The herald., 1897-12-08

Seventh-An notes shall be redeemed
in the city Of New York, at the sub
treasury, and at such other sub-treas-
uries as may be designated by the Comp
troller of the Currency, with the ap-
proval of the Secretary of the Treas
ury. The control of such redemption
shall be under the direction Of the Comp
troller Of the Currency and made from
a redemption fund Of 10 per cent to be
provided and maintained by the banks.
Eighth-Restrict the issue of national
bank notes to the denomination Of SO
and upward.
To illustrate the benefits of this plan
the Secretary cites the fact that the ma
tional banks with capitalization Of
$68,6S0,000 have a circulation Of only
$1S,S50, 900, and were compelled to borrow
$13,548,000 from Eastern banks with
which to move last years cotton crop.
His plan, he believes, would induce them
to issue sufficient circulation to transact
all their business without borrowing.
The Secretary quotes figures from the
records Of the Comptroller's office
to show the two per cent tax on unse-
cured circulation would no more than re-
imburse the government for its losses
by failed banks. That loss since the
first organization of national banks
would have been s194, 1929. while the funds
produced by the proposed tax would
have amounted to s2,454, ,14048.
RETIRE THE GREENBACK
The Secretary then goes on to argue
that the greenback in it's present status
L.. ~ tho GOLD rn.
serve and the nations credit, and the
necessity being for a reduction OF tn.
demand liabilities Of the government
these offer the most convenient agents
for that action.
After answering possible objections
from those who demand the permanent
retirement Of these notes, he says:
II am moved to press the recommen-
dation as submitted, in view of the fol-
lowing considerations:
"Paper money is the product of an in
dustrial, commercial and financial evo-
luton. It's economizing effect In the use
of metallic money precludes the idea of
abandonment until society shall relapse
into anarchy.
Credit Is the base upon which 1t rests.
Paper money Is the evidence that thing
of value has passed into the possession
Of the issuer, and that the holder Of that
paper Is willing to await payment. When
payment is made the evidence Of the
transaction should be withdrawn, to ap-
pear again only when O similar transac-
ton occurs.
"The bank Is an agency, the result
also of a pure evolutionary movement,
whose functions 1t Is to issue its various
forms Of credit instruments, of which
paper money Is one. against the pledges
and promises to 1t Of the less publicly
known members of the Industrial COM
munity. 1t thus becomes an intermedi-
ary in much the larger part of all trade
and industry.
"Whatever operates to render the
bank a safe, efficient and available
agency to the people, operates to the
general prosperity.
"The requirement that the bank shall
invest Its capital in public securities, as
a precedent to the issue of its credit in
struments-paper money-is a require
duce it's efficiency to commerce and in
dustry. 1t cannot use its capital In two
directions at the same time. Only n
necessity to control the banks capital
for the public use or an indispensable
need for security in such form to the
note-holder can justify this require
ment
1.-THE exigencies Of the governments >
finances In 1868 induced Congress to re-