The Denison review. [volume] (Denison, Iowa) 1867-current, 1899-02-14
GOV, SHAW'S ADDRESS
Before the Manufacturers Associa.
ton OF New York State.

Before the Manufacturers Associa-
tion OF New York State.
AN APPEAL FOR ACTION.
What Must be Done to Give This Country a
Stable and Reliable, Yet Flexible
Currency,
CONTINUED from last issue.)
Between January 1, 1898, and jan
uary 1, 1897, there was drawn from the
United States treasury, by means of
legal tender, nearly $500, OO0, 600 in gold.
During the same period there was ex-
ported approximately 1851, 900 600, while
the public debt vas increased S262, 0OO,-
600. 1t will be seen that under exist.
ing conditions the government furn-
ished the gold of export. Now that the
balance of commerce is in our favor
and gold is coming to us.it is deposited,
not with the United States treasury,
but with the banks. During the per-
iod referred to, while the treasury lost
$500, 100000 in gold, of which about
$3.50 600, 900 was for export, there was
imported over 5000 100000 in gold on
private and not ernmental account.
This imported gold was deposited with
the banks, while the export gold was
drawn from the United States treasury.
The government had TO buy its gold
while the banks got theirs in the course
of business. Thus it is that the gov
eminent is in the banking business to
the extent of having a paying teller
ever at it's window, but with its receiv-
ing teller always absent. Under the
proposed plan, when commerce turns
against us, as it will. the banks will
have to furnish the gold, borrowing it
if necessary, as the government Dor
rowed it in former times, and when the
flow Of gold turns again towards lis it
will be again deposited in the banks. In
other words, the burdens and the emol-
uments of commerce are made to rest
upon and inure to the benefit OF COM
mercial institutions.
National Bank Currency
Those who quote President Mckinley
as favorable to the retention of gov
eminent paper, when once redeemed,
in the treasury vaults until gold shall
be exchanged therefor, quite generally
omit this other recommendation, which
he couples Herewith, that national
banks shall be permitted to increase
the volume of their circulation equal
to the par value of their bonds, and
that they shall be required to redeem
their paper in gold. The latter provis-
ion has been incorporated, think, i'm
to every scheme proposed by any one
for the reformation of our currency
system. Suppose any of the proposed
plans of currency reform be enacted
into law; what would be the result:
Our merchants again purchases goods
abroad, and again buys a draft payable
in London. The banker again tells
him he will have to ship gold. Sup.
pose he proposes to charge a rate of ex-
change exceeding the express charges
on the money. The merchant is pro
tected. He presents his national bank
currency, demands the gold, and ships
it himself. 1t now becomes the bust,
ness of the banks to furnish the gold of
commerce, and if they do not have it it
will be incumbent upon them to borrow
it in Europe, if need be, as the Europ-
can bankers now borrow it in the Uni
ted States rather than to furnish it for
shipment. Under the plans proposed
the 350,0O0,00O of gold exported be-
tween January l, 1898, and January l.,
1897, would have been obtained al the
banks and the country would have been
saved the 1882 900, 900 increase in inter
est bearing debt.
| Panics Avoided.
but suppose under the plan proposed
the bank is unable to redeem it's paper;
and it suspends. The government then
takes possession, appoints receiver,
and obtains the gold to redeem the
notes of the bank, and it will do this in
much the same way that it obtains it to
redeem its own paper-bv the sale of
bonds-but with this marked distinc-
ton: Under the present law, when
the value of gold ran low, the govern
ment issued new bonds and sold them.
Under the proposed plan, it would sell
bonds already issued and belonging to
the bank, but on deposit with the gov
eminent. The governments credit
would be back of the currency in either
case. but its existing obligations would
be placed on the market should the
bank suspend, while new issues of
bonds are now sold to prevent govern
ment expansion. Under proposed
methods no publicity would be given
to the event. All we would hear would
be that certain bank had suspended,
and that a receiver N ad hapn aunoiutad