Savannah morning news. [volume] (Savannah) 1868-1887, 1882-10-03
Provision against Currency Con-
traction.

traction.
Senator Jones, of Nevada, has recently
published in the Chicago Tribune a
scheme of his own which he thinks will
successfully meet the danger of a sudden
contraction of the national bank circu-
lstion, to which he thinks the country is
somewhat liable because of the present
high price of government bonds. 1t is
believed probable that this scheme will
receive the sanction of the Comptroller
of the Currency, and will be submitted
to the next Congress, and this fact invests
it with unusual interest. An outline of
Senator Jones ideas, as given in the
columns of our Western contemporary,
is as follows: He proposes that the ire
deemable per cents, amounting to
S739, 600, 900, should be replaced by
bonds bearing a lower rate of in
terest, and that this rate should be
fixed at about the figure at which the
market value of the bonds would be
par. The banks which desire to obtain
the privilege of issuing national bank
notes would then be able to find in the
market supply of available bonds at
par Many banks now refuse to take
out circulation because they do not wish
to pay the high price commanded by the
As. and AS. They would not meet this
obstacle IN the case of the new bonds
proposed by Senator Jones. At present,
bank circulation is practically stationary;
there are indications that time is COM
ing when it may rapidly decline before a
currency to take its place has been pro-
vided. Bitter experience has shown this
country the disasters that come with VIC
lent changes in the currency system, and
Senator Jones thinks it is not at all too
soon for the consideration of this ques-
ton. 1t is one which is certain to force
itself upon the attention of Congress, and
the shape in which it will come will be
more disagreeable the longer it is post
poned.
The Chicago Tribune, however, thinks
that there are some features in this plan
that would make its execution embar-
RAISING. 1t says: Senator Jones pro-
poses to pay a bonus or premium to the
holders of the per cents. to induce
them to take the new d or q or 3
per cents. The lower the rate of the
new bond the greater the bonus. He
makes light of the popular dissatisfac-
ton with which this proposal to pay the
holders of governments big bonus
would be received. But it would be
serious. Such performances as the latest
O-der of Secretary Folger offering to pay
now interest not due till December % to
those holders of called bonds who will be
kind enough to take their pay in advance
have made the public suspicious of the re-
lations of the Treasurer to Wall street and
the Eastern bondholders. Vanderbilt owns
about $50, 900 of 4 per cents. The
country would not look with patience on
payment to him of a bonus of sew.
eral millions to surrender them for an
other kind of bond. Another difficulty
would be that the holders of the bonds,
seeing the advantage of their position,
would refuse to make the exchange on
terms it would be profitable for the gov
eminent to accept The spectators
would get possession of barge locks of
the bonds and attempt to dictate terms
to the government.
But, as our contemporary we'll rea-
sons, the difficulties suggested by this
plan only makes more urgent the need
that some successful solution be reached.
Our national bank circulation is more
than One-third our total circulation, and
it must be kept in such condition that it
will expand as the necessities of business
aud the growth of the country demand,
or some new currency must be found to
take its place. The time allowed for this
pressing debate is rapidly passing away.