The herald., 1897-12-08

AOVAp Y@V
and notes, $6292. Total, &162.0o4.
Az compared with the fiscal year 1885
the receipts for 1897 increased $20.s11.-
1911.
There was an increase Of $1aSel.71s.ls
in the ordinary expenditures.
Estimates for the fiscal years 1898 and
1899 are given.
THE CURRENCY QUESTION
The report closes with an exhaustive
review Of the currency question, with
recommendations.
After detailing the evils Of the present
system, according to his view, the Sec
retary offers the following recommends
tions of which he says:
1.-The recommendation I make must
be construed as tentative steps in d.
rection which, II consistently pursued.
will ultimately lead to conditions theo-
retically desirable rather than being In
themselves final measures to that end.
The condition of the treasury In its re-
lation to demand obligations requires
that one Of two steps be taken. The one
| may be larger reinforcement OF the
permanent gold reserve; the other may
be by an important reduction in the OBJ
jectionable form of liabilities The latter
is. in my opinion, the more desirable.
First, I recommend that proper legis-
lation be enacted which will establish.
separate and apart from the ordinary
operations from the treasury as they re-
late to revenue and expenditures. a de-
partment to be designated and known as
the Issue and Redemption Division. To
this division the sum of 1925. 900, 900 tr
gold should be set over from the general
fund In the treasury, to be used only for
redemption purposes, and all the silver
dollars now held for redemption OF silver
certificates and all the silver bullion and
dollars coined therefrom bought under
the act of 1890, should be passed to the
same account. Further that the sum of
5000, 900, 900 in legal tender notes of the
United States as greenbacks be collected
as hereinafter described and deposited
in the said Issue and Redemption Divi-
sion, to be disbursed therefrom only
upon the receipt in exchange therefor of
an equivalent amount of gold coin.
Such gold, when so secured, to be held
in said division as part of the general
redemption fund.
MORE BOND ISSUES
Second, I recommend that provision
be made for the issue of refunding loan
bonds, payable after ten years at the
pleasure of the government, such bonds
to bear interest at rate of 2A per cent
per annum. payable. principal and in
terest, in gold COIN and that the Secre-
tary Of the Treasury be authorized to
issue such bonds and receive in payment
therefor, with an equitable allowance
for the difference in interest any part
or all of the outstanding loans Of the
United States which mature by their
terms Of payment in the years 1904, 1907.
and 1925"
Continuing he says:
The advantage involved in the pro-
posed action lies in this: 1t removes
an ambiguity from our contract obliga-
tions-an ambiguity which affects un-
favorably the government credit. The
word "coin" now used to express the
obligation in the public debts, is an am
biguous word. 1t Is no doubt under
stood by the more discriminating public
creditor to mean gold coin, and the
solemn act of Congress pledging the
maintenance Of silver coin upon parity
with gold coin makes 1t impossible to
construe the word "coin" as therein
used, to mean anything other than gold
or it's full equivalent. Yet as this Is a
conclusion of logic rather than a clear
statement of fact, the simpler and more
humble investors or would-be investors
in the public debt are confused and
doubtful, and the public credit Is the
weaker therefor"
The Secretary then goes on to show
that the course suggested has pre-
cedent in the act of Congress of 1869
pledging the government to the pay
ment of all interest-bearing obligations
in coin or its equivalent.
BANKING LAW CHANGES
To obviate the difficulties in the way
of this method of supplying the deficien-
cy he recommends the following changes
in the national banking law:
First-Permit national banks to be or
ganized with minimum capital of $685.
loco in any place having a population of
1000 inhabitants or less.
Second-Reduce the rate Of taxation on
circulating notes secured by deposit of
bonds to one-half of per cent per an
mum.
Third-Permit banks now organized or
hereafter organized to issue circulating
notes to the par value Of the refunding
bonds hereinbefore suggested, when de-
posted by them with the Treasurer of
the United States and, further, allow
such banks as shall avail themselves Of
the opportunity to deposit as security
with the Treasury of the United States
greenbacks, treasury notes or silver GER
tifcates to total amount of 5000, ,000,-
900, against which there shall at once be
issued to them by the Comptroller of
the Currency national bank notes to an
equal amount, 1t being further provided
that from time to time, at his conven-
ience, the Secretary Of the Treasury
shall substitute for the greenbacks
treasury notes and silver certificates so
deposited to secure circulation bonds
of the same class and character as the
refunding bonds first named to the
amount of 5000, 100000 such bonds to be
chargeable to said banks and by them
accounted for at such prices (not less
than par) as the market quotations may
indicate to be their fair market value.
During the period Of time intervening
between the deposit of greenbacks,
treasury notes and silver certificates
and the substitution of the bonds by the
lSecretary of the Treasury the circulat-
ing notes specifically issued therefor
shall be exempt from taxation. Upon
such substitution of bonds the funds re-
leased thereby shall at once be trans
ferred by the Secretary of the Treas
ury to the issue and redemption division.
Fourth fter said hnukc havo do.