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 <^
 
 REPORT 
 
 THE MONETARY COMMISSION 
 
 TO 
 
 THE EXECUTIVE COMMITTEE 
 
 THE INDIANAPOLIS MONETARY CONVENTION 
 
 1897.
 
 THE 
 
 MONETARY COMMISSION 
 
 INDIANAPOLIS CONVENTION. 
 
 GEOKGE F. EDMUNDS, Vermont, 
 
 Chairman. 
 
 GEOKGE E. LEIGHTON, Missouei, 
 
 Vice- Chairman. 
 
 T. G. BUSH, Alabama. 
 
 W. B. DEAN, Minnesota. 
 
 CHARLES S. FAIRCHILD, New York. 
 
 STUYVESANT FISH, New York. 
 
 J. W. FRIES, North Carolina. 
 
 LOUIS A. GARNETT, California. 
 
 J. LAURENCE LAUGHLIN, Illinois. 
 
 C. STUART PATTERSON, Pennsylvania. 
 
 ROBERT S. TAYLOR, Indiana.
 
 
 To THE Executive Committee of the 
 
 Indianapolis Monetary Convention. 
 
 The Commission appointed by you under the resolutions 
 adopted by the Indianapolis Monetary Convention on 15th Jan- 
 uary, 1897, with a request "to make a thorough investigation 
 of the monetary affairs and needs of the country in all relations 
 and aspects, and to make proper suggestions as to the evils found 
 to exist and the remedies therefor," respectfully rej^orts that the 
 members thereof met at Washington on the 22d day of Septem- 
 ber, 1897, and organized by the election of George F. Edmunds, 
 as Chairman, and George E. Leighton, as Vice-Chairman. 
 
 The resolutions adopted by the Indianapolis Monetary Con- 
 vention declare " that it has become absolutely necessary that a 
 consistent, straightforward and deliberately-planned monetary 
 system shall be inaugurated, the fundamental basis of which 
 should be : first, that the present gold standard should be 
 maintained ; second, that steps should be taken to insure the 
 ultimate retirement of all classes of United States notes by a 
 gradual and steady process, and so as to avoid injurious contrac- 
 tion of the currency or disturbance of the business interests of 
 the country, and that until such retirements provision should be 
 made for a separation of the revenue and note-issue departments 
 of the Treasury ; third, that a banking system be provided which 
 should furnish credit facilities to every portion of the country 
 and a safe and elastic circulation, and especially with a view of 
 securing such a distribution of the loanable capital of the coun- 
 try as will tend to equalize the rates of interest in all parts 
 thereof." 
 . We have accepted those principles as the basis of our action, 
 not only because they are the instructions of the body of citizens 
 by whom we have been appointed, but also because they meet 
 the approval of our judgment. 
 
 403176
 
 We have also sought and received the counsel of many of our 
 fellow citizens in all parts of the country. Their communi- 
 cations, while differing in some respects, have, upon the more 
 important points, presented a concurrence of opinion which has 
 been an invaluable aid in the formation of our conclusions. 
 
 We submit, for the reasons hereinafter stated, a plan of 
 currency reform, in the hope that it will, if enacted into law, 
 accom])lish, so far as possible, these results : 
 
 1. To remove, at once and forever, all doubt as to what the 
 standard of value in the United States is, and is to be. 
 
 2. To establish the credit of the United States at the highest 
 point among the nations of the world. 
 
 3. To eliminate from our currency system those features which 
 reason and experience show to be elements of weakness and 
 danger. 
 
 4. To provide a paper currency convertible into gold and equal 
 to it in value at all times and places, in which, with a volume 
 adequate to the general and usual needs of business, there shall 
 be combined a quality of growth and elasticity, through which it 
 will adjust itself automatically and promptly to all variations of 
 demand, whether sudden or gradual ; and which shall distribute 
 itself throughout the country as the wants of different sections 
 may require. 
 
 5. To so utilize the existing silver dollars as to maintain 
 their parity with gold without imposing undue burdens on the 
 Treasury. 
 
 6. To avoid any injurious contraction of the currency. 
 
 7. To avoid the issue of interest- bearing bonds, except in case 
 of unlooked-for emergency; but to confer the power to issue 
 bonds when necessary for the preservation of the credit of the 
 government. 
 
 8. To accomplish these ends by a plan which would lead from 
 our present confused and uncertain situation by gradual and pro- 
 gressive steps, without shock or violent change, to a monetary 
 system which will be thoroughly safe and good, and capable of 
 growth to any extent that the country may require. 
 
 We cannot, within the limits of this preliminary report, go at
 
 length into the reasons which have led us to all the conclusions 
 here expressed. A statement of those which relate to the more 
 important points must suffice. Later a fuller and final report 
 will be presented. 
 
 THE FACTS AS TO THE CURRENCY. 
 
 The people of the United States have ten different forms of 
 currency: gold coins, silver dollars, subsidiary silver coins, minor 
 coins, gold certificates, silver certificates, United States notes, 
 currency certificates, Treasury notes of 1890, and national bank 
 notes. The respective qualities of each, the amounts outstand- 
 ing, the amounts in the Treasury, the amounts in circulation, and 
 the respective denominations of the paper currency, were on 
 1st November, 1897, as follows: 
 
 1. Gold Coins of the denominations of $20, $10, $5, and 
 $2.50, weighing 25.8 grains to the dollar and .900 fine. They 
 are a " legal tender in all payments at their nominal value when 
 not below the standard weight and limit of tolerance provided 
 by law for the single piece, and, when reduced in weight below 
 such standard and tolerance, a legal tender at valuation in pro- 
 portion to their actual weight"; receivable for all public dues, 
 and exchangeable for gold certificates. Gold bullion is admitted 
 to free coinage. The Treasury estimates that the stock of gold 
 in the country is $729,661,110, of which $153,573,148 in addi- 
 tion to $36,814,109 held against outstanding gold certificates are 
 held by the Treasury, and $195,895,107 are held by the national 
 banks. 
 
 2. Standaed Silver Dollars, each containing 412.5 grains 
 of standard silver .900 fine, coined for government account, a 
 " legal tender at their nominal value for all debts and dues, 
 public and private, except where otherwise expressly stipulated 
 in the contract " ; receivable for all governmental dues, and ex- 
 changeable for silver certificates. 
 
 From 1793 to 1873, the Mint coined silver dollars to the 
 amount of $8,031,238. From 1874 to 1878, none were .coined. 
 The act of 28th February, 1878, required not less than two
 
 millions nor more than'four millions dollars worth of bullion to 
 be purchased monthly and coined into standard silver dollars. 
 
 The act of 7th August, 1882, directs the Secretary of the Treas- 
 ury " to transport, free of charge, silver coins when requested to 
 do so, provided that an equal amount in coin or currency shall 
 have been deposited in the Treasury by the applicant." 
 
 The act passed on 19th February, 1887, which became a 
 law, without Presideht Hayes' approval, on 3d March, 1887, 
 directed that "trade dollars" received at the Treasury should be 
 coined into standard dollars. The act of 14th July, 1890, re- 
 quired four million five hundred thousand ounces of fine silver 
 bullion to be purchased monthly and Treasury notes to be issued 
 in payment therefor. The act of 1st November, 1893, repealed 
 the purchasing clause of the act of 14th July, 1890. 
 
 Under the act of 28th February, 1878, the government 
 purchased 291,272,018 ounces of silver at a cost of $308,279,260. 
 Under the act of 14th July, 1890, the government purchased 
 168,674,682 ounces at an average price per fine ounce of $0.9244, 
 costing $155,931,002. The government coined to the 1st of 
 November, 1897, $452,713,792, of which $392,715,014 are in 
 the Treasury, and $60,196,778 are in circulation. The free 
 transportation of the silver dollar has cost $1,064,106. The 
 government now holds 115,361,079.54 ounces of silver bullion, 
 which cost $104,853,851.55, and which, at the price of silver on 
 3d November, 1897, are worth $65,900,016.67. As against the 
 392,517,014 silver dollars now in the Treasury there are 
 outstanding silver certificates to the amount of $372,838,919, 
 leaving $19,678,095 in the Treasury uncovered by certificates. 
 
 As the silver bullion now in the Treasury and purchased 
 under the act of 1890 cost $103,957,026.25, and there are out- 
 standing Treasury notes of 1890 to the amount of $109,313,280, 
 silver dollars to the amount of $5,356,254 must be held as 
 against these Treasury notes of 1890, and this amount deducted 
 from the amount of silver dollars uncovered by silver certifi- 
 cates [$19,678,095] leaves as the amount of silver dollars un- 
 covenid by either silver certificates or Treasury notes of 1890, 
 and subject to disposal by the Treasury, $14,321,841. The
 
 act of 14th July, 1890, declared it to be "the established policy 
 of the United States to maintain the two metals on a parity with 
 each other upon the present legal ratio, or such ratio as may be 
 provided by law." The act of 1st November, 1893, declared 
 it "to be the policy of the United States to continue the use of 
 both gold and silver as standard money and to coin both gold 
 and silver into money of equal intrinsic and exchangeable value, 
 such equality to be secured through international agreement, or 
 by such safeguards of legislation as will insure the maintenance 
 of the parity in value of the coins of the two metals, and the 
 equal power of every dollar at all times in the markets and in the 
 payment of debts." 
 
 3. Subsidiary Silver, coined for government account in 
 denominations of 50, 25, and 10 cents, .900 fine, containing 
 385.8 grains to the dollar ; " a legal tender in all sums not exceeding 
 $10 in full payment of all dues, public and private" ; receivable 
 for governmental dues to $10; and exchangeable for lawful 
 money at the office of the Treasurer or any Assistant Treasurer 
 of the United States in sums of $20 or any multiple thereof. The 
 general stock of subsidiary silver amounts to $75,414,007, of 
 which $11,981,078 are in the Treasury, and $63,432,929 are in 
 circulation. 
 
