Santa Fe daily New Mexican. [volume] (Santa Fe, N.M.) 1885-1897, 1896-01-11
SOLVING The GOLD PROBLEM
A Michigan Man Springs a Plan
Which Takes with Con-
grPSSmen.
DESTRUCTION OF The ENDLESS CHAIN
Proposition to Require National Banks
to Maintain Reserves in Greenbacks
This Would Absorb $780,
100000 of Greenbacks.

Washington, Jan. 11.-There seems to
be disposition here on the part of con-
gressmen in both chambers of legisla-
tion to give serious consideration to the
bill recently introduced by Representa-
tive Smith, of Michigan, to compel ns-
tional banks to hold their reserves In
greenbacks and treasury notes. This is
believed to,be feasible method of de-
stroying the endless chain that the presi-
dent and secretary of the treasury 30
bitterly complain of. Many of the sena-
tors have considered Representative
Smiths bill, and are much inclined to be-
lieve it would be wisdom to enact it into
law. Senator German says the idea was
ALMOST AN INSPIRATION,
and Senator Elkins is equally emphatic
10 giving praise to the measure, and has
assured Mr.. Smith that he intends to
champion it in the senate. Senator
Sherman also indorses the measure.
The author of this bill, Mr.. William
Alden Smith, of Grand Rapids, Mich, is
young man, now serving his first term.
He is not financier by profession, but
has been engaged IN Michigan politics
for several years.
"The necessity for the government bond
ing itself periodically for the purpose of
replenishing the gold reserve, kept for
the REDEEM ption of the demand notes of
the government, consisting of United
States notes, commonly called greenbacks
and treasury notes, can, in my judgment,
be easily avoided by the adoption of the
plan suggested" said Mr.. Smith.
"My bill simply changes two words in
section 5,19l of the Revised Statutes of
the United States. That section now re-
quires that national banks, in reserve
cities, shall keep 25 per cent of their de-
posits ON hand as a reserve fund, and in
non-reserve cities Is per cent in lawful
money strike
THE WORDS LAWFUL MONEY
out of the statute and insert in their
place United States notes and treasury
notes. By this simple but effective pro-
cess upwards of 100000, 900 of the demand
notes of the government will be immedi-
ately absorbed by national banks in ac-
cordance with this new requirement OF
law.
"The endless chain which has depleted
the gold reserve Tor some time past VIII
be instantly broken. and it will be an i'm
possibility for gold brokers or those
desiring investment in national bonds to
obtain sufficient greenbacks after the
passage Of my bill to have an apprecia-
BILE effect upon the gold reserve, which
from its adoption, can stand unimpaired
at $lOO,OOO,0O0, or less, as the secretary
of the treasury may desire.
| ~ base the proposition upon this fact
There are 3,712 national banks in the
United States, and according to the last
report of the comptroller of the cur
rency there was on deposit in these banks
$1,7l5,194,S6O. 1t will readily be seer
that the reserve now required to be helt
by national banks, based upon this i'm
mense volume of deposits, will absort
upwards of $3O0,OO0,OOO of these notes
In addition to that, it has the virtue o.
making gold less necessary and putting
into circulation that portion of it nov
held by the banks as their lawful reserve
aggregating, according to the last repor
of the com ptroller, upwards of 100000,
OOO."