Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-11-30
Representative Coombs Gives His
Views on the Financial Situation.
THE GOLD RESERVEPURELY ARTIFICIAL
His Plan to Obviate the Present
Difficulty.
CURRENCY, TARIFF PROBLEMS

perierced business men in the House.
representative Of The Star asked him
this morning what he thought of the
proposition for the creation of a currency
commission.
II think very highly Of it, he said. land
only regret that one was not appointed at
the last session of Congress, so that the
coming session might take some action
upon 1t. There are, however some things
that seem to me to call for immediate
action. 1t .has become apparent that our
gold reserve for the maintenance Of the
parity of gold and silver Is purely arti-
f!cial affair, having no natural source Of
supply. Nothing comes into it from Gus
toms or internal revenue receipts.
Twice in four months It has had to be
replenished by the sale Of bonds. This WILL
Of course, be necessary from time to time
SO long as the treasury is open to the de-
mands for gold for the redemption of the
following classes Of demand obligations,
payable in gold on presentation: Treasury
notes. under act of July ii. 1900. s15l. 14O,-
56S; United States notes told greenbacks),
S46, ,GS1 ,O16; currency certificates, act June
Is. 1872. s54,325,OOO. Total. s552, lag. 5S4.
These are all, of course, part of the ma
tional debt, legacy of the past, and in
my estimation constitute the main point
of peril in our financial system. No pru-
dent merchant would have so large a per-
L
demand obligations"
How to Fund the Demand Obligations
How would you dispose of theln?'
by funding them into consolidated
bonds. drawing a very low rate OF interest.
redeemable after twenty-five years at the
pleasure of the government"
Would not that withdraw all currency
In circulation. excepting silver certificates
and the of national han,x9?''
THAT would be true If nothing further
were done, but you must remember that
the issue of these bonds would furnish
basis for the issue of further bank-note
circulation. To provide IL, / would sug-
gest that the present law imposing q tax
Of 10 per cent on the issue of notes of
state banks, or so much OF 1t as would
bring them to an equality with the na-
tional banks, be rem!tted in all cases where
they would secure their issue by deposit
with the treasury-of government bonds,
as Is now done by national banks, and ar
range for redemption IN the same manner
as they do, leaving, II insisted upon, all
the other details of the banks to tie govern
ed by state regulations, although / am
thoroughly in favor of the national banking
system. This would give a more general
circulation of currency throughout the
country, and throw upon the banks the
necessity Of providing gold for the redemp-
tion of their own notes. All such notes
could be received. seeing that the govern
ment held the securities, payment for
all debts, public and private, the same
provisions that exist in relation to the
size Of the notes to be issued as now in re-
lation to the national banks"
The Silver Certificates to Stand.
What would you do with the silver
certificates?"
Il would leave them to circulate as they
do now; they will supply the demand for
small bills. The total coinage of silver
dollars is s426 776, 4OS, against which the
amount Of certificates issued November
was $337. 712504, with 27,620. .234 silver dol
lars in the treasury not held as pledge for
silver certificates. OF these, however,
about s26OO0,OOO cannot be circulated. as
they are held, together with the silver
rotes. If the treasury notes were retired
and funded into bonds, 1t would leave them
and the bullion at the disposal of the gov
ernment. The amount Of one and two dol
lar bills of all kinds in circulation Novem-
Der 1 was s7O.216,351.- Silver dollars in cir
culation, s56, 443,67O. Total. s126, 66O, OIL
These would always be required for the
use of the people, leaving only about
sos, 100000 Of larger denomination to be
considered as a possible burden upon the
government in its efforts to maintain the
parity of gold and silver. There were, Mo-
vember !, In circulation $24s, ,4O3,634 in
value of S5 bills. If the circulation of all
banks was limited to bills above that de-
nomination and replaced by silver certif-
Gates 1t would remove almost the last pos
sibility of trouble in connection with them.
/ am not. however. prepared to recommend
this as / do not believe that 1T is neces-
sary, and might be embarrassing for the
banks. 1t would be a proper subject for
the proposed currency commission to con-
sider"
would not such a sudden withdrawal
of currency convulse the market while
the change was being nader
'Of course, IL 1t was all done at once.
which / should not advise. Let 1T be
spread out say $25,OOOOO0 a month. until
peril would grow less. / think the change
could be made SO as not to cause any per-
ceptible difficulty"
The Question of Silver Dollars.
"Why not refuse to issue small notes at
all and force the silver dollars into cir
culation?'
Simply because our experience shows
that the people insist upon notes. 1t Is
true that France and England can cir
culate among the people an enormous
amount of silver and gold coin; We
cannot do 1t, and In devising cur
rency for the people We must con-
suit what we know to be their demands.
and not try to force upon them what they
do not want. With all our efforts, even
paying freight on the coin, we find that
the amount in circulation decreases year
New York state along In the forties.. Sew
ard was elected governor upon the cam
paign cry of demand for small notes which
the other party tried to withdraw in favor
Of coin. Years have not changed that
preference, and don't know that it makes
any difference If we give them notes for
their dollars. Legally, and so far practical
ly, government has not held itself bound
to pay silver certificates in gold. 1 do not
think that there is any probability Of that
question arising to disturb us so long as
we limit the- amount of silver certificates
to anything like their present proportions.
If 1t did arise 1T would not be serious
matter, seeing that the other classes of
notes upon which gold can be demanded
are out of the way"
TT Is contended that we have not
enough currency; your plan does not pro-
vide for its extension"
The Work of the COmmissiOn.
THAT Is true and there the work of
the commission would come in. BY the
time that the twenty-sIx millions Of new
silver certificates and the twenty-three
million new national bank notes which
could be provided for by the removal Of
the 10 per cent limit were absorbed II Is
probable that some plan for its further ex-
tension could be devised. BY that time,
also, We should be able to Judge whether