The times. [volume] (Richmond, Va.) 1890-1903, 1895-12-17

fray public expense. lnder any prscii-
Naoio system Of taxation that could be
devised. and even that sum could not be
raised without severe injury 10 our in
dpstfios. nor without Unjust discfimina-
lions among them which would at once
engendcr strong spirit OF opposition in
an parts OF thc country. At this rate 70
would take neasly I'VE years 10 retire thu
notes. ana DC may be- safely asserted that
no such system OF taxation as this plan
OF retirement would require could be
maintained for even half that time. IL
would bc swept away by the first pop
mar assault made upon it, and the at
tempt 10 retire and cancel the legal-tcn-
der notes would fan again. as ii has
twice heretofore.
The opinion seems 20 prevail TO some
extent that the mere possession OF sur
Plus I'm the Treasury would prevent with
drawals Of gold. and thus render the is
sue OF bonds for The protection OF the
reserve unnecessary. but this view Of the
subject Is founded. in my judgment. upon
a. entire misconccption Of tho causes that
have produced the Withdrawals. WHAT
those causcsc were. ] have already under
taken 10 show. and, unless / am wholly
mistaken. they nave very little. ~ any
relation 10 the amount OF money held
hy the Government. or 10 the amount OF
money the Government has the ability
to raise boy taxation or otherwise. but they
relate primarily and almost exclusively 10
the character Of money that it might Doc
able 90 supply and keep in circulation. In
other words. 10 was apprehension ass TO
the kind Of money TO be used, and NOT
as 10 the amount Of money ON hand. that
brought oar securities back from abroad
fOr sale. caused foreign investors 10 with
draw their capital and foreign creditors
10 collect their debts. and compelled our
own people 10 suspenl or contract their
business operations. and thus diminish
the incomes Of employers and greatly re-
duco. 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 10 secure
gold was due 20 growing oistrist of the
other kinds OF currency in circulation.
and not az an TO any apprc henslon tina,
the toVerum ut would not Doe able TO dis
charge AN its obligations I'm some Kind
OF paper or coin. When the receipts for
customs consisted very largely Of gold.
as was the case prior 10 July ], 1892 be-
fore the results of our defective currency
system had been fully developed. sur
plus revenue enabled tho Treasury TO pay
out gold without disturbing the reserve.
ami besides there was at that time no
great demand for sold by the presentation
of notes for redemption, and there would,
therefore. have been no difficulty in mann
tanning the reserve. even If there had been
no surplus ina the Treasury. but the con-
ditious have entirely changed. and am cn-
tircly different policy is demanded TO meet
the situation now existing With or
without "a surplus revenue, the Govern
ment can now procure gold only hy ncg0-
tiating loans or boy making purchases un-
der the statute. and this state Of affairs
which is the natural result of causes siill
operative ls almost certain 10 continue
until the causes themse elves are removed.
10 may Doe That "a surplus IN the Treasury
would have a tendency with some OF our
own people 10 strengthen confidence I'm
the general situation. but 10 would afford
the Government no additional means of
procuring gold. nor would it have any
beneficial effect upon our credit ia other
countries. because The attention of their
people is directed solely 90 the character
OF our currency system and whether We
have much on little money I'm the vaults
OF the Treasury Is q matter Of no pos
sihlo concern 10 them. Reluctant as we
may he 90 recognize the fact. our own per-
sistence in an unwise policy has az last
forced as into situation which enables
the holders OF our securities. and other
creditors abroad. 90 demand and take our
gold whenever they choose and the un-
satisfactory state of our currency makes
their demands more humorous ana much
larger In amount than they would other
wise be- There is but ono safe and effect
ua way 10 protect our Treasury against
these demands. and that is 90 retire and
cancel the notes which constitute the only
means through which the Withdrawals
can be made Many partial and Temporal
ry remedies may Doe suggested and urged.
with more or less plausbilitv. bat This
IS the only one that will certainly re-
move The real cause Of our troubles and
give assurance of permanent protection
against their recurrence IN the future.
This can ho most successfully and cc)-
nomically accomplished by authorizing the
Secretary of the Treasury TO issue from
time 10 time bonds payable in gold. bear
ing interest al rate not exceeding three
per ccntum per annum and having a long
time 90 run. and TO exchange the bonds
for United States notes and Treasury
notes upon such terms as may Doe most
advantageous 10 the Government or 10
sell them abroad for gold whenever. In
his judgment 70 is advisable To- DO SO. and
use the gold thus obtained in redcoming
the outstanding notes. Under the oper-
alton Of such plan If iudiciously exec
Gated. there could be no improper con-
traction of the circulation. because if 70
should at any time Doe found that other
p
piled to the extent required. exchanges OF
bonds for notes would be suspended. and
gold would be- procured hy selling the See
curities abroad Tn order 10 further IA
ciNtate the substitution of other currency
for the retirement OF lCril-fender notes.
the national banks should De authorized
10 issue notes equal in amount 10 the face
value Of bonds deposited TO secure them
and the tax on their circulation should
be reduced 90 ono-fourth OF one per
ccntum per annum When the national
haukinL system wls established the bor'
Of the United States were selling below
par I'm the market, and there was con-
sequ.hOy. "a Sufficient reason for limiting
the amount of the circulation lotes au- /
thoiized 10 be issued TO ninety per centum
or the face value of the sec lrities dee |
posted but this reason has long since |
ceased 10 exist. and the limitation should |
be- cmcved. The only object 10 hc ac- |
10y requiring "a deposit of !
bonds is the certain security Of the notes |
issued by the banks, and an Ter existing /
conditions that is just as completely when |
he amount OF Tho issue equals the face /
value OF the bonds as when il is limited !
10 percentage.
Intn 1883 there was "a tax upon the cap !
tai and deposits OF national banks. as !
well "a tax OH their circulation. and /
rom an these sources the Government |
has received the sum OF sli6.902g62. From /
he tax on circulation alone the receipts /
have amounted 10 SiN.lO1.006 while the /
'otal estimated expenses OF supervision, /
including salaries of officials. have been /
i5 $50. gl6. The average annual cost of /
supervision has been $i5S,siS. while tax I