The Brunswick news. [volume] (Brunswick, Ga.) 1906-2016, 1912-05-25
M'cLUNG SAYS CONTRACTION is
ESSENTIAL WITH AMERl.
CAN CURRENCY.
Georgia Bankers, in Session at At
Iantic Beach, Fla, Hear United
States Treasurer Discuss Country's
Finances.

of the national monetary system was
today by Lee McClung, treasurer of
| the United States, before the cOnyen-
tion OF the Georgia Bankers associ-
alton, which is in session here. Treas
| urer McClung, however, favors a sys-
, TEN that would permit of contraction
as readily as expansion, declaring that
| a currency system that allows ex
pansion to meet an emergency, un-
less properly and scientifically pro-
viding for contraction when that
emergency has passed, would become
menace to the stability of all es-
tablished commercial or industrial
enterprise.
i After stating that the total volume
{ of paper currency in the United States
at the present is 15,S63,7 of
which the United States issued di-
rectly II per cent and the national
banks 29 per cent, based upon de-
posits of coin in the treasury, Mr..
j McClung spoke in part as follows:
! 1T will thus be seen that as long
as the issue of gold and silver GER
tificates continues under the existing
! law, the coins pledged for their re-
demption will continue to pile up in
the treasury. However, it must be
kept in mind that the process does
not contract that circulation.
THE essential quality about paper
currency is that it's redemption must
be prompt and certain This is the
one thing which, under any and all
conditions, must be absolutely safe
guarded. Around this point reyolves
the chief problem in constructing for
use in this country a sound and per-
! fectly elastic currency. AS the yard
/ stick must represent exact definite
length in order to preserve. its true
function of measuring length, so
must paper currency represent value
in order to preserve it's honest func-
ton of transferring value.
"A currency system that allows
expansion to meet an emergency un-
less properly and scientifically pro-
viding for contraction when that
emergency has passed, would become
menace to the stability Of all es-
tablished commercial or industrial en-
terprise.
There is a widespread and we'll
| founded belief in the minds of our
people, continued the speaker, that
the issuing Of currency is rightly a
! governmental function and should
AGve no connection whatever with
/ banzing, which is properly a private
function. The question naturally
/ arises why the government should
not issue the whole volume of paper
! currency required in the channels of
/ trade . As circumstances have
practically precluded the further is
sue Of nationak bank notes, it is be-
! coming necessary to revise our cur
rency system in order to provide for
an enlarged volume Of circulation
Referring to the various plans for
/ revising the currency stem, incIud-
| ing that of the monetary commits
sion which recommends the injection
| into our banking system o. a ma
| tional reserve association, with prac-
| tically unlimited authority in note is
suing power, as a panacea for pan
| ics,' Mr.. McClung stated that under
the Aldrich plan the national re-
serve association would take over
+ the bonds now held by the banks to
| secure the notes issued by them AS
a counter proposition the speaker said
| it had been suggested that conced-
ing that the national bank note must
! be discontinued, the United States
take over the bonds and assume re-
spoasibility for their redemption un-
/ der the same terms marked out for
the reserve association and pay in
exchange for the bank notes a new
series of United States notes con-
verti5le into currency debentures OF
the United States. This, he said, it
had been contended, would perhaps
give US an ideal currency that would
expand and contract according to the
business needs of the country.
WHITE MAN ELECT50cUTED.