The morning call., 1894-12-05

money at our financial centers and the general
depression in buSin IS Which prevailed In this
country SO reduced the rs,eS OF discount mat
better investments could he made. were much
greater than in ordinary times. and this
1Ogesher Win tine t1e iaGe tasea
precaution which appeared necessary
TO insure the safety Of our financial
position. Therefore, the second issue of $780,
100000 was decided upon. For this issue. pro-
posals for which were issued last mon h. 486
bids were received, amounting to S179;836,-
$50, nearly all of which were AT rates which
would yield TO the investor per cent or less
One bid for The whole sum of $4,000, 000
upon The basis OF 2.S7S per cent, and being the
most advantageous offer for the Government
that was made either singly or by aggrega lug
the SEPARATE bids. was accepted, and the pro-
ceeds OF the sale, S5S, 5SS, 500, have nearly all
been paid into the treasury according 10 the
terms of sale.
The transactions justified the opinion that
21a per cent bonds, having reasonable time to
run, could probably have been sold at par. and
certainly that per cent bonds could have been
disposed OF at or above The rate. As the aIi-
thority to issue and sell bonds already exists,
and the present state of our financial legisatiO
compels It's occasional exercise, l repeat The
recommendation in my last annual re ort, that
in the interest OF the Government and the peO-
pie power be conferred upon the Secretary of
The Treasury TO negotiate loans at a lower rate
OF interest and for shorter time than are now
allowed.
So long as there are in circulation under the
auluplily OF the government TWO CONS
equal In value, but equal in legal tender quail
ties. every consideration of good faith and
sound policy requires the prompt redemption
OF the notes on the presentation in the Kind OF
coin demanded by the holder, and the constant
Observance of such administrative methods as
may be necessary 10 preserve the purchasing
power OF the less valuable metal. This is eS-
sentlal TO the continued circulation of our
standard silver dollars and their paper repre-
Sentatives at par, and TO abandon this policy.
without submitting better one in Its place.
w nYNIry con II,
now existing, but would entail upon the people
of the country additional and greater ones.
This situation is the direct result OF the fea
lures of our currency legislation and IL cannot
be permanently avoided, CT even temporarily
improved without material changes in our laws
relating to that subject These features are:
1. The circulation of United States notes as cur
reney and their current redemption in coin on
demand
2. he compulsory reissue of such notes after
redemption.
3. The excessive accumulation and coinage of
silver and the issue of notes and certificates
against it upon ratio which greatly overvalues
the amount as compared with the standard unit
OF value In this and other principal countries.
Frequent issues of bonds for the purpose of
procuring gold, which cannot be KEPT after 1t
has been obtained. VIII certainly cause in
creased distrust among our own people as we'll
as among the people Of other countries and not
only swell tie volume of our securities re-
turned from abroad, for sale or redemption,
but increase the vii hdrawal OF foreign capital
heretofore inyestedin our domestic enterprises.
independently OF these considerations, our
own people have clear right TO demand a
sound and stable currency for use in the trans
action OF their business at home while their
purely commercial relations with the people of
other countries, upon whom the producers OF
eXp0rtaDe commodities are compelled to rely
for the consumption of their surplus, cannot be
probably maintained unless they are always in
condition TO pay for what they buy in good
money as they receive tor what they SELL We
cannot preserve our trade relations with the
best customers for our surplus products unless
we maintain monetary system substantially
in accord with theirs, aud until they manifest a
disposition 10 CO. operate with us in effectlng a
change upon terms just and fair TO all our in
tereSts We ought 10 continue our adhesion 10
the gold standard of value with as large use
OF silver as Is consistent with the strict main
tenance OF that policy.
Since the resumption of specie payment
United States legal tender and treasury notes
have been redeemed in gold to thu amount OF
S60.000.000 and all the notes r. deemed have
been reissued and are now outstanding They
are constant menace TO The gold reserve. and
no scheme OF financial reform can be complete
or effectual which does not provide at least for
their gradual elimination from our currency
system. l am convinced that the interests OF
the country requires such change in our organ
iZatiOn as Will discharge the Government en-
Irely from the business of issuing or reissuing
these notes and thus relieve its financial de-
partment OF periodical demands on Its re-
sources, which, under the existing system,
must continue TO disturb the financial and gen.
eral business affairs OF the people.
as 1t consists OF notes issued by the United
States Government, the volume of circulation
was intended TO be and is, in fact, unchaDge
able. II Is unalt rably fixed at certain
amount, and, 10 matter how great The emer-
gepcy may be, it ca be neither enlarged nor
diminished. The only part of The currency
possessing i'll any degree the quality OF elias
ITCHY Is that issued by the National Banking
Associations and il is now generally conceded,
l believe, that in that particular. at / asst, 1t
has failed to meet the requirements of the STU
alton at some of the most critical periods in
business affairs of the country. Its failure is
credible, In my opinion. to several causes; first,
TO The large volume OF United States currency
of various kinds kept constantly outstanding,
making the contraction or expansion of the
comparatively small national bank circulation
less effective than 1t would otherwise have
been; second, the difficulty and delay in pro-
ducing and TO some extent. in retiring circula-
ton; thirdly, aud mainly, the provisions OF the
bonds to secure circulation and restrict the
the par vaa 1s Of Of the bonds. cent With u
5000, 600 900 in United States notes. treasury
notes of 1890. silver certificates ana gold Ger.
tihcates. besides about S625,0oO, 600 In gold
and liver coin constantly outstanding, none of
which can be lawfully retired by the Govern
ment without the substituting OF other cur
rency in its place, the national bank notes,
which amount to only S207 100000, or about
II per cent Of the whole, cannot exert very
effective influence on the volume OF Outstand-
Ing currency at any time. especially al times
when large cOntractions or expansions are most
needed, but the greatest difficulties arr enc0un-
lie red and the national banking system as now
organized is least effective when the business
OF the country demands quick expansions OF
the currency TO meet sudden emergencies.
In view of the foregoing considerations and
many others that might be urged in favor OF a
reOTg niZatiOn and reformation of its paper
currency system / have prepared the outlines
OF plan which, in my opinion, viii relieve the
Government to a great extent from the burdens
now Imposed upon II. secure within rrasona-
bic time safe and elastic national and State
manent retirement of United States legal
tender notes Of both classes. 1t is, in brief, as
follows:
l. Repeal all laws requiring or authorizing the
deposit OF United States bonds as security for
circulation.
2. Permit national banks to issue notes to an
amount not exceeding rs per centum OF their