 4. Minor Coins, coined on government account in denom- 
 inations of 5 cents and 1 cent ; a " legal tender at their nominal 
 value for any amount not exceeding 25 cents in any one pay- 
 ment " ; receivable to the amount of 25 cents for all govern- 
 mental dues ; and redeemable in lawful money at the office of the 
 Treasurer and the several Assistant Treasurers and depositories 
 of the United States when presented in sums of not less than $20. 
 
 5. Gold Certificates, issued under the acts of March 3, 
 1863, and June 12, 1882, for gold coin deposited in the Treas- 
 ury, in denominations of $10,000, $5,000, $1,000, $500, $100, 
 $50, and $20 ; not a legal tender ; " receivable for customs, taxes 
 and all public dues," and redeemable in gold at the Treasury or 
 any sub-treasury. 
 
 Certificates to the amount of $38,348,169 are outstanding, of
 
 which $1,534,060 are in the Treasury, and $36,814,109 are iu 
 circulation. 
 
 6. Silver Certificates, issued against standard silver dollars 
 deposited, in denominations of $1,000, $500, $100, $50, $20, $5, 
 $2 and $1 ; not a legal tender; receivable for customs, taxes, and all 
 public dues; exchangeable for standard silver dollars or smaller 
 coin ; and redeemable in standard silver dollars. There are out- 
 standing silver certificates to the amount of $384,170,504, of 
 which $11,331,585 are iu the Treasury and $372,838,919 are in 
 circulation. 
 
 7. Treasury Notes, issued under the act of July 14, 1890, 
 in payment for silver bullion ; a '' legal tender for all debts pub- 
 lic and private, except where otherwise expressly stipulated in 
 the contract" ; receivable for customs, taxes, and all public dues 
 and "redeemable on demand in coin" at the office of the Treasurer 
 or any Assistant Treasurer of the United States. There have 
 been issued $155,931,002, of which $46,617,722 have been re- 
 deemed in silver and cancelled ; $7,553,325 are in the Treasury, 
 and $101,759,955 are in circulation. 
 
 8. United States Notes, issued under the acts of Febru- 
 ary 25, 1862, July 2, 1862, and March 3, 1863, in denomina- 
 tions of $1, $2, $5, $10, $20, $50, $100, $500, $1,000, $5,000, and 
 $10,000; a "legal tender in payment of all debts, public and 
 private, within the United States, except for duties on imports 
 and interest on the public debt "; redeemed when presented since 
 1st January, 1879, in gold coin at the sub-treasuries in New 
 York and San Francisco, and reissued. The highest amount 
 of these notes outstanding at any time was on January 3, 1864, 
 when it reached $449,338,902. By the Public Credit act of 
 March 18, 1869, "The United States solemnly pledges its faith 
 to make provision at the earliest practicable period for the re- 
 demption of the United States notes in coin." The resumption 
 act of January 14, 1875, authorized the use of surplus revenues 
 and the issue of bonds for their redemption. The act of May 
 31, 1878, prohibited their further cancellation or retirement, and 
 directed the reissue of such as might be received or redeemed 
 by the Treasury. The amount outstanding has therefore since
 
 9 
 
 remained at $346,681,016, of which $87,684,018 are in the 
 Treasury, $48,625,000 are held against outstanding currency 
 certificates, and $258,996,998 are in circulation. 
 
 The aggregate amount outstanding of United States notes, 
 Treasury notes of 1890, and silver dollars is $908,708,088, of 
 which $61,274,184 are now in the Treasury, but liable to re- 
 issue, and $847,433,904 are in circulation. 
 
 As against this large amount of that which is a credit cur- 
 rency, aside from the value of the silver bullion and dollars in 
 the Treasury, the Treasury now holds $153,573,147 in gold coin 
 and bullion, after deducting the amount of the gold certificates. 
 
 9. Currency Certificates, issued under the act of June 8, 
 1872, in denominations of $10,000, upon deposit of United 
 States notes, payable to order, and not a legal tender, nor re- 
 ceivable in exchange for anything other than legal-tender notes. 
 $48,625,000 are outstanding, of which $340,000 are in the Treas- 
 ury, and $48,285,000 are in circulation. 
 
 10. National Bank Notes, issued by the national banks of 
 the United States in accordance with the act of June 3, 1864, to 
 the extent of 90 per cent, of the par of government bonds de- 
 jjosited by such banks with the Treasury ; not a legal tender ; 
 receivable at par " in all parts of the United States in payment 
 of taxes, excises, public lands and all other dues to the United 
 States except duties on imports ; and also for all salaries and 
 other debts and demands owing by the United States to in- 
 dividuals, corporations within the United States, except interest 
 on the public debt and in redemption of the national currency"; 
 receivable also by every national banking association for any debt 
 or liability to it, and redeemable at the Treasury. 
 
 The national bank notes outstanding are $230,132,275, of 
 which $4,998,012 are in the Treasury, and $225,134,263 are in 
 circulation. 
 
 The national banks were organized under the act of 25th Feb- 
 ruary, 1863, and its supplements. They were authorized to 
 issue a circulation based upon bonds, in order that there might 
 thereby be created a demand for the bonds of the United States. 
 
 On 2nd July, 1866, there were 1634 banks; on 26th Decem- 
 2
 
 10 
 
 ber, 1873, 1976; on 2nd October, 1890, 3540; on 9th Decem- 
 ber, 1892, 3773, and on 5th October, 1897, 3610. The maxi- 
 mum capital was $689,698,017 on 9th December, 1892. The 
 maximum circulation was on 26th December, 1873, $341,320,256, 
 and the minimum circulation on 2nd October, 1890, $122,928,- 
 084. Up to 1892, the tendency was towards increase of capital. 
 Since then the tendency has been in the direction of a decreasing 
 capitalization. From 1873 to 1890, there was a marked decrease 
 in circulation, with occasional fluctuations ; but since 1890 there 
 has been some increase of circulation, with no prospect of any 
 material increase under the existing system. 
 
 On 5th October, 1897, there were 3610 banks, with an out- 
 standing note issue of $230,132,275 [of which $4,998,012 were 
 held in the Treasury], with a capital stock of $631,488,095, 
 with an aggregate capital, surplus and undivided profits of 
 $966,240,095, with deposits of $1,869,491,310, and with invest- 
 ments in discounted paper [rediscounts deducted] of $2,043,803,- 
 392, in United States bonds of $277,235,920, in other stocks and 
 securities of $208,831,563, and in lawful money of $388,882,631, 
 of which $195,895,107 are in gold coin. The five per cent, re- 
 demption fund held by the Treasury now amounts to $10,021,- 
 689. From the organization of the system, in 1863, to 30th 
 June, 1897, the national banks have paid in taxes to the United 
 States $150,207,339.44; and the United States has also made a 
 profit of $2,826,466 from that amount paid by the banks to 
 redeem circulation which has not been presented. 
 
 THE DEFECTS OF THE SYSTEM. 
 
 The defects of the existing system are : 
 
 First. The va.st amount of government credit currency with- 
 out a certain and adequate provision for its redemption, and the 
 consequent diminution of public confidence in the continued 
 maintenance of the gold standard. 
 
 Second. The continuance in circulation of government prom- 
 ises to pay, which, when made a legal tender, constitute a forced
 
 11 
 
 loan, which are secured only by such resources as the exercise of 
 the taxing power can render available, and which are payable 
 only at the will of the debtor. 
 
 Third. The failure to provide the means for a gradual and 
 sufficient increase of the volume of the currency to meet the 
 needs of an increasing population and an enlarging commerce. 
 
 Fourth. The want of a natural outflow and inflow of the cur- 
 rency when and as, and only when and as, the agricultural, man- 
 ufacturing and commercial interests of the country require, at a 
 given time, either a greater or a less quantity of currency in cir- 
 culation. 
 
 Fifth. The failure to secure such a distribution of the loan- 
 able capital of the country as will tend to equalize the rates 
 of interest in all its parts. 
 
 Sixth. The confusion of the fiscal functions of the Treasury as 
 the receiver of the public revenue and the disburser thereof 
 under congressional appropriations with its issue and redemption 
 functions in exchanging and redeeming the currency. 
 
 Seventh. The circulation of different forms of government 
 currency having different qualities as to legal tender and receiv- 
 ability for government dues. 
 
 Eighth. The circulation of silver dollars of full legal-tender 
 quality whose nominal value as coins so largely exceeds their 
 value as bullion, that they oflPer tempting inducements to success- 
 ful counterfeiting. 
 
 Ninth. The circulation of a national bank currency based up- 
 on government bonds, presupposing a continuing issue of those 
 bonds, diminishing the loanable funds of the banks, and, by 
 reason of their bond basis, incapable of increasing in volume 
 with a temporary demand for more currency, and of decreasing 
 with the cessation of that demand. 
 
 THE STANDARD. 
 
 The most serious evil affecting our present monetary system 
 is the threatened degradation of its standard. The story is 
 familiar, but it will be useful to recall it briefly in this connec-
 
 12 
 
 tion. The close of the civil war found the people of the United 
 States in the possession of a depreciated legal-tender paper cur- 
 rency, with its inevitable accompaniment of inflated prices. 
 To return from such a condition to one of sound money and 
 normal prices is always a painful process, and when the govern- 
 ment began that process, under Secretary McCulloch, in 1866, 
 there was an outcry against it, and it was suspended. From a 
 remonstrance against the payment of the demand obligations of 
 the Treasury at that time the movement grew to an opposition 
 to the payment of them at any time, and finally to a demand for 
 the issue of more of them, and that, not in the form of promises 
 to pay, but of fiat paper dollars. The number of persons who 
 •were carried away by these delusions was very great. The 
 political struggle which ensued was prolonged and intense, and 
 the victory which the defenders of sound money achieved in 
 the passage of the resumption law of 1875 was a close one. 
 
