St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1894-12-03

1n"t'cIS' IL Is hot necessary to set forth
II the recommendations here made, to-
gether with that which will follow.
shOuld receive consideration at the
hands Of congress. a bill drawn after
careful study and investigation of the
whole subject would necessarily em-
Dody al the details incident to a change
IRON bond to safety fund security as
OASIS for bank circulation f"
Inc comptroller then cites such proof
anu gives such statistics as seem 10 him
10 make the plan suggested a perfectly
sate one to enter upon. He SAYS:
The changes thus outlined wIIi,upOn
investigation, it is believed, prove to be
safe IN atfording complete security to
the note holder. and give to the bust
ness interests Of the country a bank
noie issue responsive to their needs"
continuing, the comptroller says:
Profit Augmented.
"Ihe profit upon the issue of circula~
tlon to the banks by such change would
be so augmented that it is giving to
them franchise, for which it is sug-
gested they should be called upon 10
make proper return to the general gov
eminent. This return should not, how
ever, be of such character as to de-
1eaI the ends sought in the privilege
given The currency redemption of
the legal tender issues, and the treas
ury issues under the act of 1890, and
the re~IssuIng instead of cancellation of
The same, must always create distrust OF
the governments credit abroad and at
home so long as the laws now upon the
statute book remain unchanged.
The general government ought to be
wholly Tree from the direct issuing and
Tedeeln!ng OF notes to pass as money
among the people. No government has
ever yet successfully engaged in so
doing, and the experience of the gov
ernment of the United States has
proven no exception to the rule. The
general cost and loss entailed upon the
government and the periods of uncer-
talnty as to the governments credit and
the stability Of our monetary system,
nave been so great as to make the legal
tender and treasury issues of 1890 one
or the extraordinary burdens placed
upon the people. These issues ought
to be
Redeemed and Cancelled.
and the government thus enabled to re-
tire frOmthe banking business, abusiness
Tor which 1t is SO poorly equipped. The
Intention Of those who first authorized
the legal tender issues was that lhey
should be retired at the earliest practic-
able moment. The Tirst congressional
enactment signed by President Grant
after his inauguration as chief eXecu.
tive was one reasSerting the deterinina-
ton OF the government TO preserve un-
questioned the public faith, and the
closing clause of it was: And the
United States also solemnly pledges
Itself to make provision at the earliest
practicable period for the redemption Of
United States notes in COIN
In the light OF the present condition
of the governments finances" the
comptroller continues, that which
ought to have been done when there
was surplus i'll the treasury cannot
now be undertaken, and the same con-
dltlonS must continue to weaken the
counry's credit and plague the lines OF
business, nnleSs means is devised for
removing these issues from the chan
nelS of current redemption until such
time AS the government finds Itself in
position TO do that which at first was
the intent of all-gTadually redeem and
cancel them. The ultimate redemption
OF coin. OF course, must all be upon the
government, but the embarrassment
does not arise from their ultimate, but
from their current redemption. 1t IS
therefore suggested that if congress
shall repeal the provisions of the pres
ent act requiring the national banks tC
make deposit or government bonds in
order to secure circulating notes and
substitute therefor provision giving
them instead the right 10 issue the same
Against Their Assets,
it incorporate therein, and as part
thereof, that, as prerequisite to so
doing, the banks be compelled to de-
poSit with the tre 4Surer OF the United
States legal tender issues or issues un-
der the act of 1890 equal in amount 10
the difference between the percentage
of their capital stock of issues granted
against their assets and the total OF such
capital stock. The deposits thus made
ought to remain with the treasurer until
the bank ceased, either through volun-
tary or involuntary liquidation, to 10
business. and in either case the govern
ment ought to redeem and cancel
such treasury notes deposited.
AS against this deposit Of
the legal tenders and treasury
notes SO made there should be issued to
the banks dollar for dollar, national
bank notes, either of the same OF differ
ent design, as might be deemed best.
A percentage of the bank notes issued
against this deposit should be free from
any taxation imposed upon circulation,
and ought to be such percentage as is
deemed equitable 10 be used as a part
of the banks legal reserve held against
deposits. The government should not
undertake or in any wise become re-
sponsible for the current redemption of
these notes. It's responsibility should
end with its redemption OF the notes
deposited TO secure such circulation
when the bank ceases 10 exist. At
present
Current Redemption Fund
Of per cent of the outstanding cir
culation is found sufficient, and 1t is
probable that in the future 10 greater
amount would be required. The elaS-
ticity of issue in the national bank cir
culatiOn will be found in the percentage
oil issue against assets subject 10 the
necessary rate Of taxation. and insured
by an adequate safety fund to guarantee
the uOtehoders against loss. The gov
ernment will be aided, the bank given
in exchange dollar for every dollar
deposited, and thus relieved of the loss
incident to depOsiting an amount OF its
capital stock in excess OF the return in
notes granted it. No violent contraction
Of the currency would follow such
course, but whenever contraction oe-
ours, it would be not less gradual than,
at other times, the expansion incident
thereto. 1t is suggested that as neces-
sary element 10 the securing OF piOper
elasticity of issue in our bank note cur
rency section 9, act of July II. 1892,
regulating the retirement and issuing
of circulation to banks within a fixed
period of time. should be repealed, and
also that an amendment should be made
to the law neceSstating the banks
keeping in the office OF the comptroller
OF the currency sufficient amount of
Blank Notes
as will enable them 20 secure circula-
tion at once Instead of after period OF
delay. Suggestions have been received
from many eminent sources that the
whole question of a banking auS cur
rency system ought to be referr4i by
congress TO 4 commission to be created
by law. appointed by the president ana
clothed with proper authority. y CONS
mission, non-partiSan in its character,
composed of men of eminent abilities,
could unOuestiOnablV devise n currency