The times. [volume] (Richmond, Va.) 1890-1903, 1893-05-07
CURRENCY ANDFINANCE
DANGERS OF THE PRESENT sITUA-
ZION DISCUSSED.
The Treasury Should be Divorced From
All Responsibility forthe Rcdcmp-
ton of Notes-H. II. 106f5.
RepublIshed by request.)


high Official position 1t should receive
the thoughtful consideration OF hnanciers
and statesmen:
think few persons who have not given
careful attention TO the matter realize the
dangers attending the present financial
situation and the absolute impossibility
of a remedy, excepting by return to
the old Democratic policy OF the absolute
divorce OF the Treasury OF the United
States from any responsibility Tor the
current redemption" Of a single dollar
OF any form OF paper money. This mas
been a fundamental principle OF the
Democratic party for three-quarters OF
century. as expressed in every Democratic
platform and in every party vote in
Congress.
All persons whose studies and expe-
rience give their opinions any special
value, are agreed that the money Of the
country should be: First safe; second,
abundant: third, elastic; fourth. uniform:
NTH. cheap sixth, in the places most
needing 1t. as far as is practicable.
moments examination and reflection will
show that the money Of this country Is
open 10 criticism in every one Of the six
qualities enumerated. The fact that our
system of Issuing paper money secured
by the United States has thus far pre-
vented the loss or single dollar 10 any
person holding the currency notes Of a
failed bank has so obscured the vision
OF thoughtful people that II has prevented
them from seeing the radical deficiencies
Of our financial system.
First The guarantee to the holder Of
any currency bank note, that he shall be
paid in full. in case Of the failure Of
the bank issuing II. is no part Of banking
proper. Such a guarantee. however GER
tain TO be made good. does not make any
paper money safe" or good money"
1t only makes the holders Of such notes
preferred creditors Of the banks in case
the banks fail II IS the same to persons
made creditors of failed banks by holding
their currency notes that IL is to wage
workers, who are made preferred credi-
tors Of failed manufacturers by the laws
Of most States, and who are first 10 be
paid. which is no part OF manufacturing.
What makes paper money safe" or
good money" is its certain and instant
current redemption" in coin, which is
done ten times or ten thousand times,
as the case may be, with every paper
dollar during its life. and as often as it
is returned to the bank issuing II. The
promise Of the United States to finally
redeem" the greenbacks may be safely
continued, but the banks Of the country
must proportionately assume their cur
rent redemption" that our paper money
may be good money" There is abso-
lutely no other way out OF our present
financial dilemma. II is a physical i'm
possibility for the Government TO Cur
rently redeem" paper money. The way
of having the banks DO this-and to their
gain, not their loss-is worked out in bill
II. r.. 1O6j report 25SD
doubt the fGtV or Uappr money is
TO condemn il. Safe paper money is
money that is sure of instant redemption
IN coin. and where two coins are re-
coguized as legal tender, safety" means
It's sure and instant current redemp-
ton" I'm that coin which has the highest
commercial bullion value. To-day there
are $1,000 900 900 Of paper money upon
800 100000 o. gold coin in the United
States Treasury. There is not a financier
IN the country who believes our paper
money is safe" and the existence OF
this doubt is proof conclusive that IL
has not the equivalent Of commercial
safety. Our currency is not even album
dant." for abundant" means enough
when the most is needed, and 1t is i'm
possible 10 have enough when the most
is needed" with n currency that is not
elastic" That our currency is elastic"
no one has ever claimed. To suggest that
Il is uniform would only provoke a
smile. That il is not cheap" is proven
by the bare statement that our banking
laws compel the banks 10 lose all income
on one-seventh OF those assets OF the
banks OF which European banks use every
dollar. That IL is not forced, as far as
practicable. 20 the places where il is most
needed. is proved by the fact that there
Is no especial inducement TO each bank
20 compel every other bank TO currently
redeem Its own bills thus keeping them
constantly travelling back to the bank
that issues them. and having them at the
point where they are most needed thus
making IT for the interest Of the banks
70 prefer to make loans 10 persons de-
string bank bills" i'm that locality, In
stood OF checks and drafts on large cities.
The banking bin ". r. 10G5. reported to
The House for consideration by that sturdy
New York Democrat Henry Bacon, who
was chairman Of the Committee on Bank
ing and Currency in the tifty-secOnd
Congress. secures every one Of the six
qualities OF good paper money in as high
n degree as modern financial method has
devised, as opposed 10 our present paper
money, which Is deficient in each one.
Second. / wish to call attention TO the
fact tfat It is impossible 20 bring the
public mind TO accept any other possible
remedy FOR the present peris 20 thf
finances OF the country. other than lcgiS-
lation that will reconcile the banks [
the idea Of wholly relieving the United
States Treasury Of the current redemp-
ton" Of the $SsGo0o 600 Of legal tenda
notes and the $500 100000 OF Treasury
notes OF July II. 1870. which will exist
on July l. 1894. and Of making II for the
interest Of the banks TO assume this
burden OF their current redemption
while not practically destroying them
keeping them in substance but making
them good money"
Third. To the impossibiity OF safely
removing the 10 per cent. tax upon State
bank circulation and Of allowing State
banks 10 issue circulating notes. until
the securing of the current redemption
OF the greenbacks by the banks IS ac
complished. provided the United State:
Treasury is ever to be relieved from
being practically responsible for the eur
rent redemption" of every dollar Of the
1000. 100000 OF existing paper money
while the hands Of the Government are
tied from using the devices OF ''moderr
finance for performing that service
Every principle OF modern finance mill
hates against the Government doing it.
Fourth. There is no difficulty in IN
practical working OF The pl ~ for inducing
the banks 10 wholly relieve the Unitei
States Treasury OF this $4,000 900 o
LEGAL tender and Treasury notes. 10y
simply making it for the interest Of tn
banks 10 do so. while at the same tim
giving the people "A popular substitute
for the present greenback In n new bank
''ereenback" under section No OF tn
bill and at the same time lowering tn
,-to Of interest on the money the peoDl