The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1894-12-03


ing American registry to ships built
abroad and owned by Americans ap-
pears in the light of present conditions
not only to be a failure for good at every
point. but to be nearer a relic of barbar-
ism than anything that exists under the
permission of statute of the United
States. 1 earnestly recommend its prompt
repeal.
THE GOLD RESERVE.
During the last month the gold re-
served in the Treasury for the purpose
| of redeeming the notes of the Govern
| ment circulating as money in the hands
of the people became so reduced, and
its further depletion in the near future
seemed so certain that in the exercise
of proper care for the public welfare it
| became necessary to replenish this re-
serve and thus maintain popular faith
in the ability and determination Of the
Government to meet, as agreed, its Pc
cuniary obligations.
1t would have been well II in this emer-
gency authority had existed to issue the
bonds of the Government bearing low
rate of interest and maturing within
short period; but the Congress having
failed to confer such authority, resort
was, necessarily had to the resumption
act of 1875, and pursuant to it's provisions
bonds were issued drawing interest at
| the rate of five per cent. per annum anu
maturing ten years after their issue,
| that being the shortest time authorized
| by the act l am glad to say, however,
| that on the sale of these bonds the
premium received operated 10 reduce the
| rate of interest to be paid by the Gov
ernment to less than three per cent.
Nothing could be worse er further re-
| moved from sensible finance than the re-
lations existing between the currency
the Government has issued, the gold
| held for its redemption, and the means
! which must be resorted to for the pur-
pose of replenishing such redemption
fund when impaired. Even If the claims
upon this fund were confined to the obli-
cations originally intended, and if the
redemption of these obligations meant
their cancellation, the fund would be
very small. But these obligations, when
received and redeemed in gold are not
cancelled, bet are reissued, and may do
duty many times by way of drawing gold
from the Treasury. Thus we have an
endless chain in operation constantly de-
pleting the Treasary's gold and never a
final rest. AS if this was not bad enough,
we have, by a statutory declaration that
it is the policy of the Government to
maintain the parity between gold and
silver, aided the force and momentum of
this exhausting process and added large
ly to the currency obligations claiming
this peculiar gold redemption. Our small
gold reserve is thus subject to drain from
cid no
our danger also increase the necessity
of protecting this reserve against deple
ton, and it is most unsatisfactory to
know that the protection afforded is only
a temporary palliation.
1t is perfectly and parpaDIy plain that
the only way under present conditions
by which this reserve, when dangerous
ly -depleted5 can be replenished, is through
the issue and sale of the bonds of the
Government for gold; and yet Congress
has not only thus far declined to
thorize the issue of bonds best suited to
such a purpose, but there seems a dis
position in some quarters to deny both
the necessity and power for the issue of
bonds at all.
1 cannot for moment believe that
any of our citizens are deliberately will
ing that their Government should default
in it's pecuniary obligations or that its
financial operations should be reduced to
a silver basis At any rate / should not
feel that my duty was done if l omitted
any effort / could make to avert such a
calamity AS long, therefore, as no pro-
vision is made for the final redemption
or the putting aside of the currency
obligation now used to repeatedly and
constantly draw from the Government
its gold and as long as no better au-
thority for bond issues is allowed than
at present exists such authority will be
utilized whenever and as often as il be-
comes necessary to maintain a suffici-
ent gold reserve, and in abundant time
to save the credit of our country and
make good the financial declarations of
our Government.
BANKS AND CURRENCY.
Questions relating to our banks and
currency are closely connected with the
subject just referred to and they also
present some unsatisfactory features.
Prominent among them are the lack of
elasticity in our currency circulation
and its frequent concentration in finan-
cial centres when it is most needed in
other parts of the country.
The absolute enforcement of the Gov
ernment from the business of banking,
is the ideal relationship of the Govern
ment to the circulation of the currency
of the country.
This condition can not be Immediately
reached; but as a step in that direc
ton as means of securing more
elastic currency and obviating other OBJ
jections to the present arrangement of
bank circulation, the Secretary of the
Treasury presents in hisr eport a scheme
modifying present banking laws and pro-
viding for the issue of circulating notes
by State banks free from taxation un-
der certain limitations
The Secretary explains his plan so
plainly and its advantages are developed
by him with such remarkable clearness,
that any effort on my part to present
argument in it's support would be super
fious 1 shall, therefore, content myself
with an unqualified Endorsement of the
Secretarys proposed changes in the law
and brief and imperfect statement of
their prominent features.
1t is proposed to repeal all laws pro-
viding for the deposit of United States
bonds as security for circulation; to per-
nit national banks to issue circulating
notes not exceeding in amount seventy
five per cent. of their paid-up and un-
impaired capital, provided they deposit
with the Government, as a guarantee
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