 That victory ought to have settled all disturbing questions in 
 relation to the monetary policy of the United States, and would 
 have done so, so far as can now be seen, if it had not been for 
 the fall in the value of silver, which began while the contest was 
 going on. From 1792 to 1873 the legal standard of value in 
 the United States was the double one of gold and silver at 
 prescribed ratios. By the Coinage act of 1873 the silver dollar, 
 which was then worth more than the gold dollar, and which no 
 one could foresee would ever be worth less, and of which very 
 few were in existence, was dropped from the coinage, leaving 
 gold as the only full legal-tender coined money. 
 
 Soon after the passage of this law, the value of silver began 
 to decline. The friends of cheap money saw their opportunity 
 and lost no time in improving it. The clamor for the restoration 
 of the sixteen-to-one silver dollar to free coinage began. This 
 was a far more plausible, and therefore more dangerous, move- 
 ment than the fiat paper money scheme. Silver had a real value. 
 At the beginning of the agitation that value was not greatly 
 less than sixteen of silver to one of gold in weight. It was 
 claimed that its admission to free coinage would increase its value 
 to the full measure of that ratio. Patriotic sentiment was in-
 
 u 
 
 voked in its favor. It was said to be the money of the fathers 
 and the Constitution. To this was added the appeal to class 
 prejudice. Gold was said to be the money of the rich ; silver 
 of the poor. Gold was said to be increasing in value, and so 
 depressing all prices, and increasing the burden of all debts to 
 the unjust advantage of all creditors. The advocates of free 
 silver professed to be the champions of the farmer, the mechanic 
 and the laborer against the aggressions of the capitalist, the bank- 
 er and the corporation. Such appeals come to men in debt, out 
 of employment and downcast in spirits with great seductive force. 
 Evidence enough of that fact is on record in the election returns 
 of 1896. 
 
 The pertinence of this retrospect is the proof which it affords 
 of the fact that so large a portion of the people of the United 
 States have no conception of the nature or importance of a money 
 standard. In such a country as ours the legal monetary stand- 
 ard is whatever a majority, or a plurality, it may be, of the voters 
 say it shall be. It is therefore of the utmost importance that 
 the standard shall not only be distinctly declared in the law but 
 clearly fixed in the minds of the people as the first and indis- 
 pensable element of a sound monetary system. All history is 
 evidence that the people who suffer most from a degradation of 
 the standard are not the rich and poM'erful, but the poor and 
 helpless. Compared with this danger all existing evils of mere 
 kind or quantity of our present money are relatively only incon- 
 veniences. The first need of the situation is to fortify the standard. 
 
 There are some considerations as to the standard which ought 
 to commend themselves to the judgment of the country. There 
 must be some standard of value. The standard must have a 
 market value as a commodity independently of any govern- 
 mental fiat and of all legal-tender laws ; it must be durable ; it 
 must be homogeneous; it must have a maximum of value pro- 
 portioned to its bulk ; it must have, as a commodity, as stable 
 a market value as possible, and in order to secure the stability 
 of that market value, the relation between its supply and 
 demand must be as constant as possible. Gold alone fulfills 
 these conditions. The civilized world has, therefore, determined
 
 14 
 
 that the standard shall be gold. No government, however 
 powerful, can in fact reverse that determination, or, without in- 
 jury to the interests of all its people, attempt to establish any 
 other standard of value. 
 
 There is a clear distinction between the functions of money as 
 a standard of value and as a medium of exchange. While that 
 money which is the standard of value will always serve also as 
 a medium of exchange, yet other forms of currency of inferior 
 market value can in no sense be a satisfactory standard, and can 
 be a suitable medium of exchange only when their convertibility 
 at par into the standard money is assured. Any possible cur- 
 rency is, therefore, of one of two kinds. The first kind is that 
 which has been adopted as the standard of value. The second 
 kind is that which is, without reference to its market value as a 
 commodity, receivable at par, because convertible at par into the 
 standard money. To-day gold is the only currency of the first 
 kind. United States notes, national bank notes, silver dollars, 
 subsidiary silver and minor coins, are currency of the second 
 kind. The face value of the silver dollars, the subsidiary 
 silver and the minor coins more or less largely exceeds their 
 bullion value, and they diiFer from the note issues only in the 
 fact that the material of which they are made has some mar- 
 ket value as bullion. Under modern conditions of business, 
 purchases, sales, loans, the discharge of debts, and even payments 
 of wages are effected in great part by drafts, checks, or transfers 
 of credits. While the work which the money, which is the 
 standard, actually performs in the exchanges of the country is 
 relatively small, yet every one of those exchanges is based on 
 that standard. If all the money of the country is convertible 
 at par into gold, there may then be whatever, and as much, of 
 the representative forms of currency as the convenience of the 
 people may require. 
 
 On the other hand, if the standard of value be lowered, there 
 necessarily follows a loss of public confidence, a lessened use of 
 credit and of credit forms of currency, and a consequent diminu- 
 tion of the effectiveness of the currency. 
 
 The gold standard, therefore, does not mean gold monometal-
 
 15 
 
 isru, and it necessarily results, not in contraction, but in the great- 
 est possible expansion of the currency within the bounds of safety. 
 
 As gold derives no value from any legal-tender law, nor any 
 value from coinage at the mint beyond " the ascertainment that 
 its weight and purity are what the law requires," and the certi- 
 fying by the government's stamp that it possesses those qualities, 
 it is, and it ought to continue to be, admitted to free coinage. 
 On the other hand, silver, nickel, and copper should be coined 
 only upon government account, into coins of limited legal- 
 tender quality ; should be issued from the mint only in ex- 
 change for gold at par; and should be re-exchangeable at 
 the Treasury in convenient multiples for gold coin at par. Under 
 this system there could be no arbitrary contraction or expansion 
 of the coin currency, nor any tampering with the standard of 
 value, and the people would then carry to their credit in the led- 
 ger of the Treasury Department the profits upon the coinage of 
 silver, nickel and copper. 
 
 Many of our fellow citizens have hoped in all sincerity that 
 the problem of the standard would be solved by international 
 bimetallism. An earnest effort has been made to realize that 
 hope, but it must now be abandoned. The only alternatives, 
 therefore, are the continued maintenance of the existing gold 
 standard, or the adoption of the silver standard. If the latter 
 alternative be taken, the obligations of the United States, of the 
 states, of all municipalities, of all private corjjorations, and of all 
 individuals, the receipts of income from every source, the proceeds 
 of policies of insurance, the deposits in banks and saving funds, 
 and the wages of labor, will then be payable in a debased and 
 depreciated currency; and individual and corporate bankruptcy, 
 and, worst of all, national dishonor, will follow. If the former 
 alternative be taken, and the necessary means be adopted to 
 secure the stability of the gold standard, the credit of the country 
 will be established ; the national debt can be refunded at lower 
 interest rates ; the surplus capital of the world will come here 
 to find profitable investment; and our country will enjoy the 
 prosperity that follows a currency system based upon a stable 
 standard of value.
 
 16 
 
 The means necessary to establish and preserve popular confi- 
 dence in the continued maintenance of the gold standard are : 
 
 1. An explicit legislative definition of the gold standard, and 
 a pledge that it will be maintained. 
 
 2. A requirement that all obligations, public and private, 
 unless otherwise stipulated in the contract, shall be payable in 
 conformity with that standard, 
 
 3. The adoption of a plan for the gradual retirement of the 
 outstanding note issues of the government. 
 
 As the gold deposited for certificates cannot be used by the 
 government, and as the issue of gold certificates is of no advant- 
 age to the government or to the people, there does not seem to 
 be any reason for their continued issue. 
 
 THE SILVER CUREENCY. 
 
 The silver certificates, being the expressed representatives, 
 dollar for dollar, of silver dollars deposited, ought to continue 
 to be exchangeable only for silver dollars. 
 
 The face value of the subsidiary silver coins more largely 
 exceeds their bullion value than is wise even in the case of token 
 coins. They might be called in and recoined ; but the expense 
 and inconvenience of that operation are such as to render its 
 postponement advisable. 
 
 As the owners of a large stock of silver bullion, silver dollars, 
 and subsidiary silver, the people of the United States are directly 
 interested in the continued use of silver as currency, provided 
 that the silver can continue to be maintained at par with gold. 
 
 The silver dollar is by reason of its size and weight an incon- 
 venient coin to carry about the person, or to use in change. Most 
 people, therefore, do not desire to use silver dollars as currency, 
 if they can have, as representatives of the coin dollars, notes in 
 denominations of $1, $2 and $5. Even with the inducement 
 of free transportation from the Treasury, it has never been 
 possible to force into circulation at any one time an amount of 
 silver dollars exceeding $67,000,000, and there are now out- 
 standing only $60,196,778, of which at least $10,000,000 are 
 held by the national and state banks. On the other hand, there
 
 17 
 
 arc in circulation $354,35/3,031 of notes of the denominations 
 of $1, $2 and $5, of which $154,965,473 are silver certificates 
 and $199,389,558 are United States notes, Treasury notes of 
 1890, and national bank notes. Of the total amount of silver 
 certificates outstanding, $154,965,473 are, as before stated, in 
 denominations of $1, $2 and $5, and $229,205,081 are in larger 
 denominations. If, therefore, the United States notes. Treasury- 
 notes of 1890, and national bank notes of the denominations of 
 $1, $2 and $5 be retired, their places can be taken by a further 
 issue of silver certificates to the amount of $199,389,558 in de- 
 nominations of $1, $2 and $5, and an equivalent amount of sil- 
 ver certificates of larger denominations be retired, leaving of the 
 $229,205,031 now outstanding in larger denominations $29,- 
 815,473 to be redeemed in silver dollars when presented for re- 
 demption. If, also, the silver dollars now in circulation and 
 amounting to $60,196,778 should be deposited in the Treasury, 
 the balance of $29,815,473 of silver certificates in denominations 
 exceeding $5 could be replaced by an issue of silver certificates 
 in denominations of $1, $2 and $5, and there might, without 
 any expansion of the present outstanding circulation, be a 
 further issue of silver certificates in denominations of $1, $2 and 
 $5, amounting to $30,381,305, based upon the silver dollars so 
 deposited. The place of the retired United States notes, Treas- 
 ury notes of 1890 and national bank notes of small denomina- 
 tions would be taken by an issue of notes of large denomina- 
 tions of the same kinds, so long as the United States notes and 
 Treasury notes of 1890 are unredeemed. 
 
