Delaware gazette and state journal., 1895-12-19

nue, however large, could eXtricate us
from our present difficulties. or give
assurance Of safetyin the future, unless
il should be required to be paid in
gold under a system which would ex-
empt the government from the obliga-
tion to furnish the gold when demanded
TO be used in making the payments ;
and it ia scarcely necessary to suggest
that such a system is impossible as
long as the United States notes and
treasury notes are kept in circulation
and are redeemable in gold by the gov
ernment itself on presentation,
"The opinion seems 10 prevail to
some extent that tho more possession of
a surplus in the treasury would prevent
Withdrawals Of gold, and thus render
the issue of bonds for the protection of
the reserve unnecessary, but this view
of the subject is founded, in my judg-
ment, upon an entire misconception of
the causes that have produced the
Withdrawals. Unless am wholly mis-
taken, they have very little, if any re-
lation to the amount of money held by
the government, or TO the amount OF
money the government has the ability
to raise by taxation or otherwise, but
they relate primarily and almost ex-
clusively to the character of money
that it might be able to supply and
keep in circulation, In other words. it
was apprehension as to the kind Of
money TO be used, and not as to the
money on hand, that brought our Sc
curities back from abroad for sale,
caused foreign investors to withdraw
their capital and foreign creditors to
collect their debts, and compelled our
own people to suspend or contract
their business operations, and thus
diminish the incomes of employers and
greatly reduce, or entirely stop, the
wages of labor.
Large Withdrawals have been made
during the last three years simply
because gold was wanted, and the
desire to secure gold was due to "A
growing distrust of tho other kinds OF
currency in circulation, and not at all
to any apprehension that the govern
ment would not be able to discharge all
lis obligations in some kind of paper
or coin. When the receipts for Gus
toms consisted very largely of gold, as
before the resulta of our defective cur
TtHCg hystoul Hhu D6til lullJ ubNbiOpGus
surplus revenus enabled the treasury
to pay out gold without disturbing the
reserve; and, besides, there was at that
time no great demand for gold by the
presentation of notes for redemption,
and there would, therefore, have been
no difficulty in maintaining the reserve,
even il there hau been no surplus in
the treasury; but the conditions have
entirely changed and an entirely
different policy is demanded to meet
the situation now existing. With or
without surplus revenue, the govern
ment can now procure gold only by ne
gotiating loans or by 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.
''There is but one safe and effectual
way 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 par.
tial and temporary remedies may be
suggested and urged, with more or less
plausibility, but this is the only one
that will certainly remove the real
cause of our troubles, and give ass ur
auce of permanent protection against
their recurrence in the future.
'This can be most successfully and
economically accomplished by authoriz-
ing the Secretary of the Treasury tc
issue from time to time bonds payable
in gold, bearing interest at rate moi
exceeding 8 per cent per annum ano
having long time to run. and to eX'
change the bonds for United States
notes and treasury notes upon suct
terms as may be most advantageous
to the government, or to sell then
abroad for gold, whenever, in his judg
ment, it is advisable to do so, and use
the gold thus obtained in redeemine
the outstanding notes. Under the
operation of such a plan, If judiciousl!
executed, there could be no improper
contraction of the circulation. be
cause il it should at any time bt
found that other forms of cur
rency were not being supplied to the
extent required. exchanges of bonds
for notes would be suspended, and gole
would be procured by selling the securi
ties abroad. In order to further facili
IulG ilAb oubbilluLtOu Vi ollNA
for the retirement of legal tender notes
the national banks should be authorizoe
to issue notes equal in amount TO thl
face value of bonds deposited to secure
them, and the tax on their circulation
should be reduced to one-fourth of one
per cent pei. annum.
''As part OF the plan for the retire
ment and cancellation Of the legal tender
notes, the treasury should be relieved
from responsibility for the redemption
of national bank notes, except worn,
mutilatcd and defaced notes, and the
notes Of failed banks, and each associa
tion should be required to redeem it,
circulation at its own office and a
agencies TO be designated by the com
troller of the currency, as was the cast
prior to the passage Of the act of Jun,
Goth, 1874 or, IL this ia not considered
expedient, and the present system O
current redemption by the treasury il
continued, the secretary should have
the power, after q future date. to be
fixed in the law, 10 require the banks tt
keep their > per cent redemption funt
in gold coin and to deposit gold coir
for the withdrawal Of bonds whenever
circulation is to be permanently sur
rendered or reduced.
The Secretary also favors the passage
of law allowing national banks tt
establish branches in small towns, with
a view to bringing them closer to the
people in parts Of the country remote
from large towns and cities, by which
their usefulness would be great,
enhanced.
In closing his report the Secretar,
says that it is not probable that an,
plan for the permanent retirement o
United States notes and treasury notes
will be adopted that will not require
considerable time for its complete eX
ecution, and ho therefore urges upor
llpOpraaa tho f,roppiaty of prnhi hi ri M