The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1912-12-08

lcon,inusd From FIRST Ps'se)
on an obsolete and antilua'ed view
81 .he methods by which business IL
now carried on.
government should Not Pc Banker
The relation Of the state 10 money
and banking. therefore, must pc
viewed with an intelligent under
star6ine OF business conditions as theS
really exist to-day B. general con
esnt. the state through rs govern
ysent Is expected tpsrcgulate ana su-
pervise ali public or quasi puoAc aV-
tjyities under which must nc IN
Guided money and hankins The con-
troll OF money IS and always mas
been = function OF the sovereign stare
.ronssouently The coinase 90 money
the selection ~ the unit % the none
tarv system rs weight and hneness'
sxing thu various concentrations or
coins and moneys regulation Of the
ALLOW and aeigniorsge. choosing the
kin6 If metal out Of which tn stand
ard and 81 sidiagt coins should pc
made. arc attributes II sovereignty.
But IL is an attribute Of sovereignty
20 determine and regulate tho amount
ana character Of bank creeks In one
sense. yes N . large sense. no. the
state has passed general Legislation
ahout checks Just as IL has about con
tracts and the like, II determ mes when
q check Is legal and il looks AFTER
forgery and similar acts bur. within
SIS supervisory sphere. - leaves me
amount and uses OF tho depostt-cur-
renew 10 the laws of trade and ex-
nerience And Vet As has been
shown. this deposit currency IS our
principal medium OF eXchans which
function - In
al lands
One point, then. Ne must all admit.
The evolution Of modern business has
created media Of exchange 50 con
nected with private transac lions that
they cannot in common sense. be per
formed by the governme n This does
not mean that the service should not
be supervised by the state y means
that the state cannot in any practical
sense directly perform the service It
self
We may start from the automatic
rsoposition. which all VIII admit that
The State itself cannot-cr should nor
attempt to-perform the private bank
ing functions Of deposit and discount
That is j. could not attempt 70 ofer
loans 70 all its citizens. nudge CT Inc
character Of paper. grant loans 20 one
ana refuse in@fn 70 1ilr tAtt " e ailF
not vet reached that extreme ct social
ism. even il II we're possible. And
vet the derosit currency IS a verv part
and consequence Of the banking func
tons OF discount and dsrcsit which.
under our policy. lie OUTSIDE OF the
direct performance By tbs State-not
outside q rs supervision u the gov
eminent should not undertake the work !
o. private banking functions, u calncf .
create the deposit currency cur chief I
medium OF exchange This ccrclu /.
sion IS zoo obvious 70 need further +
discussion. hut - leads 70 something ,
more.
No Special PROFIT IN Bank Notes.
The particular service rendered =
. bank note IS very much the same
- that rendered ~ the deposit-cur-
-ency When 2 bank makes loan
ts profit Is The same whether u
grants 70 he borrower is den,a nd ;
obligation II the fern % move - of .
a deposit accoun' The two differ. !
however. II some matters - d1re
.ion and distance - circulation which
are well known AMI ob~ious But th@
borrower should have choice without
d.rerenc4 in expense between IN. de-
and the bank note Be
cause he lives IN rural ceningnit, I
away from = cir. ara vishes - use
notes. there u ~ reason WHY his
medium ~ - hsnEe should cost him
more than The deurs t-curreHcy dos
the city nan tas is nov the case.
The point of great Importance iu .
connection with bank though
they do far less work than he de-
posit-currency-is TO re@GSuizs that
they. as well as ne deposit-currency
originate from the private operations
OF discount and DEPOSIT In proper
tion 20 the rise and fsll IN the amount
Of exch angling goods VIII more OF less
notes be called for. scccrding,> o.
notes are needed b. the cornmunirr
instead cf the depcsit-currency That
is, the issue # such notes cannot
be parform@d properiv ~ say i'm
stitution not directly in touch with
the borrowing public. A. the govern
rnent IS Qos IN such togcr. u would
be impossible Ger Il to issue these
notes IN the common interest i nay
supervise the system. sec that II Is
enlightened and adapted 70 modern
business, nut could - possibly render
directly The service performed BY oank
notse7
Note Issue Not state Function.
II the d.posi'-currencv cannot ~
provided ~ 'he zoverrrerr ,her ho,.