SCIENCE. 



LN. S. Vol. XVII. No. 440. 



relations? With our stock of gold, our 

 official holdings, and our gold in circulation 

 exceeding those of any other country, and 

 growing more rapidly in gross and per 

 capita than those of any other people, this 

 land becomes more and more the home of 

 gold. The solidity of our financial system 

 adds much to the strength of the United 

 States in commercial credit, general es- 

 teem and international politics in all the 

 world. We fear no evil from exports of 

 gold, for we can spare more than Europe 

 can pay for. 



Has inflation of currency, of prices and 

 wages gone so far as to check our" exports 1 

 In agriculture crops at home and abroad 

 determine shipments. Prices and quality 

 control exports of manufactures. In the 

 first ten months of 1902 we sold abroad 

 more manufactured articles than in any 

 like, period except 1900, and they were 

 32.63 per cent, of our total exports, the 

 largest on record. The inflow of gold is 

 not without its hazards. They must be 

 avoided. The American people are sane 

 enough to make gold not only the symbol 

 of prosperity, but its stout defense. 



Reform: Hon. George B. 



Roberts, director of the Mint. 



Mr. Roberts's paper was chiefly devoted 

 to bank-note issues upon ordinary com- 

 mercial assets. He said in part : 



The objector to note issues without 

 special security wants first of all to divest 

 himself of the idea that note redemption 

 depends solely or primarily upon the gold 

 reserve in the banks. That is a reserve 

 and guarantee fund, but the regular re- 

 demption of a scientific bank-note currency 

 is through a clearing house by a system of 

 offsets. Under the Fowler Bill, now pend- 

 ing in Congress, each bank would send the 

 notes of other banks that came to its 

 counter to its correspondent in the clearing- 

 house city of its district. It would have 



a double object in doing this: (1) It would 

 prefer to pay out its own notes instead of 

 theirs, and (2) it would do it to have an 

 offset to its own notes in the clearing house 

 and to build up its gold reserve there. The 

 whole plan is simply a further development 

 of the clearing-house idea as we have it in 

 operation for drafts and checks. It is a 

 further economy in the exchanges, a 

 further substitution of an inexpensive 

 medium. 



So long as a bank confined its note issue 

 to the service of its regular daily, legitimate 

 trade, to giving the ordinary accommoda- 

 tion to farmers, manufacturers and mer- 

 chants in their business, there would be no 

 important balances against it at the clear- 

 ing house, because the legitimate trade of 

 the country offsets itself. But as soon as a 

 bank began greedily to push its circulation 

 by unusual methods or unusual credits, ad- 

 verse balances at the clearing house would 

 begin to appear and its gold reserve to 

 dwindle. So long as a bank did only the 

 business that a bank ought to do, redemp- 

 tion would be no problem at all, but the 

 moment it departed from that policy, it 

 Avould have to suffer and settle at every 

 misstep. 



It is a familiar fact that the fall of every 

 year brings tight money in the United 

 States, due to the moving of crops and the 

 activity of trade. There is need of more 

 currency, more instruments of exchange, 

 in that part of the year than at any other 

 time, and our monetary system does not 

 respond to such special demands. Wlien 

 money is easy it accumulates in the centers, 

 fosters speculation and becomes more or 

 less engaged there, and then when the fall 

 demand comes on, there is a wail over its 

 withdrawal because it forces liquidation 

 and unsettles business. These credit notes 

 of local banks would not be likely to have 

 general circulation, for the reason that the 



