2o8 POPULAR SCIENCE MONTHLY. 



ernment to make the currency good, and also upon tlie knowledge 

 of the values represented by the different representatives of value 

 constituting the currency. Its acceptance among other peoples 

 will depend also upon the facility with which it can be exchanged 

 for currency in general use in their countries. 



That a paper representative of value, resting upon the power 

 of taxation, may attain a high degree of confidence, is evidenced 

 by the United States bonds themselves, which are eagerly sought 

 throughout Europe and America; and the national bank notes, 

 which rest upon the same basis as the bonds, are readily accepted 

 throughout the entire country. But there is a respect wherein 

 the provision for currency, if limited to the issue of bank notes 

 secured by Government bonds deposited by the issuing source, has 

 been seriously defective. In every country, and especially in one 

 covering so extensive a territory and with such varied resources 

 as the United States, the processes of production and distribution 

 do not proceed with evenness and regularity week by week, month 

 by month, or year by year. In the spring, great quantities of fruit 

 are shipped North from the semitropical lands of the South ; in 

 the autumn, innumerable train loads and vast cargoes of grain 

 come from the Western plains to the Atlantic seaboard ; the great 

 mills and factories in every line of industry are busier at' one time 

 of the year than another. Currency in greater abundance is 

 therefore needed at the times of greater activity than during the 

 periods of comparative dullness. If there be sufficient national 

 bank notes for the times of activity, there is during the times of 

 dullness a plethora which is an incentive to overtrading and 

 speculation. If their issue is only sufficient for the ordinary 

 needs of exchange, there is a scarcity at the times of greater de- 

 mand, with the result that exchange is hindered, the processes of 

 industry retarded ; that is, the currency provided by our present 

 national bank note system is not elastic, and the restrictions im- 

 posed by the Government have made its issue so little profitable 

 that the banks are often loath to increase the supply, which at 

 the present amounts to but about two hundred millions of dollars. 



The paper currency of the United States issued directly by the 

 Government is composed principally of United States notes, the 

 " legal-tender " legacies of the war, to the extent of $346,000,000, 

 which, like the bonds, are based directly upon the power of taxa- 

 tion ; certificates issued directly against and redeemable in silver 

 to the amount of $345,000,000 ; Treasury notes issued against silver, 

 but redeemable in either gold or silver, to the extent of $137,000,- 

 000 ; and certificates issued directly against and redeemable ex- 

 clusively in gold to the extent of $45,000,000. The lack of elas- 

 ticity is an objection to each of these issues of currency, and that 

 they are open to other objections recent discussion has made 



