The morning Astorian. [volume] (Astoria, Oregon) 1899-1930, 1904-09-14

carry silver dollar circulation of $3o0000000 less
in its intrinsic than in its nominal value Our gold
stock is capable of carrying all this and the gold
standard makes every dollar worth a hundred cents,
But the secretary appreciates as do all financiers,
the desrablty Of doing still better in the future
by substituting some other and better form OF cur
rency for the fiat paper and the overvalued silver
1t is believed and there is much financial experience
to justify it. that gradual elimination of the fiat
paper would result in supplying its place by gold.
As the treasury retains $l50000000 reserve gold to
redeem the fiat money, that sum would be released
at once and it is easily thinkable that gold certif-
Gates as a convenient paper currency would soon
take the place of the rest of the fiat notes Some time
ths.p of the problem must be approached, dealt
with and solved, and when it is, fiat currency will
be thing of the past.
Maintenance of the present volume of standard
dollars in silver is not exactly the same support
lof fiat paper, because each silver dollar having one
leg to stand on, is only half the burden on gold
dollar that fiat dollar is. Yet the time will come
that standard silver will disappear from our circua
tion largely by conversion into subsidiary con and
thus will be realized the purpose of the coinage act
of 1888, democratic measure the purpose of which
was declared to be sufficient supply of subsidiary
silver to serve the public convenience In small trans
actions leaving gold the standard and the currency
for large transactions.
In respect of these two measures the currency
question greatly advanced toward settlement since
1905 omoitS cciontifc commission Apnthar fnat
in our currency system was referred to at length in
the banquet speech of the secretary. The Call has
been insstent in arguing for more flexible banking
system, that will enlarge the volume of currency
in such commercial emergencies as the annual move
ment of the crops, and contract it again when the
necessity is past.
Without suggesting it as the only plan, or going
to the extent of an official Endorsement the secretary
said Suppose the national banks are permitted to
issue certain volume of currency, either based
upon the capital of the bank, upon the amount of
bond secured currency and are charged not less than
per cent interest during the time this currency is
out Certainly such currency will spring into ex-
istence whenever money is scarce and if the banks
are compelled to pay per cent interest thereon
they will retire it as soon as the pinch is over 1t can
be retired by the deposit of equal volume of cur
rency at any of the sub-treasures. 1t will not be
to redeem each individual bill. The vol
ume would be contracted as much by the deposit as
by the destruction Of the bank bills The interest
charged would vastly more than cover any possible
loss desire to go upon record being opposed to
the issue of any kind of currency the does
not guarantee, and am equally opposed to the gov
arnment guaranteeing bank currency without first
being amply secured. "
Our California bankers have not been hospitabe
to the proposition for an emergency issue. Perhaps
this is because they feel the pinch less than it is felt
in the financial center, New York But the sentiment
Of one part of the country arising in its local sit
uation should not stand in the way of measure for
general relief which may safeguard the whole coun-
try against currency pinch that may degenerate
into panic As we have often pointed out, the
problem is not one SO much Of volume as Of dstrbu- /
ton of currency An emergency issue will reinforce
distribution, by appearing where the necessity is and
when it is over.