Pawtucket tribune. (Pawtucket, R.I.) 1890-189?, 1893-08-03
BONDS FOR CURRENCY.
Treasury 10 Hold Former
Without Interest.
BILL TO BE INTRODUCED
Which, 1t is Thought, Will Relieve the
Financial Stringency.

CLENELAN', aug. o-lne IoitOWiuB iet-
ter from Congressman T.. L. johnson Is
made public:
To the Cleveland Chamber of Commences:
Gentlemen-Believin that the fasnoial pres
vure now existing demands prompt and ado
quate relief propose op the 1rst day Of the
soming session to introduce In the house u
representatives the following bill:
An aot 10 permit the exchange Of United
States bonds for treasury notes.
BE IL enacted by the senate and house u
representatives Of the United States of Amer
lea, In congress assembled, that any holder Of
bonds OF the United States may after the pas
sage Of this act deposit such bonds az the treas
ury OF the United Statee or at the office of any
assistant treasurer Of tho United States and
receive therefor their face value ip treasury
notes OF the United States as described In the
act OF July IA. lS9J. Such bonds shall be held
rs special deposit to the credit of the party
proposing them, and during the time they are
90 held shall draw no intereet, and shall be re-
turned on the order Of the party depositing
them on the payment Of their face value In
United States currency.
Sect. 2. The secretary Of the treasury shall
make such regulations as may be necessary
10 save to the government the payment Of Inc
terest on such bonds during the tims they are
held as special deposit, and he h hereby
authorized TO issue treasury notes to the
amount needed and to provide for the cancel
lation Of an equal amount Of cash notes on
the return Of said bonds 70 their owners and
sum sufficient to carry into effect the pro-
visions OF this act Is hereby appropriated out
Of any money In the treasury not otherwise
appropriated.
Sect g. All acts and parts Of cots inoonsist-
ent with the provisions Of this act are hereby
repealed.
Concerning the Present.
Whatever be the primary causes of the
financial difficulties now paralyxing business
and stopping industry, II u clear that their
first appearance was largely due 10 the Inn
pairment of confidence through fear Of an Inn
pending change In the measure Of values.
But the main and 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 lessened by the strengthening Of
reserves by banks and saving institutions and
by the hoarding Of individuals under fear Of
or the desire to bring about q still greater
scarcity.
The repeal Of the Sherman act. which con-
fdently anticipate, whus Il viii ailay fears Of
any change In the measure Of values, will do
nothing directly 10 increase the medium Of
issue Of treasury notes for silver, II will lessen
the supply. The only measure looking TO re-
lief OF the need for money yet proposed with
any hope of the necessary consent 10 that OF
permitting the national banks to extend their
issue to the
Face vslne Of Their Deposited Bonds.
But this. while certain TO arouse dispute and
consequently cause delay, would increase the
currency only some sl7OOO.OO The bill I
send you, allowing all holders Of United States
bonds to turn them into money for suoh time
as they may be willing to forego interest, af-
fords q simple, safe, immediate and sufficient
remedy for the abnormal scarcity Of money.
Beyond the bonds deposited to secure the na-
tionl bank circulation, there are In eHistenoe
$4O,OOD,0O0 OF goverpment bonds, largely held
by financial institutions
For instance. The Society for Savings"
our own city, the largest and strongest inan.
cial institution in Ohio. holds today ee,OO0OO0
of these bonds. Yet, though undoubted
security, these bonds cannot at present be
converted into money with which 70 meet
any depand of its depositors ithout loss to
the society and increase In the general fnan-
cial pressure. II could only sell them as
present at great sacrifice of their normal
value and could only borrow on them at q
rate much exceeding what they yield. Either
course would increase the general demand
for money while actually deor easing the
general supply, for the fact that such bank
was sacrificing its securities 70 get money
would increase the feeling Of panic which
Grows By what 10 Feeds On.
Now this is precisely She situation Of similar
state but over the whole Union. 90 much is
human action governed By imagination, 90
strong Is the impulse to do whstever we see
our neg hbors doing, or even think Chat they
are about to do, that II is entirely possible,
with an abundance Of money In the country to
meet all usual demands, for financial strin.
gency to grow to point that would reduce Us
almost to q state Of barter, all but stop pro-
duction and beggar all but the very rich.
The possibility Of ct once converting United
States bonds into money would entirely do
away with suoh danger and at once end the
financial stringency. It 10 not 90 much the
amount that would be converted that would
tell, but the amount that could be converted
II there was need. The government would
tsrest- bearing obligations Into noninterest-
bearing obligations, with
A Saving. For the Time. Of Interest.
There would be DO loss Of the selling value
Of bonds TO the holders spd no permanent en-
pansion of the currency, Tor % soon ~ money,
ceasing to be boarded. became normally
abundant again, borrowing rates would fall,
the price Of bonds would rise, and Il would
be to the interest Of the holders Of the do
posted bonds to reclaim them end seturn
to the treasury the money tstHsd on them
introduced into the iass oonsrsss blu In
elastic feature Of al inssrooSy yesSiSiIity of
bonds and treasury not1A The bill now pro-
pose puts the same prtaoipl4 n . wsy better
adapted TO meet the Sfleenot that has po~
risep and TO avoid matters over which there
might be dispute.
Believing that IL oGeu simple. prompt end
unobjectionabls remedy Tor the most pfesAne
evils. and desiring its confederation By my
II before you In advapps q ppssentation.
You" '''; vos sss'{. L ,om.or
Fort Hamilton, N. Y, Avg. 1. l60a