The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1894-12-05

Customers for our Surplus product. azlsss
we rnssntsin = money system Substantially
In eccors with thssrs, and until they mani
fest . 1isros7EtS3 20 co-or-rats with rs IN
effscttng a change uron terms Jzst and
fair 20 al onr interests we o1ghf 20 con-
tinus our adhesion 10 the god standard Of
vairs. with - large use Of silver ss -
consistent with the strict msintensnce OF
that policy
REDExPrfos OF TREAsrxr MOTIFS.
''Sine~ the resumption Of specie pay
rnent United States legal tender and treas
ury notes have been redeemed in gold TO
the amount o. IS, co CO.. and al the notes
redeemed have been Eeiss1eo and are nov
outstanding They are 8 constant menace
20 the gold reserve. and no scheme OF
financial reform can De complete or sf-
fectuai which does not provide az least for
their gradual elimination from our cur
rency system. | sm convinced thai the
interests Of the country require such
change ia our organization IS vii dis
charge the governments entirely from the
business OF issuing or OF reissning these
notes. and thus relieve It's financial de-
partment Of periodical demands on its re-
sources, which under the existing system
must continue 20 disfuro the financial and
general business affairs OF the people.
An arbitrary regulation of the value of cir
euiation 10 be kept outstanding is wholly
inconsistent with the maintenance Of 3
healthy financial condition, and il the ex-
srciss Of function which does not proa-
eFiy belong 70 the government or any
other public Authority. Its effect is TO
force paper currency on the people when
Il In not needed and deprive them OF il
when Is Is needed, thus establishing and
maintaining an improper and unwsr-
rsnted connection between the govern
men and the private business affairs Of
Its citizens, and making their successful
prosecution largely dependent on the ca
price OF a superior authority having no in
terest IN the transaction, except perhaps a
partisan interest no. Ia harmony with
sound financial arrangements.
REFORM or THE NATIONAL RANKING SYSTEM.
Under our present currency system, 50
far as il consists Of notes issued by the
United States government, the volume Of
circulation va. intended TO be. and is, IN
fact, Interchangeable; IL ~ unalterably liked
a. certain amount, and no matter how
great the emergency may be 10 can neither
be enlarged nor diminished. The only
part of the currency possessing in any de-
gree the quality of elasticity is that issued
by the national banking associations. and
IL Is now generally conceded, / believe.
that in that particular at least il has failed
20 meet the requirements Of the situation
a. some OF the most critical periods in the
business affairs of the country. It's failure
IL credited, IN my opinion. TO these princi-
pal causes: First. TO the large volume of
United states currency of various kinds
kept constantly outstanding, making the
contraction or expansion of the compare
lively small national bank circulation less
effective than it would otherwise have
been; second, the difficulty and delay in
producing, and, TO some extent, in
placing in circulation; thirdly and
mainly, the provisions OF the law
which require the deposit Of United States
bonds 10 secure circulation. and restrict
value OF the bonds. With 500 ooQ. 600 in
United States notes. the treasury notes of
leSo. silver certificates ana gold csrtih-
Gates, besides about $625 ,0O0, 900 in gold
and silver coin constantly Outstanding
none Of which can be lawfully retired by
the government without the substitution
OF other currency IN Its place, the national
bank notes, which amount to only s20T
DO, 900, or about Il per cent. of the whole,
cannot exert very effective influence on
the volume Of outstanding currency at
any time. especially At times when large
contrections or expansions are most
needed. But the greatest difficulties are
encountered and the national banking
systsm, as now organized, Is least effee-
tAFt " AFH tue DutAHt1h Vi LAG country de-
mands quick expansions of the currency
10 meet sudden emergencies.
'ln addition to the existing distractions
To the prompt increase and decrease of
circulation, the ninth section of the act OF
July II. 1882 which provides for the extern
sion OF the corporate existence OF national
banks, expressly prohibits them from re-
firing their notes 10 greater amount than
f3 600. COO in the aggregate per month, and
that no bank which has made deposit OF
lawful money. In order 30 withdraw its
circulation, snail be permitted TO make
any increase in its circulation for q period
of sin months thereafter. These provisions
are so manifsstly in conflict with the die
tasss OF sound policy that they require no
comment.
I'm view Of the foregoing considerations
and many others that might be urged 10
favor Of reorganization and reformation
Of she paper currency system, / have pre-
pared the outlines OF plan which, in my
opinion. will relieve the governments TO a
great extent from the burdens now i'm
posed upon IL, secure within areasonabls
time safe and elastic national and state
bank currency, and result ultimately in
the retirsment of United States legal
tender notes of both classes. IL is, in briei.
as follows:
al Repeal ali laws requiring or authorizing
ths deposit Of United states bonds as security
Tor GtfNulAtiQu.
- Permit national banks 70 issue notes 10
sn amount not exceeding IS per centum OF their
paid p and unimpatred capital, bot reeuiFe
each eanS. osiore receiving notes, 90 deposit a
guarantee fund consisting Of United states ie-al
tender notes. including treasury notes Of iSqD
10 the amount Of 80 per eentum upon the elrcn-
lating notes outstanding. TO be maintained A.
ST. tines and Whenever . bank Fetires It's en-
egiatlon. In whole or fn part. lie guarantee fund
so ns returned 90 70 IN proportion - the amount
Of the notes retired.
"a Retain the provision Of the law maxine
stock holders Individually liable. aud provide
thai tha circulating notes shall constitute a
arst lien upon all the assets OF tbe bank
- Impose tax OF oas-haif Of Per centuue
par aanur1, payable SAINT annually, upon the
average amount of notes IN circulation, 20 de-
frAv the expenses OF printing notes, oficia
supervision. cancellation, etc
- No natousi bank note % 20 Of Teas d.
nomination than sl0, And sill uetes % the same
denomination 10 be Uailorn In design, baI
may have them made payable In that coin re
secretary OF the treasury 70 have authority 70
prepare and keep en- hand, ready tor issue upan
application. a reserve Of bla0k national hsnk
notes for each banking association having cir
eulaiioa.
- Require each national backing assoalati9l
90 Fe4eeal tts notes 81 its own cNlee or a. IL
own ufflelai agencies 90 &c doslE uAtsa ~ il
-. To provide = safety fund Tor the ilnrre
diAte reds aption OF tie circulating ualss "a
failed nsnks. iupOEe = tax Cl --- ger eeat fer
aanura upon the sversre circulation 81 each
bank. unUl tha fund amounts 20 per csut oE
the total circulation outstanding REQUIRE
each new hsnk and each bank saksaE eat ssdi.