 The effect of this plan will be that the currency of the country 
 of all denominations below $10 will be silver coin, and silver 
 certificates based upon silver dollars held in the Treasury, sup- 
 plemented by gold coins of the denominations of $2.50 and $5. 
 
 The government has received the full face value for all the 
 silver dollars which have been put in circulation either in kind 
 or by means of representative certificates. The silver coins 
 differ from the note issues only in the fact that the material 
 of which they are made has some market value as bullion. They 
 are, nevertheless, as justly obligations of the government and as 
 3
 
 18 
 
 properly excliangeable at par for gold as the United States notes. 
 A gold reserve must, therefore, be provided for such ex- 
 chano^e : but as the retirement of the United States notes, 
 Treasury notes of 1890, and national bank notes of denomina- 
 tions less than $10 will leave the silver dollar, the silver certifi- 
 cates in denominations of $1, $2 and $5, the subsidiary silver, the 
 minor coins, and the gold coins of the denominations of $2.50 
 and $5 as the only currency for small transactions, it is probable 
 that the trade of the country will keep the silver and its repre- 
 sentatives in circulation, and prevent the coming in of any 
 considerable quantity of that currency. It is also to be observed 
 that when popular confidence shall have been restored as to the 
 maintenance of the gold standard and the security of our cur- 
 rency system, there will be no general desire to exchange silver 
 dollars or silver certificates for gold, for the silver currency will 
 then be, beyond question, as good as gold. 
 
 The Treasury has an asset in its silver bullion not held 
 against outstanding certificates, which may be utilized by sell- 
 ing it from time to time, as the German government has done 
 with its surplus silver. Of course, such sales should be carefully 
 made in such quantities as not to unduly depress the niarket for 
 silver bullion. It is, therefore, suggested that authority be given 
 to the Secretary of the Treasury to make such sales in his dis- 
 cretion. 
 
 It may be well to consider whether the sum of $452,713,792 
 of silver dollar pieces, with seigniorage of over 50 per cent., 
 which remain as the evidence of a serious danger to the existing 
 standard, is not too large to be permanently retained in our cur- 
 rency ; and if this should prove to be the case, whether a suf- 
 ficient number of these silver dollars should not be ultimately, 
 although not immediately, withdrawn and sold as bullion. 
 
 It is an essential part of a sound system of finance, that the 
 government should raise by taxation a revenue adequate to its 
 necessary expenditures. But as the revenues are sometimes 
 deficient, it is advisable that power be given to the Treasury 
 to sell short-term bonds to supply such deficiency. Under exist- 
 ing legislation only long-term bonds can be sold ; and if the
 
 19 
 
 government comes into possession of a surplus, such bonds can- 
 not be retired save by purchasing them at a premium. On the 
 other hand, short-term bonds can, under a securely-established 
 currency system, be negotiated at low interest rates ; can be, if 
 necessary, extended at maturity, and can be retired by purchase 
 in advance of maturity without a heavy loss in payment of pre- 
 mium. For similar reasons it is suggested that long-term bonds 
 should contain a reserved option to the government of retire- 
 ment. 
 
 It is to the interest of the government and of the people that 
 all the people should have an equal opportunity of investing their 
 savings in the obligations of the government when issued. As 
 the mass of the people have not the necessary facilities for the safe 
 custody of bonds, it is suggested that a system be adopted of 
 inscription on the books of the Treasury, instead of bonds, simi- 
 lar to that which has long prevailed in the case of the English 
 consols and the French rentes. Under this system it will be 
 possible to place government loans by a real popular subscrip- 
 tion. 
 
 THE DEMAND OBLIGATIONS OF THE 
 GOVERNMENT. 
 
 It is a part of the plan submitted that the demand obligations 
 of the government shall be put in course of retirement by a pro- 
 cess which shall be gradual in its operation as respects the 
 current money and business of the country, but which will 
 lead ultimately to the substitution of other forms of money in 
 their place. The demand obligations, properly so called, consist 
 of the United States notes or " greenbacks," amounting to 
 $346,681,016, and the Treasury notes of 1890, amounting 
 to $109,313,280. While the former are not in terms payable 
 in gold, and the latter are by law payable in gold, or silver, at 
 the discretion of the Secretary of the Treasury, it is obviously 
 necessary, in order to keep good the pledge of the government 
 to maintain the parity of the two metals as coined, to pay all 
 its notes in gold when gold is demanded by the holder. So that,
 
 20 
 
 in a practical sense, the note obligations of the government 
 payable in gold on demand must be reckoned at the sum of the 
 greenbacks and the coin notes, that is, $455,994,296. 
 
 The measures recommended in relation to these obligation^ 
 may be briefly summarized as follows : 
 
 1. The separation of the note issuing and redeeming opera- 
 tions of the Treasury from its ordinary fiscal operations by the 
 creation of a Division of Issue and Redemption, and the transfer 
 to it of the gold reserve and other resources held against ob- 
 ligations ; the government notes to be paid in gold coin on 
 demand through that division. 
 
 2. The reserve to be maintained from revenue when adequate, 
 and by sale of bonds when necessary ; the proceeds of such sales 
 to be used for that specific purpose, and no other. 
 
 3. Notes paid to be canceled as paid, up to the amount of 
 $50,000,000 ; the cancelation thereafter for five years not to ex- 
 ceed the increase of bank notes. After five years the notes 
 paid to be retired at a rate not exceeding 20 per cent, per annum 
 of the amount then outstanding; at the end of ten years the legal- 
 tender quality of the notes then outstanding to cease. 
 
 4. No note, once paid, to be reissued otherwise than in exchange 
 for gold, except that, in case of an excessive accumulation of re- 
 deemed and uncanceled notes in the Division of Issue and Re- 
 demj)tion, the Secretary of the Treasury may use them in the 
 purchase of United States bonds for the benefit of the Division 
 of Issue and Redemption ; such bonds to be held in that division 
 and sold for the benefit of the redemption fund when directed by 
 the Secretary of the Treasury. 
 
 At the present time the government has no fund for the pay- 
 ment of its demand obligations except the general balance in the 
 Treasury applicable alike to the payment of all dues. Our 
 revenues are more or less uncertain in amount ; our expenditures 
 are large and growing, and liable to vary with changes in the 
 spirit of the times and the disposition of Congress and the peo- 
 ple. It is, therefore, uncertain whether we shall have at any 
 })articu]ar time an adequate fund for the redemption of the de- 
 mand obligations without recourse to borrowing. Borrowing is
 
 21 
 
 an ineifectual resource, because, under the law as it stands, the 
 notes which have been paid must be returned to circuhition, and, 
 so, may be used over and over to draw out the borrowed gold. 
 The uncertainty of this situation is increased by the fact that the 
 issue of bonds rests with the executive department, and whether 
 it will be resorted to or not will depend upon the personal views 
 and discretion of the officials at the head of that department. 
 More serious still is the fact that it is in the power of the 
 executive department, as the law now stands, to decide absolute- 
 ly whether the government notes shall be paid in gold or in sil- 
 ver. An end ought to be put to this anomalous and hazardous 
 situation by making specific and adequate provision for the pay- 
 ment of the demand obligations, and directing in the law that 
 such payment shall be in gold at the demand of the holder. 
 
 It is regarded as certain that if this were done there would be 
 comparatively little presentation of notes at the Treasury for 
 redemption, in the absence of serious public alarm, and that 
 the best possible security against the recurrence of such alarm 
 would be attained. The provision authorizing the purchase of 
 bonds during the period mentioned is recommended, with the 
 belief that it would enable the Secretary of the Treasury to pre- 
 vent any injurious contraction. The bonds purchased with the 
 notes returned to circulation would furnish the means with 
 which to redeem them when presented again. 
 
 A proposal to retire the government notes may be received 
 at first with disfavor by some persons, but it must be 
 supposed that, upon due reflection, preferences which are 
 to a large extent merely sentimental will yield to argu- 
 ments resting on solid grounds of safety and advantage to the 
 government and the people. All good citizens must desire that 
 the credit of the government shall rest on a basis so secure that 
 no wind that can blow will ever shake it ; that the standard by 
 which all obligations and values are measured shall be the most 
 perfect expression of truth and honesty and unchangeableness 
 which is possible of attainment ; and that all the money in cir- 
 culation shall be up to that standard in its value, and shall, in 
 respect to its form and quantity and distribution, serve every
 
 22 
 
 requisite of commercial and personal use as equally and com- 
 pletely as is in the nature of things possible. If it is necessary 
 in order to accomplish these results to relieve the government 
 from the function of supplying money in the form of its own 
 notes, it is only necessary to make that fact clear to the people 
 to secure their approval of the measure. Not to believe this 
 would be to despair of the capacity of the people for wise and 
 successful government. 
 
