The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1895-12-17

merely propped up by frail and tenn
porary supports. No surplus revenue
however large, could extricate us from
our present difficulties or give assur-
ance Of safety in the future unless 1t
should be required to be paid in gold
under q system which would exempt
the government from the obligations to
furnish the gold when demanded to. be
used in making the payments, and 1t IS
scarcely necessary to suggest that Such
system is impossible as long as the
United States notes and treasury notes
are kept in circulation and are redeem.
able in gold by the government 1tseh
on presentation.
An Erroneous Idea
'"The opinion seems to prevail to some
extent that the mere possession OF d
surplus in the treasury would prevent
withdrawals of gold, and thus render
the issue of bonds for the protection or
the reserve unnecessary, but this view
of the subject is founded, in my Judg-
ment, unon an entire miSconceptlon OF
the causes that have produced the
Withdrawals. Unless | am wholly mis-
taken they have very little. II any, re-
lation to the amount of money held
by the government, or to the amount of
money the government has ability 10
raise by taxation or otherwise, Dut they
relate primarily and almost exclusive
ly to the character of money llidt II
might be able to supply and Keep III
circulation. In other words, IL was dp
prehension as to the kind OF money 10
be used, and not as to the klnd Oh
money ON hand, that brought OUT Sc
curities back from abroad Tor sale,
carlsed fo1,eign investors to withdraw
their CAPITAL and foreign creators 10
collect their debts and compelled our
own people to suspend or contract their
business operations and thus dlmlnlSh
the incomes of employees and greauly
reduce or entirely stop, the wages OF
labor.
Caused by Distrust
Large Withdrawals have been mace
during the last three years SIMPLY pe-
cause gold was wanted, and the oe-
sire to secure gold was due to a grow.
inp distrust of the other kinds OF
currency in circulation, and not at all
to anv apprehension that the govern
ment would not be able to discharge
all its obligations in some klnd Oh pa
per or coin. When the receipts tor
customs consisted very largely OF gold
AS was the case prior to July l, 1872
before the results of our defecuVe cur
rency system had been fully devel-
cped. a surplus revenue enabled the
tuqIbing the reserve; and, besides.
there was at that time no great de.
mand for gold by the presentation or
notes for redemption, and there would,
therefore. have been no difficulty In
maintaining the reserve, even If there
had been no surplus in the treasury;
but the conditions have entirely
changed and an entirely different pol
icy is demanded to meet the situa-
a
surplus revenue the government can
now procure gold only by negotiating
loans or making purchases under the
statute. and this state of affairs,
which is the natural result of causes
still operative, is almost certain to
continue until the causes themselves
are removed"
But One Safe Way.
There is but one safe and effectual
way" the secretary says, ''to protect
our treasury against these demands and
that is to retire and cancel the notes
which constitute the only means
through which the Withdrawals can
| be made. Many partial and tempo
raIy remedies may be suggested and
urged with more or less plausibility,
tainly remove the real cause of our
troubles and give assurance of per-
manent protection against their recur-
renee in the future.
This can be most successfully and
economically accomplished by authoriZ-
ing the secretary of the treasury to
issue from time to time bonds payable
in gold, bearing interest at rate not
exceeding per cent per annum and
having long time to run, and to eX-
change the bonds for United States
notes and treasury notes upon such
! terms as may be most advantageous
| to the government or to sell them
abroad for gold whenever, in his judg-
ment, it is advisable to do so, and tc
use the gold thus obtained in redeem
ing the outstanding notes. Under the
operation of such a plan, if judiciously
executed, there could be no improper
contraction of the circulation, because
if it should at any time be found that
other forms Of currency were not being
supplied to the extent required, eX-
| changes Of bonds for notes would be
suspended and gold would be procured
! by selling the securities abroad. In
order to further facilitate the substitu.
ton of other currency for the retire
ment Of legal tender notes, the nationa
banks should be authorized to ISSUE
notes equal in amount to the face value
| of bonds deposited to secure them, and
the tax on their circulation should be
reduced to one-fourth of 1 per cent pei
annun1 lIiti4a
As Part of the Plan
'tAs "a part of the plan for the re.
| tirement and cancellation Of the lega
| tender notes, the treasury Should be
relieved from the Responsibility for the
redemption of national bank notes eX.
cept worn mutilated and defiled notes
and the notes of failed banks and each
association should be required to re.
deem it's circulation at its own office
and at agencies to be designated by
the comptroller of the currency as was
the case prior to the passage of the
act of June 80, 1894; or, if this is not
considered expedient, and the present
system of current redemption by tht
treasury is continued, the secretary
should have the power after q, future
date to be fixed in the law, to require
| the banks to keep their 5 per cent
redemption fund in gold coin and tc
deposit gold coin for the Withdrawal
| of bonds whenever circulation is to be
permanently surrendered or reduced"
The secretary also favors the pas
sage of a, law allowing national banks
to establish branches in small towns
to the people in parts of the country
remote from large towns and cities
| by which their usefulness would be
greatly enhanced.
The secretary in closing his report
says that it is not probable that any
| plan for the permanent retirement OF
United States notes and treasury notes
will be adoped that will not require
considerable time for its complete exc
cution. and he therefore urges upon
Congress the propriety of prohibiting
| NJ iSG11nS n -,