The national Republican. [volume] (Washington City [D.C.]) 1866-1870, 1869-09-03

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no hand and the Government on the other.
1t 70 clear that II, under this proposed
amendment, onr nAtioSAl bank
otes arc always convertible al par into coin
: greeubaeks d thelr place Of Issue, and
ur grsenbaeks are always Convertible into
cln al par In New York, we shaai have q
aper currency everywhere and always
quail 10 gold, and the problem Of resump.
lon will be solved. But how shall the
'anks and the Government be enabled to
edeem their demand notes at part In this
way, u
,sition, as already stated, involves the grad |
nal contraction within two years Of the legal |
lenders to volume Of s258, 000, 900. With |
lts demand obligations thus reduced, II |
would be entirely safe for Government to re- |
sumo with el00, O00, 900 Of coin In the Treas
ury, as q large portion Of tho legal tenders
would be permanently held 10 the vaults Of
the seventeen hundred banks, and could not
be concentrated for any sudden or large de-
mand. This amount OF specie could be ac-
cumulated In two years ~ by boarding all
that should come into the Treasury from
customs duties, except enough TO pay the In
terest on the public debt; and (2) by issuing
three-year, compound.interest, gold-notes,
the interest payable only at the maturity OF
the principal. These gold notes could be
issued at the rate Of two or three millions
per month, to such extent as might prove
necessary TO make up the remainder Of the
elOO, OOO, 600. But probably not more than
t25, 900 900 would be required. Their grad
ual issue would not derange prices, they
would Of course be equal to gold In the
market, (being receivable for duties at their
face yaiue,) and owing TO the constantly ac-
cumulating interest, which would benefit no
one but those holding the notes at maturity,
they would soon DO retired from circulation
and held as an Investment, as were the
three-year, compound-interest,l egal-tender
notes Of 1894. The maturity Of these pro-
posed gold notes being dsEed Q. Sn,oISd
their payment would never be matter OF
embarrassment to tho Treasury. Even now
there are $50, 900 900 Of gold Voluntarily de-
posted In the United States Treasury by prl-
vate citizens, who receive no interest at all.
Finally, a. II the worst possible fortune
should befall this plan, and there should
seem 10 be danger Of the Government gold
being exhausted, II would be entirely prac-
ticable, as a last resort, and as O certain
avoidance OF further danger, to make gold
loan In Europe Of my or even one hundred
millions. In this way resumption BY the
Government would be provided for beyond
the possibility OF doubt or failure.
| Resumption BY he Bdaks.-The national
banks, with their proposed circulation OF
e+00, 000, 900, should be required on the day
Of resumption to have In their vaults, with
which to redeem their outstanding notes, a
reserve Of coin and Government legs tenders
equal together 10 twenty-five per cent. Of
800, 900, 900, at least 600, 100000 could
easily be In specie. The banks could &C.
cumulate that amount OF coin In the two
years OF preparation In this way;
They already have on hand, say t2O, 900, =
900. Now, let the resumption act provide
that, from the date Of its passage until the
day Of resumption, two years, no gold In
terest shall be paid to the banks on the Uni.
ted States securities deposited by them with
the Treasurer to secure their circulation. Az
the Interest on these pledged securities
natures, let the Secretary of the Treasury
be directed to deliver to each bank non,
negotiable certificate that II has a certain
amount Of gold deposited In the Treasur,
subject to Its order on the day Of general re-
sumptlon-the banks to be allowed to coun
these certificates as part OF their reserve re
quired by Law. This course would render /
certain that the banks would accumulate |,
two years about sc, 000, 900 more Of specie
I and this, added to the amount now on hand
; would make the desired t60, 900, 900 on tn
LIST Of January, 1872. If II be objected tina
, this Withholding Of interest would seem ar
titrary, we reply that this Is merely shor
cut to result which could be reached b
other means. Congress, having plenar
power to prescribe regulations for the ma
tlonal banks, could permit them 10 be tn
custodians OF their own coin, while rigid
requiring them to hoard 1t as fast as paid b
them by the Government.
In addition to this, the banks would O
course be required, as now, TO keep an ads
quate reserve Of United States three per cent
4 certificates, grecDbacks, national bank note
and New York balances, to secure deposition
Q 1T being remembered that depositors coul
: not, according to this plan, demand speci
7 Ds's"ta,,<sd HsaenpEion.-it is already oil
n Vlous that the prominent feature of this mod
y Of redemption Is the decentralization OF r,
y demptlon by the national bauks-each banl
d instead Of being compelled TO redeem its ci
Q culatlng notes when presented In New Yorl
/ only being required to redeem them wbe
4 presented at Its own counter. In addltlc
i to this, and for the purpose of renderir
e runs" and panics still more difficult az
8 improbable, the law providing for resum
j tion should prohibit ersrv national bank fro
II dssortinq The notes Of hs other banks In 9th,
i words, the banks, even If so disposed, shou
not be allowed to act the pirate against eac
9 other, and thus help to bring about anoths
! suspension. With such law, enforced wit
{ reasonable vigilance by the Government, "
should have an abundant currency ever,
where equivalent to gold we should be OF
empt from the probability Of financial panic,
and free almost from the possibility of al
other general suspension Of specie payment
upon the currency In time Of peace.
Iraetiedl Workings. resumptio
OF specie payments, necessarily accompanie
by restored confidence, gold and silver woul
no longer be boarded as now In uuprodu,
Y tive idleness, but would flow into the char
nels Of business and thus swell the yolum
: OF the currency. We see only some two hui
, dred millions OF coin In the United States Q
Q present, but the actual amount Is neare
o four hundred millions. With a paper GU
r rency everywhere equal to specie, our De,
s pl, would have only two actual uses T,
Q gold, viz: First, to manufacture into plat
9 ornaments, etc., and, second, to ship al -oa
= in settlement OF adverse trade balances
Q While resumption Itself, by curtallng 9,
y travagance at home and preventing owe
{ trading abroad, would tend to throw Ii
yearly balance Of foreign traffic in our fayo
yet suppose, after rcsuming on the pla
r here indicated, that our cotton, breadstuff
petroleum and other exports should prov
Insufficient to pay for our importations Of an
given year, and New York importer find
himself compelled to send abroad half mi
lion In gold, how will no obtain IT. Ordi
( narily the banks would accommodate hiI
( without Inconvenience aud without charge
= but at the worst the importer would simpl
A go to the bullion-broker Tor be his ow
r broker If desirable) and pay him the usuu
Q percentage Of from one eighth to one ha
!, per cent. for obtaining the gold. The bu
!, lion-dealer, after exhausting his own suppl
: OF coin or bullion, would check out from III
n city banks an amount Of greenbacks On
r mired national bank notes. The greenbacl
Q he would take to the sub-treasury and Q,
/ change for gold. The national bank not,
: he would dssort, and whenever he found bill
to the amount Of, say, $500 or more on an
one bank, he would place the package /
the hands OF the express company to b
transmitted to the Issuing bank for redeml
ton. The broker would receive in return
from the one hundred or five hundred wldel
scattered banks on which he had drawn, tn
desired amount either In gold or greenbacki
II the latter, he would exchange them 70
coin at the sub-treasury, and the transactio
would be closed. Thus, whenever a larg
amount Of specie should be needed for anil
ment, 1t would be drawn in comparative
small sums from hundreds of different d,
, positories located In various parts of tn
country; the money market would feel n
| ahapk and M nna ha nj tunpld faaI - T., =.