 A government paper currency educates the people who use it 
 in false notions concerning money. Such a currency, circulating 
 year after year without redemption, appears to those who do not 
 look at it critically to derive its value from the " government 
 stamp." It ceases to be regarded as a promise to pay money, and 
 is thought to possess the virtue of money in and of itself. It is 
 so easy to create it that in any emergency the call for more is 
 perfectly natural. There can be no doubt that the aberration 
 of judgment on the money question by so many of our people in 
 recent years has been largely due to the miseducating influences 
 of the greenback currency. The young and middle-aged men 
 of to-day have grown up in a vitiated financial atmosphere. 
 
 Such a currency also lacks the important quality of automatic 
 adaptability to the varying demands of business. A paper dol- 
 lar is a useful form of currency so long as there is legitimate 
 use for it. When there is no legitimate use for it, it becomes 
 a superfluous and injurious thing — a temptation to speculation, 
 extravagance and unwise business ventures. A paper currency 
 created by legislation is fixed in volume by the law of its creation, 
 and can neither contract nor expand in response to those varying 
 conditions which are bound to occur in the affairs of men. 
 
 More important than this is the fact that such a currency puts 
 upon the government the burden of maintaining the credit of 
 all the financial institutions of the country. The government 
 notes are as good as gold only so long as the government re- 
 deems them in gold. If it should fail in that, all bank notes, 
 bank deposits, insurance losses, and debts and dues of every 
 kind not si)ecifically payable in gold would be payable in 
 the depreciated paper or in silver. Every passing incident, there-
 
 23 
 
 fore, which raises an apprehension, however slight, of a possi- 
 bility, however remote, that the government may be unable or 
 unwilling to maintain gold payment of its obligations sends a 
 nervous tremor through the whole business system of the coun- 
 try. A sovereign government cannot be compelled to pay its 
 debts ; it pays them only when it wills so to do ; and there is 
 in the public mind more or less doubt as to the continuance 
 of the will of our government to pay its demand obligations 
 in money satisfactory to the holders thereof. In these days 
 of large invested capital and small profits such a condition is a 
 serious drag on business enterprise. 
 
 The existence of a large outstanding debt payable on demand 
 is also a source of weakness to the government in its interna- 
 tional relations. Modern warfare is so expensive that it is al- 
 most as much a matter of money as of men. A nation suddenly 
 confronted by the alternative of war or dishonor would be greatly 
 handicapped by a large demand debt which it must provide for 
 at once. Great additional force is given to this consideration by 
 the fact that it would be scarcely possible for this nation to en- 
 gage in war in its present situation — counting as part of the sit- 
 uation the imperfect development of clear conceptions on the 
 subject of money in the minds of the people — without a suspen- 
 sion of specie payments and a resort to further issues of govern- 
 ment notes. There is no occasion to criticise those patriotic men 
 who believed that the issue of greenbacks was necessary to save 
 the Union, But the world has advanced in financial knowledge 
 and skill since then. There is no doubt that if our government 
 were relieved of its existing demand obligations, and our currency 
 system put in working order upon a gold basis, it would be entirely 
 possible for us to go through a war without suspension of specie 
 payment, or any derangement of our monetary system. If war 
 should come, the value to the country of the ability to thus 
 avoid the indirect losses following from depreciated currency, 
 inflated prices and financial demoralization would be so great 
 that the burden of paying off now our demand obligations would 
 be as nothing in comparison. 
 
 While the silver dollars are not, by the terms of the law, ex-
 
 24 
 
 changeable for gold coin, their current value is sustained by the 
 promise of the government to maintain their parity with gold. 
 So that we have a total volume of paper and silver in circulation 
 amounting to $908,728,087, all resting for its value on the 
 credit of the government, except in so far as the bullion in the 
 silver dollars has value. That credit is maintainable only as a 
 whole. The paper of the United States could not be dishonored 
 and its silver upheld. It is necessary, therefore, that the gov- 
 ernment shall keep a large fund in gold, and continue to do so 
 so long as the credit currency is outstanding. Such a fund 
 in the hands of the government is defenceless against attack. 
 In countries where the government has no demand debt out- 
 standing, and the gold reserve is held by banks, the nation's 
 stock of gold is capable of some degree of protection through the 
 rate of interest charged for loans. But our government has no 
 such resource. Its great gold reserve is an open mine free to all 
 who bring its notes. The exigencies of war or commerce are 
 liable to create sudden and great demands for gold. And as the 
 entire monetary system of the country hangs upon that one re- 
 serve, the situation is one of uncertainty and hazard against 
 which no insurance is possible, and which is bound to continue 
 while the government demand obligations are extant in large 
 volume. It would go far to relieve the perennial strain of this 
 situation and strengthen our financial position at home and 
 among nations to transfer this burden to the banks and other 
 moneyed institutions. 
 
 As against these serious disadvantages there is no advantage 
 which can possibly be claimed for paper money in the form of 
 government notes over any other form of paper money equally 
 good — that is, equally current in all parts of the country and 
 equally certain of redemption in specie on demand — except 
 the saving of interest on so much of the public debt as is 
 represented by the notes. Our national bank notes have 
 served the uses of the people as well as greenbacks. In all 
 ordinary business transactions no one cares which he receives or 
 pays out. The supposed economy of the greenbacks is more 
 apparent than real ; indeed, when we consider all the facts they
 
 25 
 
 are an extremely costly form of money. To keep them good 
 requires the maintenance of a large gold reserve in the Treasury, 
 which offsets the saving of interest to the extent of one fourth 
 or more. When conditions arise which threaten to deplete that 
 reserve and compel a resort to extraordinary measures to protect 
 it, no limitation of cost can be observed, and it is impossible to 
 know what sacrifice may become necessary. 
 
 In order to create the gold reserve required for the resump- 
 tion of specie payments in 1879, United States bonds to the 
 amount of $95,500,000 were sold, and most of which are still 
 outstanding in a refunded form. During the years 1894, 1895 
 and 1896 bonds to the amount of $262,315,400 were sold. 
 Throughout those years there was a constant drain of gold to 
 redeem United States notes. By the law of 1878 it was pro- 
 vided that United States notes " shall not be retired, canceled 
 or destroyed, but they shall be reissued and paid out again and 
 kept in circulation." There being a deficit in the ordinary rev- 
 enue, these notes continued to go out again and again in pay- 
 ment of ordinary expenses. Whether the deficit would have 
 required the sale of bonds if there had been no want of public 
 confidence in the payment of the notes, and they had not con- 
 tinued to be presented for redemption, is a point upon which 
 there may be a difference of opinion. Not to enter upon that 
 question closely, it is clear that with interest to pay on three 
 hundred and fifty-seven million dollars of indebtedness incurred 
 chiefly, if not wholly, in consequence of the existence of the 
 government notes, and one hundred millions of reserve lying 
 idle in the Treasury, the saving in interest by the United States 
 notes is a small gain compared with the unending burden of 
 providing for their redemption. 
 
 In considering the cost of these operations, it is necessary to 
 take into account, also, the expense of engraving, printing, book- 
 keeping, and other incidents. ' From all of which it appears 
 that instead of saving money to the people, the United States 
 notes have been and are now costing them a large sum annually. 
 This cost is liable to be increased by the further issue of bonds
 
 26 
 
 for the protection of these notes in emergencies, — not now pres- 
 ent, nor immediately threatening, but always possible. 
 
 Between 1st January, 1879, and 1st November, 1897, the 
 Treasury paid United States notes in gold to the amount of 
 $507,470,149, being $160,789,133 in excess of $346,681,016, the 
 entire amount outstanding at the resumption of specie payments ; 
 M^hich paid and repaid and yet undiminished amount still remains 
 outstanding to be paid again, and, unless some change be made 
 in the existing law, again and again. 
 
 Between 14th July, 1890, and 1st November, 1897, Treasury 
 notes of 1890, issued for the purchase of silver bullion, have been 
 redeemed in gold coin and reissued to the amount of $90,680,879. 
 
 Moreover, we are carrying a burden put upon us by the doubt 
 and uncertainty which the presence of this large demand debt 
 of the government in the form of current money produces, which 
 no man can estimate. Any one of a number of circumstances 
 might cause a suspension of gold payment of its notes by the 
 government. A war, a failure of revenue, a commercial revul- 
 sion, an election, a weak President, — any one of these unfavor- 
 able conditions, exciting alarm and then panic, might cause the 
 Treasury to be depleted of its gold and its notes to be dishonored. 
 The injury which all business suffers from this condition of the 
 currency is none the less real because it is not distinctly perceived. 
 The evil may go long unnoticed, like friction in machinery or 
 malaria in the air ; but it has its effect nevertheless. When it 
 comes to an acute manifestation of the evil, such as we have 
 experienced within the last five years, the loss occasioned is 
 beyond computation. Many concurring causes contributed to the 
 business depression which the people of the United States have 
 suffered within that period ; but it cannot be doubted that the 
 fact that the entire paper currency of the country consisted of or 
 rested upon notes of the government, and that there was an 
 uncertainty as to the redemption of those notes, was the chief 
 cause of that great disaster. All the government notes outstand- 
 ing, and all the interest they have saved since they were issued, 
 would pay only a small fraction of the loss which the American 
 people have suffered within that time.
 
 27 
 
 THE BANKING SYSTEM. 
 
 Under the present system a bank may issue circulation not 
 exceeding 90 per cent, of its paid-up capital, and also not ex- 
 ceeding 90 per cent, of the par value of the bonds deposited. 
 Each bank is required to deposit with the Treasury a redemp- 
 tion fund of 5 per cent, of its outstanding circulation ; and the 
 notes are secured by a first lien on all the assets of the bank, 
 including the liability of the shareholders. While in some cases 
 shareholders of and depositors in national banks have lost by 
 unskillful or unfaithful management, yet the bank circulation 
 lias been so well secured that no holder of a national-bank note 
 has ever had occasion to inquire what bank issued the note, or 
 has ever lost any part of the amount of the note. But the rel- 
 ative increase in the number of the banks and decrease in the 
 amount of the issue of the circulation shows that the system 
 should be so amended that, while the notes issued thereunder 
 shall be as adequately secured as under the present system, there 
 will yet be an increased issue of bank notes, and an outflow and 
 inflow of those notes as the business of the country may require. 
 
