Birmingham state herald., 1895-12-17

entire volume of currency and of our ability at all times to preserve equality in the exchangeable value of it's various parts.
 The issue of bonds to procure coin for the reserve, which is the only effective method now available under the law, will, unless the conditions which have already been developed by the present policy are radically changed, ultimately result in the creation of a public debt much larger than would be required to retire and cancel all the notes; and the annual interest charge will be much greater than it would be necessary to incur on a new class of bonds adapted to the present circumstances of the government and the well known preferences of investors. If, however, an attempt is to be made to keep the United States notes and treas ury notes permanently in circulation by reissues after redemption, and the gov ernment is to be permanently charged with the duty of sustaining the value of all our currency, paper and coin alike, the conclusion cannot be avoided that the policy of issuing bonds for the accom- plishment of these purposes must also become permanent, and such additional powers must be conferred upon the secre- tary as will enable him to execute the laws relating to these subjects with the least possible disturbance of the busi- ness affairs of the public and the least possible charge upon the treasury. I
 
 icy ought not to be continued, but that the United States notes and treasury notes should be retired from cireula- tion at the earliest practicable day, and that the government should be wholly relieved from the responsibility Of pro- viding a credit currency for the people.
 If our legal tender notes were retired there is abundant reason to believe that very large amount of gold which has been excluded from the country by the
 
 circulation would promptly return to take it's place in our currency and con stitute a permanent part of our medium of exchange.
 The retirement and cancellation of the legal tender notes would not necessarily produce any contraction of the circula- tion; and if such result should continue for any considerable period, 1t would be a demonstration of the fact that the volume of currency previously existing was not needed in the business of the people. for whenever the volume is re- duced below the actual requirements of trade the deficiency will be supplied either from abroad in exchange for our products and securities or by the banks at home, or by both.
 Loss of Revenue.
 After discussing at considerable length the disturbances to the country caused by the silver purchasing act Secretary Carlisle continues as follows:
 The great loss of revenue. instead of be. ing the cause of our financial difficulties, is one of the effects produced by a de- fective currency system and failure to recognize this important fact will lead us further astray in our search for an adequate remedy. It is true that the tariff act of 1890, which remained in force until after the close of the fiscal year 1894, had greatly reduced the revenue derived from customs, and that the expenditures nf ernU n xxar QY Yirny cod frnf $31S,040,710 during the fiscal year 1890 to $3S3, ,954 during the fiscal year 1893: still it is not probable that there would have been any considerable excess of ex- penditures over receipts if the business of the people had not been interrupted by the disturbances growing out of the unsatisfactory condition of our currency.
 Remedies which might have been more or less effective under other circum- stances cannot be in the least degree ef- fective now, and it would be futile and dangerous at this time to attempt a cor rection of our financial disorders other wise than by total removal of their causes.
 No surplus revenue, however large, could extricate us from our present diff faculties or give assurance of safety in the future unless it should be required to be paid in gold under system which would exempt the government from the obligation to furnish the gold when de- manded to be used in making the pay ments; 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 redeemable in gold by the gov ernment itself on presentation.
 Possible Dangers.
 Owing to the peculiar character of our currency the ability of the treasury to hoard United States and treasury notes te 1fx.afk fk(I cannot be definitely determined in ad- vance-and if it should, after that amount has been reached, refuse to pay out these notes in making disbursements at the places where our customs are col lected, the immediate result would be that nearly all payments to the govern ment would be made in silver certifi- cates, which it is bound to take, but can compel no one else to take. There would be a stream of these non-legal tender certificates constantly flowing into the treasury, and 1t would receive scarcely any more United States notes or treas ury notes as parts of the surplus revenue, but would soon be compelled to pay out those already accumulated, or pay gold, or break down in it's obligations at the sub-treasuries. This result has been avoided heretofore only by paying out these notes from the treasury from time to time whenever the character of the currency coming in indicated that the point or danger was aDOut 10 De reacneQ, and 1t will be necessary to pursue the same policy hereafter as long as the legal tender notes are in existence. Notwith- standing all the efforts of the depart ment to protect the treasury against ex- cessiye receipts of these certificates, it has frequently happened that they con- stitute more than 80 per cent of all the payments of customs dues at New York, where more than two-thirds of the total collections are made; but if the United States legal tender paper should be re- tired and a proper currency system adopted gold and gold certificates and bank notes redeemable in gold will take their place in the circulation, and the government will have no further trouble in the kind of money used in its receipts or payments.
 But even if this difficulty could be ob- viated an attempt to impose taxation upon our people sufficient in amount to enable the treasury to take up and per- manently hoard all the legal tender mon ey, now amounting to about $4S5, 100000. would be the most remarkable financial experiment of modern times. while an at- tempt to secure by taxation within any