Birmingham state herald., 1895-12-04

Industry that would follow the eancella- tion of the gold demand obligations now aniicting us. In any event the bonds pro- posed would stand for the extinguish- ment of a troublesome indebtedness, while in the path we now follow there turks the menace. of amending bonds, with our indebtedness still undischarged and aggravated in every feature. The obligations necessary to fund this in- debtedness would not equal in amount those from which we have been relieved since 1884 by anticipation and payment beyond the requirements of the sinking fund out of our surplus revenues.
 The currency withdrawn by the retire ment of the United States notes and treasury notes, amounting to probably less than $4S6,000000, might be supplied by such gold as would be used on their retirement, or by an increase in the cir culation of our national banks, though the aggregate capital of those now in existence amounts to more than S664 ,000,- 0OO. Their outstanding circulation, based on bond security, amounts to about $190 00000 900. They are authorized to issue notes amounting to 90 per cent Of the bonds deposited to secure their cir culation, but in no event beyond the amount of their capital stock, and they are obliged to pay 1 per cent tax on the circulation they issue. I think they should be allowed to issue circulation
 
 deposit to secure it, and that the tax on their circulation should be reduced to A Of l per cent, which would undoubtedly meet all the expense the government in- CUTS on their account. In addition they should be allowed to substitute for de- posit in lieu of the bonds now required as security for their circulation those which would be issued for the purpose of retiring the United States notes and treasury notes. The banks already ex- isting, if they desire to avail themselves Of the provisions of the law thus modi- fled, could issue circulation in addition to that already outstanding, amounting to $478,000,O00, which would nearly or quite equal the currency proposed to be cancelled At any rate, I should confi- dently expect to see the existing national banks, or others to be organized, avail themselves of the proposed encourage ments to. issue the circulation and promptly fill any vacuum and supply ev- cry currency needed.
 It has always seemed to me that the provisions of law regarding the capital of national banks which operate as a limita- tion to their location fails to make proper compensation for the suppression of state banks, which came near to the people In all sections of the country and readily furnished them with banking accommo- dations and facilities. Any inconven- fence or embarrassment arising from these restrictions on the location of na- tional banks might well be remedied by better adapting the present system to the creation of banks in smaller commu- mites, or by permitting banks of large capital to establish branches in such To- calities as would serve the people, so regulated and restrained as to secure their safe and conservative control and management.
 But there might not be the necessity for such an addition to the currency by new issues of bank circulation, as at first slance is indicated. If we should be re- lieved from maintaining a gold reserya- tion under the conditions that constitute it the barometer of our solYency, and if our treasury should no longer be the fool ish purveyor of gold for nations abroad or for speculation and hoarding by our citizens at home, I should expect to see gold resume it's natural and normal func- tions in the business affairs of the coun- try. and cease to be an object attracting the timid watch of people and exciting their sensitive imaginations.
 do not overlook the fact that the cancellation of the treasury notes, issued under the silver purchasing act of 1890, would leave the treasury in the actual ownership of sufficient silver, including seigniorage. to coin nearly $178,000, ,000 in standard dollars. It is worthy of consid- eratfon whether this might not from time to time be converted into dollars or fractional coin and slowly put into cir culation as in the Judgment of the sec retary of the treasury the necessities of the country should require.
 2 Whatever is attempted should be en- tered upon fully appreciating the fact that by careless, easy descent we have reached a dangerous depth, and that our ascent will not be accomplished without laborious toll and struggle. We ch Q ho xxric hat 1uo financially i'll and that restoration to health may require heroic treatment and unpleasant remedies. In the present stage of our difficulties it is not easy to how the amount of our rev. nue receipts decidedly affect it. The inn portant question is not the quantity of received, but of the kind of money we maintain and our ability to continue in sound financial condition. We are considering the governments holdings of gold as related to the soundness of our money and are affecting our national credit and monetary strength. If our gold reserve had never been impaired so, if no bonds had never been issued to replenish it, if there had been no fear or timidity concerning our ability to con- tinue gold payments, if any part of our revenues were now paid in gold and if we could look to our gold receipts as a means of maintaining a safe reserve, the
 
 fuential factor in the problem but unfor- tunately all the circumstances that lend weight to this consideration are entirely lacking.
 In our present predicament no gold is received by the government in pay ment of revenue charges, nor would there be If the revenues were increased. The receipts of the treasury when not in sil- yer certificates consist of United States notes and treasury notes issued for silver purchases. These forms of money are only useful to the government in paying it's current ordinary expenses and it's quantity in tn governments possession does not in the least contribute toward giving us that kind of safe financial standing or condition which is built on gold alone.
 If 1t is said that these notes, if held by the government, can be used to obtain gold for our reserve, the answer Is easy. The people draw gold from the treasury on demand upon the United States notes and treasury notes, but the proposition that the treasury can on demand draw gold from the people upon them would be regarded in these days with wonder and amusement. And even if this could be done there is nothing to prevent those thus parting with their gold from regain ing it the next day or the next hour by the presentation of the notes they re- ceiyedl in exchange for it The secret rv