Iron County register., 1900-05-10
BANK NOTES.
The Poor Reasoning of One Who Ad-
vOcates Extending the Power
of Money Institutions.

Until well along in the century, says
Sound Currency, the issuing of notes
was regarded, and is still in a certain
sense regarded, as inherent in the ma
ture of bank. The reason for the reg
ulation of bank-note issues was excep-
tionally well expressed by former Sec
retary of the Treasury Hon. Charles S.
Fairchild in his statement before the
committee on banking and currency
In January, 1898. He said:
''I conceive that the way government
gets its right to interfere as to these
demand obligations is this: They were
found to be a most useful instrument in
transferring property and services from
man to man. To attain their highest use-
fulness. however. it was necessary that
they should have great rapidity of move
ment, and in order to attain that rapid
ity of movement the receiver of them
must be saved the necessity of 1ookin s
to the credit of the issuing party, who
ever he might be.
Therefore government properly came
in and devised a system by which they
shall be issued and then certifies that
they are issued under that system. So
that man who takes a note, if he knows
how good the system is, can know how
good the note is, and he does not have
to stop to look further. He has to know
one large thing instead of a vast number
of smaller things.
Now. that is the same service exactly
that the government performs when it
coins pieces OF bullion. In the case of sill
Yer another service is performed, because
with the silver dollars the government
has put a certain degree OF promise be-
hind them: but take a piece of gold
and it would be the same way with sill
yer if We had the free coinage of silver
with no government credit behind it
and what the government does in that
instance is simply to take the piece of
bullion from the owner of it ana put
It in a certain form, and certify that it
IS such Il quantity and of such q quality.
The government does not contribute any
capital: it does not put anything into
the bullion transaction: it does not con-
fer much benefit upon the owner of the
bullion because he could put the weight
and the quality on it if the government
did not do that, but it does confer a very
great benefit upon the people who want
to use that bullion for the transfer of their
property and services, in that it saves
them the trouble of assaying and weigh
ing.
The government does the same thing
with a bank note. It does not put any
capital into it. 1t does not give it any
credit except that it provides a system
and certifies that it is issued under that
system. The government performs great
service in that way, of course, to the peo-
pie who want to use bank notes. and in
both cases it performs great service to
the whole community in that it diminishes
the amount of bullion and the number of
bank notes necessary to carry on the
transactions of the community, because 1t
gives them both greater rapidity of move
ment and causes less of them to be re-
quired for the same volume of transac-
tions."
No fault can be foundwith the above
II,
change the Technology a trifie, and
that is in respect to the one word ''in-
terfere." Nobody has ever disputed
the right of bank to issue notes any
more than such right has been dis
puted for the individual. The point of
dispute comes when it is suggested
that the government add it's credit to
such notes. When this is done they be-
come government notes. Why not.
then, let the government issue it's own
notes? How can the government in
terfere in it's own functions? The
bankers do not want greenbacks; but
they demand that the government
credit be added gratuitously to their
private notes. In this light the fallacy
in the following. conclusion to the
above quotation will readily be seen:
IF that is true statement of the gov
ernment's functions in regard to bank
notes, it has always seemed to me we
should approach the subject with the
fact in view that the duty of govern
ment is not to repress these things, but
to go on in the direction of the principle
the philosophy, which has given it it's
right to interfere at all. and simply pro-
vide for the greatest facility of movement,
that being dependent on the goodness of
the system that it devised, and, having
done that, leave the people to take care
IF themselves