Audubon Republican. [volume] (Audubon, Iowa) 1894-1925, 1895-12-05

continuance in our present course may re-
suit in further bond issues, and that we
this for the sake of supplying gold for for
eign shipment or facilitating its boarding
at home, situation is exhibited which GER
woke immediate legislative relief
Notes Should BE Retired.
1 am convinced the only thorough and
practicable remedy for our troubles is
round in the retirement and cancellation
OF our United States notes, commonly
called greenbaclxs, and the outstanding
treasury notes issued by the government
IN payment of silver purchases under the
readily accomplished by the exchange Of
these notes for United States bonds Of
small as well as large denominations,
bearing low rate of interest They should
be iong-term bonds, thus increasing their
dosirabiltty as investments, and because
their payment could be well postponed to
a period far removed from present finan-
Gal burdens and perplexities, when with
increased prosperity and resources they
would be more easily met. To further in
sure the cancellation of these notes and
also provide a way by which gold may be
added to our currency in lieu of them, a
feature in the plan should be an authority
given to the secretary of the treasury to
dispose of the bonds abroad for gold if
necessary to complete the contemplated
redemption and cancellation, permitting
him to use the proceeds of such bonds to
take up and cancel any of the notes that
ceived by the government on any account
Would Restore Confidence.
The increase of our bonded debt in
volVed in this plan would be amply COM
pensated by renewed activity and enter
prise in all business circles, the restored
confidence at home, the reinstated faith
in our monetary strength abroad, and the
stimulation of every interest and industry
that would follow the cancellation of the
gold-demand obligations now affecting us.
In any event, the bonds proposed would
stand for the extinguishment of trouble
some Indebtedness, while in the path we
now follow there turks the menace of un-
ending. bonds, with our Indebtedness still
undischarged and aggravated in every
feature. The obligations necessary to
amount those from which we have been re-
lieved since 1884 by anticipation and pay
ment, beyond the requirements of the
sinking fund out of our surplus revenues.
How to Fill the Void.
The currency withdrawn by the retire
ment of the United States notes and treas
ury notes, amounting to probably less
than $685. 900, might be supplied by such
gold as would be used on their retirement
or by an 'increase in the circulation of our
national banks. Though the aggregate
capital of those now in existence amounts
to more 1864 ,000,0 GOO, their outstanding cir
culation, based on bond security, amounts
to only about $50, 100000. They are author
ICED to issue notes amounting to so per
cent. of the bonds deposited to secure their
n,
amount of their capital stock, and they
are obliged to pay one per cent tax on the
circulation they issue.
l think they should be allowed to issue
circulation equal to the par value of the
bonds they deposit to secure it, and that
the tax on their circulation should be re-
duced to one-fourth of one per cent, which
would undoubtedly meet all the expense
the government incurs on their account.
In addition, they should be allowed to SUBJ
stitute or deposit in lieu of the bonds now
required as security for their circulation
those which would be issued for the pur-
pose of retiring the United States notes
and treasury notes. The banks already eX-
listing, if they desired to avail themselves
of the provisions of law thus modified,
could issue circulation in addition to that
already outstanding, amounting to $47S,-
100000, which would nearly or quite equal
the currency proposed to be cancelled. At
any rate, / should confidently expect to
see the existing national banks or others to
be organized avail themselves OF the pro-
posed encoura gementS to issue circulation
and promptly fill any vacuum and supply
every currency need
1t has always seemed to me that the pro-
visions of law regarding the capital of ma
tional banks which operate as a limitation
to their location fails to make proper
compensation for the suppression of state
banks, which came near to the people in
all sections of the country and readily fur
nished them with banking accommoda-
lions and facilities. Any inconvenience
or embarrassment arising from these re-
might well be remedied by better adapting
the present system to the creation of banks
in smaller communities or by permitting
banks of large capital to establish branches
in such localities as would serve the peo-
pie, so regulated and restrained as to Sc
cure their safe and conservative control
and management.
Necessity May Not Arise.
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 condi-
lions that constitute it the barometer of
our solvency, and if our treasury should
no longer be the foolish purveyor of,gold
for nations abroad or for speculation and
boarding by our citizens at home, / should
expect to see gold resume its natural and
normal functions in the business affairs
of the country and cease to be an object
attracting the timid watch of our people
and exciting their sensitive imaginations.
/ do not overlook the fact that the can
collation. of the treasury notes issued un-
der the silver-purhcasinga act of 1880 would
leave the treasury in the actual ownerhSip
of sufficient silver. including seigniorage,
to coin nearly $17S,000,G00 in standard dol
lars. 1t is worthy of consideration wheth-
er this might not, from time to time, be
and slowly put into circulation, as in the
Judgment of the secretary OF the treasury
the necessities of the country. should re-
quire. Whatever is attempted should be
entered upon fully appreciating the fact
that by careless, easy descent we have
reached dangerous depth, and that our
ascent will not be accomplished without
laborious toll and strength. We shall be
wise IL we realize that we are financially
i'll and that our restoration to health may
require heroic treatment and unpleasant
remedies.
Question of Quality. Not Quantity.
In the present stage of our difficulty it is
not easy to understand how the amount of
our revenue receipts directly. affects it.
The important question is not the quantity
of money received in revenue payments,
but the Kind of money we maintain and our
ability to continue in sound financial con-
ditions. We are considering the govern
ment's holdings of gold as related to the
SoundneSS of our money and as affecting
If our gold reserve had never been i'm
paired, or If no bonds had ever been issued
to repleniSh 1t; If there had been no fear
and timidity concerning our ability to con-
tinue gold payments; if any part of our
revenues were not paid in gold, and If we
could look to our gold receipts q s means
of maintaining safe reserve, the amount
of our revenues would be an influential
factor in the problem. But unfortunately
all the circumstances that might lend
weight to this consideration are entirely
lacking. In our present predicament no
gold is received by the government in pay
ment of revenue charges, nor would there
be If the revenues were increased. The re-
ceipts of the treasury, when not In silver
certificates, consist of United States notes
and treasury notes issued for silver pur-
chaSes. These forms of money are only
useful to the governm ent in paying its
current ordinary expenses, and its guam
tity in government possession does not In
the least contribute toward giving us that
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