are scattered along the coast to the Aleutian Islands and northward, but have inquired into the subject from every white man that could give me information. Those who have been all over Alaska assure me that the condition here does not differ from that elsewhere; everywhere the natives are dying of tuberculosis, and are being incapacitated by trachoma. The number of Indians described in this paper is, of course, small, but we can have no good reason to believe that mortality is less or conditions better at other points. If reports from intelligent white men and natives are to be believed, disease is even more prevalent in some portions of Alaska than in this vicinity. The statements of all who travel here are in accord.

With the view to lessen this needless sacrifice of human life I urge that the following recommendations be considered, and that the matter be referred to the proper department of the Government at Washington:

I. That Alaska be divided into a certain number of sanitary districts and a sanitary officer placed in charge of each district, his duties to comprise the treatment of the sick, the instruction of natives in domestic sanitation and elementary laws of hygiene, and in a simple way to elevate them along sanitary lines.

II. That an intelligent Indian sanitary inspector be appointed for each town having 200 or more Indian inhabitants, who will first take a course in the required work under the sanitary officer, and returning to his village disseminate this knowledge among his people, reporting to his sanitary officer each week the number of cases of tuberculosis and trachoma, so far as he can judge, and the measures instituted by the afflicted and family to prevent their spread.

III. That the sanitary officer be required to visit such village having a sanitary inspector in his district at least once a year and such other villages as may be accessible and transportation permits. On these missions the sanitary inspectors should call the natives together through their head men at some public point and deliver to them simple talks and suggestions concerning their welfare.

IV. That the sanitary officer further instruct the sanitary inspectors in their duties by mail and whenever occasion offers.

V. That such sanitary inspectors receive $25 per month.

VI. That the duties of sanitary officers correspond in a general way to the duties of medical men in the Indian service in the United States and, in addition, the special sanitary work above enumerated. VII. That a total of 16 sanitary officers be appointed.

VIII. That one chief sanitary officer be appointed, whose duties shall comprise the supervision of the sanitary officers and districts; the making of frequent inspections of districts, towns, and villages; giving legitimate directions to sanitary officers, and making such reports and recommendations as may be necessary. It is essential that the chief sanitary officer be a man of some experience in tuberculosis and general sanitary work.

Very respectfully,

PAUL C. HUTTON, Captain, Assistant Surgeon, U. S. Army, Surgeon.

The ADJUTANT-GENERAL,

Department of the Columbia, Vancouver Barracks, Wash.

S D-60-1-Vol 31-22

O

OUR UNELASTIC CURRENCY.

Mr. FLINT presented the following

ARTICLE FROM THE ATLANTIC MONTHLY OF JULY, 1906, UPON OUR UNELASTIC CURRENCY, BY GEORGE v. L. MEYER.

FEBRUARY 13, 1908.-Referred to the Committee on Finance and ordered to be printed.

OUR UNELASTIC CURRENCY.

[By GEORGE V. L. MEYER.]

When one compares the excessive fluctuations in the rates of interest at New York with those at London, Paris, and Berlin, it seems extraordinary that no action has been taken by our Government to remedy the defects in our currency system. In order to appreciate these enormous changes in the value of money, it is necessary to keep constantly in mind the fact that money is merely a commodity. If, for instance, the supply of ice were so fixed that the same quantity was meted out for each month, irrespective of the temperature or the requirements of the community, we should see in New York, during July and August, ice advancing to fabulous prices, on account of the extraordinary demand and the fixed limited supply, which could not be increased to meet the occasion during those two months. So in Wall street, a few months ago, the temperature rose, as it were, matters became excited, and the supply of money was not equal to the demand; and, as it could not be quickly increased to meet the temporary requirements, the rate actually rose to over 100 per cent. Let us see what regulations are made in other countries, in order that their currency may have some elasticity and be able to meet emergencies in case of a crisis.

England. By the law of 1844 the Bank of England was divided into two departments: (1) For issuing paper money, (2) for ordinary banking. The department for issuing paper money acquired the reserve of the Bank of England with 14,000,000 sterling of securities, mostly government bonds. This department of the bank is allowed to issue 5-pound notes and upward to the full extent of the reserve, plus an additional sum of 14,000,000 sterling on the credit of the securities above mentioned; thus the circulation could not exceed the coin reserve by more than 14,000,000 sterling in 1844.

The law of 1844, besides prohibiting the establishment of any more banks of issue than already existed in that year, and besides limiting the circulation of these banks to the amount extant among them in April, 1844, further provided that if one of these banks of issue should fail or withdraw, then the Bank of England could be authorized by order in council to add to its own issue two-thirds of what the late bank had had the right to issue.

In consequence of this provision the authorized issue of the Bank of England against securities up to the present date (of March 1, 1906) has been increased by £4,450,000 beyond the 14,000,000 sterling provided by the bank act of 1844.

