The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-12-07
N'KIHLEY'S MESSAGE
Continued From First Page.

Continued From First Page.
from 1893 to 1897 must admonish congress Of
the immediate necessity OF SO leglslathg as
to make the return of the conditions tneh
prevailing impossible.
There are many pl1ns proposed as a rem
edy tor the evil. Before we can find the true
remedy we must appreciate the real evil. 1t
is not that our currency of every kind is not
good, fer every dollar of it is good; good
because the governments pledge is out to
keep it so and that pledge will not be
broken. However the guaranty of our pur-
pose to keep the pledge will he best shown
by advancing toward its fUldllment.
The evil of the present system is found IN
the great cost to the government of main
tanning the parity of our different forms OF
money, that is keeping all of them at pan
with gold We surely can not be longer he d.
less of the burden this imposes upon the
people even under Ialrly prosperous c1nd.-
items, while the past four years have demon
strated that it is not only an expensive charge
upon the government, but dangerous men
ace to the national credit.
ISSUES OF BONDS.
It is manifest that we must devise some
plan to protect the government against bond
issues for repeated redemptons. We must
either cUrtaiI the opportunity for speculation
made easy by the multiplied redemptons of
our demand obligations, or increase the gold
reserve for their redemption. We have $780,
coo goo of currency which the government by
solemn enactment has undertaken to keep at
par with gold Nobody is obliged to redeem
In god but the government. The banks are
not required to redeem in gold The govern
ment is obliged to keep equal with gold all
Its outstanding currency and coin obligations.
while its receipts are not required to be paid
in gold. They are paid in every kind of
money but gold, and the only means by Wnlcn
the government can with certainty get god
is by borrowing. 1t can get it in no other
way when il most needs it. The government
without any fixed gold revenue is piedged
to maintain gold redemption which it has
steadily and faithfully done and which un-
der the authority now given it will continue to
do.
The law which requires the government
after having redeemed its United States notes
to pay them out again current funds de
mands a constant repenishment of the gold
reserve. This is especially SO in times of
business panic and when the revenues are
insufficient to meet the expenses of the gov
eminent. AT such times the government has
no other way to supply its deficit and main.
tain redemption, but through the increase or
It's bonded debt, as during the administration
of my. predecessor when $262 3l5, 400 OF Az per
cent bonds were issued and sold, and the pro-
CeedS used to pay the expenses OF the govern
ment in excess of the revenues and sustain
the gold reserve. While it is true that the
greater part of the proceeds OF these bonds
were used to supply deficient revenues, con-
siderable portion required to maintain the
gold reserve.
With our revenues equal to our expenses,
there would be deficit requiring the issu-
anCe of bonds. But If the gold reserve falls
below $100 coo coo how will it be replenished,
except by selling more bonds? Is there any
other. way practicable under existing law?
The serious question then is shall we con-
tinue the policy that has been pursued 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 O her legislation is had and the policy OF
selling bonds is to be continued, then con-
gress should give the secretary OF the treasury
aUtb IN a
DDS, bearing a less rate of interest than is
now authorized by law.
AN OBVIOUS DUTY.
I earnestly recommend, as soon as the
receipts of the government are quite sufh-
Gent to pay all the expenses OF the govern
notes are presented for redemption in gold
and are redeemed in gold, such notes shall
be kept and set apart and only paid out in
exchange for gold. This is an obvious duty.
IL the holder of the United States notes
prefers the gold and gets it from the govern
ment, he should not receive back from the
government a 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 redemption of
United States notes-a non-interest bearing
debt. Surely 1t should not pay them out
again except on demand 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 them-another interest bear
ing debt to redeem a non-interest bearing
debt.
In my view, it is of the utmost Importance
that the government should be relieved from
the burden of providing all the gold re-
CURED for exchanges and export. This re-
sponsbility is alone borne by the govern
ment, without any of the usual and neces-
sary barSda powers to help itself. The
banks do not feel the strain of gold re-
dempton. The whole strain rests upon the
government. and the size of the gold re-
serve in the treasury has come to be- with
or without reason, the signal of danger or
of security. This ought to be stopped.
If we are to have an era of prosperity in
the country, with sufficient receipts for the
expenses of the government, we may feel no
immediate embarrassment from our
present currency, but the danger still exists
and VIII be ever present menacing us so long
as the existing system continues. And be-
sides it Is in times of adequate revenues and
business tranquility that the government
should prepare for the worst. We cannot
avoid, without serious consequences the
wise consideration and prompt solution of
this question.
The secretary of the treasury has outlined
a plan In great detail for the purpose of re-
moving the threatened recurrence of a de-
pleted gold reserve and save us from future
embarrassment on that account. To this
plan l invite your careful consideration.
concur with the secretary of the treasury
In MS recommendation that national banks be
allowed to issue notes to the face value of
the nUnds which they have deposited for cir
eulation, and that the tax on circulating notes
secured by deposit of such bonds be reduced
to one-half of per cent per annum | also
join him in recommending that authority be
given for the establishment of national banks
with minimum capital of go, 600 This will
enable the smaller villages and agricultural
regions of the country to be supplied with
currency 10 meet their needs.
recommend that the issue of national
bank notes be restricted to the denomination
MI ride fhA
have herein made shall have the approval of
&C H,Iess then l would recommend that ma
tional banks be required to redeem the notes
in gold.