The Saint Paul globe., 1896-12-09

II
dny person having investable capital.
- ls 10 De doubted whether the re-
Turns upon the capital invested in
panhing, proportiOnate to the amount
ihuiCdte as large percentage Of profits
as tnat invested in merchandise IKE
net earnings on the capital stocL and
surplus fund Of national banks for tha
past year was 5.4 per cent. includinat Ill
profit made on the issue of Circulation
AS compared with the profits acerl1ine
% those interested in many mining and
manufacturing enterprises the rate ls
exceedingly small.
Inc actuary of the treasury has for
recent years estimated the profit upon
bank circulation, secured by all classes
OF accepted government bonds, to be as
follows: 60
Date. nos.
October 81, 1894 q as7
october 81. 1895 .... .... / I07
october 81, 1896 .......... .............1 1859
Upon this basis the amount of ma
tional bank circulation outstanding
secured by a deposit of bonds, was:
November l. 1894 <17o "a, oc.
November !. 1895 1e9 an 10 10 oSi Ss1
-Norenper J. 1896 ..... .t.......... 216,510O14
The monetary difficulties of the
eleasury aHeet every class of people.
and embarrass the administration ~
tne aHalrs OF the treasury department
ana can no longer continue without en-
falling still greater loss and more wide.
spread financial disaster They do NOT
ma their origin in any mere surface
gnu a, temporary weakness, nor are they
oue TO recent and passing conditions
Ihey are inherent in the fnanr;aI
pollcy which has been built IN in tha
Onlted States and constitute an in
cegral part Of it. Instead of lesseninos
II. III eHects with time, they will ac-
dll oulilaiate more strength for harm at
each recurring season Of financial and
business disturbance
Inc polcy OF having the treasury a
nank OF issue, as it is in the issl1ine oP
lhe treasury notes, without attaci7irer
10 IL needed bank of-issue powers. and
.anaiAIs rrie'hi1ls oI II a bank of-deposit in the
maintenance of the subtreasury systeYl
without corresponding nk-of-deposit
essentials, violates the laws of all-sIc-
cessful government financiering. If
Ine treasury is to be a bank Of issue. il
snould be clothed with complete powers
III thls regard. If it is to be a bank OF
deposit, 1t should be governed bv nrin-
clples invoked by such an institution
ana make Of benefit to trade and com
merce the moneys which come into its
vaults. 1t ought not to enbarrass the
business world by locking I'D vast
o.o1 euol,e; lesultlng at times in artificially
cIeatlhg money stringency, and at
othefs, by suddenly expendine, enualIv
large amounts, creating a plethora IF
the harm worked by this latter feature
oL our financial policy is less than that
iiloWlng from the former, it is neverthe-
less source OF very great weakness.
A policy in finance wrong in nrir-
clple never becomes right in practice
Inc truth of the statement is fulIv
Illustrated by the course Of the legal
tender treasury issues of the Unified
states They have been always dis
eurDlng element in business, and their
current redemption a continuing weak
ness and anxiety to the treasury. They
compel the treasury of the I1niteTf
states 10 carry reserve of gold which
tnelr use makes the basis of supply for
all places and all people. They have
NJ NO. even the merit OF being without ex-
pense TO the government. At one time
lt was argued in behalf Of continuing
tnelr issue and compulsory reissue. that
10 cancel them meant to dangerously
contract the currency. That arguments
mas given way to one which assumes
that they are what is termed "a nom
1nterest-bearing debt and are conse-
quently carried without additional tax
upon the public. Those who advance
this as argument either disregard. or
are ignorant of, the facts
Flgures are then given showing the
cost to the United States Of maintain
ing the legal tenders and the difference
In such cost if the notes had been con-
Verted into per cent bonds which diff
ference is shown to be $685., 1874 222.
With this cost is compared the profit
10 the government on account of the
national banks, which has been $157,-
4s9, ,24S98. Concluding, the comptroller
says:
The efforts in other countries have
been directed toward divorcing the
| treasury department of governments
from the bank-note function. That
function has been given to corporations
created for the purpose There is no
state of affairs peculiar to the United
States which makes it wise to employ
different methods or to invoke different
rules in the same line of conduct.
The current credit instruments, enter
ing into the movements Of finance
trade, and commerce, ought all to be
issued by the banks as needed under
government supervision in order to in
sure uniformity and to guard against
loss. The responsibility for their re-
demption in gold coin should be wholly
borne by the banks, and upon the
banks should rest the duty of furnish
ing whatever gold is needed for domes-
tic or foreign business purposes. In
order to attain this end the credit cur
rency OF the government, now out
standing, should be redeemed in gold
and retired, through funding or other
wise, as speedily as safety will permit
and the banks made to assume the
rights and burdens which properly be-
long to them. The question is not one
of ability on their part to meet such de-
mand, but one Of opportunity freed
from government competition and un-
restricted by unrequired government
control 1t IS respectfully submitted
that legislation by congress, based
upon safe and prudent lines, having in
view the gradual payment and cancel
lation of the credit currency now main
tained by the government and the is-
suance hereafter of all Of such cur
rency through the banks, with full re-
sponsibility therefore placed upon
them should be had at the very earliest
practicable moment. The results
which would follow such enactments
would be beneficial, and neither would
monopoly be created nor favor shown
thereby.