Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1916-05-22
rsnesial Correspondence

by Shrinkags ct Gold Long Circulated.
Especial Correspondence
Washington, May 22-The federal
reserve bank law Is tending rapidly to
drive gold out Of circulation in this
country. .s-.
Nobody worries about this detail, be-
cause nowadays it is recognized that
gold can do more work when it doesn't
circulate; 1t Is more useful when It's
locked up in a vault and perfectly
SAFE while a warehouse receipt circu-
lates in its stead
But the manner in which the reserve
bank system has been taking the yell
low metal out Of peoples pockets is
both interesting and curious. More
over. it is one OF the utterly unexpect-
ed results OF the new law.
Uncle. Sam. as most people don't
know, declines to recognize his own
mint stamp on a gold coin. You may
take a perfectly good, brand new
eagle to the treasury, or to a federal
reserve bank, and they weigh 1t. al
lowing you. not its face value. but the
precise amount that. by weight, it Is
worth. You may lose cent. or some
dollars; for the shrinkage OF gold
coins Is something remarkable. Not
long ago a teller in a reserve bank.
experienced in handling money. took in
a IS gold piece without weighing 1t.
and later found he was "stung' for
s1.36: the coin had been carefully
"sweated' Of that much Of its gold.
without showing it in the least
In the good old days there was an
immense circulation Of gold coin on the
Pacific coast, thru the mountain states,
and as far east as Chicago The peo-
pie especially in the mining country
liked It's looks and It's feel: didn't
think paper money was quite the real
thing, anyhow. The banks at San
Francisco. even SO late as the panic
Of 1907. asked their eastern CORE
spondents to make rsmittances Of great
amounts to themsin gold coin, because
the presence Of stacks of II in the
tallers' windows went farther to make
the public feel cheerful than bales Of
any, kind Of paper money would have
done. Some OF them paid neat pre-
miums to get gold when paper. worth
just as much. could have been had at
less expense. ,li- $500 81 3. ~.
.ea Taken a. Discount.
When the reserve banks were or
ganized, and the national banks were
called upon to pay up. IN gold. their
contributions to the reserve institu-
tons capital. IL was suddenly discoy-
cred with something Of a shock that
Uncle Sam accepted no mint marks as
conclusive evidence Gold. coins that
had been circulated for decades with
out question went over the counters
straight into the scales and weighed
np at a discount that in some cases
staggered banking humanity. Since
then the bankers, have been allies of
the movement 20 keep the gold in the
vaults and circulate something less
valuable There is pending in con-
gress a bill to reimburse the banks
for their losses by reason of this
shrinkage Of the value in their gold
coins. 1t is urged, with a good deal
OF reason, that nobody except the bank
ever gets stuck on such a coin: no
body else does business directly with
the federal government in such mat
ters. But the enthusiasm in congress
for the bill 20 reimburse the bankers
mas NOT been obvious. >.a ..t
This system Of the federal govern
n1ent.' in weighing all gold coins, re-
Gently developed an amusing incident.
A government employe IN washington
drew, in his pay envelope, a nice, shiny
SEQ gold piece. That very day his
taxes were due. He marched around
to the municipal building and tossed
out, among the rest, that SEQ gold coin,
IN tender for his taxes
Now it happens that the tax collect
or Of the District Of Columbia is a
semi federal parsonage. He deposits
his collections regularly with the ma
tional treasury; therefore any gold
coin he takes in must be weighed. He
must not assume that 500 gold piece
Is worth $50, because il ne does, and
afterward the scales at the treasury
department discover that II lis worth
only 1889. he will be guilty Of NAL
feasance, or embezzlement, or some
equally heinous thing. ~ "
Got Worst Of II.
So the $50 gold piece in question was
passed over the balance at the NUM-
cipal building. and 1s cents subtracted
from its value. It had been rubbed
around 10 cents worth and was worth
just 1887. It would have paid $40
worth Of taxes in any other town In
America: but only 1887 worth in
washington
The man scratched his head and
considered prayerfnlly. Uncle Sam
had paid him for $40 worth Of services,
an hour earlier. with that coin Now
Uncle Sam would allow him only $19.a7
Tor Vt in payment OF taxes. The more
Ne thought about II the madder he
got. .a'e .z5,s ,.s ss
He went back to his ofrice--after
lHaHding the 70 cent shave--at,d staff
ed writing letters to various folks sup
posed tos participate In running the
government The director Of the mint
sent heartIess reply. indicating that
he knew nothing about coins, except
making them. He accepted nothing on
It's face. He passed the case fartheI
| up. 4ss 3ls
The tax collector blandIy explained
! that the law would take that l3 cent?
away from him, unless he took it away
from the taxpayer. He Guessed hi
would prefer to let the other fellow
ipay IT.
The Experiment OF the treasury wor.
r1ed somewhat about the case, but