The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1895-12-04

NAR1E&1 QI THESE now IN EAfSNSfsNC AflRLitS
10 more than Se4. coo. GO. 'their outstanding
circulation. based on bond security.
amounts 70 only about $Ia0.0o9.eo. They
are authorized 10 issue notes amounting 20
- per cent. OF the bonds deposited 10 Sc
cure their circulation. but in 10 event be-
yond the amount OF their capital stock.
and they are Obliged 20 pay ! per cent. tax
on the circulation they issue. | think
they should be allowed TO issue circulation
equal TO the par value Of the bonds they
deposit TO secure IL, and that the tax or
their circulation should be reduced 70 one
quarter OF l per cent. which could I'M
douhtediy meet all the expense the gov
rnmen incurs on their account. In adj
dition. they should be above TO substi-
tute or deposit. in lieu OF the bonds now
required as security for their circulation.
those which would be issued for the pur-
pose of retiring the United States notes
and treasury notes. The banks already ex-
listing. If they desired 10 avail themselves
of the provisions OF law thus modified,
could issue circulation. in addition TO that
already outstanding. amounting to Si1S,-
o0, 0o, which would nearly or quite equal
the currency proposed TO be Cancelled At
any event I should confidently expect TO
see the existing national banks or others
TO be organized avail themselves OF the
proposed -encouragements 10 issue circu-
lation and promptly fill any vacuum and
supply every currency need.
L II has always seemed 70 me that the pro-
visions OF the law regarding the capital
Of national banks which operate as a limi-
tation TO their location fails TO make proper
compensation for the suppression Of state
banks, which come near 10 the people in
all sections of the country and readily
furnished them with banking
dations and facilities. Any inconvenience
or embarrassment arising from those re-
strictions on the location of national banks
MIGHT wall Ia ranc1faG nv hatfar a1QOffDR
the present system to the creating of
banks in smaller communities or by per-
hitting banks or large capital 10 estao-
lish branches in such localities as would
serve the people. so regulated and restrain
ed as 70 secure their safe and conservative
control and management.
But there might not be the necessity OF
for such an addition TO the currency by
new issues of bank circulation as at first
glance is indicated. II we should be reliev-
ed from maintaining 4 gold reserve under
conditions that constitute IL the barometer
OF our solvency. and II our treasury should
no longer be the foolish purveyor Of gold
for nations abroad or for speculation and
boarding by our citizens al home. | should
expect 10 see goid resume its natural
functions in the business affairs of the
country. and cease 10 be an object attract
ing the tim:d among our people and excit-
The Country Very III.
do not overlook the fact that the can
collation. of the treasury notes issued I'M
der the silver purchasing act of 1890 would
leave the treasury in the actual owner
ship Of sufficient silver. including seignior-
age. to coin nearly SITS, 0o0.00 in standard
dollars. 1t is worthy of consideration
whether this might not from time TO time
be converted into dollars or fractional
coin and slowly put into circulation. as in
the Judgment Of the secretary of the treas
yIry- the nnceSsfriaG pf the country ShQOlH
require. Whatever is attempted should
re entered upon fully approaching the
fact that by a careless, easy descent we
have reached a dangerous depth. and that
our ascent will not be accomplished with
out laborious toll and struggle. We shall
be wise II We realize that we are financial
ly i'll, and that our restoration TO health
may require heroic'treatmen and unpleas-
ant remedies.
Revenue Has Nothing to DC with II.
In the present stage Of our difficulty ii is
not easy to understand how the amount
Of our revenue receipts directly affect it.
The important question is not the quantity
of money received IN revenue payments.
but the Kind of money we maintain and
our ability 10 continue the sound financial
condition. We are considering the goV-
ernment's holding of gold as related TO
the soundness of our money and as af-
fecting our national credit and monetary
strength. If OUR gold reserve had never
been impaired, or If M bonds had ever
been issued to replenish II. II there had
been no fear and~no timidity concerning
our ability to continue gold payments II
any part of our revenues were not paid
in gold. and we could look TO our gold
receipts as a means OF maintaining a safe
reserve. the amount Of our revenues would
be an influential factor ia the problem.
but ~ ~"tunately the circumstances that
might / weigh TO this consideration
are entirely lacking in our present predic-
ament. No gold is received by the gov
eminent in payment of revenue charges.
nor would there be If the revenues were
increased. The receipts OF the treasury,
when not in silver certificates. consist
Of United States 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 governments pos
session does not in the least contribute
toward giving us a safe financial stand
ing, a condition which is built on gold
slone. II II is said that those notes. IL
held by the government. can be used TO
obtain gold for our reserve, the answer
is easy. The people drew gold from the
treasury on demand upon United States
notes and treasury notes. but the prOpO-
sition that the treasury can on demand
draw gold from the people upon them
would be regarded in these DAYS witt won
DER ana amusement ana, even II LllS
could be done, there is nothing 10 prevent
those thus parting with their gold from
r~egaining IL the next day or the next
hour by the presentation OF the notes they
received In exchange for II. The secre-
tary OF the treasury might use such note
taken from A surplus revenue TO buy gold
In the market, but OF course he could
not do this without paying a premium.
Private holders OF gold, unlike this gov
eminent. having 40 parity TO maintain,
would not be restrained from making the
best bargain possible when they furnished
gold to the treasury, hut the moment the
secretary Of tho treasury bought gold on
any terms above par he would establish a
general and universal premium upon II,
thus breaking down the parity between
gold and silver which the government is
pledged 10 maintain. and opening the way
TO new and serious complications. In the
meantime the premium could not remain
stationary. and The absurd spectacle might
be presented Of a dealer selling gold TO
The government and with United States
notes or treasury notes IN his hand i'm
mediately clamoring for its return and a
resale At higher premium.
Il NAV be claimed that A large revenue
and redundant receipts might favorabiy
effect the situation under discussion by
af0rding an opportunity Of retaining these
thus preventing their presentation for
gold. Such retention 20 0e useful ought
- he ~ least measurably permanent. and
this is precisely wkat is prohibited. so far
As United States notes are concerned, by
the law II 1873. fOrbidding their further
r~fIrerpent. That statute IN 50 many words
provides that these notes when received