Birmingham state herald. (Birmingham, Ala.) 1895-1897, 1896-12-23

consists of gold or silver being subject
to the demands of all who desire to ex-
change notes for coin, must be replen-
ished from time to time by such means
as the government is able to command.
No system of coinage that can be devised
will furnish the government with either
gold or silver, unless it pays for 1t with
means already collected by taxation, or
by contracting an indebtedness to be paid
by the people in the future.
II am thoroughly convinced that the
retirement and cancellation of United
States notes of both classes, under such
reasonable limitations and restrictions
as to time and methods as congress may
see proper to prescribe or as prudent
secretary of the treasury would adopt in
the exercise of his discretion, would not
result, either permanently or temporar-
lily in an injurious contraction of the cur
rency. No government, however despot-
ic, can prescribe the exact amount of
currency its people shall use in the trans
action of their business, and every at
tempt to regulate this subject by arbi-
trary rules in the form of legislation, or
otherwise Is departure from true eco
nomc principles. The people, If left free
to conduct their business affairs in their
own way, will always decide for them
selves how much money they need, and
unless prevented by artificial obstruc-
tions, the necessary amount will always
be supplied either from their own re-
sources at home or through exchange
abroad. The volume of business trans
acted determines the amount of money
and credit required, and whenever the
volume of business demands an addi-
tional supply of money or an extension
of credit, the demand will certainly be
complied with, provided the laws do not
interfere to prevent it. AS rapidly as our
notes are redeemed and cancelled, gold,
or a currency as good as gold, will take
rD1a 10
terests of the country require 1T.
with a liberal commercial policy,
promoting the profitable introduction of
our large surplus products into markets
of other countries, and a sound currency
system promising safe investments for
foreign capital in our domestic indus
tries, we may confidently rely upon the
operations of the natural laws of trade
and finance for an abundant supply of
good money to transact all the business
of the people and fully develop the great
resources at our command"
The secretary holds that without
reformation of our currency we can not
safely rely upon permanent accesSionS
to our stock of gold from abroad in set
Element of trade balances in our favor.
He refers to his recommendation of last
year that the secretary of the treasury
be authorized to issue from time to time
bonds payable in gold and to exchange
them for United States notes and treas
ury notes. Concerning this he says:
while an act comforting express and
plenary authority upon the secretary to
issue bonds and use them or the proceeds
of their sale for the purpose of retir-
ing certain amount Of notes each year,
would, in my opinion, be the most eff
fectual and economical way to accom-
plish that object, 1t may be that so radi-
cal a measure would not receive the as
sent of congress in the present state of
the public mind on the subject and If
SO, it is submitted that, at the very least,
authority should be given to retire and
cancel maxim amount of notes each
year when voluntarily presented by the
holders and redeemed in gold; and if
the maximum amount fixed by congress
should be retired and cancelled in any
year by redemptions out of the gold re-
serve, the secretary of the treasury
should be clothed with authority to APP
ply to that purpose any surplus funds in
the treasury and in addition, If neces-
sary to issue the character of bonds
above described to a sufficient amount to
comply with the provisions of the law.
The adoption of such policy would give
immediate assurance of a purpose tt re-
turn within reasonable period to a safe
and elastic currency system, and would
remove much of the doubt and uncertain
ty which have for many years disturbed
the public mind and embarrassed the
business of the people and the opera
llollS VI Inc mo sudden OF
large contraction of the active currency
could result from the execution of such
a plan, because the redemptions would
be made from time to time with money
already Withdrawn from circulation and
held in the treasury except in cases
where it might become necessary to is
sue and sell bonds In order to make the
redemptions correspond to the amount
required or authorized; and in all such
cases contraction could easily be pre-
vented by selling the bonds abroad and
thus adding their proceeds to our do
mestic stock of money"
Continuing, he says:
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,
unless it includes provision relieving
the treasury from the obligations to re-
deem national bank notes. except such as
are worn, mutilated or defaced, and the
notes of failed banks, or requires these
institutions to keep their per cent. re-
demption fund in gold and to deposit
gold coin for the withdrawal of bonds
when circulation Is to be surrendered or
reduced"
Mr. Carlisle renews his recommended
lions for such amendments to the ma
issue of circulating notes equal In
amount to the face value of the bonds
deposited and reduce the tax on notes to
one-fourth of per cent. per annum, and
that authority be given to establish