evident. Gold, the standard of value in international exchange, has for many years exceeded silver in value in greater ratio than that deemed by the United States to exist between them. As it has been the declared intention of the Government to keep all the paper currencies issued by it of the same value as though they had been issued against gold, its currency must be exchanged for gold upon the request of the holders. But as the legal tenders, when accepted in exchange for gold by congressional enactment, must be immediately paid out again, to be again exchanged for gold if the holders so request, and so on without limit, the supply of gold in the Government's possession has been kept at so low an ebb that it has often been feared that it would not be able to maintain its intention of keeping all its issues of currency as good as gold. To avert this fear, the Government has increased its indebtedness by several issues of bonds which have been exchanged for gold, which the legal tenders have immediately again begun to drain. It is obvious that this and other evils of the immediate situation must be removed. But, without further reference to them, this article must return to the discussion of an ideal system of note issue.
The experience of the United States, as referred to in the preceding paragraph, makes important in that discussion the reply to the question—
Should the paper representatives of value which serve as currency be issued directly by the Government?
The determination from time to time of the amount of currency necessary for a nation's exchanges at all places within the territory of that nation would require the services of a large number of intelligent men, thoroughly organized; and that the currency might expand and contract according to the nation's needs, a governmental mechanism would have to be provided that is difficult of conception, and its maintenance in efficiency would be more difficult. The losses occasioned by the errors of the officials would fall directly on the Government, and therefore entirely upon the whole people; and as the issue of currency in any event must be closely allied to the business of banking, if not always practically an incident thereof, the maintenance of a governmental organization for that purpose would impose a superfluous burden upon the people, as the banking organizations are capable of the same function.
As it is the banks that, by making loans and discounts and cashing checks, can the most readily get notes into circulation and can profit by so doing; as it is the banks that come directly into contact with the business pulse of entire communities, it is evidently proper that banks should be empowered to issue representatives of value for use as currency upon such resources as
