San Antonio daily light. [volume] (San Antonio, Tex.) 1886-1907, 1893-08-08
ELASTIC FEATURE
OF THE U. S. BONDS PROPOSED
BY CONGRESSMAN JOHNSON.
Bonds to be Deposited as Security
for Money and Interest on
Same to Cease.

Congressman Sam l.. Johnson, OF
Ohio, has prepared bill on the
financial question, which he pro-
poses to present to Congress at the
first opportunity. The bill is in
substance the same as read before
the cleveland, Ohio, Chamber of
Commerce, which is as follows:
An ACT TO PERMIT THE EXCHANGE
OF UNITED STATES BONDS FOR
TREASURY NOTES:
Be it enacted by the Senate and
House of Representatives of the
United States of America, in Con-
gress assembled, That any holder
of bonds of the United States may,
after the passage of this act, de-
post such bonds at the treasury of
the United States, or at the office of
any assistant treasurer of the Unit
ed States, and receive therefor their
face value in treasury notes Of the
United States, as described in the
act of July IA, 1890. Such bonds
shall be held as a special deposit
to the credit of the party deposit
ing them, and during the time
they are so held shall draw no in
terest, and shall be returned on
the order of the party depositing
them on the payment of their face
value in United States currency.
Sec. 2. The secretary of the treas
ury shall make such regulations as
may be necessary to save to the
government the payment of inter-
est on such bonds during the time
they are held as special deposit,
and he is hereby authorized to is
sue treasury notes to the amount
needed and to provide for the cam
collation. of an equal amount of
such notes on the return of said
bonds to their owners, and sum
sufficient to carry into effect the
provisions of this act is hereby APP
prOpriated out of any money in the
treasury not otherwise appropri-
ated.
Sec. 3. All acts and parts of acts
inconsistent with the provisions of
this act are hereby repealed.
Whatever be the primary causes
of the financial difficulties now
paralyzing business and stopping
industry, it is clear that their first
appearance was largely due to the
impairment of confidence, through
fear of an impending change in the
measure of values. But the main
and pressing difficulty now is, the
scarcity of the medium of ex-
change. While the shrinkage of
credits has increased the need for
money, it's available volume has
been greatly lessened by the
strengthening of reserves by banks
and savings institutions, and by
the boarding of individuals, under
fear of, or the desire to bring about,
still greater scarcity.
The repeal of the Sherman act,
which i confidently anticipate,
while it will allay fears of any
change in the measure of values,
will do nothing directly to increase
the medium of exchange. On the
contrary by stopping the issue of
treasury notes for silver, it will
lessen the supply. The only meas
ure looking to relief of the need for
money, yet proposed with any hope
of the necessary consent, is that of
permitting the national banks to
extend their issue to the face value
of their deposited bonds. But this,
while certain to arouse dispute and
consequently cause delay, would
increase the currency only $l7,000,-
1000.
The bill l send you, allowing all
holders of United States bonds to
turn them into money, for such
b time as they may be willing to
. forego interest, offers simple, safe,
immediate and sufficient remedy
for the abnormal scarcity of money.
Beyond the bonds deposited to
secure the national bank circula-
tiGn, there are in existence $780,
e000, 600 government bonds, largely
held by financial institutions. For
instance, "The Society for Savings"
of our own city, the largest and
strongest financial institutions in
Ohio, holds today 81, 100000 of these
bonds. Yet though undOubted Sc
rcurity, these bonds cannot at pre-
sent be converted into money with
which to meet any demand of its
odepositors, without loss to the So
ciety and increase in the general
financial pressure. 1t could only
sell them at present at great sac
rifice of their normal value and
could only borrow on them at a