The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-11-22
C. N. THOMPSON HEARD.
An Analytical Discussion of the New
Currency Law.

Charles n. Thompson, an Indianapolis
attorney, was next presented to the con-
vention. and offered a paper on 1.-THE New
Currency Law" Mr.. Thompson's address
was well considered and couched in force
fui and convincing terms. He was listened
to with the closest attention and at the
close of the reading the applause which
broke forth spontaneously testified the ap-
probation of the delegates and visitors for
tia able address. He also was rendered a
vote of thanks. Mr.. Thompson's paper was
as follows:
1.-THE new currency act removes all doubt
as 10 the standard of value by putting that
standard in express terms in the gold dol
lar. Ii removes all doubt to the kind
OF money In which the demand notes of the
government to be paid anc also, In
effect, its Understanding obliga tions. 1t
puts In the power of the secretary OF the
treasury, means and machinery adequate
10 maintain the gold standard and 10 pay
the government obligations In gold and
TO maintain on a parity and of equal value
ali money issued and coined by the govern
ment. IL has made clear and positive
statutory obligation the policy of the gov
eminent To go back briefly, from 1892 to
1884 there was absolute free coinage of
gold and silver at the fixed legal ratio of
fifteen parts of silver to one part of gold,
the then commercial ratio. The two coins
separated In their purchasing power, god
1884 changed the ratio TO 16 tc /. thus con-
trfbuting TO the circumstance which put
silver to a small premium. The country
was on a silver basis until 1884. Gold was
the dearer metal and went out of circula-
ton In 1851 the weights of gold coin were
reduced so thas the silver dollar was
worth more than the gold. The latter was
over valued In coinage just as the silver
had been prior to 1854 1t is well known
that the two metals have not circulated
concurrently at a legal ratio when that
ratio differed from the commercial ratio
The gold dollar became the standard Of
value In 1862 and 1863 the standard was
dollar of defined weight, but promise of
the government to pay that amount IN
gold. The value of this standard was
measured by the credit of the government
solely. In 1878 Congress declared that the
unit of value should be the gold dollar
of the standard weight of 25-S grains
money. 1t has been the practice of the
government and. indeed. expression has
been made by Congress prior to the pas
sage OF this act, that the parity of all
forms Of money issued by the government
shoulc be maintained at the value of gold:
The Sherman act declared that IL was
the established policy of the United States
to maintain gold and silver on parity
with each other upon the then present
legal ratio or such ratio as may be pro-
vided by law.
a DISTINCT GAIN.
while II has been the practice since 1873
To carry out the scheme declared In Section
] of the present act, yet the enactment Of
that scheme into positive law is distinct
gain. The law is mandatory of the
policy heretofore carried out. BY Section
the reserve is strengthened. To the time
OF this enactment the only statutory recog
milton of the reserve was in the act of
1882. which provided for the cessation of the
issue OF gold certificates when the gold re-
serve dropped below one hundred millions.
When the reserve was one hundred millions
and the circulation Of the United States
notes 3i7 millions the reserve was
about - per cent OF the redemptible obli-
CATIONS. When the treasury notes were
added In the sum or l53 millions the ratio
OF the reserve dropped TO about 20 per cent
Under the effect OF the present law by
which ali treasury notes when redeemed
shall be exchanged for gold in the treasury
and not reissued except in discharge OF
gold obligations there will be gradual
shrinkage OF treasury notes in circula ton.
50 that eventually the direct gold redemp-
ton liability of the government will be
the United States notes Of 81 millions
which will increase the reserve ratio 10
about - per cent. The silver dollar. not
redeemable In gold. viii usurp the func-
not be a direct charge against the reserve
II will not be menace in this respect
against the reserve. but IL will tax the
ability OF the government TO maintain its
parity with that OF gold. AS 10 the status
OF United States and treasury notes n
change Is made by this law. Until 1880 the
United States note was a coin obligation.
The latter act did not change II In terms
coin obligation. but compelled its re-
demption IN coin at a parity with gold
The practice OF the government hy execu-
tive officers favorable 10 the gold standard
was under that provision to redeem I'm
gold. but the law Is now clear recurring
its redemption In gold. This section I'm aid
OF the maintenance of the gold reserve