The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1888-04-17
PROCEEDINGS OF CONGRESS
Senator FarWeII Delivers a Strong Ar
gument on the Financial QuestioG,
Urging the Paramount importance of Retain
ing the National Bank System and the
Abolition Of All Legal-Tender Laws.


instrneting the select committee on operation Of
the cisil-ssrvice law to inquire and report
whether there has bean, within two years. any
fraud or INSTRUMENTATION in the New York
custon,-house in regard 70 the importation of
sugar.
Mr. Riddlebereer offered a resolution for the
suspension of the Senate rules as TO executive
sessions during the consideration Of the fish
cries treaty.
Mr cockrell-Let that resolution lie over.
Nir. Sherman remarked that resolution here
tofors offered by the Senator from Virginia. in
exactly the same terms. was now pending before
the committee on foreign relations. and would
be reported for action; he could not say whether
for or against, before the fishery treaty would
come MP. He did not think il wise to precipi-
tate debate on the subject now.
Mr. Riddlsbereer-Does the Senator object to
present consideration of the resolution
Mr.. Sherman--If the Senator desires this res
olution to DO referred TO the committee on for
sign relations. have no objection.
Mr.. Riddlebsrger-No; do not want another
resolution ssnt to that graveyard.
TIE resolution went over under the rules.
Conference reports on the bills to divide the
great Sioux reservation into separate smaller
reservations, and to ratify and confirm the
greement with the Gros Ventres and other
bands of the Blackfeet Indians in Montana.
were presented and agreed to.
On motion Of Mr. Farweli, the bill providing
for the Investment Of certain funds in the Treas
ury was taken up. and Dir. Farwell proceeded
to address the Senate the financial question.
He gave notice of his intention to offer two
amendments to the bill. One OF them Directs
the Secretary Of the Treasury TO issue and sell
- aoAa - h.. he Rnw I'D Sfne0
notes, United States two-and a-haH per
cent. bonds, redeemable after fifty years. TO be
used by the banks security for their clrcu-
lating notes. the notes to be issued the full
par value of the bonds. 1t also directs the Sec
rotary Of the Treasury invest the surplus
funds held in the Treasury. including the amount
to be received for these bonds, In the purchase
of any United States bonds in open market, and
it repeas all the sinking fnnd laws. The other
amendment authorizes the Secretary of the
Treasury. in order to enable the national banks
to maintain and increase their circulation, and
TO prevent the ultimate destruction OF the banks
by the purchase or payment of the national
de5t. to receive from the BANKS. to secure their
circulating notes. State. county or municipal
bonds of the United States, upon which interest
has been heretofore promptly paid, and whose
market value IL equal TO or greater than their
par value, bearing interest at not less than per
cent Such bonds, however. not 10 be
received by the Treasurer of the United States
ut more than Is per cont of their par value,
until the approval of the Secretary of the Treas
ury. the Treasurer of the United States and
Comptroller or the Currency shall have been In
dorsed upon them.
Mr.. Farwell went on TO say that the bill was
good enough as far AZ il went. It did not in
clude the whole financial question, which he
garded OF permanent interest, but onlyproposed
20 temporize with it. It simply reduced the in
terest on the per cent bonds to q per cent.
These bonds amounted to ovsr 800. coo, 600, aud
matured in 1907. and 1t authorized the national
banks 10 receive circHlatlon at par upon them,
and upon all other United STATES bonds. The
bill did not remedy the evils of the present
a.
which he proposed to offer would, he thought
cure those evils. He would, IL he could.
amend the financial legislation of the country
that tie national banking systematic best ever
devised-should be continued. His amend
ments, IL adopted, sould enable the national
banks 90 use he debt of the United States
If that debt could be continued at its present
volume, the legislation proposed by him
would be inadequate to maintenance of the
national BANKING system. But he recognized
the fact that the American people were ANXIOUS
and determined 10 pay that debt. He was in
favor Of the largest possible bank circulation
that was redeemable In gold demand No
circulation reasonable in that manner could be
too large. The rapid decrease of national bank
circui alton was due to the very large premium
on the national bonds and their maturity.
The banks could not afford TO hold them with the
absolute certainty of losing that large premium.
They, therefore. took them up and released
themselves from the obligation OF redeeming
their notes. For that reason the national pank
circulation had been reduced, since 1882, from
1853, 000 600 about $l60. eco 00O aud the banks
would be compelled to retire the balance of their
circulation in very short time unless some
thing was done to prevent it. The country
9ould not afford to destroy the best banking syS-
tenn ever devised. Under his amendment the
banks would have new lease OF life. and would
be Aole to furnish the country with all the
circulating medium required. limited only
by the amount OF the national debt. IF il were
desired that their permanent existence should be
secured and the necessary volume of currency
furnished through them, then authority should
be given 20 them furnish other bonds MS a
basis for circulation. according as the national
debt was reduced and retired Without that
authority. the national debt was paid, the
banks would be compelled TO give MP circulation
secured thereby. and thar circulation would, OF
course, be destroyed. The real trouble was in
the want OF legislation. ia forcing all the com
mereial interests of the country 10 base its
medium of exchange the national debt and
in the retirement Of that debt without the sub
stitate OF some other basis of circulation. A
bank circulation q necessity, and could not,
without detriment to trade, be- replaced by any
fixed governmental issue The governments
being outside OF and disconnected with tbs COM
nercial requirements OF the country could not
assume of the functions Of banking with
advantage to trade unless II assumed all OF them
The relation between the circulation and com m-r-
cial credits was intimate that if the govern
ment assumed such control Of the one TO prac-
ttcay prohibit its issue. it necessarily limited the
other No other nation lad ATTEMPTED to sepa-
rate the two. England. France and Germany
controlled their respective calculations, but only
through government banks, and as these banks
granted credits they had some connection with
the commercial world. Each Of thenf reeulat
ed and assisted commercial credit, irrespective
o. It's form. by raising or lowering the rate OF
discount. while under the American system no
assistance could DO rendered to the com mercial
world ia the way OF credit with the best security,
even government bonds, at any of dis
count matter what the necessity might be.
The prejudics existing against national banks
and persons having money such that he
thought it quite improbable that the legislation
which he thought necessary and useful upon
that subject would pass now. Ha would IL no
had the power. pass law now that
would perpetuate the national banking system.
Government was organized to protect the peo-
ple; it had other duties. In the late civil war
the government had fully exercised those func-
tions. In doing SO it had invoed this people in
being able to borrow tho money needed, had
sssusd greenbacks, had declared them 10 be a
legal tender, and had organized the national
banking system to mage market for govern
ment bonds. Nearly up TO the present time
business had been dons upon ersenbacks and