The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1892-08-14
TaE ST. TREASURY SCHEME AND
1TIONAL BANKS,

TIE p. ,ition of the Peoples party in
respscL )aning money 70 the people is
not eiesI efnrd. Whether it is intended
10 issue zee enable paBeT or fat money is
not bnown The CALL recently said that
II the G5Tef ment should issue redeemable
paper A. I'd lose the difference between
the lnteres IN good money and the per
cent yea IL is proposed to charge for
loans, also hat if the Government should
issue fist no ey it would receive per cent
Tor money at cost and was intrinsically
worth az. A correspondent agrees
~is5. IFE ALL about the fat money. but
Qf8sfa SDect to the other proposition.
de writes
y lie GOV nment shonid Issue redeemable
il out. instead OF losing it would
gem - crest received whether that were
pes cent 0. lore.
No Cover nent can issue large amount
OF redeemsb,y paper without maintaining
Oasls OF This basis need not neces-
sarily he dn'lar for dollar, but it must be
broad enough to preserve public confidence.
For thirteen years. since the resumption of
specie payments in 1879, the Government
has kept 500, 000, 600 Of gold coin living idle
In the treasury. its only service being to
assure holders OF greenbacks that they
could AsTe coin for their currency when
they might want it. AT present we have
SieO.ooo,oW IF coin in the treasury for
something nore than $780, OO0, 600 of legal
tender "a circulation. There is no general
demand Tor the coin, for the reason that
every ous Anows that the coin awaits a
presentation of the Government note
ao" eohllllon OF a Government issue Of
currency 70 Dan is that the issue sbeuld he
large eneugt to accommodate all who MIGHT
0Her the rec Tired security. 1t would not do
Tor fhe doY rnment to issue currency for a
favored CLASS of borrowers. Neither wonld
= De rieht 10 Issue few hundred millions
10 be distributed by means of a scramble
FIRST come, hfst served. III the currency was
desirable money, brokers would pet il az
arst hand md loan it out to the peonle at
current rates. Now, no one viii CONTEND
thai the government can issue thousands of
millions Of sdeemable paper without a cor
responding DIN basis, and IL will certainly be
admitted 4 IT the coin stored as basis will
cost the e vernment the ordinary interest
on money 1t is true the volume of cur
Tency mAY be much larger than the amount
OF eoiE 1t IS based upon, but as the basis
must b8 enc urable while the amount of cur
ieney Woaic fluctuate. the profit would not
Dc 10 large IS would at first appear. To sum
up' tae t'op rnment would need to keen coin
~ reserve the amount of 0ne-third of the
tssos 81 q rrency. Tie coin is worth at
ieAss z per cent year, but the Govern.
nens ISSUES but about three times az mnch
oAsat enc as II keeps in coin at / per cent
year e Government, therefore lose.
on interesi. loses ON the fiuctua,.n, 49,.
o. eufrencs and loses on the mschtnar,. ~.
which the currency would be disirlbn,ss
and collected. 'eu
DuI cur e9rrespondent asks If this IL No,
the very u ng that Is being done with the
national banks. Not exactly. THO bonks
give tbs g gernment the Governments own
bonds Tor security. The banks also nav
TAX ana stand the cost of fluctuations and
OF distfi5uilon. Ali the Government mas
10 90 IS TO surrender bonds when CORE
spending amount OF currency is surren-
aeIsa. II should be borne in mind thai
-iasse Danks were chartered when the Gov
elH'henL vas in distress for money, Its
own satss we're subjected to heavy dis
ecnnI temporary loans and floating in
,euness mad TO be provided for. The
DabKs boHsht Government bonds bv IN.
hunafea millions in consideration OF the
piis"faes occurred To them. Sill IL IL an
spn question II, as our correspondent
ARGUES IL would not be better for ~ g.,
eminent 70 issue legal tender diree,l, 80
''as 'Aas me profit on the currency circn.