The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1894-12-03


system relative 20 cuyrsut rsceHpEo2 OF
hank notes ard che governments posstaon
toward the same and Kindred fnz1seTs, -
IL not necessary % set forth IL the
recommendations. here aade, toTesneF
With TIA. which will follow, should re-
eeiy. consideration ~ the hands Of con-
9re... a bsil drawn after careful ssucy snd
sryes.s1ation OF tie whole subject Eould
u~cs~xarfiy smbody ali the details mel
esnt 10 q chsngs rom bond 20 safety
fund necessary as basis OF bank circEsa-
ton
The Comptroller thea cites such PROOF
and gives such statistics IS seem 10 him 20
make she plan suggested o perfectly safe
one 70 enter on- lie says;
"Ths change thus ontisnsd viii, upon
Investigation, IL IA believed. prove TO De
safe ia sffsrding cosnrlets security 20 "a"
note holder and Ffvs 20 the business inter
eats Of the country hank nose issue re-
sponsive TO their nseds
Continuing. the Comptroller says;
.The profit upon the Issue Of circulation
10 tie banks by such change would De 80
augmented that IL would be giving TO them
a franchise for which il 10 suggested thst
thev should Is called upon 10 make
proper return 70 tbs general zoFernine0t
This return should not, however Dc o.
snca q character as 20 defeat the encs
reaey redemption 81 the legal tender Is
sues and the treasury issues under the act
OF isg0 aad tbs reiss1kDg instead OF can
collation. Of tiae same must always create
distrGst OF the governments crs1H
abroad aud NJ home. 80 long as Tie
laws now upon the statute book reFDsin
unchanged The general government
ought 10 be wholly free from the direct -
suing and rsdeeming Of notes 10 pass as
money among the people. No govern
nent mas ever yet successfully engaged ia
so doing, ant the experience 81 The gov
eminent Of TIE United states has proven
no exception - the rule. The general
cesf AMI loss eutasle1 upon the govern
Taent and the period OF uncertainty az 10
the government credit and the stability
of our monetary system have Deen 80
great ss 70 MAKE the legal tender and
treasury issues Of 1890 one 81 iie extraof-
binary burdens placed on the people.
These issues ought 10 be redeemed and
cancelsd and the government thus enabled
10 retire from the banking business. a
business for which il Is 50 poorly equipped.
The intention Of those she nTst
authorized the legai tender -
sues was that they should be
retired At the earliest practical moment.
The first congressional enactment
signed by President Grant after has insug-
uralion a. chief executive vas one Fe-
asserting the determination Of the govern
meat 81 preserve anqussttonea the public
faith. aud the closing clause OF II was:
And the United states also solemniy
hedges its faith 90 mske provision at the
earliest practicable period for the redemp-
ton OF United States notes in coin. In
the light OF the present condition OF the
governments finances that which ought
10 have been done when there vas sur
Plus lu TIE treasury cannot now 5e under
taken, bat the same conditions must con-
tinue 10 weaken the eonntry's credit aud
plague the lines OF business unless a means
~ devised for removing these issues from
the channel OF current redemption until
such tine as the government finds itself
in a position 10 do that which at first Mas
the intent OF al--araaually redeem and
cancel them. The ultimate redemption Of
coin Of course must all be upon the gov
ernment but the etn barrassnant does not
srise from their ultimate bat from their
current redemption.
I'll 10 therefore suggested that If con-
gress shall repeal the provisions Of the
present act requiring the national banks
10 make a deposit of govern ment bonds ia
order TO secure circulating notes and sub
stituie therefor a provision giving them
instead the right to issue the same against
their assets, is shall incorporate therein.
and rs a part thereof that as prere-
quisits 90 30 doing the banks shall be COM
PEELED 10 deposit with the treasurer OF the
under the act OF 1890 equal In amount TO
the difference between the percentage of
their capital stock of the Issue granted
against their assets and the total OF such
capital stock. The deposits thus made
ought to remain with the treasury until
the pank ceased. aithsr through voluntary
or involuntary liquidation. to do business,
and In either case tho government ought
then TO redeem and cancel such
treasury issues deposited. As against
tins deposit OF legal tender
aud treasury notes made
there should DO issued TO the banks dollar
for dollar, national bank notes. either of
the same or different design. as mignt he
desust best The percentage OF The ban x
notes issned against the deposit should be
free from any taxation imposed upon cir
cuiatlon, and ought 20 be such percent
age rs Is deemed equitable 10 be used as =
part of the banks legal reserve held
against deposits. The government should
not undertake or in any wise become re-
sponstble Tor the current redemption of
these notes. Its responsibility should end
with It's redemption Of the notes deposited
To secure such circulation when the bank
ceases 10 exist At present current re-
demption fund of 8 per cent of the out
standing currency IL found sufficient and
70 Is probable that Ia the future no greater
amonnt would hs required.
.'fhe elasticity OF issue In the national
baak circulation will be found in the per-
eentage of issue agaiast assets subject TO
the necessary rate of taxations aud insured
BY An adequate safety fund TO guarantees
tie nafsholders against loss. The govern
ment will he aided. the bank given in ex-
change dollar for every dollar deposited.
and thus BE relieved Of the loss incident 20
deposlting AZ amount of tts capital stock
in exchange for the return in notes granted
IT. No violent contraction OF the currency
would follow such . course, but whenever
contraction occurs it would be not less
gradual than at ether times the expansion
incident thereto
1t il suggested that as a necessary els-
ment 20 securing the proper elasticity II
issue in cur bank note currency section s
of the act OF July Il iso2 regulating the
retirement aud issuing of circulation 20
hanks within 8 nxsd period Of time should
be repealed, and also that an amendment
should be ms ale 80 the law necassitafing
the banks keeping in the ofnce Of the
comptroller OF lhe currency sufficient
amount ef blank notes 30 enable them "a
secure circulation at once. Instead Of after
period of delay.
Suggestions have been received from
many eminent sources that the whoIr
question Of = banking and aeaFreHey sys-
ten cushf 20 be referred by co.'s sress 10 9
COMMITTEES - hc created ay law. appointed
by tie pgesidsnf eud clothed With ths
rFoper authority. A commission non.
partisan in its character. composed q
men Of eminent abilities. could aDquss
tionshly devise = currency system sound
in svary part ard oas which would com
mend itself g. every Interest Of the eoun
try, IL could large take the question ca
Of politics and have 10 eonssdsred simply
in It's business aspects and uron its rnsr
rs. bat II abe present congress 10 20 en- SC