New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1894-12-18
4 CPE4T DANGER TO BE AIEPTJD

4
Secretary Carlisle is appealing 10 Congress
passonatcly 10 put through his State bahk DILL
on the ground that the Treasury must nave To-
lief 1t is crcdtabe 10 him ihat ne r'ailA'S
its emergency. !, is only few days since H.
raised its bullion fund 10 Sll .Ooo'Ooo by sale
of bonds hoping thus to restore coniiu'h'e III"
prevent the demand for redemption "i NOTES
which was rapidly sucking ou' the hi'ploou
of the monetary system. Yet he made the Ia'ai
mistake OF proposing at the same time a none
tary revolution. and withdrawals OF goH ny re-
demption have been So great that already the
bullion fund is reduced below Sl"'""'""
again The heavy shipments of gold II Europe
show that large part of these wi'hdraWaS
are for foreign account and express in the most
emphatic way the Judgment of foreign capital
regarding the financial future Of this country
under the present Administration
Mr. CarliSles plan would not relieve the treas
urv in the slightest degree if it were adopted
on the contrary. il would only asgravate the
existing dstrust and the difficulties when me
Treasury has to meet If it were passed II
would first 81 all impcl National banks To sell
their Government bonds. amounting IL several
hundred millions in which money is now locked
I'D. which. under Mr. Clrlislc'S plan they c'ud
use more proitably This sale would at once
dcpress the price of bonds and lower the crcdi;
of the Governments and make II far NOR" dlih'
cult for the Treasury 10 raise money for lis cN-
ppnses and the redemption II lis notes IL
would be simply amazing folly to pr"cpi'ai"
upou the market already weakened hy III" be
lief that the Government revenue VIII not equal
lis expenditures. So large an amount OF bonds.
Idle capital would find investment there rather
than i'm the Industries which need IFS heip.
Prostration Of Government credit would lnJurl-
o,,slv afcc, all other securities. and rc'arl re
covery even if il did no. cause another disaster.
Rut next the rapid retirement Of National
bank circulation would In all probability fol
low imposing upon the Government the burden
of redecminc notes amounting to many millions
against which ii already has money deposited.
/ 1t will he remembered that fund for that pur-
/ pose amounting 10 about SJo,OoO,ooo was ny
authority of law transferred 10 the general
| Treasury account few years ago. ana since
/ that time the Treasury has been under obliga-
| ton to redeem the banknOtes Itself. As fur'her
retirements may be ordered. Of course further
deposits will be made, but the process IL sur
render would speedily cut into the Treasury
reserve on account Of the notes for which II al
| ready holds deposits The effect would he Ia
dcplcte that reserve, and at the same time TO
disorder the whole financial system
1t is probable. for reasons already explained,
that the State bank organizations would prac-
ically monopozc the nOtc-lssulng business I'M
der the Administrations plan. and muli'ndeS
Of National banks would wind MP rs such. and
become State banks with all the privileges Of
such organizations. This again would produce
n tremendous disturbance, for which the coun-
fry. in it's present condition Of business. Is by
no means prepared The new banks would he
eager 10 get their notes into circulation ~ n
time when the legitimate business II the coun-
try does not keep employed anywhere near The
volume Of currency now in circulation. 50 that
the loans on real estate. which various Western
and Southern Congressman openly demand as
the peculiar advantage of the proposed system
would be made under circumstances especially
calculated TO render them unsound. Where the
lender is passionaicly eager 10 get his notes
into circulation. he Is apt 10 mako loans which
al other times would be rejected as unsafe
Instead Of helping the Treasury, this financial
revolution would enormously incrcas" existing
distrs, Indeed. before any such bill as that
o. the Administration could pass. the with
drawai Of gold from The Treasury would prob
abb, suffice 10 convince almost every one. if not
President Cleveland himself. that the plan could
not he carried without disaster Persistcncy
and obstinacy are sometimes valuable But oh
stinate blindness in the presence Of danger, per
sisicnt refusal 10 see facts which conflict with
partisan purposes. are not qualities tending to
produce wise financial management The best
thing that can he done with the wildcat bank
bill is to kill il at once. and thus to stop an
agitation and an uncertainty which are prevent
ing the recovery of trade and industry.