The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-10-16
rnR cuRRENcY PRoRLEM.


To TIE EDITOR OF Tbs SUN-Sir; The
Chamber Of Commerce and A. J. warner
appear TO be much confused regarding the
stntus or function OF the national a note.
The Chamber OF Commerce nays that TINS
note Il -merelya medium OF exchange put
although IL In not legal tender. II IN q measure
replaces such money. National bank notes
do not, as your correspondents states. aid 20
the same extent as Government currency
in carrying prices up" for no bank credits
can be based on national bank notes. ana
bank credits have an important OriOe IN
creating q measurement OF values.
A medium Of exchange" solely and simply
cannot exist where q gold or even a silver
standard n maintained. 10 IN q term only
applicable TO pure nst money a cur
rency.
Mr.. Warner makes a second blunder in
saying that purely automatic regulation OF a
paper currency IL impossible" This Is not
only not impossible. but absolutely neces-
sary for a currency 10 answer every require
ment. All currency must be controlled oy
its metal reserve and expand in answer 20
the requirements Of and contract
by being called In as the metal reserve con-
tracts. This In what Is meant by auto
matte" regulation free from the arbitrary
influence OF any individual.
Because the monetary systems OF England
France and Germany are imperfect that does
not indicate that O more perfect system can
not be devised here. England and Germany.
to protect their gold reserve. manipulate the
interest rate, an arbitrary interference with
commerce.. and France places a premium on
sS!d 20 modify ths demand. The regulation
By the reserve exceeds all the "tnLsIilKsnst esG-
~Iations" OF, your correspondent, TO tax e
a measure would be used as a subterfuge to
exact exorbltant interest rates not, only on
iSsn, s 1F fbs sSgp eSTr % *: s e9s Se Of ne pe fhsl ps
a thousand times the amount Of emergency
money. When we shall have a scientific
monetary system we shall need no sucn emer-
The monetary science Is very simple when
the student Is not blinded 6y STstt or s 6 81.
metal money by a supplementary currency
within safe limits. never losing the confidence
The most effective and stable protection of
the gold reserve " not the advance OF the
interest rate or premium on gold but silver
value OF the world will protect the gold Re;
serve against every foreign demand. All
I am pleased to see the statement from
your. correspondent that the coinage of the
metal and the Eegglatlon Of the currency
S ceSSld rs &c nnlesS onss cTTRR s plan Se of he X
American Bankers Association. so far as
CbsmbeI nS but 81. louis NAV
The elasticity and volume of our currency
nlusb DC uNTlNSd IOuh IA AlCbdl 70 ohN
from no other source.
Our currency at present. we might say, is
based on the prosperity Of the country" a
most Unstable 70 lndation, as currency should
be so sound as u stand the test OF centuries,
apd as free from arbitrary influence as the
air We breaths.
There have beer frequent references to
stock speculation N connection with the cur
on the exchange b as legitimate a business
as that of the corner grocer, but more free
from deception. Our money when on a
scientific adjustment will be sufficient for
every branch OF business and interfere with
none. FREDERICK W. LUTTGEN.
New YORK.. October is.