 A note circulation, issued under the present system, unques- 
 tionably satisfies the condition of security, but is open to grave 
 objections. 
 
 1. It presupposes a continuing issue of government bonds, 
 when it ought to be the national policy to steadily reduce and 
 ultimately extinguish the debt of the United States. 
 
 2. The investment in bonds diminishes the funds of the bank 
 available for loans to its customers. 
 
 3. Such a currency does not increase in volume with a tempo- 
 rary demand for more currency, nor decrease with the cessation 
 of the demand. 
 
 All the conditions can be met by — 
 
 1. A national system with improved regulations as to exam- 
 ination, supervision, etc. 
 
 2. The issues to be based upon those readily convertible assets 
 which represent the exchangeable wealth of the country in its 
 natural products and manufactured goods.
 
 28 
 
 3. A limitation of the amount of the issues to the unim- 
 l^aircd capital of the issuing bank. 
 
 4. A further security in a common guaranty fund. 
 
 5. The continuance of the present redemption fund and 
 method of redemption, with the extension of the places of re- 
 demption under the approval of the Secretary of the Treasury. 
 
 6. A further security in the liability of the shareholders to 
 the full amount of the par of their shares. 
 
 The chief difference of the proposed from the existing system 
 of bank notes is that it gradually does away with the require- 
 ment that there shall be a deposit of bonds with the government 
 as a condition for the issuance thereof. As now, the notes are 
 to be a first lien upon all the resources of the banks, including 
 the stockholders' liabilities. This change is necessary because 
 of the scarcity of United States bonds; and the attempt to sub- 
 stitute other bonds would lead to many evils. The change is 
 wise because it permits the issuance of notes in the way and 
 at the time when, and for the purpose for which, they Avould 
 be issued under natural conditions, if no law prevented. Such 
 a system would more perfectly than any other give the country 
 a circulating medium ; it would readily and quickly adjust 
 itself from season to season to meet the wants of the business 
 of the country requiring bank notes for its convenient trans- 
 action. Under the present system, the problem presented to a 
 bank, when its customers call for currency, is not the 
 amount of its own assets, but its ability and desire to make 
 an investment in something quite apart from its usual bus- 
 iness as a bank, in order that it may be in a position to pro- 
 vide a man who wishes to move property or employ labor with 
 the tools most convenient at the time for his purpose. Notes 
 secured as herein provided cannot fail to be safe, because, being 
 based upon all the resources of all the banks issuing them, they are 
 based upon the whole business of the country, and that business 
 is the thing which gives life and value to all securities, government, 
 municipal, railway, and individual obligations. Should all the 
 resources of the banks ever so shrink in value as not to be ample 
 security for the amount of notes that could be issued under this
 
 29 
 
 plan, then all other securities, even government bonds, would 
 become valueless. The banks are bound together for the security 
 of* these notes to accomplish the same purpose that the deposit 
 of bonds is intended to accomplish, namely, to guard against 
 loss through the misfortune or bad management of single banks, 
 and thus save the holder of a bank note the need of ascertaining 
 the standing of any bank. The objection that is sometimes 
 made that the larger banks in the great cities would not 
 issue notes because of an apprehended liability for other banks, 
 is shown by statistics to be groundless. 1893 was the year of 
 largest bank failures ; but had all the banks of the country then 
 iasued notes up to 80 per cent, of their capital, the amount of 
 their assessment to make good the ascertained deficiencies of that 
 year up to the time of the Comptroller's report of 1896 would 
 have been only a fraction of 1 per cent. Had 80 per cent, 
 of the capital of all national banks been issued in notes, upon the 
 proposed plan, since the beginning of the national banking sys- 
 tem in 1863, the assessment upon the banks annually would 
 have been an amount so insigniticant that it need not be taken 
 into account. Taking the country banks as a whole, it is 
 found that on 5th October last they had $401,000,000 of the 
 $631,000,000 of national bank capital. Should they issue notes 
 up to 80 per cent, of that capital, they would have $321,000,000 
 of notes, and there would be $1,956,000,000 of resources against 
 these notes, not counting stockholders' liability. 
 
 If these resources of the country banks are insufficient security 
 for this amount of notes, they will be insufficient only because 
 there would then be such a condition of business paralysis that 
 government, municipal, and railway bonds would be valueless, 
 and also few, if any, banks in the reserve cities would remain 
 solvent. The occurrence of this disaster is so improbable that 
 its consideration may be dismissed. 
 
 In some quarters fear is expressed that there would be undue 
 expansion under this plan. There is no danger of this. The 
 system of redemption, not only at the banks but at the Treasury 
 in Washington and at the sub-treasuries, would strongly guard
 
 30 
 
 against that. The expansion over that which could be effected 
 were no notes issued at all will be found, upon investigation, to 
 be small. Dangerous expansion does not take the form of the 
 issue of bank notes, but of the extension of credits. Very few 
 borrowers take their loans in the form of bank notes. The bank 
 note is only one form in which he to whom credit is given will 
 use that credit; he can use it equally well for most purposes if 
 the loan is placed to the credit of his account by the bank 
 making the loan to him, or by some other bank or by a private 
 person. 
 
 The plan increases stockholders' liability, so that each stock- 
 holder is absolutely liable to assessment up to the par of his 
 stock, and not ratably and equally with every other stockholder 
 as now. 
 
 The existing tax of 1 per cent, per annum on circulation is 
 repealed. In its place taxation of capital, surplus, and undivided 
 profits is provided. The issue of circulating notes is only one 
 form in which a bank expresses its demand liability. The other 
 form, deposits, is, under the development of modern banking 
 operations, of vastly greater importance, and the one which, in 
 cities and highly organized commercial communities, is most used. 
 In October, 1897, the country banks issued more than 72 per 
 cent, of all notes issued. The reserve banks, except those of 
 the central reserve cities, New York, Chicago and St. Louis, 
 issued more than 18 per cent.. New York less than 8 per 
 cent., and Chicago and St. Louis together about IJ per cent. 
 Surplus and undivided profits and capital show the profits and 
 property of banks, and these are certainly more legitimate objects 
 of taxation than the mere instruments which banks may be called 
 upon by their customers to issue to serve chiefly the convenience 
 of those customers. This tax makes as equitable an apportion- 
 ment of the expenses of the system as can be devised. 
 
 The plan provides that these notes shall be received by banks 
 and by government in payment of debts and dues under the 
 same conditions as now. This provision is made, not because it 
 materially adds to the security of the notes, but that they may be
 
 31 
 
 more convenient to the people and in aid of their speedy re- 
 demption. 
 
 This method of passing from the present to the new system is 
 proposed in order that the change may be gradual and that the 
 country may become accustomed to it in this way, and also to 
 guard against the possibility of undue sale of United States 
 bonds. Doubtless, portions of the country lack adequate bank- 
 ing facilities; and to meet this a diminution of the minimum 
 capital required for banks in places of small population, and 
 authority for the establishment of branch banks, are advised. 
 
 PLAN OF CURRENCY REFORM. 
 
 I. Metallic Cuerency and Demand Obligations. 
 
 1. The existing gold standard shall be maintained; and to this 
 end the standard unit of value shall continue, as now, to consist 
 of 25.8 grains of gold, nine tenths fine, or 23.22 grains of pure 
 gold, as now represented by the one tenth part of the eagle. All 
 obligations for the payment of money shall be performed in con- 
 formity to the standard aforesaid ; but this provision shall not 
 be deemed to affect the present legal-tender quality of the silver 
 coinage of the United States or of their paper currency having 
 the quality of legal tender. All obligations of the United States 
 for the payment of money now existing, or hereafter entered 
 into, shall, unless otherwise expressly provided, be deemed, and 
 iield, to be payable in gold coin of the United States, as defined 
 in the standard aforesaid. 
 
 2. There shall continue to be free coinage of gold into coins of 
 the denominations, weight, fineness, and legal-tender quality, pre- 
 scribed by existing laws. 
 
 3. No silver dollars shall be hereafter coined. 
 
 4. Silver coins of denominations less than $1 shall be coined 
 upon government account, of the denominations, weight, fineness, 
 and legal-tender quality prescribed by existing laws. 
 
 0. Minor coins shall continue to be coined upon government
 
 32 
 
 account, of the denominations, weight, fineness, and legal-tender 
 quality prescribed by existing laws. 
 
 6. Subsidiary and minor coins shall be issued and exchanged 
 as prescribed by existing laws, except as hereinafter otherwise 
 provided. 
 
 7. There shall be created a separate division in the Treasury 
 Department, to be known as the Division of Issue and Redemp- 
 tion, under the charge of an Assistant Treasurer of the United 
 States, who shall be appointed by the President by and with the 
 advice and consent of the Senate. 
 
 8. To this division shall be committed all functions of the 
 Treasury Department pertaining to the issue and redemption of 
 notes or certificates, and to the exchange of coins; and this divis- 
 ion shall have the custody of the guaranty and redemption 
 ftiuds of the national banks, and shall conduct all the operations 
 of redeeming national bank notes, as prescribed by law; and to 
 this division shall be transferred all gold coin held against out- 
 standing gold certificates, all United States notes held against 
 outstanding currency certificates, all silver dollars held against 
 outstanding silver certificates, and all silver dollars and silver 
 bullion held against outstanding Treasury notes of 1890, and all 
 subsidiary and minor coins needed for the issue and exchange of 
 such coins, and the funds deposited with the Treasury for the 
 liquidation of national bank notes. All accounts relating to the 
 business of this division shall be kept entirely apart and distinct 
 from those of the fiscal departments of the Treasury ; and the 
 accounts relating to the national banks shall be kept separate and 
 apart from all other accounts. 
 
