Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1895-01-30

DcESCS. vi Si-cAI Va
them. would suffice. Until the reve-
nue. became insufficient the redemp-
ton OF the greenbacks in gold gave
Us no trouble. The 800, 900, 900 OF
governments bonds which were sold
during the past year. and the $780,
600. 900 more which are probably 60
ing to be sold this year, have not
been rendered necessary by the exis-
tencc OF the legal tenders. They
have been q clumsy substitute for the
short-tcrm bonds which should have
been authorized by congress to meet
the temporary needs of the treasury,
and their Issue is perversion OF law.
if it is not distinctly Illegal.
Bat whether the legal tenders are
or are not improper and detrimental,
those who clamor for their extinc-
ton. like those of our citizens who
lately clamored for municipal rapid
transit. have evidently never consid-
cred the practicability of the meas
ure. nor its inevitable consequences
If an attempt should be made to car
~ ii out. First of all. the over
whelming popular sentiment that is
against it in the west and southwest
must be met and overcome. and this
cannot be accomplished by mere
defamation and assertion. Then
provision must be made to fiji the
vacuum in the currency which the
retirement OF the lie gal tenders wolld
occasion. The substitution 'or them
of bank notes would only partially
suffice. At present they compose the
greater part OF the reserves which
the national banks by law. and the
state banks from necessity. hold
against their deposits. This purpose
bank notes will not serve, and re-
course must be had To gold The
national banks alone would need
SI65, 900. 900 in gold to replace their
legal tenders. and the state banks
nearly as much. Ii the government
finds il difficult TO obtain enough of
the metal to keep its resources mp TO
200. GOA, 900. certainly the banks
would find it more difficult to OBJ
tain twice or three times that amount.
and while they were engaged in get
ting il they would have to contract
their loans to au extent which would
lead to 4 frightful financial disaster.
Surprising. however. that, undc-
TERED BY this prospect, the retire
ment of the legal tenders should be
determined upon. the next point 20
be considered would be the method
of cfTec;inL it. The notes are GER
tainly not to be repudiated, and il
they are not repudiated. they must
either be paid OF in gold out of sur
plus revenue or funded into bonds.
OF the former plan it Is enough to
say that there is no surplus revenue
now, nor is there likely TO be one for
long while to come. The admins
tration is at its wits ends % devise
means for procuring enough revenue
10 barely meet its expenses, and pay
ing off 500, 100000 OF legal tender is
out of the question. Besides, If there
were a surplus. it could not be
turned into gold to an extent sufli-
cient to retire even S50.000.00O of
grcensacks Il year without convulsip g
the financial world
The other scheme. that OF funding.
seems more feasible. and is discussed
as if there were no obstacle to its
accomplishment. Its advocates fail
| to consider that it involves the with
drawing, within a comparatively
| short space OF time. not merely from
the banks, but from the pockets OF
the people. of $500, 000,0 coo of cur
rency. and that this would be so diff
iicult a to he practically impOssi-
BILE. The talk OF popular loan pro-
ceeds from gross ignorance Of the
/ financial circumstances OF our peo-
pie. Unlike the French, they do no,
keep money hidden away in chests
and old stockings. but invest all they
can spare. retaining only so much as
is absolutely necessary for their
daily needs. To buy government
bonds they would have to draw out
savings bank deposits Welding them
a much higher rate of interest, or
sell securities also producing more
income Ii the funding OF the legal
tenders is to he effected at ali, ii
must be effected by the agency ot
banks and bankers. here aud abroad
and If they attempted to scoop NJ
| the legal tenders and return them t.
the treasury. financial collapse
would he the result The burden
which the payment of interest upor
! the bonds issued to do this mischie
would impose upon the nation it il
unnecessary TO discuss. Even at tn,
low rate of ?! per cent per anuuu
il would amount to S12.500,OOO ,
year. and would by that amount in
crease the already large deficit of tbs
national revenue.
The upshot of the matter is that
for the sake Of enabling the banks t.
,put out $5O0. OO0,0 900 of their owl
notes and make profit by lendin:
them a money. it i proposed tina
the country shall be saddled with Al
interest charge in perpetuity of Si2.
5p0, 600 year. and incur the risk o
a financial crisis compared to whicl
that OF 1898 would appear insignifi
cant. Nor would the maintenance
OF gold payment be rendered an,