Eureka daily sentinel. [volume] (Eureka, Nev.) 1871-1887, 1879-03-18
onEErBACK CURRENCY AND ITS

The funded debt OF the United States,
three years ago, consisted Of four and five
per cent. bonds, amounting in all to less
that 81, zoe, 000, 900. Since Secretary Sher-
man came into power the public debt bear
ing interest in coin has been steadily in
creased, month by month, until now it
consists Of four, four and q half, five aud
SIX per cent. bonds, amounting to s2.0l4.-
27l, 9O0-an increase Of more than three
hundred millions. The interest bearing
debt Of the country is to-day counted by
che thousand millions for che first time
since the passage Of the Funding Act,
eight years and a half ago. In the first
Eve years after the war the debt was re-
duced by more than six hundred millions,
and in the next eight years more than half
that reduction has been lost. Some little
Increase is due to the refunding Of the
debt, which has been going on lately SO
fast that the redemptions have not kept
pace with the issue Of the new tours,
and the result has been a temporary in
crease. This will continue for q month at
least, and the April statement will show q
large reduction, but still not enough to
bring it back to the figures Of last fall.
The greater part Of this increase has been
due to the preparations for resumption,
nearly one hundred millions having been
secured for that purpose.
This large addition to the national debt
which bears interest in coin is the price that
we. pay for the privilege Of using legal
tenders. To keep them on q par with coin
there must be Q coin balance constantly on
hand in the Treasury, and it is not safe to
reduce that reserve below thirty-three and
one-third per cent. Of the total amoun OF
le~gal-tenders outstanding. Many expe-
rienced fnanciers do not think il
safe to attempt to maintain resump-
ton with q balance Of less han forty per
cent, and the Bank Of England, which has
some little experience as q bank Of issue,
always endeavors to add to it's reserve when
1t falls below that proportion. Should il
ever go below onc-third Of the amount out
standing, there Is an increase in the rate OF
discount until the proportion is brought
up again. The reduction in the National
debt has been almost continuous month by
month, but it has been brought about with
. constantly increasing funded debt, as
bonds have been sold for cash and the
proceeds deposited in the Treasury. The
cash balance is now six times as large
- when we began to refund and set our
house in order to pay out gold for legal
tenders. If the greenback currency were
done away with now. we should be relieved
Of the necessity of maintaining this large
deposit Of gold in the vaults, and the
millions now there would be kept in the
banks, where the money would be equally
available. The debt could be reduced al
once by $50, 000, 600, and We should also
be spared the necessity of printing and
maintaining a National currency at a cost
Of millions. We should, IN the Other
hand. get the tax o: n per cent. on SC
much additional currency issued by tht
banks, and make all the profit, whateve,
it might be, on destroyed and mutilatet
notes. 1t does not require any long argu
ment to show that it would be more eco
nomical for the Government to go out o
the banking business, and let the banks
furnish a currency based upon the deposi'
Of bonds and subject to the tax for the
privilege.