The Union times. [volume] (Union, S.C.) 1894-1918, 1913-08-08

gold or silver, bearing the guaranty
OF Government, and usable as gold or
silver money. Paper money in this
form leads easily to paper money in
other forms-still trusted and ac-
cepted by the people because of the
known strength and wealth of the
Government which guarantees it's
full value. There is need of such
money, too, because there is not
enough gold and silver in the world
to supply the worlds demand for
money, especially as production and
commerce are multiplied in the devel
opment of science and progress. Pa
per currency proper may thus be the
mere promise of the Government to
pay-good enough up to limit, but
with tendency to depreciate if is
sued in too great quantities. It is
dangerous to depend upon this kind
of money as there is temptation at
times to exceed the proper limit, and
thus to lower the standard value. But
the prestige Of the nation is a trem-
endous factor in securing circulation
for its mere promissory notes.
Other paper currency, more SUBJ
stantial than the mere promise to
pay, may be money issued on assets
of value other than the precious met
ais. Such currency is the Govern
ment's promise to pay, secured by
valuable collateral which the Gov
ernment certifies that it holds as an
added assurance Of it's ability to pay.
This kind of money is like the paper
issued as a receipt for gold or silver,
and is as good to the extent that the
asset for which it stands is as good
as silver but it is less readily ac-
cepted to the extent that it is less
certainly valuable than gold or sill
yer. Wherever this asset is trusted,
such money" should be as good as
any-especially if the Government
be strong and have public confidence
1t is far better than Clearing House
certificates, with which the banks of
Columbia have relieved the strinpen-
cy of panics. 1t is far better than
the issues of the State chartered
banks, which constituted the money
OF the South in large proportion be-
fore the war. 1t is far better than
the "greenbacks" mere promisorry
notes, with which the United States
Government weathered the financial
strain of the war between the states.
lar below the nominal value of silver
certificates, since silver bullion is
Tar below the nominal value of siver
money. 1t should be as good as gold
II the asset is in general demand, is
of adequate excess value to allow for
any possible depreciation or deterio-
ration, and is insured against de-
struction or damage. All the better
If the asset is thing the outside
world must have and will send gold
to get.
1t has for more than a generation
been the policy of the Federal Gov
ernment to issue such currency
Through national banks) with Gov
eminent bonds as the asset. This
currency has long been as fully trust
ed, as readily accepted, as gold it.
self. Yet, consider what its Sc
curity; First, the Governments
bond--another form of Government
promise to pay, but bearing interest,"
and therefore in demand as an easy
and safe form of investment, though
at small profit; second, there is the
banks promise to pay, a sort of en-
dorsement for the Government. But
the manner of the issue is such as to
make the note that of the bank ra-
ther than, of the Government, and it
bears the Governments certificate
that the bank has left Government
bonds with the Government as secur-
ity. The Government styles all these
notes of the different national banks
National Currency and as their
sponsor and the holder of the collat-
erai tits own indebtedness) pledged
TO secure them, the Government ia
the quasi-guarantor or endorser for
the banks. Uncle Sam is a good en-
dorser, and the party for whom he
endorses is quite favored above the
common run Of men.