492 THE POPULAR SCIENCE MONTHLY. 



notes of profit, and, even were the banks willing to keep out their cir- 

 culation for the small recompense which now comes to them, little reli- 

 ance can be placed upon a continuance of the present conditions. The 

 reduction of the Government debt will be resumed, nor is the delay 

 likely to give more time than will be needed in which to devise 

 and put into operation some other plan for furnishing a currency 

 supply. 



There are many men so many as to constitute a party considerable 

 in number who have an ever-ready remedy to administer for this or 

 any similar trouble which threatens our financial system ; that is, an 

 additional supply of legal-tender notes. It is not intended here to dis- 

 cuss this proposition. The evils which are certain to attend an un- 

 limited or largely increased issue of legal tenders have so often been 

 shown, and the greenback clamor has so far died away, that there are 

 grounds for the hope, which let us cherish, that a majority will not call 

 for a Government paper circulation, albeit the United States Supreme 

 Court has decided that Congress has uncontrolled power to create and 

 regulate such an issue. For the purpose of this paper, therefore, it 

 will be assumed that resort will not be had to legal-tender notes for a 

 supply of paper money when the bond-secured national-bank notes 

 shall be withdrawn. 



There is a school of economists a title that can not properly be 

 applied to the greenbackers who hold that it is radically unsound 

 and productive of evil for banks to assume the function of furnishing 

 money ; who maintain that there should be no money other tban a 

 metallic currency, or one which would in all respects act precisely as 

 a metallic currency acts, because not only based upon but actually 

 representing specie of a like amount deposited and held for its redemp- 

 tion. This school would doubtless regard the time of the retirement 

 of national-bank notes as presenting an opportunity for inaugurating 

 their system too good to be lost. Very recently suggestions in this 

 line have been made and widely considered as, perhaps, offering solu- 

 tions of both the paper currency and the silver problems ; and, indeed, 

 if the experiment were a wise one, it never could be made with less 

 prospect of serious disturbance during the transition period, for the 

 process is already begun by the issue of gold and silver certificates 

 which could be increased, if specie were forthcoming, as bank-notes 

 were withdrawn. If any plan embodying this idea were adopted, we 

 should then have a system somewhat similar to that by which England 

 has been supplied with paper money since the adoption of Peel's act 

 in 1844. Under that act the Bank of England is now authorized to 

 issue notes to the amount of fifteen million pounds sterling upon Gov- 

 ernment securities ; beyond this sum the amount of circulation is de- 

 termined solely by the amount of bullion which the public chooses to 

 deposit, for the bank is bound to buy gold bullion at the mint price, 

 whenever offered. The banking department and the issue depart- 