 9. A reserve shall be established in this division by the 
 transfer to it by the Treasurer of the United States from the 
 general funds of the Treasury of an amount of gold in coin, and 
 bullion, equal to 25 per cent, of the aggregate amount of both 
 the United States notes and Treasury notes issued under the 
 act of July 14, 1890, outstanding, and a further sura in gold 
 equal to 5 per cent, of the aggregate amount of the coinage of 
 silver dollars. This reserve shall be held as a common fund, 
 and used solely for the redemption of such notes and in exchange
 
 33 
 
 for such notes, and for silver and subsidiary and minor 
 coins. 
 
 10. It shall be the duty of the Secretaiy of the Treasury to 
 maintain the gold reserve in the Division of Issue and Redemp- 
 tion at such sum as shall secure the certain and immediate 
 redemption of all notes and silver dollars presented, and 
 the preservation of public confidence; and for this purpose 
 he shall from time to time, as needed, transfer from the 
 general fund of the Treasury to the Division of Issue and 
 Redemption any surplus revenue not otherwise appropriated ; 
 and in addition thereto he shall be authorized to issue and sell, 
 whenever it is in his judgment necessary for that purpose, bonds 
 of the United States bearing interest not exceeding 3 per cent., 
 running twenty years, but redeemable in gold coin, at the option 
 of the United States, after one year ; and the proceeds of all 
 such sales shall be paid into the Division of Issue and Redemp- 
 tion for the purposes aforesaid. 
 
 11. To provide for any temporary deficiency which may at 
 any time exist in the fiscal department of the Treasury of the 
 United States, the Secretary of the Treasury shall be authorized, 
 at his discretion, to issue certificates of indebtedness of the Uni- 
 ted States, payable in from one to five years after their date, to 
 the bearer, of the denominations of $50 or multiples thereof, 
 with interest at a rate not to exceed three per centum per 
 annum, and to sell and dispose of the same for lawful money 
 at the Treasury Department, and at the sub-treasuries and 
 designated depositories of the United States, and at such post- 
 offices as he may select. And such certificates shall have the 
 like privileges and exemptions provided in the act to authorize 
 the refunding of the national debt, approved July 14, 1870. 
 
 12. Whenever money is to be borrowed on the credit of the 
 United States, the Secretary of the Treasury shall be authorized, 
 instead of issuing the usual forms of engraved bonds, upon 
 receiving lawful money of the United States in sums of not less 
 than fifty dollars ($50) in any single payment, to cause a record 
 of all such payments to be made in books to be kept for that 
 purpose in Washington, and thereafter, from time to time, to pay
 
 34 
 
 to those so registered on such books interest not exceeding 3 per 
 cent, per annum in gold coin on the amount with which they shall 
 severally stand credited on such books in the same manner and 
 at the same dates as if they were the holders and owners of regis- 
 tered bonds of the United States ; and he shall also pay to those so 
 registered the principal sura originally deposited, in gold coin, 
 at the date of maturity of such inscribed loans. Suitable 
 arrangements shall be made at each and every money-order post- 
 office in the United States for receiving such payments into the 
 Treasury on like terms, as well as for the transfer, on proper 
 identification, of any inscription on the books in Washington, or 
 of any part thereof not less than fifty dollars ($50). No interest 
 shall accrue or be paid on inscriptions which shall have been re- 
 duced below fifty dollars ($50). No charge of any kind shall be 
 made by any department or officer of the government for any 
 service in connection with the receipt or transmission of the law- 
 ful money, nor in the transfer of inscriptions on the books at 
 Washington. 
 
 13. The Division of Issue and Redemption shall on demand 
 at Washington, and at such sub-treasuries of the United States 
 as the Secretary of the Treasury may from time to time desig- 
 nate — 
 
 (a) Pay out gold coin for gold certificates. 
 
 (6) Pay out gold coin in redemption of United States notes or 
 Treasury notes of 1890. 
 
 (c) Pay out silver dollars for silver certificates of any denomi- 
 nation. 
 
 (d) Issue silver certificates of denominations of $1, $2 and $5, 
 in exchange for silver dollars and for silver certificates in de- 
 nominations above $5. 
 
 (e) Pay out gold coin in exchange for silver dollars. 
 
 (/) Pay out silver dollars in exchange for gold coin. United 
 States notes or Treasury notes. 
 
 {g) Pay out United States notes or Treasury notes, not subject 
 to immediate cancellation, in exchange for gold coin. 
 
 (h) Pay out and redeem subsidiary and minor coins as pro- 
 vided by existing laws.
 
 35 
 
 {i) Pay out United States notes in exchange for currency 
 certificates. 
 
 14. United States notes or Treasury notes once redeemed shall 
 not be paid out again except for gold coin unless there shall be 
 an accumulation of such notes in the Division of Issue and Re- 
 demption which cannot then be cancelled under the provisions 
 of the act, in which case the Secretary of the Treasury shall 
 have authority, if in his judgment that course is necessary for the 
 public welfare, to invest the same or any portion thereof in bonds 
 of the United States for the benefit of the redemption fund, such 
 bonds to be held in the Division of Issue and Iledemption, sub- 
 ject to sale at the discretion of the Secretary of the Treasury for 
 the benefit of the Division of Issue and Iledemption, and not 
 for any other purpose. 
 
 15. The Secretary of the Treasury shall be authorized to sell 
 from time to time, in his discretion, any silver bullion in the 
 Division of Issue and Redemption ; and the proceeds in gold 
 of such sales shall be placed to the account of the gold reserve 
 in the Division of Issue and Redemption. 
 
 16. The gold certificates and the currency certificates shall, 
 whenever presented and paid or received in the Treasury, be re- 
 tired and not reissued. 
 
 17. No United States note or Treasury note of 1890 of a de- 
 nomination less than $10 shall hereafter be issued ; and silver 
 certificates shall hereafter be issued or paid out only in denomi- 
 nations of $1, $2 and $5 against silver dollars held by or de- 
 posited in the Treasury. 
 
 18. The Assistant Treasurer in charge of the Division of 
 Issue and Redemption shall, on demand, pay in gold coin all 
 United States notes and Treasury notes presented for payment, 
 and as paid cancel the same up to the amount of $50,000,000. 
 After that amount shall have been paid and cancelled, he shall 
 then from time to time cancel such further amounts of notes so 
 paid as shall equal, but not exceed, the increase of national bank 
 notes issued subsequent to the taking effect of the proposed act. 
 
 19. If at the end of five years next after the taking effect 
 of the proposed act any United States notes or Treasury notes
 
 36 
 
 shall be outstanding, a sura not exceeding one fifth of such out- 
 standing amount shall be retired and cancelled each year there- 
 after; and at the end of ten years after the passage of the 
 proposed act the United States notes and Treasury notes then 
 outstanding shall cease to be legal tender for all debts public 
 and private, except for dues to the United States. 
 
 20. The Secretary of the Treasury may, in his discretion, 
 transfer from surplus revenue in the general Treasury to the 
 Division of Issue and Redemption any United States notes or 
 Treasury notes which on such transfer could then lawfully be 
 cancelled under the provisions of the proposed act if they had 
 been redeemed on presentation ; and when so transferred the 
 same shall be cancelled. The Secretary of the Treasury, in his 
 discretion, whenever there may be United States notes or Treas- 
 ury notes in the general Treasury which are not available as 
 surplus revenue, and which upon transfer to the Division of 
 Issue and Redemption could then lawfully be cancelled under 
 the provisions of the act, may exchange such notes with the 
 Division of Issue and Redemption for gold coin, and such notes 
 shall thereupon be cancelled. 
 
 21. All vested rights of property or contract, and all pen- 
 alties incurred before the tjjking effect of the proposed act or 
 any part of it, shall not be affected by the passage thereof; and 
 all provisions of law inconsistent with any of the provisions 
 <^f the proposed act should be repealed. 
 
 II. Banking System. 
 
 22. The total issues of any national bank shall not exceed the 
 amount of its paid-up and unimpaired capital, exclusive of so 
 much thereof as is invested in real estate. All such notes shall 
 be of uniform design and quality, and shall be made a first lien 
 upon all the assets of the issuing bank, including the personal 
 liability of its stockholders. No such notes shall be of less de- 
 nomination than $10. 
 
 23. Up to an amount equal to 25 per cent, of the capital stock 
 of the bank (the whole of its capital being unimpaired), the notes
 
 37 
 
 issued by it shall not exceed the value of United States bonds, to 
 be fixed as hereinafter provided, deposited with the Treasurer 
 of the United States. The additional notes authorized may be 
 issued without further deposit of bonds. 
 
 Beginning five years after the passage of the proposed act, the 
 amount of bonds required to be deposited before issuing notes 
 in excess thereof shall be reduced each year by one fifth of the 
 25 per cent, of capital herein provided for ; and thereafter any 
 bank may at any time withdraw any bonds deposited in excess 
 of the requirements hereof. 
 
 24. Every national bank shall pay a tax at the rate of 2 per 
 cent, per annum, payable monthly, upon the amount of its notes 
 outstanding in excess of 60 per cent, and not in excess of 80 per 
 cent, of its capital, and a tax at the rate of 6 per cent, per an- 
 num, payable monthly, upon the amount of its notes outstanding 
 in excess of 80 per cent, of its capitaL 
 
 25. Any bank may deposit any lawful money with the Treas- 
 urer of the United States for the retirement of any of its notes ; 
 and every such deposit shall be treated as a reduction of its out- 
 standing notes to that extent ; and the tax above provided for 
 shall cease as of the first of the following month on an equal 
 amount of its notes. 
 
