The Topeka State Journal

Topeka State Journal Information Bureau
Frederic J. Haskin, Director
Washington, D. C.

SIMPLIFIED CURRENCY

Washington, D. C., May 18.-The average American who goes about with a rubber band around his roll of money or who carries a lone bill or two in his vest pocket, little appreciates the fact that there are 20,000 varieties of paper currency printed by the federal government. The average individual pays almost no attention to a detail of the sort of bills he accepts as legal tender. He is likely to be surprised if he opens his wallet and finds that of the five bills contained in it no two are alike. He pays no attention whatever to the fact that some of those bills are silver certificates, some of them are national bank notes, and some of them are federal reserve currency. He merely has the feeling that the United States government is back of them and that they are consequently as good as gold.

In this last impression he is entirely correct. All of these bills are equally good and if anybody uses as money, paper which is not of proper issue, paper which is counterfeit, the federal government will trace that paper to its origin and punish those who are responsible for it. Occasionally, however, the mere individual stops to wonder if this extremely complicated currency is a necessity or if it would be possible to get along with a much simplified method of issue.

Reduce 20,000 to Six.

Judge James H. Moyle, an assistant secretary of the treasury, having charge of the bureau of engraving and printing, has been doing a bit of wondering and converting his speculation into investigation to find out if it is not possible to simplify the government's issue of paper money. He has reached very definite conclusions. Those conclusions are to the effect that it would be possible, advisable and economical to substitute for the 20,000 varieties of notes now issued by the government, six varieties. He believes that six varieties of currency would serve the public purpose and the banking purpose of the nation as effectively as do the 20,000 varieties. He believes that reducing a very complicated currency to a very simple currency would be in the interest of the whole people. He demonstrates that such a simplification of money manufacture and issue would save the government at least $500,000 a year.

Having become convinced from an investigation in the treasury department of the advisability of simplifying the issues of currency Judge Moyle took the question up with many individual bankers and finally with the American Bankers' association. His plan has met with almost universal approval from the members of this association. No banker has pointed to insurmountable difficulties in the way of this proposed simplification.

Experts Favor Simplification.

As a matter of fact the proposal is not entirely new. Experts in the treasury department have put it forth from time to time for the past ten years. John G. Herndon, one of these experts still in the treasury, proposed a similar reform in 1912 and a bill was at that time introduced into the house of representatives by John Q. Tilson of Connecticut. The proposal to simplify the currency has often arisen since but has never been fought to an actual enactment into law.

The currency issued by the government, the paper money which everybody uses, is a Topsy affair which merely grew of itself. Every development of the banking system of the nation seems to have called forth a new issue of paper money. So complicated has grown the structure that few people have the temerity to say that they understand it, that it is ridiculously complex and that it may be easily simplified.

The chief element in the multiplication of notes is the fact that each bank has considered that it must have a distinctive issue. Take the case of the federal reserve banks, as an example. This case is comparatively simple because there are but twelve such banks. For each of the twelve, however, the treasury department prints federal reserve notes. The notes are different in each case, each having upon it the name of the particular bank for which it is printed. Thus it is necessary that for this work twelve different sets of plates be manufactured, twelve different lots of money be printed, kept in stock, redeemed and reissued. The same purpose would be served if this currency were not made peculiar to the given banks, if all federal reserve bank currency were exactly alike. Its issue would be one-twelfth as complicated as at present.

One Bill for All Banks.

Where the kinds of notes issued by the federal reserve banks are twelve times as many as are necessary, the varieties issued by the national banks are 8,000 times as great as are needed. There are more than 8,000 national banks. Each of these has the authority to deposit with the treasury certain securities and have issued to it certain amounts of currency. On an average national banks ask for two and a half varieties of currency, notes of different denominations, thus making 20,000 varieties altogether. The United States treasury prints for each of the national banks the different kinds of bills for which it asks. It puts the name of the individual bank on those bills. Then it accumulates a stock of the bills of that bank that it may respond to any further demand for the currency. It also files away the plates from which those bills are made and keeps them against any future demand. In every phase of the handling of the money of that bank it must be assorted and an individual record kept of it.

Now, this whole process, says Assistant Secretary Moyle, is confusing, complicated unnecessary and expensive. No purpose is served in printing a special currency for a special bank and putting the name of that bank upon the currency. All national bank notes are guaranteed by the federal government. They are dipped out of the same general reservoir and eventually come back to it to be retired or reissued. They should all be just alike. When a national bank asks for currency it should be given the standard national bank currency. There is no reason for printing special currency for it.

It Is Time for Reform.

Here is an example of the waste. Special currency is printed for a given national bank. It has the name of that bank on it. Stock must be kept ready printed subject to the call of that bank. The bank fails, consolidates with another bank, for some good reason changes its name. The ready-printed currency at the treasury is no good. It, together with the plates, must be destroyed. You can see ten or twenty thousand dollars worth of such good money being destroyed at the treasury any day. If all drew from a common reservoir there would be no such loss.

It has often been noted that governmental agencies grow in an unwieldy way, always adding to themselves new complications. The issue of money, Judge Moyle holds, is an example of this tendency. The process becomes so complicated that administrative agencies are too close to it to get the proper perspective. It is necessary that the problem be set out to itself, removed of every possible confusing detail and viewed for what it is. The purpose to be served should be understood and the simplest method of serving that purpose should be determined. Proper methods of simplification and reform should undergo the necessary tests to prove their correctness but when their advisability has been established action should be taken. He holds that the time has now arrived for a reform in the method of issuing paper money and that the government should perform the obviously necessary task.