The Ottawa free trader. [volume] (Ottawa, Ill.) 1843-1916, 1883-10-27
BANK CURRENCY AND SILVER

40 Tor u currently UdSIS Nv" 'H'' '''~ ~ -
bonds available tor tina, purpose are Delhs
so rapidly called in and redeemed. Inc
bnlk of the national bank currency now
rests on the per cents, but Of these there
are but $500, 100000 left, and every month
or two the secretary of the treasury calls
! in and redecms twenty or thirty millions,
| At this rate few years vii see all the
bonds available for currency purposes eX-
Iunguished. Even already, within the past
eleven months, the national bank currency
of the country has been diminished, or
contracted" some $0,OOOO6O, on account
of this bond redemption and the contrac
ton must go on much more rapidly here
after. What are the banks to do?
At the late National Bankers Conven.
Ilon at Louisville the matter was very
gravely discussed, and the only escape
from a rapid withdrawal OF all the
national bank currency was held 10
lie in the banks purchasing per
cents, of which there are suIl some
S1OOO0O0O0 unredeemcd and with twenty
or more years 10 run, bu; these bonds are
worth 12i on the dollar against lOl Tor the
% per cents, and with the present profits on
currency the banks cannot afford to pay
such "A price tor the bonds. 1t was Sug,
gestcd that if congress should remove the
per cent. tax the banks now pay on their
currency they could afford to buy the 4
per cent. bonds, and congress Is to be pc
ttioncd for that purpose; but rs favorable
action by democratic congress is exceed
ingly doubtful, little consolation was
drawn from that source. Comptroller
Knox, of the National Currency Bureau,
made the wild proposal that, in the ab.
sencc Of national bonds OF our OWN, the
banking system in this country should be
based on deposits of the national bonds OF
foreign countries, but the scheme, We be
licyc, found no hackers.
The question arises as the withdrawal
Of all The national bank currency within
the next decade under presen, auspices is
inevitable, is such an outcome greatly to
to be dreaded? True, 1t involves Il con
traction OF the currency in that direction OF
over $500 100000 but cannot that contrac-
ton be made up IN some other way?
year ago the total amount OF money in the
country-gold, silver, greenbacks and ma
tlonal bank notes-was stated by the comp
troller Of currency at SASS, 100000, and
ten months later he stated it to be $l,514,
100000, or nearly $l00,0000OO greater,
though no greenbacks had been retired
during the year, and but $4,000, 900 Of ma
tlonal bank bills Withdrawn. The increase
has been in gold and silver, both largely IN
circulation IN the form of gold and silver
certificates. BY the same method undoubt-
eddy, rs things are now moving, the expen.
sion of the circulation based on metal will
move along at least pari pasSu with the
contraction by the national banks, while if
congress should decree the free coinage of
silver, the metal eXpension would greatly
outrun the currency contraction.
But, say the monometalllst advocates
of an exclusive gold standard, this large
swelling of the circulation by the coinage
of silver must ultimately drive out all the
gold. How? The only use we nave for
gold is TO settle balances in our foreign
trade. If the balance Of trade is in our
favor, gold > lmporte if against US, gold
will 20 abroad. This will be the case
whether we lave one hundred or one thou
sand millions of silver in circulation here
Nobody takes our silver abroad, COnsc
qucn,ly there Will be none to send home to
us to settle balances of trade. Thus the
solution of the currency problem becomes
simple enough, and Is found III the larger
use of silver
Anyhow, the question how to provide
the country with enough circulation il we
let the national bank currency die out Is
one which, as the Tribune aptly says, the
national government is entirely competent
to deal with. The free coinage of gold and
silver and the issue against them of paper
certificates will, with the outstanding legal
tenders, give US abundant paper money.
Notes representing com or bullion, dollar
for dollar, Is the best paper money in the
world. AS the national bank notes disap,
pear coin certificates can take their places.
All our money will then be national, and
the banks will employ all their capital in
a Legitimate way, rs more conservative
banks everywhere are how doing volun-
tarily.
In reference 10 the interview with the
i,.,lI