 26. The Secretary of the Treasury shall annually fix the value 
 01 each series of bonds of the United States bearing a rate of in- 
 terest exceeding 3 per cent, as equalized upon the rate of interest 
 of 3 per cent, per annum, and such valuation as fixed by the 
 Secretary on this basis shall be the valuation at which the bonds 
 will be receivable upon deposit. Bonds payable at the option 
 of the government shall be receivable at 95 per cent, of their 
 then market value as determined by the Secretary of the Treas- 
 ury. If any bonds shall be issued hereafter payable at a date 
 named and bearing interest at 3 per cent., or less, they shall be 
 receivable at par. 
 
 27. The Comptroller of the Currency shall from time to time, 
 as called for, issue to any bank the capital of which is full paid 
 and unimpaired any of the notes herein elsewhere provided for, 
 on the payment to the Treasurer of the United States, in gold 
 
 403176
 
 38 
 
 coin, of 5 jjer cent, of the amount of notes thus called for, which 
 payments shall go into the common guaranty fund, for the prompt 
 payment of the notes of any defaulted national bank. Upon the 
 failure of any bank to redeem its notes, they shall be paid from 
 the said guaranty fund, and forthwith proceedings shall be taken 
 to collect from the assets of the bank and from the stockholders 
 thereof, if necessary, a sum sufficient to repay to said guaranty 
 fund the amount thereof that shall have been used to redeem 
 said notes ; and also such further sum as shall be adequate to the 
 redemption of all the unpaid notes of said bank outstanding. 
 
 28. Persons who, having been stockholders of the bank, have 
 transferred their shares, or any of them, to others, or registered 
 the transfer thereof within sixty days before the commencement 
 of the suspension of payment by the bank, shall be liable to all 
 calls on the shares held or subscribed for by them, as if they held 
 such shares at the time of suspension of payment, saving their 
 recourse against those by whom such shares were then actually 
 held. So long as any obligation of the bank shall remain unsat- 
 isfied, the liability of each stockholder shall extend to, but not 
 exceed in the whole, an amount equal to the par of his stock. 
 
 29. If the said guaranty fund of 5 per cent, of all the notes 
 outstanding shall become impaired, by reason of payments made 
 to redeem said notes as herein provided, the Comptroller of the 
 Currency shall make an assessment upon all the banks in pro- 
 portion to their notes then outstanding sufficient to make said 
 fund equal to 5 per cent, of said outstanding notes. 
 
 Any bank may deposit any lawful money with the Treasurer 
 of the United States for the retirement of any of its notes ; or 
 return its own notes for cancellation ; whereupon the Comptroller 
 shall direct the repayment to such bank of whatever sum may 
 be the unimpaired portion of said bank's contribution to the 
 guaranty fund on account of said notes. 
 
 Any portion of the guaranty fund may be invested in United 
 States bonds in the discretion of the Secretary of the Treasury. 
 
 The taxes on circulation, provided for in Paragraph 24, as 
 well as the interest accruing from investment of any part of the 
 guaranty fund, shall be held in the Division of Issue and Redemp-
 
 39 
 
 tion in gold coin or in United States bonds in the discretion of 
 the Secretary of the Treasury, and shall be a fund supplementary 
 and in addition to the guaranty fund, to be used only in case said 
 guaranty fund shall ever become insufficient to redeem any bank 
 notes issued hereunder, and it shall not be taken into account in 
 estimating the amount of assessments necessary to replenish said 
 guaranty fund or in repayments to banks of their contributions 
 to the guaranty fund, 
 
 30. The present system of national bank note redemption 
 should be continued, with a constantly maintained redemption 
 fund of 5 per cent, in gold coin, and with power conferred on 
 the Comptroller of the Currency, with the approval of the Sec- 
 retary of the Treasury, to establish additional redemption agen- 
 cies at any or all of the sub-treasuries of the United States, as 
 he may determine. 
 
 31. So much of the provisions of existing law as require each 
 national bank to receive at par, in payment of debts to it, the notes 
 of other national banks, and making such notes receivable at par 
 in payment of all dues to the United States except duties on 
 imports, shall be extended to cover notes issued under the pro- 
 posed plan. 
 
 32. National banks shall hold reserves in lawful money 
 against their deposits of not less than 25 per cent, and 15 per 
 cent, for the respective classes as now provided by law, at least 
 one fourth of which reserve shall be in coin, and held in the 
 vaults of the bank. Neither the 5 per cent, redemption 
 fund, nor the 5 per cent, guaranty fund, shall be counted as 
 part of the reserve required. No bank shall count or report 
 any of its own notes as a part of its cash or cash assets on hand. 
 
 33. Permit the organization of national banks with a capital 
 stock of $25,000, in places of four thousand population or less. 
 
 34. Provision should be made whereby branch banks may be 
 established with the consent of the Comptroller of the Currency 
 and approval of the Secretary of the Treasury. 
 
 35. For the purpose of meeting the expenses of the Treasury 
 in connection with the national bank system, a tax of one eighth 
 of 1 per cent, per annum upon its franchise, as measured by the
 
 40 
 
 amount of its capital, surplus and untlivided profits, shall be 
 imposed upon each bank. 
 
 36. So amend existing laws as to provide — 
 
 (a) For more frequent and thorough examinations of banks. 
 
 (6) For fixed salaries for bank examiners. 
 
 (c) To provide for rotation of examiners. 
 
 {d) For public reports, regular or special, at the call of the 
 Comptroller of the Currency. 
 
 (e) To make it penal for any bank to loan money, or grant 
 any gratuity, to an examiner of that bank, and penal for such 
 examiner to receive it. 
 
 37. Any national banking association heretofore organized 
 may at any time within one year from the passage of the pro- 
 posed act, and with the approval of the Comptroller of the Cur- 
 rency, be granted, as herein provided, all the rights, and be 
 subject to all the liabilities, of national banking associations 
 organized hereunder : provided, that such action on the part of 
 such associations shall be authorized by the consent in writing 
 of shareholders owning not less than two thirds of the capital 
 stock of the association. 
 
 38. Any national banking association now organized which 
 shall not, within one year after the passage of the proposed act, 
 become a national banking association under the provisions here- 
 inbefore stated, and which shall not place in the hands of the 
 Treasurer of the United States the sums hereinbefore provided, 
 for the redemption and guarantee of its circulating notes, or which 
 shall fail to comply with any other provision of the proposed 
 act, shall be dissolved; but such dissolution shall not take away 
 or impair any remedy against such corporation, its stockholders 
 or officers, for any liability or penalty which shall have been 
 previously incurred. 
 
 39. Any bank or banking association incorporated by special 
 law of any state, or organized under the general laws of any 
 state, and having a paid-up and unimpaired capital sufficient to 
 entitle it to become a national banking association under the pro- 
 visions of the proposed act, may, by the consent in writing of 
 the shareholders owning not less than two thirds of the capital
 
 41 
 
 stock of such bank or banking association, and with the approval 
 of the Comptroller of the Currency, become a national bank un- 
 der this system, under its former name or by any name approved 
 by the Comptroller. The directors thereof may continue to 
 be the directors of the association so organized until others are 
 elected or appointed in accordance with the provisions of the 
 law. When the Comptroller of the Currency has given to such 
 bank or banking association a certificate that the provisions of 
 this act have been complied with, such bank or banking associ- 
 ation, and all its stockholders, officers and employes, shall have 
 the same powers and privileges, and shall be subject to the same 
 duties, liabilities and regulations, in all respects, as shall have 
 been prescribed for associations originally organized as national 
 banking associations under the proposed act. 
 
 This plan is based in its main features upon principles, Avhich 
 are conceived to be fundameutal and unchangeable, and which 
 never have been, and never can be, departed from without dis- 
 aster. Its methods and details are of course capable of consider- 
 able variation consistently with these principles. The methods 
 suggested have been reached after very careful inquiry and 
 study, and it is thought that they will prove to be practical, and 
 adequate to the realization of a safe and steady system of finance
 
 42 
 
 and currency, in which all the people of our country, of whatever 
 calling or political opinion, are equally and most deeply inter- 
 ested. 
 
 All of which is respectfully submitted. 
 
 Washington, 
 
 December 17, 1897. 
 
 Geoege F. Edmunds, 
 
 Chairman. 
 
 George E, Leighton, 
 
 Vice- Chairman. 
 
 T. G. Bush. 
 
 W. B. Dean. 
 
 Charles S. Fairchild. 
 
 Stuyvesant Fish. 
 
 J. W. Fries. 
 
 C. Stuart Patterson. 
 
 Robert S. Taylor. 
 
 I sign except as to provisions relating to metallic currency and 
 certificates issued thereon. 
 
 Louis A. Garnett. 
 
 The undersigned, while heartily agreeing in general to the 
 above plan, dissents from the principle involved in Section 14, 
 by which the Secretary of the Treasury is empowered to reissue 
 United States notes in purchase of bonds. Believing that the in- 
 crease of the circulation should not be left to the decision of 
 government officials ; that no official should be exposed to the 
 pressure which would thereby be created ; that the issue of gold 
 in redemption of the notes would prevent contraction ; and that 
 it is inconsistent with the principles on which an elastic bank 
 currency has been recommended, because notes should not be 
 issued by the government in an emergency when bank issues 
 have been above provided for exactly such an occasion. 
 
 J. Laurence Laughlin.
 
 Copies of this report can he had upon appli- 
 cation to the Secretary of the Monetary Commission^ 
 Room 30, Corcoran Building, Washington, or to 
 H. H. Hanna, Secretary of the Executive Committee, 
 Indianapolis.
 
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