Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1899-09-30
THE CURRENCY QUESTION.


1t IS common to hear our bank-note
system spoken Of as "the best the world
ever saw" As TO the note itself, 1t Is
,rue that no one need want better
money" But the note and the system
are two different things. The virtue OF
The note lies in the fact that 1t passes
anywhere. and. no matter what happens
f. the bank that has emitted it, the note
holder Is secure. Yet, when we find that
experience has proved that this desidera-
tum has been attained through other
systems. and follow the operations of our
svstem i'm its relations TO the business of
the country. the question arises whether
the latter is not the worst the world ever
saw. When we dinerentiate the note
rom the system we find that the condi-
lions that recommend the former TO the
public have been used by the advocates
az the present financial regime to pro-
pagate fiction and fallacy which tend TO
retard business and Industrial develop
ment and progress. The virtue Of the note
has been made TO obscure the viciousness
Of the system.
our banks Of issue virtually contribute
nothing towards the demands of business
for an increase ia the volume of currency
~ times in which such increase is most
essential TO the conduct of business. On
the contrary, through a series of years,
they have exercised their powers and
privileges so as to reduce their currency
output concurrently with business devel-
opment and requirements. In 1873 the bank
circulation was sS40c0O,OOo on January
1st of this year IL was s21i,0l6,S&. When
we consider the country's increase Of
population, and-despite of seasons of
aepression-its general Industrial and
business progress between those dates,
Ibis exhibit renders the soundness of the
foregoing contention obvious.
Since the LIST OF January. however, We
have had a still more striking demon
stration of the RIGHTEOUSNESS Of the
system. and its tendency to work in in
verse ratio 10 the necessities Of trade.
During the year there has been a steady
expansion of business On January 1st,
rs We have said. the bank-note circuia-
ton was S2l4o16SSS. BY July LIST 1t had
fallen 10 SOS. O9i Since the latter date
Il has. Il Is true risen 10 S205 6g los, but
the net contraction still stands at $70oO,-
GOO In view of the extraordinary need
for currency during the last few weeks,
the increase was a mere bagatelle. And
Net-and here We have another ilustra-
tlon Of the viciousness OF the operation
OF "the best system the world ever saw
from the standpoint Of the banks IL was
business not to increase their issues ma
ferally during the currency dearth."
The issue securities were too high TO be
profitably utilized as a basis for circula-
ton. Furthermore, what with the rate
OF interest ruling in consequence OF the
pinch" there was more money" for
the banks In lending out funds In open
market than in tying them up In low in
tcrest bonds for the privilege OF emitting
notes. under the restrictions imposed by
the existing Anticipated banking and cur
rency laws Hence We see that any
elastic quality the system may have may
work for expansion when currency is not
wanted. but is certain TO work for con-
traction when It is wanted.
And how does the administration pro-
pose 90 keep its promise TO remedy the
defect in ''the best system the world ever
saw? By tlnkering with 1t. The ad-
ininistration's scheme OF currency reform
contemplates % impounding all legal
tender notes that come into the Trea-
sury and inhibiting their reissue, except
Tor gold. and 60 permitting national
banks TO issue notes up 10 the par value
Of bonds deposited 10 secure them.
The legal tenders" referred 20 ought TO
be impounded and their reissue ought to
be inhibited under any circumstances
They Will be a menace TO the gold In the
Treasury and the credit Of the country
until they arc destroyed. Impounding
them under the conditions Mr.. Mckinley
proposes would not prevent the passage
| OF u law by Congress for their reissue out
|" hand Ut any time. But that aside.