496 THE POPULAR SCIENCE MONTHLY. 



rency and consequently of bonds would be needful ? The Secretary 

 of the Treasury or the congressional committee who should be called 

 upon to determine this point would require the same degree of omnis- 

 cience that would be required to fix the proper limit of irredeemable 

 legal tenders. The objections to any arbitrary regulation of the vol- 

 ume of currency have been so often pointed out as to make needless 

 their recital in this connection. 



To maintain, for the purposes of bank-note security, a Government 

 debt anything in excess of the Government's needs, would be, in effect, 

 to levy a tax upon the community at large for distribution as a bounty 

 on bank-note circulation. It may be said that the benefits inuring to 

 the issuers would be slight and incidental a not undue reward for 

 the service rendered and that the real purpose would be the protec- 

 tion of the note-holder, which protection would be worth more than 

 its cost. Thus stated, the proposition would be to make the note- 

 holders a preferred class of creditors, secured at the public cost. It 

 would be pertinent to ask here, By what logical method is the con- 

 clusion reached that this preference should be given to the note-hold- 

 ers alone ? Are there not other classes of creditors with equal claims 

 for protection ? The depositors in savings-banks, the beneficiaries of 

 life-insurance policies, and divers other corporate and private trusts, 

 are now very largely secured by Government bonds, and it is not 

 easy to see why, if the note-holders are to have special protection, 

 these can not with perfect justice ask that they too shall continue to 

 be cared for by the Government. That such demands should be 

 acceded to few will assert, but it would be quite as proper for the 

 Government to furnish security for all as for a part. But it is idle 

 to discuss this proposition at length. Whatever differences of opinion 

 there may be as to the rate at which reduction of the debt should go 

 on, there is little difference as to the general principle that it should 

 be reduced as fast as may be consistent with a proper distribution of 

 the burden. The proposition that it is a good thing to pay one's 

 debts, when abundantly able to do so, is sound, and it applies to an 

 aggregate of individuals the state precisely as it does to a single 

 individual. Public opinion will doubtless demand s it certainly would 

 be right in demanding, that the volume of the public debt shall be 

 regulated without reference to national-bank-note issues ; the idea 

 that it should, or might with propriety, be regulated with reference to 

 their needs, is radically unsound. Nor, it maybe added, are there any 

 reasons, economic or political, for a resort to such strained methods. 



That a paper currency is one of the requirements of a great com- 

 mercial country is generally admitted. That such a currency can best 

 be furnished by banks of issue, if not so generally admitted, would 

 seem to be demonstrated by universal custom among civilized nations. 

 The issuance of circulating notes is a legitimate, if not necessary, func- 

 tion of the business of banking. It is one of the forms of the compli- 



