The daily journal. (Salem, Or.) 1899-1903, 1900-11-08

allowed to issue notes and put them
adoat door would be opened TO no end
OF frauds on the public. To protect the
people against such frauds the law ex-
erciees a minute supervision over the is-
sue Of paper money. IL allows IL 10 be
done only by a corporation, all Of whose
stock has been paid up in cash. II
limits the amount which the corporation
can Issue. II requires some kind Of
security for the payment Of the notes TO
be placed in the hands Of the govern
ment. II requires the notes TO be print
ed in such way, that competent judge
can tell whether a note is genuine or not
by its appearance. All these provisions
are for the protection Of the public; to
make sure that the people shall not be
imposed upon by worthless or spurious
notes.
Bank Supervision.
IL is apparant from this that the gov
ernment's supervision OF the issue Of
bank notes is identical in object and
utility with its mintage OF coin. II every
man could take the trouble, every time
he received hank note, TO ascertain for
himself the genuineness Of the note and
the solYency OF the bank we would not
need any government supervision. But
that would he as inconvenient as 10 test
the fneness OF the metal and weigh IL
every time payment was made in gold.
This, therefore, is the function Of the
government with regard TO all money
not TO furnish IL in the exercise Of
kingly prerogative, but 10 supervise its
issue for the convenience and safety Of
the people who useit.
Advantages Of Paper MOsey.
Perfect paper money is better tool
than coin for business, for three reasons.
CD It's convenience in handling and
transportation.
(2) Its economy. IL is part Of wise
business management, first, TO have good
tools, but 10 invest no more capital in
them thau 10 necessary. II takes hu-
man labor 10 get gold. TO use IL in
daily business wears 1t out. II is there
fore an expensive form Of money 10 be
used for daily business; that Is, expen-
sive in the large sense that il costs society
great expenditure in the persons and
lives OF those who dig il out Of the
ground. On the other hand, bank
bill costs substantially nothing.
(3l Paper money has Aexibility Of
volume which gold has not. The guam.
ity OF gold in a given country changes
slowly. Paper money can be issued
quickly and retired quickly, and hence
can be adapted in volume TO the wants
OF the people at all times and places.
These, then, are the requisites OF a
monetary system perfectly adapted 10
the wants OF modern business; gold
standard and enough gold coin 10 pro.
vide for the redemption on demand Of
all paper money.in circulation, and as
much more as the people care 10 have
for use silver and subsidiary coins for
use in small transactionsj and paper
currency issued under such conditions
that II shall always be redeemRble in
gold on demand with absolute certainty,
and az free and untrammeled in itH issue
as it can possibly be made consistently
with absolute certainty OF redemption.
The manner OF issuing notes should be
such that they can be issued quickly
and retired as quickly. bank note is
10 be regarded as an ephemeral, short
lived thing-a promise 10 pay which is
TO DO raid just as soon as its usefulness
Tor the purpose Of circulation has
ceased. This is a fundamental quality
Of perfect paper money, and one which
is not found aud cannot be provided In
notes issued by the government.
IL is regarded as Indispensable that
bank issuing notes notes shall deposit
good security OF some kind for their
payment with the government. There
are two ways OF putting up such secur-
ily, One is TO lot each bank put up it's
own and take care Of It's own notes In.
dependently OF all the other banks.