The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1884-11-27
NATIONAL CAPITAL NEWS.
concluded from First Page.


culation of $194, TAT, $50. The banks held, Nov.
l. 1884, $l55, 604, 400 per cent. bonds, payable
at the pleasure of the government, of which
SO, $50, 200 have been called for payment, the in
terest ceasng Nov. l, 1884. If these bonds
not replaced by others bearing interest, there
will be an immediate reduction in circulation of
80 per cent of their amount
On Nov there were $194, 100, 500 3 per cent.
bonds payable at the pleasure of the govern
ment. These bonds will probably be paid with
in the next two years, even if considerable
changes are made in the tariff, and from 1887 to
1891, when $3.50, O0O 900 of Al per cents ma
the government can call in for redemption No
doubt the accumulation of surplus revenue if it
continues to accrue at the present rate during
the four years between 1887 and 1891, together
with the revenue of 1892, will be more than suf
fclent to pay off the four half per cents,
and from 1892 to 1907 it will be impossible for
the government to use any of its surplus rev
enues for payment of its bonds, except at the
option of their holders. 1t is apparent that the
government cannot accumulate and hold its sur
plus revenues oven during the short period from
1887 tie 1892 without great disturbances to the
business interests of the country, and much less
can it do so during the longer period from 1892
to 1907 1t appearsr-therefore, that the forego
ing considerations should be given due weight in
any plan for funding the per cent.
bonds maturing in 1904 and the
Comptroller therefore suggests that the principle
difficulties of the situation may, perhaps, be
obviated as well reduction of interest eff
fected by funding these bonds into others which
shall mature in proportionate amounts at certain
fixed intervals. Thus, the $73S, 900, 600 of per
cents might be funded into an equal amount of
or % per cent. bonds one-fifth of which, or
$l47 coo, GOO to mature at intervals of five years,
the first installment falling due July l, 1897, and
the remaining installments of $147, GOO, 900 each
on the LIST of July in the last year of each sue
ceeding period Of five years, viz: in 1902, 1907
1912 and 1917. The average maturity of these
five classes of bonds would be the same as that
July l, 1907. Whatever course may
be deemed expedient by Congress
in regard to the finding or future payment of the
public debt the Comptroller is of opinion that it
is perfectly safe, and will afford great benefit to
the public, to promote an issue by the national
banks of circulation to the extent of 100 per
cent, par value, of bonds deposited, instead of
80 per cent. Even admitting that the bonds rep
resenting the public 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
banks, always have the right to cancel the
bonds on deposit securing the same, and thus
eXtinguish an amount of its debt equal dollar
for dollar, to the notes redeemed 1t is further
submitted that the profit on circulation may be
increased to point whiehwin induce the banks to
keep up their circulation to a maximum and stop
the contraction of their circulation, which is
now occurring, by repeating the law taxing such
circulation at the rate of of l per cent. The
expenses Of keeping up the national banking
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 lastnamed method. In concluding this sub
ject, the Comptroller wishes to have it under
stood that he is not in favor of any measure
which will cause imitation. He is of opinion
that the present aggregate of paper circulation,
made up of legal tender and national bank
notes, and gold and silver certificates, is ample
for all the needs of business. He believes, how
ever, that a sudden contraction of national bank
circulation, which, without appropriate legisla
ton, is imminent, will seriously embarrass the
business of the country, and that if this contrac
tion is permitted to go on, it may result in the
entire discontinuance of the issue of notes by
the national banks. The Comptroller believes
that this form of currency, which can be in
creased or diminished in accordance with the
natural laws which control business, should be
continued in preference to any other now per
mitted by law.
In regard to circulation based on silver, the
Comptroller says the people of the United States
now hold paper circulation based upon the silver
dollar in amount equal to more than one
third Of the national bank circulation If it
is for the best interests of the United States
to issue a circulation based upon sill
yer, the Comptroller believes the circulation
should he issued upon coin or bullion which
contains sufficient number of grains of silver
to have an intrinsic value in the markets of the
world equal to its nominal value Some writers
nave suggested that circulating medium might
be based upon bullion, both gold and silver and
the Comptroller is Of the opinion thai, under GER
tain restrictions and regulations it would be far
more correct in principle to issue silver certif
Gates, based upon deposits Of silver bullion to be
valued in the exact proportion of silver to gold,
than to continue to issue certificates under the
present law. If this was done, silver bars might
be stamped at their market value and held IN
the treasury for redemption of certificates.
which would call on an amount of silver equal
in value to their nominal face value
pressed in gold. The bullion represented ty
10 .aallxs
its market price in gold, and certain proper
tionate amount Of silver so held might, perhaps
be coined to provide means for REDEMPTION of
certificates. if redemption was desired for bust
ness purposes. The Comptroller believes the use
of silver as money in this manner. and its peri
odical valuation, would have more influence in
the appreciation of the market value of silver
money among the nations of the world than the
present arbitrary coinage of APP grains of silver
as dollar. The issue of currency Iased upon
silver should not however, be unlimited and
the present laws making the purchase and coin
age of a fixed amount of silver bullion mandatory
are very perniciouS in their effect, the
unlimited and continued issuance of full
legal-tender silver coinage and certificates
based thereon, OF intrinsic value less than their
face has already caused boarding of gold, and
will continually Lrive it from the channels of
trade, thereby car sing practical suspension of
gold payments There are many indications of
this, notably the uneasiness in financial circles
in June and July last, caused by the reserve of
gold in the treasury falling so near to the point
at which, under the law, the issuance of gold
certificates ceases. 1t will also be observed that
during the present year, the national banks
throughout the country have increased their
holdings of gold. including certificates, in the
sum of $40, Ga, $50.
The Comptroller concludes his report with
discussion Of the subject of bank examinations
and a consideration of the financial troubles of
May, 1884
THE STOVE-LID DOLLARS.
Heaping Them Up in the New Vault at
Washington.