejudice in this country against the
banks. growing out of the mismanagement
of some Of the Western banks before the
war. but they declare that they are
willing to submit TO a test OF the banking
currency principle upon so moderate
scale that there can Bee no risk, but under
conditions which VIII afford a test OF its
benefits in a season of tight money. One
of the plans which was submitted 10 the
Republican caucus committee at Atlantic
city. proposed that "a limited experiment
should be tried by authorizing ISSUES %
ten per cent. OF the capital of any bank
complying with certain requirements SUBJ
iect 10 "a tax Of one or two per cent. upon
the amount Of the notes outstanding. The
proceeds Of this tax were 90 constitute
a safety fund % cover amy possible losses
upon the notes OF failed banks. and 10
was argued that the tax would drive the
notes ont OF circulation as soon as the
currency became redundant. Such a sys-
TEN. II IS declared by the currency reform
ers. would have permitted note issues dur
ing the recent squeeze 10 the amount Of
about $4,000 0oo. n generally avaied of by
the national banks ana would have oh
Waited the necessity for such high rates
for money as actually prevail The coun-
try banks moreover. would have been able
10 extend larger accommodation In moving
the crops without Withdrawing their New
York deposits II has been supposed IN
some quarters that the ehb and flow OF
gold would be sufficient 10 prevent any
currency contraction. because scarcity OF
currency would he reflected I'm o high I'm
terest rate which would attract gold from
abroad The principle Of this proposition
e. NOT Disputed By the advocates of q
banking currency. but they declare that
an exclusively gold currency is obtained
az 4 heavy expenditure Of capital and
that project safety can be obtained az
much less cost 90 industry by permitting
the banks 20 issue a limited quantity Of
notes. having the same security behind
them as certified checks. but a trife more
convenient for passing from hand 20
hand II tho situation IN london should
result IN an unusually high discount rate
there. which attracted gold from the
United States and put intense pressure on
The New York market tho sltua ON may
demand serious cohs' ierati0n by Congress
al some means OF relief
Day g. breaking al last II has been
long pull. but tho position OF Tho Times
has been vlndicatod and leading fnanciers
are now beginning 70 see that the argu-
rnents OF The Times. at which they used
20 laugh. are logical and that the plan
which The Times has suggested furnishes
the only solution OF the currency problem
The key TO the uroblcln IS Iree banking
we do not believe that the government
has any right 20 interfere in any way
with state banks Of issue. but we are
willing to waive that g,oint and. for the
sake Of uniformity. let the government
make regulations for the government Of
banks OF issue. provided the prohibltory
tax shall be removed.
The arguments against free banking are
strangely conflicting. ON the one hand it
is contended that TO permit the banks 20
issue notes would be TO food the country
with worthless currency: on the other
hand that to commit this function TO
banks were 10 give them a monopoly OF
the currency OF the country, and that the
hanks would then make money scarce In