The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1884-12-12
FINANCIALLY


tionaI Debt and other Financial Matters.
The annual report of the comptroller of the
currency, just made public, says: The national
banks held on November l, 1884, 1855, Co.. 400
In three per cent bonds, payable at the pleasure
of the government, of which 1856, 200 have
been called flor payment, interest ceas-
ing November 1, 1884. If these bonds are re-
placed by others bearing interest, there will be
an immediate reduction of 90 per cent of their
amount. On November 1 there were 1894, 1907
500 three per cent bonds payable at the pleas
ure of the government. These bonds will prob
ABLY be paid within the next two years. Even
If considerable changes are made in the tariff.
and from 1887 to 1891, when $3.50, 900, 900 of Az
per cents mature, there will be no bonds which
the government can call in for redemption.
No doubt the accumulation of the surplus rev.
enue, If it continues to accrue at the present
rate during the four years between 1887 and
1891, together with the revenues of 1892, will
be more than sufficient to pay off the AZ per
cents, and from 1892 until 1907, it will be i'm
possible for the government to use any of its
surplus revenues for the payments of its bonds
except at the option of their holders. 1t is ap-
parent that the government cannot accumulate
AID hold its surplus revenues, even during the
eaort period from 1887 to 1892, without great
disturbances to the business interests of the
? huntrV, ana mucn less cdn II 10 So turing u
longer ,eriod than from 1892 to 1907. 1t APP
pears. therefore, that the foregoing considefa-
lions should be given due weight in any plan
for funding the 4 per cent bonds maturing in
1907, and the comptroller therefore suggests
that the principal difficulties of the situation
NAV perhaps be obviated by funding these
bonds into others, which shall mature in pro-
portionate amounts at certain fixed intervals.
Thus the $780, 900, 900 4 per cents might be
funded into an equal amount of 3 or ~ per
cent bonds, one-fifth of which, or S147,6OO,OOO,
70 mature at intervals of five years, the first In
stall lent -alling due July 1, 1897, and the ~
naming installment of s147 GOO, 900 each on toe
first July in the last year of each succeed
ing period of five years, W 1902, 1907, 1872
and 1917. The average aurity of these five
classes of bonds would b 5re same as that If
the present 4 per cents, Va: July l, 1907.
Whatever course may be deemed expedient by
congress in regard to the funding or the future
payment of the public debt, the comptroller is
of the opinion that it is perfectly safe and will
afford great benefit to the public to prevent an
issue by the national banks of a circulation to
the extent of 100 per cent, par value, of the
bonds deposited, instead Of 30 percent. Even
admitting that the bonds representing the pub
lie debt when funded at lower rates might at
times in the future be below par in the market,
the government would if forced to redeem the
notes of insolvent national bank, always hav.
the right to cancel the bonds on deposit Sc
curing the same, and thus eXtingulsh an
amount Of its debt equal, dollar for dollar, to
the notes redeemed. II is further submitted
that the profit on the circulation may be in
creased to a point which will induce the banks
to keep up their circulation to q maximum and
stop the contraction of their circulation, which
is now occurring, by repeating the law taxing
such circulation at a rate or one-halt OF ono
per cent semi-annually. The expenses of keep
ing up the national banking system by the gov
ernment are at present paid in part from the
proceeds of this tax and in part by assessment
on the banks. If the tax be abolished, all
these expenses should be paid by the last NAM
ed method. In concluding this subject, the
wishes to have it distinctly ur-
derstood that he is not in favor of any measure
which will cause imitation. He is of the opin-
ion that the present aggregate paper circula-
tion, made up of legal tender and national
bank notes and gold and silver certificates is
ample for all the needs of business. He be-
lieves, however, that sudden contraction of the
national bank circulation, which, without APP
propriate legislation, is imminent, Will
Sc. ously embarrass the business oil
contraction is permitted to go on it may result
In the entire discontinuance of notes by the
national banks. The comptroller believes that
this form of currency, which can be increased
or diminished in accordance with the natural
laws. which control business, should be con-
in preference to any other now permit
ted by law. In regard to the circulation based
on silver, the comptroller says: The people OF
United States now hold paper circulation
| sed upon silver dollars in amount equal TO
more than one-third the national bank circula-
ton. If it is for the best interest OF the United
States to issue circulation based uDon silver,
the comptroller believes circulation should be
Issued upon coin or bullion which contains a
number of grains of silver to havein-
trinsic value equal in the markets of the world
10 its nominal value. The present laws OF
making the purchase and coinage OF a fixed
amount Of silver bullion mandatory are. the
says, very pernicious in their effect,
as the unlimited and continued issuance of 9
full legal tender silver coin and certificates
based thereon, of intrinsic value less than their
face, has already caused the boarding of gold
md will eventually drive 1t from the channels
If trade, thereby causing the practical suspen-
sion Of gold payment. There are many indica,
ions Of this, notably uneasiness In financial
circles In June and July last, caused by the re-
;erve Of gold in the treasury falling so near to
he point at which, under the new issuance,
!, ID certifcation ceases. 1t will also be OBJ
,erved that during the present year the naticu-
i banks throughout the country have in
,reased their holdings of gold, including Ger
.ifcates, In the sum of s19,615, $50. The comp
roller concludes his report with a discussion
# the subject Of bank examinations, and the
consideration of the financial trouble OF May,
SS4.