ernment to make the currency good, and also upon the 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 demand, 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 imposed 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 taxation; 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 exclusively in gold to the extent of $45,000,000. The lack of elasticity is an objection to each of these issues of currency, and that they are open to other objections recent discussion has made
