Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1893-08-04
81 TELEGRAPH.



CIEvEIASD, Aug. A-The following let
Der from Congressnaa T. L Johnsoa .
made public.
To the Cleveland Chamber Of Commerce.
Eeatiensen Believing tina, the financial PRES
sHre nav existing demand. prompt and sde-
zaafe relief. Isrssfsose on tie nrsz day OF tae
coming s-o-tea 10 introduce In the house Of
representatives the following bill:
An act 10 permit the exchange OF United
States hoF.ats for treasury notes.
Be il snsetesi by the senate and house Of
Representatives of the United States Of Afzs.r-
ics, IA congress Assemhlesi, that any holder Of
Fossa. Of the Caiie.4 States may after the pas
sage Of tbs act deposit such bonds al the twas
ury Of the United states or Al the ofti1e Of any
assistant treesarpr Of the United states and
reeeIye therefor their face value IN treasury
ao5es Of the nited State. described In the
act Of July a l-sl Such bonds shsII b aetd
- Special deposit to the credit vf the party
PraYs7ssa; them. and aaFiag the time they are
20 Aesd shall draw nofnterest. and shall be re-
tarned On the order u the party dsposttins
taefn On the payment Of their face value Ii
L B3tcd States currency
Sect 2. The secretary u the treasury shall
make stlch regulations as may be Necessary
70 save 10 the gUsernment the payment OF III
tsrrst Ga such bonds during the tine thef are
held special deposit, and he Is hereby
authorized to issue treasury notes to the
amount needed and TO provide for the cancel
latien Of an equal amount OF cash notes on
the return Ut .sid bonds 10 their OWNERS and
= SUN sufficient To carry into effect the pro-
visions of this at is hereby appropriated out
Of any money ia the treasury not otherwise
appropriated,
Sect. q. All acts and parts Of acts ineonsist-
snt with the provisions OF this act are hereby
repealsd
Concerning the Present.
Whatever be- the primary causes OF the
financial difficulties now paralyzing business
snd stopping industry. IL is clear that their
drst appearance was largely due TO the i'm
gairrneat OF confidence through fear Of an I'M
peadu3g change in the measure Of values.
Bat the main aad pressing difficulty now Is
the SCARCITY OF the medium Of exchange.
While the shrinkage Of credits has increased
the need for money, its available volume has
been greatly ie-sened by the strengthening OF
reserves by banks and saving institutions and
BY the boarding Of individuals under fear Of
or the desire TO bring about a still greater
scarcity.
The repeal Of the Sherman act. which con-
hdently aniicip pate, while IL Will aiiay fears Of
any change in the measure Of values, will do
uu1hiug directly tu Increase the medium of
exchange. Ca the contrary By stopping the
.SIe If treasury uot.s for silver. IL Will lessen
the supply. The oaly measure looking to re-
lief VI The feft for money yet proposed with
sag hope Of he necessary consent Is that Of
permitting the national banks to extend their
tssue tJ the
Face Value of Their Deposited honda
But this. while certain TO arouse dispute aud
consequently cause delay, would increase the
currency only some sl1,1j,so. The bill
send you, allowing all holders of United States
bonds to turn them into money for such time
as they may be wtiiiu1 TO fareso interest, af-
fortls simple, safe, immediate and sufficient
remedy for the abnormal scarcity of money.
Beyond the bonds deposited To secure the Ia
tional bank circulation. there are in existence
sHusb.tno Of government bonds, largely held
by financial Institutions
For instance. The Society for savings"
our own city tue largest and strongest finan-
cial institution in Ohio. holds today s2,tnl,U0
If these bonds Yet, though unduubted
security, thes. bonds cannot at present be
converted into money with which to meet
any demand vi its depositors wit bout boss to
the society and increase in the general imam
ciaI pressure. II could only sell them st
present at n great sacrifice Of their normal
value and could only borrow on them at
rate mitch exceeding what they yield. Either
course would Increase the general demand
for money while actually decreasing The
general supply. for the fact that such bank
would increase the feeding Of panic which
Grows by What 1t Feeds On.
Now this i, precisely the situation of similar
institutions not only throughout our city and
state bur over the whole Union. so much IL
human action governed by Imagination, 81
strong j. the impulse to do whatever
our neigh bors doing, or even think that they
are about 20 do. that il is entirely possible.
with an abundance Of money In the country 10
al Il finn al .tFit
sency to grow 70 q point that would reduce u
almost to a state of barter, all but stop pro-
ductinu and beEgar all hut the very rich.
The possibility Of AZ once converting United
states bonds into money would entirely do
away With such danger and at once end The
financial stTingcncy. II is not so much the
amount that would be converted that would
tell but the amount tia! could be converted
if there was need. The government would
run no risk. Il would mFrcly exchange in-
tercst- bearing obligations into nOn-intcrest-
bearing obligations, with
A saving, Tor the Time, of Interest.
There would he no loss of the selling value
Of bonds to The holders and no permanent ex-
pansion of the currency, for soon as money,
rca.ns to I've hnaried. became normally
abundant again. borrowing rates would fall
the price of bonds would rise and it would
be fu the interest Of the holders of the de
pp~ited bonds to reclaim them and return
to the treasury thc money issued on them.
introduced into the last congress bill in
tended To add 10 our currency system the
elastic feature of an intercpnvertibihty of
bonds and treasury notes. The Bill now pro-
pose puts the same principle in way better
adapted to meet the exigency that has now
risen and 10 avoid matters over which there
might be dispute
Relieving that it offers a simple prompt and
unohjectionable remedy for the most pressing
evils an desiring its consideration by my
constituents and the general public, | thus lay
il before you in advance of presentation.
Yours very truly,
--..--- Tom T.. JOHNSON.
L,o,s u,-;tton Y Y ,un tat1