The Intermountain Catholic. (Salt Lake City [Utah] ;) 1899-1920, 1902-01-11
! !, -. .lo1,,,ar uilI exist in proportion

Iord-+lis danger will exist in proportion
as the doubt is recognized.
..yVo have a volume of coined silver
,,o,,, in tbe vaults of the United states
sufficient to fill a corn CRIB elSht IeeI
wide ten feet high and l,2oo 1eet long.
This silver commerce VIII not absorb
In lien thereof the government issues
a warehouse receipt, commonly caile''
a silver certificate; stamps upuH d
niece of paper the statement that IneIs
has been deposited with the = tilteu
States traa sury twenty silver do-iarS'
70 he Md To the bearer on the surren-
der of the warehouse receipt tut
there is no provision for the exchange
ability of either the silver or the Ger
tiicate at par with gold.
".Trnder. present conditions there y ~
danger in this. The balance OF trace
is in our favor. We sell abroad S9oV'-
OC0, GOO per annum more than we puy
and this requires the Importation Oh
$500, eco eco of gold per annum Tor tIle
redemption of $500O00,000 of outstand-
Ing national. municipal or personal oo-
legations. or the investment of that
much money in foreign securities; the
account has to be balanced.
But these conditions will not last
forever. W Q nave pIlS-llA III u III
worlds su7ply of gold Suppose this
balance Of $500 100000 per annum was
to be settled in gold. In ten years we
would have the worlds supply 1t is
needless to say it would not remain
with us. Other nations would borrow,
if not buy, and it would need to be eX-
ported.
''The point 1 make is this: AS soon
as we begin to export gold in excess
of it's Importation, then it will begin
to cast about for a place of safety,
knowing that this great volume of sill
Yer is not exchangeable or redeemable
in gold. This tinid fellow may deem
it wise to hoard a little gold against
possible danger, and the next t1mid
fellow, discovering, as he looks over
the reports, that some gold has been
boarded will be induced to hoard also,
and in this way we stand on the road
to panic.
Some time, in some way. either with
or without an enforced lesson, provision
will be made for the exchangeablll
of ali forms of money.
az do not say that silver certificates
should be redeemable in gold, nor do
l say that national bank notes should
be redeemabIe in gold. l am speaking
theoretically, and net advocating any
specific measure. am willing that the
national bank notes shall be redeem
able in silver Ger tificates, and the sill
yer certificates lie redeemable in sill
yer. and that this redemption may take
place in Washin gton, if you please,
and then the silTer may be made re-
deemable in S5OG1N sums in gold.
"All l contend cor is that every draft
on a solvent merchant. every note
signed by a solvent debtor, every piece
of paper that cir 3ulates as money and
every coin shall Ultimately be payable,
redeemable or er changeable for the
standard coin of this country. In no
other way can it 5e protected from dis
count Safeguard it as you may, under
conditions easily conceivable, the sill
yer certificate or the silver or the coin
may be at a discount. and so long as
there is the element of danger how
ever remote, so long there will exist an
ever present Gauge of panic.
@ O g
"I consider ou.' national bank sys-
tenn one of the hest in the world. It
was wise conce ption.
Suppose it were abolished. The gov
eminent would still owe the debt. If
the bonds were held abroad 1t would
only pay the interest, ana this interest
would help to settle the balance of
trade and would reduce the importa-
ton of gold in proportion to its vol
ume. 4 rate OF interest would be
charged higher than now.
I'VE have all noticed that. as the
facility for using government bonds as
the basis for national bank circulation
has increased the value of these bonds
has increased until the government OBJ
legations now circulate at a lower rate
than the securities of any other coun-
try on the face of the earth. The gov
eminent could borrow at practically IL
per cent interest. 1t would be COM
PEELED to pay 2 per cent-21A at least
but for the national bank system.
Thus the people are saving some
thing in interest. The fact that a ma
tional bank can purchase bonds that
will yield ~ per cent interest and is
sue national bank currency against it
is q very pressing inducement toward
an increase in circulation, and even an
attraction to capital toward the bank
ing business. Capital will be invested
in banks so long as the profits to be