The Guthrie daily leader. [volume] (Guthrie, Okla.) 1893-1996, 1902-12-03

by making every obligation between
the government and the people, and
between individuals, payable in mon
ey every dollar Of which shall be the
equivalent Of 25 8 grains Of standard
gola. ard on which a demand for This
e uivalent can be directly or indirect
ly predicated.
Recent events not only justify but
enforce the conclusion that our bank
ms system is Imperfect During GER
tain months Of the year inte. est rates
, dropped dangerously low-dangerous
in the sense that speculation was in
vited thereby. When the time ar
rived for moving crops, rates advanc-
ed alarmingly high Meantime, the
price OF government bonds rendered
the maintenance Of national bank cir
iculation Improbable. and this class
Of currency was retired with great
rapidity The department exerted ev-
cry influence within its authority to
counteract this natural contraction.
Whenever there is a surplus of pub
Lief funds in the treasury, and financial
conditions make it advisable that It
be released, it becomes necessary to
purchase government bonds. At pres
ent there is no other way to put accu-
lmulated surplus revenues promptly I'm
circulation. The available bonds are
not held by banks or by business con-
Germs. So, whenever the government
Is purchaser, the price is promptly
advanced. Should the bonds falling
due in the near future be permitted
to mature. they can be extended at a
very low rate Of interest. payable ON
demand. and the holders thereof can
no longer dictate prices TO the gov
ernment.
Additional circulation will be neces-
cary. Outstanding government bonds
are inadequate TO secure it even if
their market value would justify their
luse BY the banks. II is even doubt
! full If national bank currency based
on government bonds can be made
advantageous to banks. A lower tax
on circulation would be counteracted
very promptly by a corresponding ad-
vance in the price Of bonds, and the
profit would accrue to the present
bond holders.
see no objection to the Issuance
of circulation based upon general
credits, If properly safe guarded.
Neither do l believe it necessary to
make currency thus issued a first lien
upon assets. A very small tax upon
circulation would be Sufficient to
cover any possible loss. The gov
ernment actuary has demonstrated
thar a lax Of one eighth Of one per
ccsa upon circulatioOI would have
covered all loss from the beginning
OF our national banking system to
the present time, had each bank
maintained its limit of circulation.
The banks could be required to re-
deem their circulation at reserve cit
les, and the government would never
suffer injury or embarra sment as an
insurer against ultimate loss. The
lowest tax suggested by anyone would
far exceed any possible loss, and the
government could assume responsible
Iity to the people and still realize a
profit When thus guaranteed and
primarily redeemed by the govern
ment az the expense Of the bank of
issue, currency based on general as
sets. would be as acceptable and as
secure as the present national bank
notes based on specific a'sets.
| doubt. however the wisdom of
making provision for the issuance Of
credit currency to rhe limit Of the
banks capital. Not that would fear
unfortunate results but In all fnan-
cial legislation the greatest oaut
must be exercised Test the currency
be suddenly and unduly unhated. A
gradual increase in circulation is
well nigh imperative but sudden
and unnecessary increase would be
Imo-t unfortunate.
am no. prepared at this time 10
recommend anch hanks. Recent
events confirm a previous opinion
tina. the peculiar conditions Of this
country would not be conserved by
such a policy. ] think a far better
course. for the present at least, would
be TO provide an elastic currency,