The midland journal., 1894-01-05
QUESTIONS OF THE DAY.
A FINANCIAL HISTORY.


Since 1851.
BY N. A. DUNNING.
From The National Watchman.
You cannot borrow of capitalists any
more money on twenty years seven per
cent bonds, nor on your 7 $40 Treas
ury notes at the rates fixed by the act
OF July last. If you offer to the peo-
pie and put on the market $500, ,0O0,-
600 more, to the highest bidder, in the
present aspect of affairs, they would
not be taken, except in ruinous rates of
discount. That policy would depreciate
the bonds already taken by the banks
and the people who are most loyal to
the Government, and who came forward
as your best friends, and furnished the
means SO much needed during the last
few months to organize your army and
navy; and besides, depreciation would
greatly increase the debt, by requiring
a much larger amount Of bonds to be
issued than would be needed if your
loans were taken at par. A loan put
upon the market in the present de-
pressed state of United States stocks, to
be followed by other loans, is not re-
garded as favorable mode of provid-
ing the means for maintaining the
Government at the present time. If it
had been adopted at first it might
possibly have been the best mode; but
it 10 now too late to essay that to adopt
it. I fear the twenty years six per
cent bonds would under the pressure
fall to rs, 70, 60, and even 80 cents.
This would be ruinous mode of raising
she means to carry on the Government.
What, then, is to be done ? The
Secretary of the Treasury in his annual
report does not recommend the issue of
demand Treasury notes, although he
points out many advantages that would
result to Government from the issue.
He suggests two plans: first the issue
of demand Treasury notes and second, ,
. national currency, secured by pledge
of United States stocks, to be issued by
banks and associations, with proper
regulations for their redemption by the
banks themselves. On the propriety of
the issue of Treasury notes by the
Government, to be put in circulation as
money, the Secretary says:
"The first of these plans was partially
adopted at the last session of Congress,
in the provision authorizing the Sec
retary to issue United States notes,
payable in coin, to an amount not
exceeding fifty million dollars. That
provision may be SO extended as to
reach the average circulation of the
country, while moderate tax gradually
augmented, on bank notes, will relieve
the national from the competition Of
local circulation. 1t has been already
suggested that the substitution of q
national for a state currency, upon this
plan, would be equivalent to loan tc
the Government without interest
except on the fund to be kept in coin
and without expense, except the cost O.
preparation, issue, and redemption
while the people will gain the addi-
tional advantage of uniform currency
and relief from considerable burGer
in the form of interest on debt"
These remarks OF the Secretary were
before the suspension of spscie pay
ments. The situation OF the country
is now very different from what it was
two months ago. The circumstance
have changed; and the Secretary ant
Congress, will find it necessary, in thu
present exigency, to conform theil
action to what can be done, and not Il
what they would be able to do, were i
otherwise practicable. II * x
If you cannot borrow the money or
the credit of the United States, eZcep
at ruinous rates of discount, and canno
make the new banking system available
in time, and cannot realize the amour
required from your tariff and tax bills
in what mode can the means be obtained
and the Government carried on ? 1t il
believed that the only way in which i
can be done is by issuing Treasury
notes payable on demand, and makiRs
them legal tender in payments of al
debts, public and private, and b.
adequate taxation, to be Imposed b!
new bills. This will bring into full
exercise all the higher powers o
Government under the Constitution
The Constitution confers on Congress