The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1894-12-03

NohtiuuiuS Inc CamptrolIer says: Inc
prohe upon the issue of circulation to the
banks by such change would be so aug
mented that it is giving to them a fran
chlse Tor which it is suggested they should
oe called upon to make proper re-
turn TO the General Government. This
return should not, however. be OF such a
character as to defeat the ends sought in
the privilege given. The currency re-
demptlon Of the legal tender Issues and
the treasury issues under the act of 1890
and the relssuing instead OF the cancella-
lon OF the same must always create dis
trust OF the Governments credit abroad
ana at nome so long as the laws upon the
statute book remain unchanged The
General Government ought to be wholly
Tree from the direct issuing and redeem
Ing OF notes to pass as money among the
people. No Government has ever yet
successfully engaged in so doing, and the
experience of the Government of the Uni
TED States has proven no exception to the
rule. Inc general cost ana loss entailed
upon the Government and the period OF
uncertainty to the Governments credit
and stability Of our monetary system have
Deen so great as TO make the legal tender
and treasury issues of 1890 one of the eX-
traordlnary burdens placed on the people.
"These issues ought to be redeemed and
cancelled and the Government thus en-
abled to retire from the banking business,
business for which it is so poorly
equipped. The intention of those who
first auth0riZe the legal tender issues
was that 1t should SO retire at the earliest
practicable moment. The first Congress
Grant after his Inauguration as chief
executive was one reassertlng the defer
mination of the Government to preserve
unquestioned the public faith, and the
closing clause of it was. And the United
States solemnly pledges its faith to make
provision at the earliest practicable period
for the redemptio of United States notes
in CON-"
In the light of the present condition of
the Governments finances, the Comp
troller continues. that which ought to have
been done when there was surplus in the
treasury cannot now be undertaken, and
the same conditions must continue to
weaken the country's credit and plague
the lines of business, unless a means is
devised for removing these issues from the
channel of current redemption until such
time as the Government finds itself IN a
position to do that which at first was the
intent Of all-gradually redeem and cancel
them, The ultimate redemption of coin.
OF course, must all he upon the Govern
ment, but the embarrassment does not
arise from their ultimate, but from their
current redemption.
1t is, therefore, suggested that If Con-
gress shall repeal the provisions of the
present act requiring the national banks
to make deposit of Government bonds in
order to secure circulating otes and SUBJ
stitute therefor provision giving them
instead the right to issue the same against
their assets 1t Incorporates therein and as
a part thereof that as a prerequisite to so
doing the banks be compelled to deposit
with the Treasurer of the United States
legal-tendsr issues or issues under the ct
of 1890 equal in amount to the difference
between the percentage of their capital
stock Of issue 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 voluntary or involuntary
liquidation. to, 10 business. and in either
case the Government ought then to re-
deem and cancel such treasury Issues de-
posited.
AS against this deposit of legal tender
and treasury notes so made there should
be Issued TO the banks, dollar for dollar,
national bank notes, either of the same or
different design, as might be deemed best
The percentage Of the banknotes issued
against this deposit should be free from
any taxation imposed upon circulation,
and ought to De such percentage as is
deemed equitable to be used as a part of
the banks legal reserve held against de-
posit. The Government should not under
take or in any wise become esponsible
for the current REDEEM ption of these q otes.
Its responsibility should end with it's re-
demp' on OF the n otes deposited TO secure
such circulation when the banks ceased to
exist At present a current redemption
fund of per cent of the outstanding cir
culatiOn is found sufficient, and 1T is prob
able that in the future no greater amount
would be required.
The elasticity of issue in the national
bank circulation will be found in the per-
centage OF issue against assets subject to
the necessary rate of taXatons and in
sured by an adequate safety fund to guar
dHsCO VIC uutcuOlucES dBdluSb lOSs. ITO
Government will be aided. the bank given
in exchange dollar for every dollar de-
posted, and thus relieved of the loss Incl
dent to deposlting an amount of It's capital
stock in excess of the return in notes
granted it. No violent contraction of tho
currency would follow such a course, but
whenever contraction occurs it would be
not less gradual than at Other times the
expansion incident thereto.
1t Is suggested that as q necessary ele-
ment to securing the proper elasticity Issue
in our bank note currency section 8, act of
July IL, 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 necessItaing the banks
keeping in the Office of the Comptroller of
the Currency sufficient amount of
notes as will enable them to secure circu-
lation at once instead of after period of
delay.
Suggestions have been received from
many eminent sources that the whole
question OF a BANGING and currency sys-
TEN ought to be referred by Congress 10 a