The Anaconda standard. [volume] (Anaconda, Mont.) 1889-1970, 1899-02-14

| the loss on the investment of his money
| to bear, whereas, under the proposed
| systems, he must pay for an equal per
| cent. of loss on the investment Of the
| note holders money, and by that much
| have his loss increased
| Careful estimates, based upon the
| official records of insolvent banks as to
| the effect of this preference upon the
| depositor class, indicate that it would
fall with crushing weight upon the de-
! positors in the smaller banks of the
| country and those situated in the newer
| sections of our country, and that it's
general effect would be highly injurious
and wrong.
Besides these objections, which are
| urged by those who do not believe in
the practicability of bank asset cur
rency In the present condition of our
banking system, those who are in favor
of it have not been able after nearly
two years of discussion to unite in any
definite agreement upon and acceptance
of terms which will enable any of these
plans to receive even their united sup
port.
In the midst of this conflict of
theory and opinion. the plain, simple
and comprehensive suggestions of the
president for governmental currency
reform stand out clearly and distinctly.
THE Interpretation placed by the
president upon the voice of the people
in 1896, has stood the test of a year OF
economic discussion as has no other
plan proposed.
A Jolly for the Masses.
1.-THE great masses of our people
understand his plan. They understand
that it cannot result in con-
traction of the currency, for gold must
come out of the fund whenever
greenback goes in. They understand
that it breaks the endless chain. and
that from the endless chain arose the
chief trouble in 1893. They understand
that these recommendations are for the
reformation of governmental currency,
and that the reformation of government
tai currency, not bank currency, is the
demand of the hour.
Let those with more radical plans
join in giving his measure loyal sup
port, and not obstruct the first great
step in advance which it seems possible
to take. y
What will be the effect of enactment
into law of his principal recommended
ton? It's simplicity should not obscure
its great value and Importance. It will
accomplish the following results, all
of which relate directly to the safety
of the gold standard.
with this trust fund in existence
deficient government revenues cannot
eat away the foundation of government
tai currency. In the past deficient reve-
nues have led ITO the payment of gold
from the treasury for expenses, which
should have been retained to redeem
currency obligations. 1t may be urged
that when a deficit in governmental
revenues occurs, borrowing on the part
Of the government becomes inevita ble
and it is immaterial whether that Dor
rowing is done to replenish the gold
supply paid out for expenses, or to Sc
cure money in the first instance for ex-
penses. This is an incorrect view. In
the first place, the practical effect of
the inability of the secretary of the
treasury to use the trust gold fund for
current expenditures will be to require
the adjustment of revenue laws by con-
greSS to meet the emergency, In the
second place, with this trust fund in
existence, if it is necessary for the gov
eminent to borrow money before con-
gress can change the revenue laws so
as to provide for a deficiency, it will
borrow under more favorable condi-
tions. When the government must
borrow not only money to pay
expenses, but gold to protect the
credit of it's currency, it's credit is in
jured. The high rates of interest paid
by the government when reduced to
this situation in 1894. 1895 and 1896, well
illustrates this truth.
" McKinley's Plan.
With this recommendation of the
president enacted into law, the stabil-
ity of our currency cannot be directly
affected by any instability of govern
ment revenues, resulting from chang
ing business conditions.
Enthusiastically there might come a
demand from some at certain times
of emergency that laws should be pass
ed to break into this trust fund to pay
expenses rather than to increase taxes
to provide for deficient revenues. But
to admit that such demand would be
dangerous or have any chance of sue
cess, would be opposed to common
sense, and our knowledge of the diff
ficulty of securing the passage of re-
trograding legislation through the two
houses of congress- with the necessary
executive approval.
I'm the third place, with this trust
fund in existence, the preservation of
the gold standard by the direct act of
the president and the secretary of the
treasury, which occurred of necessity
several times in the years 1894, 1895 and
1885, would not be absolutely necessary
until the trust funds were exhausted
by the redemption from it of an equal
amount of currency liabilities. At pre-
sent the gold in the treasury can be
drawn on both for redemption and ex-
these demands are almost sure to come
at the same time.
In the face of the unquestioned
ability of the United States to furnish
at all times, through current legislation
revenues sufficient to pay its current
expenses, the absorption of a portion of
the present surplus gold holdings into a
fund for the better protection of the
demand currency liabilities of the treas-
ury can incite no reasonable opposi-
ton.
! 1.-THE early segregation of this fund
which cannot be drawn upon for the
current governmental expenses, in
creasing, as it will, the immediate i'm
portance of adequate revenues, cannot
but have a beneficial effect in making
more prominent that relation, which,
more than any other. is vital to the
success of both governments and in
dividuals-the relation of existing in
come to existing expenses.
"In his second annual message the
president omitted the specific recon-
mendation that national banks should
be allowed to issue currency to the par