The Anaconda standard. [volume] (Anaconda, Mont.) 1889-1970, 1897-12-07

such times the governmnt has no other
way to supply its deficit and maintain
redemption but through the increase
of it's bonded debt as in the admins
tfation of my predecessor, When S262,
315, 400 of four and one-half per cent.
bonds were issued and sold and the
proceeds used to pay the expenses of
the government in excess Of the rev
enues and sustain the gold reserves.
While ii is true that the greater part
Of the proceeds Of these bonds was used
to supply deficient revenues, consider
able portion was required to maintain
the gold reserve.
With our revenues equal to our ex-
penses there would be no deficit requir-
ing the issuance of bonds. But If the
gold reserve falls below 500 1000, 900 how
will it be replenished except by selling
more bonds? Is there any other way
practicable under existing law?
The Presidents Plan.
The serious question then is, shall we
continue the policy that has been pur-
sued in the past: that is, when the gold
reserve reaches the point of danger.
issue more bonds and supply the needed
gold. or shall we provide other means
to prevent these recurring drains upon
the gold reserve? If no further legis-
lation is had and the policy of selling
bonds is to be continued, then con-
Sl6SS aIIouid give lnt SGNiStdIy III tlS
treasury authority to sell bonds at long
or short periods, bearing a less rate
of interest than is now authorized by
law. / earnestly recommend, as the
receipts of the government are quite
sufficient to pay all the expenses of
the government, that when any of the
United States notes are presented for
redemption in gold and are redeemed in
gold, such notes shall be kept and set
apart and paid out in exchange for
gold only. If the holder of United
States note prefers the gold and gets
ii from the government, he should not
receive back from the government
United States note without paying gold
in exchange for it. The reason for this
IS made all the more apparent when the
government issues an interest bearing
debt to provide gold for the redemp-
ton of United States notes-a non-in-
tefeSt bearing debt. Surely, il should
not pay them out again except on de-
mand and for gold. If they are put
out in any other way they may re-
turn again to be followed by another
bond issue to redeem thenl-aaother
interest bearing debt to redeem a non
interest bearing debt.
In my view ii is of the utmost i'm
portance that the government should
be relieved from the business of pro-
yiding for all the gold required for
exchanges on export. This responsible
lily Is dio1e DDFHe DS the government
without any of the usual and neces-
sary banking powers to help itself. The
banks do not feel the strain of the gold
redemption. The whole strain rests upon
the government and the size of the gold
reserve in the treasury has come to
be, with or without reason. the signal
of danger or of security. This ought
TO be stopped.
II we are to have an era Of prosper
ity in the country with sufficient re-
ceipts for the expenses of the govern
ment, we may feel no immediate EN-
barrassment from our present cur
rency. but the danger still exists and
will he ever present menacing us as
long as the existing system continues.
And, besides, 1t is in time of adequate
revenues and business tranquility
that the government should prepare for
the worst We cannot avoid, without
serious consequences. the wise consid-
Grafton and prompt solution of this
question
The secretary Of the treasury has
outlined a plan in great detail FOR the
purpose of removing the threatened re-
currence of a depleted gold reserve and
save us from future embarrassment on
that account. To this plan | invite your
careful consideration.
Bank Notes Redeemed IN Gold.
! I concur with the secretary of the
treasury in his recommendation that
national banks be allowed 10 issue
notes to the face value of the bonds
which they have deposited for circula-
tion. and that the tax on circulating
notes secured by the deposit of such
bonds, be reduced to one-half Of one
per cent per annum. / also join him
in recommending that authority be
given fer the establishment of national
banks with minimum capital of $25.-
00c. This will enable the smaller yil-
lagos and agricultural regions Of the
/ country to be supplied with currency
to meet their demands. / recommend
that the issue of national bank notes be
restricted to the denomination of ten
dollars and upwards If the sugges-
tions I have herein made shall have
the approval of congress- then | would
recommend that national banks be re-
quired TO redeem their notes in gold