A distinction has to be drawn between notes "issued" and notes "in circulation." Notes are technically issued by the Bank of England when they are transferred from the issue department to the banking department. Thus it is practically a fact that the bank always "issues" notes up to the full extent of its legal power. But the notes so "issued" are not all "in circulation," a large proportion of them usually being held by the bank in its banking department.

The Bank of England is by practice the depository of the ultimate gold reserve of the country; consequently the bank has to have on hand a large cash reserve in its banking department. It is not necessary, however, that the entire banking reserve should be held in the banking department in the form of gold and silver coin, about £2,000,000 being so held for the convenience of current transactions. The remainder is deposited as gold coin or bullion in the issue department, and notes representing that amount take its place in the banking reserve of the banking department. It will therefore be found that the notes in circulation, plus the notes held by the bank, equal the gold in the issue department, plus the issue against securities. Thus in the year 1895 the equation stood approximately as in Table Aa.

From which it will be seen that the total amount of notes issued by the Bank of England in that year was £53,100,000, but the actual notes in circulation were only £25,800,000.

On the 1st of March, 1906, the notes issued from the issue department of the Bank of England were £53,938,330. Of this amount £28,265,930 were in circulation (in the hands of the public) and £25,672,400 were held by the bank in the banking department. In that year the equation would have read as in Table B.'

Hence we see that on March 1, 1906, without any further addition to the stock of gold held by the Bank of England, its currency had a possible increase for circulation to the full amount of the notes held by the bank, namely: £25,672,400. In other words, it could almost double its outstanding circulation.

Any elasticity beyond this 25,000,000 sterling would have required the suspension of the law of 1844. Owing to a sudden and unprecedented demand for money in 1847, 1859, and 1866, the Government, to avoid a panic and possibly save the bank, repealed the law in order to allow the bank to issue paper money (over and above the reserve, plus the issue against securities) till all legitimate demands were satisfied. Thus on three occasions the crisis was tided over. In each case the law of 1844 was resumed, and is in force to-day.

The silver in the reserve fund must never exceed one quarter of the gold coin and bullion, but as a matter of fact the reserve in England since 1861 has been entirely in gold.

France. The control of the Bank of France is vested in a governor and two subgovernors, who are appointed by the French Government, and by 15 regents and 3 censors, elected by an assembly of the 200 largest stockholders. No deputy or senator can serve as governor or

a TABLE A.-Notes in circulation, £25,800,000+notes in bank, £27,300,000=gold, £36,300,000+securities (bank act, 1844), £16,800,000.

TABLE B.-Notes in circulation, £28,265,930+notes in bank, £25,672,400=gold, £35,488,330 securities, £18,450,000.

as subgovernor, while 3 of the regents must be chosen from among the Government's receivers-general of finance. The governor, subgovernors, regents, and censors together compose the general council of the bank, which determines the rate of discount and the like. The issue of paper money is under the special care of the 3 censors, without whose unanimous consent no issue can be made. The Bank of France issues paper money, but of no denomination less than 50 francs. The money is of value because of the credit of the bank. Its policy, however, is to keep so substantial a reserve of gold and silver that it may be able to replace, on demand, its notes by gold and silver.

Since 1880 the policy has been to increase the proportion of gold in the reserve, and from that date the silver in the reserve has remained at about 1,100,000,000 francs. On the other hand, the gold in the reserve has risen from 550,000,000 francs in 1880 to about 3,000,000,000 francs in 1906. Hence the reserve of the Bank of France is now composed of about three-fourths gold, instead of about one-third gold, as in 1880.

As there is a legal limit to the amount of paper money which the Bank of France can issue, there is consequently a limit to the elasticity of its currency. Thus, in 1880 the legal limit of the paper money which the Bank of France could issue was 3,200,000,000 francs, while the actual amount of paper money in circulation was about 2,319,000,000 francs. The reserve at that time was 1,775,000,000 francs, of which 550,000,000 francs was gold, and 1,225,000,000 francs silver. In January, 1906, the legal limit of the paper money which the Bank of France could issue was 5,800,000,000 francs, while the actual amount of paper money in circulation at the same period was 4,721,000,000 francs. The reserve was 2,844,000,000 francs gold and 1,054,000,000 silver. Consequently it will be seen that a considerable and increasing elasticity is secured by the bank arranging with the minister of finance, when the actual circulation approaches too nearly the legal limit, that a law be passed raising the legal limit to a figure which allows increased circulation. This was last done at the end of 1905, the legal limit of issue being raised from 5,000,000,000 francs to 5,800,000,000 francs. The actual notes in circulation in 1905 were 4,408,000,000, and on the 1st of February, 1906, 4,831,000,000, permitting an increase of elasticity of about 1,000,000,000 francs.

The following table will show the capital of the Bank of France, also the circulation and reserve of various years since 1870:

Germany.-By the laws of 1875 thirty-three banks in the German Empire were granted the right to issue paper money. Since then twenty-seven banks have relinquished the right, and to-day only six of the banks privileged in 1875 to issue paper money remain in possession of this privilege, of which the principal one is the Reishsbank,