The record-union., 1895-12-04

long-term bonds, thus increasing their
desirability as investments, and be-
cause their payment could be we'll post
p0ned to a period far removed from
present financial burdens and perplexi-
ties, when with increased prosperity and
resources they could be more easily met
To insure the cancellation of these
notes, and also provide a way Dy which
gold may be added to our currency, in
1 lieu of them, a feature in the plan
should be an authority given to the Sec
retary of the Treasury to dispose of the
bonds abroad, for gold, if necessary, tC
complete the contemplated reduction
and cancellation, permitting him to use
the proceeds of such bonds to take ur
and cancel any of the notes that may
be in the Treasury, or that may be re-
| ceived by the Government on any ac-
count
The increase of our bonded debt in
vclved in this plan would be amply COM
pensated by renewed activity and en-
terprise in all business circles. The re-
stored confidence at home, the rein
stated faith in our monetary strength
| abroad, and the stimulation of every in
| tefeSt and industry, would follow the
! cancellation of the gold demand obli-
cations now affecting us.
In any event, the bonds proposed
would stand for the eXtinguishment OF
path we now follow there turks a men
ace Of unending bonds, with our in
Gebtedness still undischarged, and ag-
| gravated in every feature. The obliga-
| tiOnS necessary to fund this indebted
ness would not equal in amount those
| fcOm which we have been relieved since
| 1884, by anticipation and payment. But
! the requirements of the sinking fund
! out OF our surplus revenues, the cur
rency withdrawn by the retirement Of
! the United States notes and Treasury
notes, amounting to probably less than
S4S6, ,OOO,0 600, might be supplied by such
gold as would be used on their retire
ment, or by an incrase in the circula-
ton Of our National Banks.
Though the aggregate capital of these
now in existence amounts to more than
$664, ,O00, 600, their outstanding circula-
ton. based on bond security, amounts
to only about $4,000 600
They are authorized to issue notes
amounting to 80 per cent. of the bonds
deposited to secure their circulation, but
in no event beyond the amount of their
capital stock, and they are obliged to
pay / per cent. tax on the circulation
they issue.
I think they should be allowed to
issue circulation equal to the par value
of the bonds they deposit or secure, and
| the tax on their circulation should be
reduced to one-fourth of one per cent
which would undoubtedly meet the ex-
pense the Government incurs on their
account. In addition they should be
| allowed to substitute, or deposit 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 existing, if
they desired TO avail themselves of the
provisions of law thus modified, could
/ issue circulation in addition to that al
ready outstanding, amounting to S41S
! O00.O0O. which would nearly, or quite,
! equal the currency proposed to be can
| celled. AT any event, 1 should conf
! IDENTIFY expect to see the existing
! National Banks or others to be organ
| lied, avail themselves Of the proposed
/ encoura gements to issue circulation,
and promptly fill any vacuum, and sup
| ply every currency need.
! It has always seemed to me that the
provisions of law regarding the capital
/ of national banks, which operate as a
/ limitation to their location, fails to
make proper compensation for the sup
! preston of State banks, which come
near to the people in all sections of the
country, and readily furnished them
with banking accommodations and IA
cilities.
EMBARRASSING Restrictions.
Any inconvenience Or embarrassment
| arising from these restrictions, on the
! location of national banks, might well
/ be remedied by better adapting the
! present system to the creating of banks
/ in smaller communities, or by permit
! ting banks Of large capital to establish
| branches in such locations as would
| serve the people so regulated and re-
! strained to secure their safe and con-
| seryative 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 glance is indicated IF we should
| be relieved from maintaining a gold
| reserve under conditions that consti-
/ tute it the barometer of our solvency,
and if our Treasury should no longer
/ be the foolish purveyor of gold for ma
! tions abroad or for speculation and
/ boarding by our citizens at home, !
! should expect to see gold resume it's
natural and normal functions in the
business affairs of the country, and
! cease to be an object attracting the
! timid Of our people and exciting their
/ sensitive imaginatiOns
I do not overlook the fact that the
! cancellation of Treasury notes issued
under the silver purchasing Act Of 1890
would leave the Treasury in the actual
4 ownership or SQflclent silver, including &
/ scignorage, TO coin nearly S17S, 900 600.
/ in standard dollars. It is worthy Of con-
sideration, 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 Treasury the necessi-
ties of the country should require
Whatever is attempted should be en-
tered upon fully appreciating the fact
that, by careless, easy, descent we have
entered a dangerous depth, and that our
ascent will not be accomplished without
! Ia borious toll and struggle.
FINANCIALLY ILL.
We shall be wise if we realize that we
are financially i'll, and that our restora-
! tion TO health may require heroic treat
nent and unpleasant remedies.
in the present stage Of our difficulty
ig is not easy TO understand how the
amount Of our revenue receipts directly
I affects il. The important question is
not the quantity of money received in
| revenue payments. but the kind of mon
/ ey we maintain and our ability to con-
! tinue in a sound financial condition. We
! are considering the Governments hold
/ ings of gold, as related to the soundness
/ Of our money, and as affecting our Ma
tiOnal credit and monetary strength
DuCT