Evening capital news. (Boise, Idaho) 1901-1927, 1916-03-13
A QUESTION OF INITIATION.

Among questions raised by those who look doubtfully
present prosperity in America is whether it is not
due to the influence Of currency initiation. Some interest
ing points this subject brought out in Scrbner by
Alexander Dana Moves financial editor Of that magazine
and of the New York Evening Post. While there have
been immense increases paper money in the countries
at and the deprecated value of this currency is i'm
Dictated by the rates OF exchange he finds that there has
been no paper initiation in the United States
At the beginning Of the war; $380000000 of emergency
currency issued under law passed shortly after the
panic of 1907 but this had all been retired and cancelled
by the end of june 1915 Under the banking SYSTEM
put into operation four months after the broke out
machinery provided which apparently would have
permitted expansion OF paper currency such would
cut important figure compared with Europe
Has the federal reserve currency them been governing
Influence In our unexpected chapter OF prosperity during
the twelve months past has it not2 Mr. Noyes asks
The answer he says quite the of what good
many people, those of practical experience to-
think The establishment of the banking system
important factor in promoting financial confidence but
its facilities for expansion by issue of currency of the elias
tic type based commercial security not used
During the process OF cancellation OF the emergency
rencY the federal banks beginning to issue
notes. and substantial amount of them is outstand
ing Yet total bank currency old and new which ag
gregated $1121 100000 Nov. l. 1914, stood only at
$98540O000 on Jan Of the present year. I'm other
words SAYS Mr. Noyes 1.-The countrys paper currency
has decreased not increased since the wartime revival
in American finance began
However, the point is occasionally made that the
amount of bank currency outstanding at the beginning
of this year $25 100000 greater than at the out
break OF the war III August 1914 and OF this increase
$214000000 consists of federal reserve notes But
when the $214000000 of federal reserve notes
yzed Mr. Noyes points out it appears that only $16600
600 of them of the elastic currency type secured by
commercial paper while $197000000 secured dollar
for dollar by gold making them the same for all practical
purposes treasury gold certificates
Because of heavy mportatons of gold the banks had
actually of it IN their vaults at the end of 1915 than
they had need to basis of their loans to American
finance and industry Therefore they chose for
nenee to put part Of in circulation in the form Of notes.
The importatons Of gold during 1915 $451000OO0
nearly $3o000000 beyond any previous year, and the
gold mines of the country produced $9898 900 The
total supply Of money in the United States increased
$429000000 during 1915 but the increase of gold alone
much greater So whatever other questions may
main to the nature of the counrys prosperity and
probable future Mr. Moves appears to have made pretty
clear that If as he says living under currency in
flation, it must be initiation in the form of gold.