To this kind of money there are many objections. The most potent of which is that a practically insolvent government-if it were not insolvent it would not need to issue this form of money-mortgages its future revenues to redeem notes issued to provide for its present indebtedness or for advances made presumably for immediate uses. Next the great incentive to over-issue, and the necessarily diminishing value of the notes. The placing in the market of a large volume of government credits unsettles values, disturbs commerce, and is certain first to beget over-sanguineness and later on the inevitable depression which follows.

The issuing of demand obligations payable at the option of the holder, the first notice of which option the government receives when the notes are presented for payment, cannot but be dangerous to that government's credit; as it is almost certain that so long as the government is amply able to meet its notes their payment will not be demanded, but the very moment its inability is suspected, -the time when it most needs its available assets,-then the note holders demand payment. The issue of government notes is generally effected only by either the actual restriction of the issue of individuals, or the practical restriction by making such issue unprofitable.

Again, the want of elasticity of such a currency; the issue of which is regulated by the necessity of the government and not by the needs of commerce; and no government is in that close touch with commercial life which enables it to increase such issue when necessary and to contract the amount thereof when not needed. In fact the necessities of a government generally prevent its acting solely with a view to the interests of commerce.

Indeed, it seems a preposterous contention that the debt of a government should measure the volume of the people's currency, and that debt remain unpaid because it might restrict the amount of currency in circulation.

The fact is that the very existence of such a currency is a discrimination against the non-governmental issue of credits, and a restriction of the power of the utilization by banks and others of their credits, the United States Government requiring, in order to make a place for its own notes and bonds, banks to deposit in its Treasury United States registered bonds selling at say 117 in order to secure 90 per cent. of their par value in notes, on which issue they must pay the government taxes annually, making the issue of notes of so little profit that few banks will now issue them, and in reality depriving banks of the use of one of their most profitable rights, the use of their credit as currency, and absolutely prohibiting the exercise of credits in this form by individuals.

Only banks or bankers and men who are in daily contact with business life can be in a position to know the demands of trade, and the regulation of the amount of paper credits in the shape of money is best left under certain restrictions in their hands. They should be given the power upon the deposit of a certain percentage of bullion with some central bank or banks or depositary under the supervision and partial control of the government to issue paper money when needed, and at their option to retire such issue and reclaim the bullion deposited.

In this connection it is earnestly suggested that no good reason can be shown why a paper currency should not be regulated by that same law of supply and demand which governs all business transactions; nor why the government should take from the persons who are the interpreters of that law in all other business relations the interpretation of the law when applied to currency.

To recur to the subject of an inconvertible paper currency. If such can be made a legal tender in the payment of the government's obligations to individuals, in order to protect the receiver it is necessary that he

should be able to compel his creditor to accept it in payment of his debt to that creditor, and to the same extent that the first individual has been deprived by the government of his rights to that extent can he lawfully deprive his creditor of such creditor's rights against him. And it is in order to prevent just this contingency arising, as well as for other reasons, that many contracts are made payable in gold coin of a certain weight and fineness.

Postage-stamps, while in no sense credits or obligations to pay, but simply evidences of pre-payment of a service to be rendered, yet as they always can command that service, and as it is a service in which the public stands in constant need, are frequently used to remit small amounts.

Various forms of credit such as checks, drafts, notes, bills of exchange, letters of credit, certificates of deposit, cashiers' checks, etc., greatly assist, if they do not actually, in many instances, take the place of currency.

In Queensland checks to bearer are used almost entirely in place of money and form the general currency of the people. This is an example however that we are happily not called upon to emulate.

Government Regulation of Money.-The regulation of metal and token money has always reposed in the sovereign power for reasons before stated.

The regulation of coinage and its issuance by the mints. of the various countries follow naturally from the exercise of similar powers in earlier times, as does the issuance of, or the restriction of the issue of paper money by the governments of the present day the issue of token money by the ancients.

First we will consider how the government obtains the metal which it coins, and secondly, how that metal becomes distributed among the people.

Any possessor of gold may deposit the same with the government and have it converted into coin and returned to him minus a small charge for refining where the gold

is less than

fine. This is practically an unlimited or free coinage of that metal.

The government does not only coin metal belonging to others, but also the bullion which it receives in payment of obligations due it, which it, in course of time, distributes through its disbursing officers, banks, etc., in payment of its debts, the government paying out annually in coin and currency over $125,000,000 in pensions alone.

The coinage of silver at different times in the history of this country has been unlimited, except for the seigniorage charge, which at present consists of the difference between the commercial value of the silver in the coin and the face value. Under the Sherman law, now repealed, the government bought about $50,000,000 of silver yearly at the market rates per ounce, and coined it at a ratio to gold established years ago. The difference between the two is generally spoken of as the seigniorage. At other times the coinage of silver has been, and is now, limited in amount, whereas the coinage of gold has always been unlimited.

The possessor of gold bullion can, and always since the formation of our government could, have it coined; and there has been no limit to the quantity, while the contrary is the case with silver, the government only coining its own silver in such quantities as it needs.

Next we must consider the government's issue of paper money and its restriction of the issue of such money by others. This money when issued by the government reaches the channels of trade in just the same way that coin owned by the government does-that is, it is paid out in discharge of the government's obligations, frequently in payment of bullion or coin furnished the government by others and by them paid out to their creditors or in purchase of commodities or values.

That portion of paper money issued by others and the extent of which issue is restricted by the government is first printed and issued by the government to the banks

on a deposit by the banks with the government of United States bonds, as is more fully described in the condensation of the National Banking Act. These bills are then, by the banks, loaned or used in the payment of their obligations, or the extension of their credits, and thus become disseminated among the people.

Neither the Federal or State government nor any corporation or individual can remain solvent and part with money except it or he receive for the money an equivalent value. It is true a corporation or an individual may lend its issue to others on promises of payment, and State, municipal, and county governments have at times issued their bonds in support of, or have guaranteed, semi-public and semi-private enterprises; and even the United States Government has guaranteed and paid the interest on the bonds of certain railroads, but they have never gone so far as to issue their money except in payment of their own debts already incurred, or in the purchase of values. Nor is the government guarantee of the payment of national bank notes a violation of this rule, as at first glance it might appear to be, because the government not only secured by the institution of national banks a safe means of placing its bonds on the market, but by compelling a deposit of those bonds to secure these national bank notes, as well as by the imposition of a tax on their circulation, amply protected and at the same time compensated itself for the risk assumed. In other words, it made that part of its debt, which it compelled national banks to purchase and deposit with it as a condition precedent to operation, the security of the circulating notes of these banks.

The government can neither give away money (pensions are considered a debt) nor loan it, and if it did either to any great extent the issue would become so large as to render the small security in the shape of bullion and the revenues available for the redemption of such issues prac