Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-12-04
CARlISLE'S PLAN
Continued from Third Page.

terest of the government and people. power
be conferred Jon the Secretary of the
Treasury to L. sotiate loans at a lower rate
OF interest and for a shorter time than are
now allowed. The existence of such au-
thority, irstead of increasing the proba-
bilities OF a frequent resort to that means
OF raising money, would have the contrary
effect, because when 1t Is known that the
Secretary of the Treasury is clothed with
ample power and facilities to procure
means FOR the maintenance of the reserve,
public confidence In the ability Of the gov
eminent to meet promptly all demands
upon Ii will be much stronger than under
present circumstances. Besides, the policy
of limiting the government to the sale of
an antiquatedr bond, bearing a rate of in
terest wholly inconsistent with the exist
Ing state of the public credit and having a
longer time to run than is apparently
necessary at the date of its issue, cannot
be justified upon any grounds of expedi-
ency or principle.
''The law should be so amended as to
conform to the conditions and REQUIRE
ments of the public credit and service at
the present time. and / earnestly hope that
Congress will take early and favorable az
tlon upon the subject.
The Situation Stated.
III, however, the mandatory legislation
which keeps large volume of government
notes In circulation, notwithstanding their
repeated redemptions in coin. and also i'm
TO maintain the parity of the two metals
In respect to their purchasing and debt
paying power, Is perpetuated, IL is evident
that the treasury must remain in a posi-
ton which will compel it to procure and
furnish gold to all who demanl tx, wheth-
er they be our own citizens Or citizens or
subjects Of other countries. At the same
time II will have no lawful regular
means of obtaining gold. except by the is
sue and sale of bonds, thus periodically in
creasing the Understanding public debt
without either making permanent additions
TO Its stock of this metal or diminishing
TO any extent its obligations on account
OF the notes redeemed. This situation Is
the necessary result of three features of
our currency legislation, and II cannot be
permanently avoided, or even temporarily
improved, without material changes In our
laws relating to that subject. These fea-
lures are:
/. The circulation of United States notes
as currency and their current redemption
In coin on demand.
2 The compulsory reissue of such notes
after redemption.
age of silver and the issue of notes and
certificates against 1t upon a ratio which
greatly overvalues that metal as compared
with the standard unit of value in this and
the other principal commercial countries"
Continuing, the Secretary says:
But, Independently of other considera-
lions, our own people have clear right to
demand sound and stable currency for
use In the transaction of their business at
home, while their purely commercial rela-
tons with the people Of other countries,
upon whom the producers of eXportable
commodities are compelled to rely for the
consumption of their surplus, cannot be
profitably maintained unless they are al
ways in a condition to pay for what they
buy in as good money as they receive for
what they sell. We cannot. therefore, pre-
serve our trade relations with the best
customers for surplus products unless
we maintain a monetary system substan-
TALLY in accord with theirs; and until they
manifest a disposition TO cooperate with
US in effecting change upon terms just
and fair to all our interests, We ought to
continue our adhesion to the gold stand
ard of value with as large a use of silver
as is consistent with the strict maintenance
OF that policy. But, in order to insure the
success of such policy, 1t Is necessary not
only that the government should be at all
times prepared to redeem Its direct obliga-
lions in the standard unit Of value. and
preserve equality In the eXchangeable value
of all it's legal tender coins, but that its
ability and determination to discharge his
duty shall be so manifest as to command
the entire confidence OF the public.
While no proposition should be enter
tanned that will have a tendency to degrade
the currency, or In any degree impair pub
lie confidence in its safety. am convinced
that the interests of the country require
such changes in our legislation will
disconnect the government entirely from
the business of issuing reissuing cir
culating notes and thus relieve its fiscal
department from the periodical demands
upon it's resources which under the
listing system must continue to disturb
the financial and general business affairs
of the people. In proposing such changes
no consideration should be ignored which
affects the industrial commercial in
terests of any part of the country, for
all the people are alike concerned in what
ever promotes or retards the healthy de-
yelopment of our great national resources.
The Secretary's Plan.
Under our present currency system, SO
far as IL consists of notes issued by the
United States government, the volume of
circulation was intended to be, and is. in
fact. Interchangeable; 1t is unalterably fixed
at a certain amount and, no matter how
great the emergency may be. 1t can be
neither enlarged nor diminished. The only
part of the currency possessing In any
degree the quality of elasticity Is that is
sued by the national banking associations,
and II Is now generally conceded, 1 be-
heve, that In this respect, at least, Ii has
failed to meet the requirements of the sit
uation at some of the most critical periods
In the business affairs of the country. This
failure is attributable, IN my opinion, to
three principal causes. First, the large
volume of United States currency of va
rious kinds kept constantly outstanding,
making the contraction or expansion of the
comparatively small national bank circula-
ton less effective than 1t would otherwise
have been; secondly, the difficulty and de-
retiring, circulation; thirdly, and mainly,
the provisions Of the law which require the
deposit of United States bonds to secure
circulation, and restrict the issue of notes
to ninety per cent of the par value of the
bonds,
In view of the foregoing considerations,
and many others that might be urged in
favor of a reorganization and reformation
OF our paper currency system, / have pre-
pared the outlines Of a plan which, in my
opinion, will relieve the government to a
great extent from the burdens now i'm
posed upon 1t, secure within reasonable
time a safe and elastic national and state
bank currency, and result ultimately in
the permanent retirement of United States
legal tender notes of both classes. 1t is,
In brief, as follows:
Repeal all laws requiring, or authorizing,
the deposit of United States bonds as Sc
curity for circulation.
III.
Permit national banks to issue notes to
an amount not exceeding seventy-five per
centum of their paid-up and unimpaired
capital, but require each bank before re-
ceiving notes to deposit guarantee fund,
consisting of United States legal-tender
notes, including treasury notes of $780, to
the amount of thirty per centum upon the
circulating notes applied for. This per-