The Advocate and news., 1897-12-08


certainty get gold is by borrowing. It can get
10 In no other way when II most needs IT, The
government without any hxed revenue is
pledged to maintain gold redemption, which It
has steadily and faithfully done and which
under the authority now given it will continue
10 do.
Redemption Of Government Notes.
The law which requires tho government after
having redeemed It's notes to pay them out
again as current funds demands constant re-
plenishment OF the gold reserve. This is espe-
pially so in times OF business panic and when
the revenues are insufficient to meet the ex-
penses OF the government AT such times the
government has no other way to supply It's de-
felt and maintain redemption but through the
increase Of it's bonded debt Thus in the ad-
ministratiOn Of my predecessor, E6S SlS,-
400 OF AZ per cent bonds were issued and sold
and the proceeds used to pay the expenses OF
the government in excess Of the revenues and
sustain the gold reserve. While II is true that
the greater part OF the proceeds Of these bonds
were used 70 supply deficient revenues, con-
siderable portion was required to maintain the
gold reserve
With our revenues equal TO our expenses,
there would be no deficit requiring the issu-
Rnce OF bonds. But II the gold reserve falls
below SiOO, OOO 900 how viii II be repenished ex-
Cept by selling more bOndsY Is there any other
way practicable under existing law9 The Sc
rious question then is, shall we continue 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 pre-
vent these recurring drains upon the gold re-
serve? II no further legislation Is had, and the
policy OF selling bonds is to be continued, then
| uiV a treas
ury authority to sell bonds at long or short Pc
riodS, bearing u less rate OF interest
than Is now authorized by law l ear
nestly recommend as soon 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 only paid out in exchange for gold. This
Is an obvious duty II the holder Of the United
States note prefers the gold and gets 1t 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 oil the more apparent
when the government issues an interest-bearing
note to provide gold for the redemption Of
United States notes-a non-interest bearing
debt Surely II should not pay them out again
except on demand and for gold II they are put
out in any other way they may return again to
be followed by another bond issue to redeem
them--another Understanding debt to redeem
o nOn-interest bearing debt
Providing Gold for BusIness.
In my view it Is OF the utmost Importance
that the government should be relieved from
the business Of providing all the gold required
for exchange and export This responsibility
Is alone borne by the government without any
of the usual and necessary 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
we are to have an era Of prosperity in the
country with sufficient receipts for the ex-
penses OF the government we may feel no i'm"
mediate embarrassment from our present cur
rency; but the danger still exists and will be
ever present menacing usso long as the existing
system continues. And besides it Is In times
Of adequate revenues and business tranquility
that the government should prepare for the
worst We cannot avoid without serious con-
sequences the wise consideration and prompt
solution Of this question
Secretary Cages Plan.
| The secretary Of the treasury has outlined
plan in great detail for the purpose Of remov-
ing the threatened recurrence of a depleted
gold reserve and save us from future embar-
rassment on that account To this plan 1 In
Vte your careful consideration. 1 concur with
the secretary Of the treasury in his recommen-
dation that national banks be allowed to issue
notes to the face value OF the bonds which they
deposited for circulation, and that the tax on
circulating notes secured by deposit Of such
bonds be reduced to one-half OF one per cent
per annum. l also join him In recommending
that authority be given for the establishment
OF national banks with minimum capital Of
S25, 600 This will enable the smaller villages
and agricultural regions Of the country to be
supplied with currency 10 meet their needs.
I recommend that the issue Of national bank
notes be restricted to the denomination OF SlO
and upwards. If the suggestions have herein
made shall have the approval Of congress, then
would recommend that national banks be re-
Quired to redeem their notes In gold
FOREIGN RELATIONS.
The most important problem with which