Mr. Merchant: Mr. Banker, you have just told us of what our currency consisted. Gold coin, gold certificates, token coins, silver certificates, United States Notes and our bond-secured Bank Notes. Taken altogether I presume you would call that our currency system. Do you call it a good system?
Mr. Banker: It is our currency system, but it is without doubt the worst currency system in the world, if you include only respectable commercial nations.
Mr. Merchant: Well, Mr. Banker, what is wrong with it?
Mr. Banker: To tell you what is wrong with our currency system, I would first have to tell you what a right kind of currency system is. And I will proceed to do so in a word. A right kind of currency system consists of three forms of currency only.
First: Gold coin, or the gold certificate.
Second: Token, or subsidiary coin.
Third: A credit bank note or bank credit currency.
All these forms of currency are absolutely essential to a right currency system, as I shall proceed to demonstrate.
First: Gold coin, or its substitute, the gold certificate, is the very foundation of a right currency system, because there must always be present, or immediately available, a sufficient amount of gold to prove, protect and redeem, if necessary, all other forms of currency.
Second: Subsidiary coins are absolutely essential as a matter of convenience to carry on the small trade of the country.