The evening times., 1896-12-21
FINANCES OF THE NATION
Continued from FIRST rage.

act all the business of the people and fuiiy
develop the great resources at our COM
mand. As soon as the resumption OF specie
payments had become assured, and the
agitation of that question had ceased, gold
began to flow into this country in large
amounts, and from s7StO 1881 both years
included, our net gain from imports alone
was $1T9,74s, ,592, but, in addition TO
this our available stock of this metal was
considerably increased by our domestic
production, and by the renewed use OF
a great part of the coin previously boarded
by our people on account of its superiority
in value over a deprecated paper currency.
DEFICIENT CROPS.
''For a series of years there had been
deficient crops in Europe, and the sale
of our grain and provisions in foreign
markets created a very large excess OF
exports of merchandise over imports, cul-
minatingin in 1878 in a balance in our ia vor
of $305, / 80 SAG, the largest that ever
existed in a single year. No such balance
has been ever approached in any year
since, except during the current calendar
wear. 1896. In eleven months the cx-
cess of exports OF merchandise over I'M
DOTts btth S-oOiocVs'cos "hN ~ e'A-|
should be added the net exports Of silver,
SI4, 1855 5,O15, making total OF $3l1,OIl,
724, or nearly $4,000, 600 more than the
highest amount for any previous period
of twelve months. 1t is scarcely possible
that such changes can occur in the course
of our international trade during the next
few years as to prevent large annual
balance in our favor, and if these favor
able results continue to be realized, and
our currency system shall be placed upon
sound basis, experience and reason aiikc
Justify the conclG sion that very consid-
cradle amounts of gold must be sent here
to pay for our exported products, or that,
even If this should be the case, the de-
mand upon our existing stock Will cease,
and our own production, amounting to
not less than $40 900 900 per annuIn,
will he permanently added to the volume OF
our circulation.'
The Secretary holds that without a ref
ormation OF our currency We cannot safely
rely upon permanent accessions to our
stock Of gold from abroad in settlement Of
trade balances in our favor. He refers to
his recommen ndatiCn Of last year that the
Secretary of the Treasury he authorized
TO issue from time to time bonds ayabie
in gold and 10 exchange them for United
States notes and Treasury notes. Concern
ing this he says:
While an act comforting express and
plenary authority upon the Secretary TO
issue bonds and use them 0r the proceeds Of
their sale for the purpose or retiring Il
certain amount of notes each year, would,
in my opinion, be the IL ost effectual and
economical way toaccompii>h that obJect,it
may be that so radical a measure would not
receive tEeassent OF Congress, in the present
state Of the public mind ON the subject, and
If 30. il is submitted that, at the very least,
authority should he given to retire and can
Gel a maximum amount OF notes each year.
when voluntarily presented by the holders
and redeeInedin gold; and If the maximum
amount fixed by Congress should be retired
and Cancelled in any year by redemptions
out OF the gold reserve, the Secretary OF the
Treasury should be clothed with authority
to app to that purpose any surplus fuDdsin
the Treasury, and in addition, il necessary.
to issue the characte of-bonds above de-
scribed TO a sufficient amount to comply
with the provisions OF the law
A SAFE SYSTEM.
1.-THE adoption of such policy would give
Immediate assurance OF purpose to re-
turn with a araasoDable periodic safe and
elastic currency system, and would remove
much OF the doubt and uncertainty which
have for many years disturbed the public
mind and embarrassed the business OF the
people and the operations OF the govern
ment. No sudden or large contraction OF
the active currency could result from the
execution of such A plan, because the re-
yy-nnli he. made from fiTnp
time with money already withdraw n from
circulation and held in the Treasury, cx-
cept in cases where it might become neces-
sary to issue and sell bonds in order to
make the redcmptions correspond to the
amount required or authorized; and in all
such cases contraction could be easily pre-
vented by selling the bonds abroad and
thus adding their proceeds to our domestic
stock of money.
Whatever plan may be finally adopted
for the retirement of United States notes
and Treasury notes, 1t will fail to afford
complete protection to the government
against demands for gold in the future, un-
less it includes a provision relieving the
Treasury from the obligation to redeem
national bank notes, except such as are
worn, mutilated or defaced, and the notes
of failed banks, or requires these institu-
tions to keep their per cent redemption
fund in GOLD, and to deposit gold coin for
the witlidra wal of bonds when circulation
is to be surrendered or reduced. Prior to
the act of June 20, 1874, each bank was re-
quired to redeem its circulating notes at
its own counter, and also to select, with
the approval Of the Comptroller of the Cur
rency, 4 national banking institution, To-
act, at which redemption could be made,
and the Treasurer was not authorized or
required even to redeem worn, mutilated
or defaCed notes; but since the passage of
that act, each national banking association
has been required to keep on deposit in the
Treasury of the United States, in lawful
money OF the United States sum equalto
5 per cent of its circulation, to be held in
trust for the redemption OF its notes, and
when such notes, assorted or unassorted,
are presented in sums of 81 900, or any
multiple OF that sum, the Treasurer is re-
quired to redeem them in United States
notes In view of these provisions of the
existing law, it is clear that in case the
United States notes should be withdra wn
from circulation, some other method of
redeeming the national bank currency must
be adopted, and, in my opinion, the obli-
cation should be imposed directly upon
the banks themselves, or they should be
required to keep the redemption fund on
deposit with the Treasurer in gold con.'
MI Ndihsie ieheWS uiS ACKNOWLEDGEMENTS
for such amendments to the national bank
ing laws as would permit the issue of cir
culdting notes equal in amount to the face
value of the bonds deposited and reduce
the tax on notes to one-fourth Of l per
cent per annum and that authority be Civ
en- to establish branch banks for the transac-
ton OF all kinds of business now allowed
except the issue Of circulating notes. No
good reason is perceived. he says, why this
limitation upon the required amount of cap
ital should not be reduced to $25, 700 with