The Yale expositor., 1895-12-13

400 In Efforts 70 mkintain II; that the annual
interest charge on such bonded indebtedness
Is more than $l1 200. 900; that a continuance in
our present course may result In further bond
Issues and that we have suffered or are threat
ened with all this for the sake OF supplying
gold for foreign shipment or facilitating it's
boarding at home. situation Is exhibited
which certainly ought TO arrest attention and
provoke immediate legislative relief.
1 am convinced the only thorough and prac-
ticable remedy for our troubles is found IN the
retirement and cancellation or our United
states notes, commonly called greenoacks. and
the outstanding treasury notes issued by the
government In payment OF silver purchases un-
der the act OF 1s00. believe this could be
these notes for United States bonds OF small
as well as large denominations. bearing a low
rate OF interest. They should be long-terin
bonds, thus increasing their desirability as in
vestments, and because their payment could
present financial burdens and perpexities. when
with increased prosperity ahd resources they
the cancellation Of these notes and also pro-
vide way by which gold may be added to
our currency In lieu OF them feature in tho
plan should be an authority given 10 the sec
retary OF the treasury to dispose OF the bonds
abroad for gold IL necessary TO complete the
contemplated redemption and cancellation. per-
miting him to use the proceeds OF such bonds
70 take up and cancel any of the notes that
may be In the treasury or that may be re-
ceived by the government on any account.
The increase OF our bonded debt involved in
this plan would be amply compensated by re-
newed activity and enterprise in all business
circles the restored confidence at home, the
reinstated faith in our monetary strength
abroad and the stimulation of every interest
and industry that would follow the cancella-
tion Of the gold-demand obligations now aiilict-
ing US. In any event the bonds proposed would
stand for the eXtinguishment OF a troublesome
Indebtedness, while In the path We now follow
there turks the menace OF unending bonds, with
our indebtedness still undischarged and aggra-
waited in every feature. The obligations neces:
sary 10 fund this indebtedness would not equal
In amount those from which we have been re-
lieved since 1854 by anticipation and payment.
beyond the requirements OF the sinking fund
out OF our surplus revenues.
The currency withdrawn by the retirement of
United states and treasury notes do 900 amount mount,
be used on their retirement or by
tional banks. Though the aggregate capital
of those now in existence amounts 70 more
than S664 600 OoO their outstanding circulation
based on bond security amounts TO only $780,
600 600. They are authorized 10 issue notes
amounting to 90 per cent of the bonds deposited
to gecure their circulation, but In no event be-
yond the amount Of their capital stock and they
are obliged TO pay per cent tax on the elrcu-
lation they issue.
/ think they should be allowed 20 issue circu-
lation equal 20 par value OF the bonds they
deposit 20 secure H.. and that the tax on their
circulation should be reduced TO one-fourth OF 1
per cent, which would undoubtedly meet all the
expense the government incurs on their account.
In addition they should be allowed 10 substi-
tute or deposit IN lieu of the bonds now re-
quired security OF their circulation those
which would be issued for the purpose or re-
firing the United States notes ana treasury
notes.
II has always seemed to me that the pro-
visions OF law regarding the capital OF naUondl
banks which operate as Limitation TO their
location fails 10 make proper compensation for
the suppression Of state banks, which camS
near to the people In all sections Of the coun-
try, and readily furnished them with banking
accommodations and facilities. Any incon-
venience or embarrassment arising from these
restrictions ON the location OF national banks
might well be remedied by better adapting the
present system TO the creation or banks IN
smaller communities. or by permitting banks or
large capital 20 establish branches in such lo-
callties as would serve the people-so regulated
and restrained as to secure safe and conserva-
tive control ana management.
/ do not overlook the fact that the cancella-
tion OF the treasury notes issued under the
sllver-purchase act OF 1890 would leave the
treasury in the actual ownership OF sufficient
silver. including segnorage, 10 coin nearly
Sl7S 600 600 IN standard dollars. IL ~ worthy
OF consideration whether this might not, from
time 10 time, be converted into dollars or frac-
tional coin and slowly put into circulation as
in the judgment Of the secretary OF the treas
ury the necessity Of the country should re-
oure.
In our present predicament no gold is re-
ceived by the government in payment OF rev.
enue charges, nor would there be II the rev
enues were increased. The receipts OF the
treasury. when not in silver certificates, con-
sist OF United States notes and treasury notes
issued for silver purchases. These forms OF
money are only useful to the government IN
paying Its current ordinary expenses. and its
quantity in the government 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 II Is said that these notes, II held by the
government can can be used to obtain r. gold r'r ror
receive gold from the treasury from demand
upon 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 IL this could be
done. there Is nothing TO prevent those thus
parting with their gold from regaining II the
next day or the next hour by the presentation
OF the notes they received IN exchange for II.
The secretary Of the treasury might use such
not taken from surplus revenue TO buy gold
In the market. OF course he could not do this
without paying premium. Private holders
OF gold, unlike the government, having no
parity to maintain, would not be restrained
from making the best bargain possible when
they furnished gold TO the treasury but the
moment the secretary OF the treasury bought
gold above par he would establish a general
and universal premium upon II, thus breaking
down the parity between gold and silver which
tho government is pledged to maintain. and
opening the way 10 serious complication. In
the meantime the premium would not remain
stationary, and the absurd spectacle might be
presented OF dealer selling gold to the govern
ment, and with United States notes or treasury
notes in his hand Immediately clamoring for
its return and resale at higher premium.
REVENUE RECEIPTS.
It may be claimed that a large revenue and
redundant receipts might favorably affect the
situation undtr dscussion by anording an op-
portunIty OF retailing these notes in the treas ,s
presentation for gold. Such retention, to be
useful. ought 20 be at least measurably, per-
ed, SO far as the United States notes are con-
cerned, by the law OF 1878, forbidding their
further retirement. That statute IN so many
words provides that these notes, when received
into the treasury and belonging TO the United
States shall be paid out again and kept In
circulation" IL will, moreover. bo readily
seen that the government could not refuse TO
pay out United States notes and treasury
notes in current transactions when demanded,
and Insist paying out silver alone. and stu
maintain the parity between that metal and
accumulation in the treasury OF currency OF
any kind exacted from the people through
taxation Is Justly regarded as an evil, and II
cannot proceed far without vigorous protest
against an unjusti1able retention Of money
from the business OF the country, and a de-
nunciation OF scheme OF taxation which
proves itself to be unjust when IL takes from
so much in excess OF tho needs OF government
support that large sums can be gathered and
kept in the treasury. Such condition has
heretofore. in times OF surplus revenue. led
the government to reetore currency to the
people by the purchase OF It's unmatured bonds
OF it's deposits in iAtonal banks, and we
easily remember that the abuse of treasury
accumulation has furnished most persuasive
argument In favor OF legislation radically re-
ducing our tariff taxation.
Perhaps II IS supposed that sufficient revenue
receipts would In sentimental way improve
the situation by inspiring confidence in our SOL
haustion. And yet, through all our struggles
TO maintain our gold reserve. there never has
been any apprehension to our ready ability
to pay our way with such money as we had:
and the question whether or not our current
receipts met our current expenses has not en-
tered into the estimate OF our solvency. OF
course the general state OF our funds. exclus-
iva of 0old was entiroiv iurnaterfal 10 the for