Barre evening telegram. (Barre, Vt.) 1898-19??, 1902-12-04
MONEY PLAN
Annual Report Makes Some Interest
ing Recommendations.
CHANGE IN BANKING LAWS
o0gGestiOn Made That General Cred
its he y Basis For the Currency
Instead of Combining 1t to
Cash and Bonds.

Washington, Dec. 4-The annual re-
port Of Secretary of the Treasury Shaw
has been presented to the house Of rep
ressntatives 1t contains nearly 10000
words.
On the question Of the currency the
b the redemption Of silver and its
change for gold. This would ward of
q danger which might arise in hard
times when the government revenue
was less than it's expenditures.
There can be no valid reason, legal,
economic or equitable" says the report,
"why the government should not re-
deem i'm gold all its own obligations.
whether they be represented in paper,
100 per cent fiat, or in silver, 80 per
cent fiat When the government ex-
pressly guarantees it's own issue, no OBJ
lection can appropriately be urged
against requiring banks to pay their
notes In gold. On the contrary, l see
many advantages to be gained. espe-
cially with respect to our foreign COM
merce, by making every obligation be-
tween the government and the people
and between individuals payable in
money every dollar Of which shall be
the equivalent of 25.8 grains Of stand
ard gold and on which demand for
this equivalent can be directly or indi-
rectly predicted"
1t is also urged that more subsidiary
silver coin be minted. The treasury
cannot now supply the growing de-
mand The legal limitation has been
reached 500, OOO, OOO-and the demand
10 $1O,OO0,OOO a year. The secretary
urges that the law requiring the coin
ing Of ID, ZOO, 900 silver dollars month
be repealed and authorization given to
coin subsidiary silver to the limit of the
demand.
Would Change Banking Laws.
As to changing the banking laws. the
report discusses the question at length.
Additional circulation, 1t says, Is need
ed Bank branches are not recon-
mended. No one plan is, the question
being left open to congress, but sug-
gestion is made.
Il see no objection to the issuance OF
circulation based upon general credits
II properly safeguarded. Neither do
believe it necessary to make currency
thus issued first lien upon assets A
very small tax upon circulation would
be sufficient to cover any possible loss
.srhe government actuary has dem
onstrated that tax of One-eighth OF !
per cent upon circulation would have
covered all loss from the beginning or
our national banking system to the
present time had each bank maintained
It's limit of circulation. Instead OF call
ing this tax, suppose it be called pre-
MUM on insurance and the govern
ment the underwater The banks
could be required to redeem their cir
culation at reserve cities, and the gov
ernment would never suffer injury or
embarra ssment as an insurer against
ultimate loss.
1.-THE lowest tax suggested by any
one would far exceed any possible loss.
and the government could assume re-
sponsibility to the people and still real
izs a profit. When thus guaranteed
and primarily redeemed by the govern
ment at the expense of the bank OF
issue, currency based on general assets
would be as acceptable and as secure
as the present national banknotes based
on specific assets.
Credit Currency.
Il doubt, however, the wisdom OF
making provision for the issuance OF
credit currency to the limit OF the
banks capital. Not that I would fear
unfortunate results, but in all hnancial
legislation the greatest caution must De
exercised lest the currency be suddenly
and unduly inflated. A gradual IN
crease in circulation is well nigh im-
perative, but sudden and unnecessary
increase would be most unfortunaie'
Several other safeguards will naturally