Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1908-07-03
FINISHED
Continued from page IL

to be New York. 1t means vast
power for Wall street, power that
may be sometimes has been abus-
ed. But all power may be abused.
We must still have our famous street.
/ speak at some length on this point
for l have discovered that the aver
ags man of our state, and other
western states, has an attitude OF
mind toward Wall street which is q
curious compound of ignorance, SUI
perstition and hatred.
Elastic Currency and the Banks.
There is no more confused question
before our people today than that of
the government, on the one hand, in
its attitude toward issuing money,
and, on the other hand, that Of the
banks and the issue of currency. And
yet this question of money and cur.
rency has been settled by all your
neighbors, even by Russia and Japan.
There is no doubt as to the govern.
ment possessing the function OF coin.
ing money. Our constitution pro-
vides for that,ssvery properly, and
congress has, finally by the act4 OF
1900, given us the same money that
our neighbors use, namely gold. But
since money has now become the bas-
is of credit, and banks are furnishing
credit. we have the question on our
hands of proper form of credit OF
elastic currency. Our confusion
comes largely from the awkward po-
sition Of our government in putting
out not only money, a true govern.
ment function, but also issuing cred
1T, true bank function. Thus under
our peculiar system of national bank
notes guaranteed by the government
and the greenback likewise guaran-
teed, we have form of credit cur
rency which has created govern.
ment liability of over billion dol
lars. While it may look good to us,
it weakens our credit with the world.
This matter will be made clearer,
trust, If we viii look for moment
at the methods of our neighbors in
dealing with their currency prob
lens.
England has system that some
what resembles our own, but with
some marked differences. The fol
lowing are the chief points Of inter
est to us:
England.
England has no medieval "strong
box for boarding the government
funds, known to us Familiarity as the
treasury and sub-treasury system.
Government moneys are all handled
by the Bank of England, private
institution, thus leaving the money
free for ordinary banking purposes.
2. The Bank Of England was char
tered in 1894, with no requirements
as to coin reserves. For hundred
and fifty years easy methods OF in.
fation of note issues prevailed. BY
the famous bank act of 1874, still in
force, the bank was put on a basis
somewhat like our national banks.
a note issue limit was fixed of s70,-
1900, based substantially on goy-
eminent bonds. This limit is now
SOC. $4,000. Beyond this the bank
can issue only on the gold in its
vaults. England went on the gold
basis in 1916, the first country Of
the world to take the step conscious-
".
8. Other English banks may issue
to the extent Of $40, 200, 600.
That makes a total uncovered
issut In England OF about $3.50, oOG-
600, Of which 10000, 900, or three
fourths IL Of the treat central banK.
5. The central bank controls the
rate Of discount, and hence the mova
ment of gold.
g. Critics have said that the besi
thing about the act is that it car
be suspended. 1t was suspended ii
the great crisis Of 1s47, 1857, and