The Providence news. (Providence [R.I.]) 1891-1906, 1894-12-04


The transaction iustifes the opinion
that 2h per cent. bond having reason-
able time to run, could probably have
been sold at par, and certainly a per
cent. bond could have been disposed OF at
or above that rate.
He renews his recommendation that
law be passed empowering the Govern
ment to negotiate loans at lower interest
and to run for . shorter time
The policy OF limiting the govern
ment to the sale of an Anticipated
bond bearing rate OF interest
wholly inconsistent with the
existing state OF the public credit
and q longer time to run than is apparent
ly necessary at the date of its issue, can
not be justified upon any grounds OF ex-
pediency or principle. The law should be
SO amended as to conform to the condi-
tions and requirements OF the public
credit.
Had there been no statute requiring the
Government TO redeem in coin aud re-
issue its own notes aud to maintain the
parity OF two kinds of coin of unequal in
trinsic value there would never have been
time since the close of the war when the
funds In the treasury were not ample for
other purposes and no issue of bonds
would therefore have been necessary.
IL the mandatory legislation which
keeps large volume of government notes
in circulation, Notwithstanding their
repeated redemptions in coin, and also
imposes upon the Government an obli-
CATION to maintain the party of the two
metals in respect to their purchasing and
debt paying power, is perpetuated,
1t is evident that the Treasury must
remain in position which will
compel it to procure and furnish gold to
all who demand it whether they be our
own citizens or citizens or subjects of
other countries. At the same time it
viii have no lawful or regular means of
obtaining gold, except by the issue and
sale of bonds, thus periodic lilly increasing
the interest bearing public debt without
either making permanent additions to It's
stock OF this metal or diminishing
to any extent its obligations on account
OF the notes redeemed.. Fhis situation is
the necessary result of three features of
our currency legislation, and it cannot be
permanently avoided, or even temporarily
improved, without material changes in
our laws relating to that subject. These
features are:
1.-The circulation of United States
notes as currency and their current re-
demption in coin on demand.
2-The 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 a ratio
which greatly overrules that metal as
compared with the standard unit of value
in this and the other principal CONNER
cial countries.
These features are the most prominent
characteristics OF our financial code, and
they constitute a monetary system un-
like that of any other enlightened govern
ment in the world. One OF their most
obvious effects is to defeat all attempts of
the treasury department to procure and
keep constantly on hand sufficient
amount Of gold to inspire entire conf
dence at home and abroad and in
It's own credit and maintain sound cur
roncy for the use OF the people. Frequent
issues of bonds for the purpose OF
procuring gold, which cannot be kept
after it hes been obtained, will certainly
cause increased distrust among our own
people, as well as among the people of
other countries, and not only swell the
nf
from abroad for sale of redemption but
increases the Withdrawals of foreign
capital heretofore invested in our domes-
tic enterprises; and it must be admitted
by all, no matter what opinions they
may entertain upon currency questions of
finance that such condition of affairs can
not permanently continue without still
more serious consequence TO the material
interests OF all our citizens than have
heretofore been experienced.
81 am convinced that the interests OF the
country require such changes in our legis-
lation as will disconnect the Government
entirely from the business of issuing cir
culating notes and thus relieve its
| fiscal department from the periodical
the existing system must continue to dis
turb the financial and general business
affairs of the people,"
The Secretary refers to the present laws
relative to the issue OF circulation as so
maniiestly in conflict with the dictates OF
sound policy as to require no comment.
lie then gives the outlines Of his plan to
| relieve the situation.
Briefly it is:
| 1-Rcpeal ell laws requiring orauthor-
izing the deposit OF United States bonds
as security for circulation.
2-Permit national banks to issue notes
to an amount not exceeding 75 per cent.
of their paid up and unimpaired
capital, but reqire each bank before re-
ceiving notes to deposit q guaran-
tee, consisting OF United States legal ten
der notes, including treasury notes