St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1886-11-26
FINANCIALIEGiSLATION.
A Subject Which Cong ress Will be
Compelled TO Consider.

WASHINGTON, Nov. 24.-COngresS. it
would seem, must of necessity proceed to
financial legislation. The rapid extingiish-
ment of the public debt is slowly contract
ing the currency, and if some relief is not
I forthcoming this contraction is liable to
bring with it shrinkage in values and de-
preston. Just now the national banks ap-
pear as the main sufferers, but the bur-
den in the end will fall on the people. In
very few months all the outstanding per
cent. bonds will have been called in. There
will then be no bonds in the market as a
basis for national banking except the Is
! and AIS. The latter have less than ten
| years to run.
| Take an illustration: Proceed to organ
iZe a national bank. The United States
requires as preliminary step thereto a de-
poSit of $50. 600 of its own bonds to secure
a charter. To get these bonds in the mar
ket the $50, 900 in fOurS would cost SIP. 500
premium. In other words. the bank would
have to put up about sos. 600 to organize,
and it would not realize, because of the eX-
cessive premium, more than 81 per cent.
for its money. Now, the condition of af-
fairs is that the thIee-per-centS, which are
being rapidly called, are now owned by ra-
tiOnal banks largely, and are already in the
treasury vaults
TO SECURE CIRCULATION.
Quite number of banks thus placed have
already surrendered their circulation be-
cause it did not pay them to buy the higher
priced bonds to hold it. With the tax on
circulation and the high rate of securities
they found no profit. The result is that
when bank surrenders its circulation the
currency Is contracted to the amount of its
circulating medium. Any considerable sur
render of circulation will produce violent
contraction of the currency. and the shoe
will pinch them who are least able to bear
it. The banks have one way out. They
can secure silver certificates and let their
circulation go. This, however, puts the
government in hole, because it makes
the treasury vaults merely a receptacle
for all the surplus silver in the land.
What this government needs is a low-priced
bond having no forced limit of call. The
objection advanced is that the government
has more money than it wants and that it
would be poor sense to pay low rate of
interest for that which it doesn't want.
However much there may be of justice in
this way of putting it, it should also 5e
borne in mind that the people have
HEROICALLY SUBMITTED
to taxation, and now that the government
is over all its financial troubles attendant
upon the great war debt it ought to do a
little for the people. A low interest bond
perpetual would be popular at once in man
fold ways. France has it, 50 has England.
Neither of these powers can be charged
with lack of thorough
understanding of financial problems.
Inquiry at the treasury department shows
that as the time for assembling of congress
approaches, the public interest in the
national bank question is visibly increaS-
ing. The comptroller of the currency is
now receiving letters from all parts of the
country making suggestions as to a more
permanent basis for the national banks
These letters come not only from persons
interested in National banks, but from Off
GERS of state banks, private bankers end
from prominent manufacturers. and many
merchants seem also to have directed their
attention to the maintenance of the existing
system. Comptroller Trenholm said to-day
that he was very much pleased to receive
suggestions, and hoped that every body
having any ideas on the subject would COM
municate them to him. 50 that he would be
prepared to lay them before the proper
committees in case congress should take up
the consideration of the subject.