The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-11-22

makes distinct effort to render harm
less the so-called endless chain. The term
endless chain arose from the fact that
the United States notes might be pre-
scented for redemption at the treasury I'm
exchange for gold then pa, paid out d by the
for gold. This process II continued would
exhaust the gold. The act prohibits the
paying out of the United States notes to
meet any deficiency in current revenues.
The secretary of the treasury may ex-
change it for gold or redeem United States
bonds or for any lawful purpose the public
interests may require.
CIRCULATION OF GREENBACKS.
$50 that whenever the greenback goes
into circulation again under the present
law it is either In exchange for gold or a
gold obligation. and thus its repeated as
saults on the gold reserve are TO be avoided.
In this respect the gold reserve has been
| protected against a menace, but unfortu-
nately this is not the only menace. Our
currency system is not scientific but il is
a political one. 1t Is not flexible to the
wants of trade The gold standard is main
tanned by force. 1t has been truly said our
gold supports a great structure of promises
to pay. A slight weakness in the founda-
ton might bring down this structure. In
| the period of greatest imitation of currency
| in history the exports of gold have
| been the largest. For instance, the exports
| of gold and gold bullion, which had been
between thirty-four and thirty-five mil
| to nearly eighty-seven millions. Gold dis
appeared under the enormous coinage of
| the Sherman act. In January, $780, 92.6 per
| cent. of the governments custom dues were
| paid in gold; while in January, 1898, SO per
cent. only were paid in gold. On Nov. 1,
| 1900 SOC. 0S1 162 standard silver dollars had
| been coined. of which Il,36l, TAO were in cir
| culation. There is fiat value in these dol
| lars of about one-half. They are kept at
par, not through their exchangeability in
| gold, but because OF the policy OF the gov
Al...t,- n~t&
! of gold; and the positive mandate of the act
| of March a. 1900, that such parity
must be maintained has strength
/ ened public confidence in them.
ON Nov there were in circulation silver
| certificates redeemable in the silver dollars
| in the treasury, 1894 ,916.2S9 which, added
| to the silver dollars in circulation,
amounted to s466.337,979 There is gradual
| increase in all forms of currency On the
| 1st day of October 1900 the increase was
in excess of $50 900 during the preceding
/ fifteen months. During October the in
| crease was I'm excess of 900. With
prosperous industrial conditions and a ia
| vorable trade balance averaging in excess
/ of $685., 100000 in the last three years, the
wants of trade have kept apace with the
| increased money supply, and the inflow of
! gold has been the greatest In our history.
! -'he absolute monetary integrity estab-
| lished by this act has created a conf
/ dence in business that absorbs this in
creasing circulation. However, the act in
+, creating this confidence has not, under
peculiar money system, rendered our cur
| rency flexible, so that il will expand and
| contract according TO the wants of trade.
In strange contrast to the effect of the
/ law since its enactment do the arguments
of its opponents now appear. To them
/ the startling proposition was that this
/ bill would contract the volume of cur
circulation that amount of paper money
| and silver. The whole theory of the law
is to keep all forms of money in circula-
ton by keeping them at parity with a
| standard of value that will make them
| acceptable to the people. And that is
its effect. Its whole tendency is towards
| expansion of currency. Within the past
| year, national bank notes have gained
roughly sSs.000,o00 almost permanently.
| addition TO our currency, because they are
so good they are not presented for redemp-
| ton.
DECLINE OF TRADE.
eff trade should decline so that the stock
| of money would not be absorbed, United
| States notes, silver dollars and national
bank notes would displace gold in circula-
! ton. The silver certificates, of which
large amount is in circulation, could be
| exchanged for silver dollars with full legal
| tender capacity, and the silver dollars
! could be exchanged for United States and
treasury notes, and by the latter gold could
| be withdrawn. Expansion and redundance
/ of money might not necessarily cause GOLD
/ to leave our shores, but if that condition
| should be accompanied by an apprehension
that the paper and silver currency might
not be redeemed in or kept al parity with
/ gold then the gold reserve might be seri-
| ously threatened. A bit of history will illus
| trate: In 1890 silver currency doubled and
upon this imitation steady export of gold
| set in up to 1897. In 1891 exports amounted
| roughly to So, 600 600. in 1893 to SS7 900 600
| The reason was that during those three
years monetary circulation received such
| additions that business declining could not
absorb it and gold went rapidly out of the
country. This Section establishes a stat
| utory gold reserve which have never
| had and protects that reserve against the
/ drains of the endless chain; but as rough
| ly Is per cent. of currency is not re-
deemable in gold and IL has fiat value of
one-half, the danger to the gold standard
may be in the inelasticity of our money
so that it will not expand and contract as
commerce may require. If there is a re-
dundance of money the cheaper form will
| displace gold in circulation If this is a
possible evil, the province of this paper will
| not permit any discussion as to a remedy
Nothing more is contemplated than the
suggestion that the present increasing ex-
| pansion of an inelastic currency If not
| absorbed in business. will result in cheap
er forms expelling gold from cir
cuiation, and, accompanied by any
| apprehension as TO the ability of
| the government to redeem in gold obliga-
uons required by law TO be so redeemed
| or TO Keep all forms of money at a parity
with gold, may start drain upon gold.
Silver and silver certificates in these times
OF public confidence and profound pros
perlty are acceptable currency in all chan
neis, but let credits shrink and distrust
| appear then they are dangerous volume
| IN our monetary system. Section :, for the
presumable purpose OF retiring redeemable
gold obligations. provides that as fast as
silver dollars are coined under the provi-
slons of the acts OF July II, 1890, and June
| IL, 1898 from bullion purchased under the
/ act OF July IA, 1890. for the retirement and
cancellation of an equal amount of treasury
| EOtes whenever received into the treasury
and upon the cancellation of trca sury
notes. silver certificates shall be issued
| against the silver dollars so coined. This
section favors the silver certificate, and is
not in line with views of gold standard
| advocates heretofore expressed President
/ Hayes vetoed the act of 1873 providing for
| their issue. but il was passed over his veto.
| The certificates have been retained as a
convenient substitute for silver dollars
The present secretary OF the treasury, MIR.
| Gage, said In Chicago In 1894. In them
| tthe silver certificates) dangerous volume
OF inferior money has found an abnormal
| use They are the most Derplexinc fea-
| ture in the much involved problem of our
national finances. The only rcdeeming
| feature about the silver certificates is that
| they have no legal tender capacity. hut In
a roundabout way they can be exchanged
| for legal tender. and whenever that hap
| pens they in effect become a direct charge
/ upon the gold reserve
THE DENOMINATIONS
by Section silver certificates can only
be issued in denominations OF $40 and UNI
| der. eycept that not exeeeGine In tho az