The Indianapolis journal., 1896-12-22

it the constitutional power. in my opinion.
10 make its promises legal tender In the
payment of private debts. Such a policy.
even IL sanctioned by the Constitution. in
stead OF imparting strength and stability
10 our currency system. seriously endan-
and partisan consideration into the man.
agement OF subject which ought
TO be regulated entirely by the business
interests of the people and by the laws OF
trace and the principles which control hon.
est commercial intercourse.
Although the actual ability of the gov
ernment 10 redeem its notes promptly in
gold coin may be undisputed, still the ques-
tlon whether they Will be or ought to be so
redeemed must always be open TO public
discussion. and it is we'll known that the
constant agitation of this question during
the past few years has on several occasions
greatly imperiled the safety of our entire
currency system. So long as the United
states notes remain in circulation, ques-
tons as TO the mode and manner of their
redemption. and as to the means of pro-
curing and maintaining coin reserve for
that purpose, will be made political issues,
and so long as these questions remain in
politics public confidence in the sta bility of
our currency must be more or less dis
turbed. Even if the agitation of these
questions affected only the value of United
States notes. the consequences would be
sufficiently serious to justify a demand for
their permanent retirement. but the char
acter of our currency is such that what
ever creates a doubt or suspicion concern
ing their prompt redemption in gold on
presentation. necessarily impairs confidence
In the whole volume of our circula ton and
ini1lctS much greater injury on the public
than could possibly result from the failure
OF ordinary banking institutions 10 redeem
their paper
Every menace to the gold reserve and
every manifestation of a formidable pubic
sentiment in favor of the redemption of our
notes otherwise than in gold coin. at once
alarms the whole business community de-
presses trade and industry and mpairs the
value OF our nubuc and private securities
in all the markets of the world. There is
but one absolutely certain way to remove
this delicate and dangerous question from
cancel the notes. All attempts to hoard
them permanently by the government
must fail, for the obvious reason that our
people will not consent to be taxed merely
for the purpose of accommodating and hold
ing large and useless surplus in the
treasury. Besides. the notes must be with
drawn from circulation in order to be
boarded. and when withdrawn from circula-
ton it would be far more advantageous to
the public to cancel them than to keep
them on hand as a constant temptation to
indulge in unnecessary and extrayagant
SHOULD NOT BE DELUDED.
1--WE must not be deluded into a feeling
of security by the fact that there has been
a suspension of gold Withdrawals during
the last few months and a large accession
TO stock of gold from abroad during
the same time, because there is no suffi-
cient reason to believe that this condition
ing system is maintained.
mo system of coinage that can be de-
vised will furnish the government with
either gold or silver, unless it pays for it
with means already collected by taxation
or by contracting an indebtedness to be
paid by the people in the future.
Il am thoroughly convinced that the re-
tirement and cancellation of United States
notes or both classes. under such reasos a.
BILE limitations and restrictions to time
ana meth0GS as Congress may see proper
to prescribe. or as prudent secretary of
the treasury would adopt in the exercise
of his official discretion, would not result
injurious contraction of the currency.
''The people. if left free to conduct their
business affairs in their own way, will al
ways decided for themselves how
much money they need, and, un-
less prevented by artificial OBJ
structions. the necessary amount will al
sources at home or through exchanges
abroad. The volume of business transacted
determines the amount of money and credit
required. and. whenever the volume of bus
mess demands an additional supply of
money or an extension of credit. the de-
mand will certainly be complied with, pro-
vided the laws do not interfere to prevent
it, AS raj ily as our notes are redeemed
and cancelled. gold; or a currency as good
as gold Will take their places in the circu-
lation. if the interests of the country re-
quire it.
With liberal commercial policy. pro-
noting the profitable introduction of our
large surplus products into the markets of
other countries, and sound currency syS-
tenn. promising safe investments for for
eign capital in our domestic industries. We
may confidently rely on the operation of
the natural laws OF trade and finance for
an abundant supply of good money to
fully develop the great resources at our
command
In my last annual report it was recon-
mended that the secretary of the treasury
should be authorized to issue. from time to
time. bonds payable in gold. bearing inter
est at a rate not exceeding per centum
per annum and having long time to run
and to exchange such bonds for United
States notes and treasury notes. upon such
terms as might be most advantageous to
for gold whenever. in his judgment, it
might be advisable TO do so, and use the
gold thus obtained in making redemptions
of outstanding notes. The terms in which
this recommendation was made. and The
suggestions submitted in support of it,
showed that it did not contemplate the re-
tirement of all outstanding notes at one
time. but that the process should be so
conducted as 10 avoid any danger of an
improper contraction of the currency. Be-
lieving that this plan of redeeming the
notes. and at the same time substituting
an absolutely sound currency in place of
them. promises the most certain means of
accomplishing the desired result within
reasonable time, adhere to the views then
expressed: but the object to be attained
is so essential to the future nnancial SAFETY
of the country that it ought not, in my
Judgment. to be defeated or abandoned
simply on account of differences of Opin-
ion concerning the methods of securing it.
GRADUAL RETIREMENT.
while an act comforting express and
plenary authority on the secretary to issue
bonds and use them the proceeds of their
sale for the purpose of retiring a certain
amount of the notes each year. would. in
my opinion, be the most effectual and
economical way to accomplish that object
it may be that radical a measure would
not receive the assent 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 maximum amount
of notes each year when voluntarily pre-
gold: and if the maximum amount fixed
by Congress should not be retired and cam
celed in any year by redemptioDS out OF
the gold reserve the secretary of the
treasury should be clothed with authority
TO apply to tnat purpose any surplus funds
in the treasury. and. In addition II neces-
sary. to issue the character of bonds above
described to sufficient amount to comply
with the provisions of the law. The adop-
ton of such a policy would give immc-
date assurance of purpose to return
within a reasonable period to safe and
elastic currency system, and world remove
much of the doubt and uncerta 1ty which
have for many years disturbed the public
mind and embarrassed the business OF the
peopie and the operations OF the govern
ment No sudden or large contraction of
the active currency could result from the