The Minneapolis journal., 1904-12-07
The Presidents Currency Recon-
mendation.

The president in his message shows
his courage in taking up and discussing
questions which the mere politician hes
itates to touch.
When he comes to the currency, he
advocates the betterment Of our system,
thru intelligent investigation by the
standing committees OF congress, lie
recommends that they "consider the
question of the retirement Of the greer
backs and the problem Of securing in
our currency such elasticity as is con-
sistent with safety,' while declaring
with emphasis, that "every silver dol
lar should be made by law redeemable
in gold at the option of the holder.'
The suggestion that the standing COM
mittees include in their consideration Of
currency reform the retirement of the
greenbacks will still send cold shivers
down the backs of many American citi-
zens, who think greenback retirement
would be little short of treason. In
the last three years, however, several OF
the many currency bills introduced in
congress contain the feature of green
back retirement, along with the estab-
lishment of more uniform currency.
After the currency imitation of the war
period, Secretary McCulloch began to
contract the currency, but was checked
by congress after the greenbacks were
reduced in amount to $356,OOO,OOO, and,
after the panic of 1873, there was a call
for imitation and congress expanded
those notes to $4OO,0O0,000. But Grant
vetoed the bill, and compromise was
effected, placing the greenback issue at
$382,0O0,000 Subsequently, by the
specie resumption act, under which, for
every issue of national bank notes to
. the amount of 800, $50 of greenbacks
should be retired, the latter currency
was reduced to $346,000,000. Congress
then forbade any further contraction, on
the ground that business was suffering,
and the greenbacks outstanding have
ever since remained at those figures.
Had the process of retirement of the
notes, begun in 1875, been continued,
the treasury would have been freed
from the incubus, but there was a
strong feeling that greenbacks were
symbols Of American patriotism and
should be retained, and many held that
such currency, issued directly by the
government and paid out by the gov.
ernment, was the only true currency
The progress of financial education has
decidedly shaken this delusion, and it
will not be long before the common
needs Of the business community will
secure an agreement, thru necessity, not
only upon greenback retirement, but
upon q practical method Of securing ar
elastic currency to supply the leading
defect of our monetary system. There
is now no automatic method by which
the amount Of money in circulation il
quickly and easily decreased when not
needed for business purposes and in
creased when business is active an(
the demand increases. True, expansion
is within reach, either by government
deposits or currency, at interest, in tn,
national bank, and by the banks secur
Ing more circulation by the deposit O.
bonds with the secretary of the treas
ury, but the steady increase in the pric
Of government bonds affects the abili
ty Of the nationals to take out circu
] lation thru bond deposits. The onl7
way contraction can be accomplishe,
is thru the absorbing and impoundin,
of money by the government. The evil
of inelasticity have been witnessed sew
eral times within the last thirty-fv
years, when business depression ha
come and panic generates an acute de
mand for money to prevent collapse O
credit and there is not sufficient none
,btainable to restore confidence, Will
gold is drawn from abroad, freauentl
1t large cost, to strengthen credit some
what.
President Roosevelt evidently think
1t would be very "good politics'' t
give the country the advantages of a
elastic currency conservatively mar
aged, even if many politicians shrin
from the mere mention of greenbac
retirement, the interchangeability {
The silver dollar with gold, and elasti
eurreAcy. %
A correspondent, writing about the a,