The Washington times., 1916-01-29

serve board positive denial that there
has been any effort to start a crusade
OF this kind The reserve bank officers
took their action and issued their
declaration without consulting the re-
| serve board members: in fact. the board
did not even suspect that the subject
was to be taken ND. IT Is declared to be
Amerely a coincidence that both the re-
gional bank managers and the reserve
| board are a unit in favor Of this pro-
ceedinE.
In the opinion OF banking authorities,
| there has never been a time. from their
issuance down to date. when the retire.
ment of the Rreenbacks could have been
accomplished with so little disturbance
even to the prejudices of financial
theorists as now. because the vacuum
left by them could be filled. II neces-
sary. by increasing the issue of reserve
notes. The latter are not open to the
objections so long urged against the
Ereenbacls. and 1t is quite possible. in
the opinion Of many financlers. that the
gradual retirement of the Rreenbacks
| without substituting anything for them.
| would accomplish a contraction of the
money stock that. together with tho i'm
provement of its quality incident to
eliminating the fiat issue. would be a
benefit to the country.
Fear of Too Much Money.
Thie II because there is very
genuine fear Of getting too much money
in circulation. Imitation can be accom-
plishcd Just as effectively by having
too much gold as by too much fiat
money. The increase In the country's
gold stock during 1915 was 80 great that
| II. during that time. the entire issue of
Greenbaeks had been gathered In and
burned. there would have been prac-
tically no change at the years end in
During the latter half OF 1914 thare
was a great movement of gold from
this country. netting loss, for tho
| whole year. of 500, ,000OO0. Then the tide
| turned and we imported a total of $780,
| 600 OOO in 1915.
But this does not state the real
measure of our increase in gold stock.
| Ordinarily, the country exports about
| all the domestic production of gold. The
| business world must draw its gold from
| the few countries that produce It: most
of II from South Africa. North America,
| and Australia. But in 1915 We kept at
| home the 100000 ono gold that we pro-
| duced, and that ordinarily would have
! been in greater part sent away. Adding
| this to the S42O O1O 900 drawn from abroad
makes the enormous total of $500, 600 900
increment-in our stock.
| Surviving 40 impressive
This means that the United States
! has now just about two billion dollars
in gold coin and bullion available for
use as coin, or $50 per capita. We
have gained immensely while every
other country possessed OF very large
| gold stock has been losing. To what
extent the warning countries have lost
gold there is no Worthwhile informa-
| tion; fiscal authorities are very sure
that all of them are misrepresenting
| the facts and making their gold hold
ings look bigger than the facts war
rant. and even the countries at war
accuse each other of this misrepresenta-
| tion.
But comparing Americas gold store
of two billions of dollars even with the
holdipGs OF other countries before tho
war began draining 1t away from them
the showing OF this country is impress
sive. Austria-Hungarv had 1856 OO0, ,OOU;
Germany. $205.0DO,0O0: lie United King
dom, s71J,OO0.OOo: France, Sl,9OC, 200. 900;
Russia, $946, 900. 900; Italy. $2ss. coo. The
| whole British empire was credited with
| only about 81. 900, 100000, or a little more
than half what the United States now
holds. and this included the India, Cana
dian, Australasian, and South African
dominions,
In this computation the entire worlds
ynSAs sSSE Of rsS soa fS Tss Set down
would appear to have nearly 30 per cent
of the gold money stock OF the whole
! world.
Financiers Are Afraid.
Financiers are frankly afraid of this
condition. Some relief was recently ex-
pressed In Washington when exports Of
gold to Canada and Argentina were re-
ported. 1t was hoped that this indicated
that Americans were buying securities
in those countries, and that the business
would continue, so as to diminish the
tendency to pile up gold here as temp
tation to low interest and big specula-
tion.
Comparing the $34S. 900, 900 Of the green
backs that are theoretically in cirCula-
tion, Il is evident that the greenba cka
in the national circulation than they
were even a few years ago. Moreover,
nobody believes there would be nearly
this amount of the greenbacks TO re-
Issued in 1862 good many millions Of
them have been lost, burned, or other
wise destroyed. Careful calculations
from all kinds Of experience have been
prepared by statistically disposed people
TO approximate the probable losses in
these ways, but the results are only
guesses. Some place the shrinkage as
low as $4,000, 900; the highest go up to
$50, 900, 900, with the higher figures gem
orally regarded as more probable than
the lower
| Inc teueral RESERVE bOaTu would like
to see the country done with the green
backs but ii has no notion of trying to
get legislation TO accomplish this. There
is still too much fiatist sentiment in the
country. "A measure to provide spe-
cifically for retirement of the green
backs wouldn't have chace, IN my
opinion, at this time" declared one
fiscal officer of the Government. "It
would be senseless to involve the new
banking system i'm such a quarrel, with
all the prejudices that would be aroused.
! THE time may not ~ - 0Woa