Daily Kennebec journal., 1897-12-08


900. 900 in greenbacks paid in by banks
and against which they would be al
lowed to issue notes. He would furth-
er have for protection the authority to
issue gold loan bonds bearing y. per
cent interest. He would have the in
creased issue of national bank notes
prevent any contraction in the circula-
ton. He accordingly makes the same
recommendations as did the President,
stock to induce the establishment OF
national banks in small places where
banks are needed, reduction of the
tax and permission to issue to the full
amount of bonds deposited for circula-
ton: also the restriction of bank notes
to denominations of $40 and upwards.
He does not recommend redemption By
the banks in gold but he adds various
conditions designed to place in the re-
demption fund $2oo,oco.ooo of green
backs, and also provide a guaranty
fund for the redemption of an issue of
unsecured bank notes when some oc-
casion. such as the moving of crops
might demand.
Secretary Gage is not unmindful of
the opposition some features of his re-
port are likely to excite among those
who are hostile to any form of bank
currency and prefer greenbacks. The
feature most likely to do this perhaps.
is that relative to putting away $780,
600, 600 greenbacks in the reserve fund.
OF this the secretary says. among other
things: 1T will at once appear to
many that the proposal herein made to
place in conditional retirement the sum
of $500, ,C00. 600 in our legal tender
(greenback)) issues is a discrimination
against a form of paper money, which
under the influence of a worthy senti-
ment, has become to them symbol Of
the unity and power of the nations
life. A little reflection, however, will
lead to a conclusion quite to the con-
trary of such an inference. Bearing in
mird the fundamental truth upon which
this argument rests, viz, the necessity
for reduction in the volume of de-
mand liabilities, now constituting a
menace to the public treasury, it is,
economically speaking, matter of i'll
difference whether this reduction be
made in the volume of silver, silver
certificates, treasury notes, greenbacks.
or in some agreed upon proportions of
each; but the historical fact is that it
has been through the greenback. TIE
only unalloyed credit note of the gov
ernment, that the endless chain" has
been worked Once disbursed. these
notes find their way, by purely ma
tural process to the banking centers,
where in case of an outward movement
of gold or because of any internal
movement of distrust. they have been
a ready agency to deplete the gold re-
serve in the public treasury. The pro-
position to retire large portion of
these notes into an issue and redemp-
tion division there to be held until the
public is willing TO offer for them in
fair exchange an equal sum in gold, is
a proposition to dignity them with the
honor of actual gold equivalency when
they are passed out. as they have hith-
erto been honored with actual gold
equivalency when pushed in upon the
treasury for redemption. The PROPOSE
tion is therefore quite different from Il
proposition to retire and destroy them.
On the other hand. the proposal to
thus preserve and honor them will eX-
cite objections from another class. who
will allege that the notes now in ques-
tion should be retired and utterly de-
stroyed. They will aver that so large
a sum, no matter how held. will prove
an irresistible temptation to which
Congress will yield when in some ext
gency extraordinary and pressing
needs for public expenditure shall res
upon the treasury. and that the re-
strictions now proposed,if if adopted, will
then be disregarded
In considering this objection. il
must be remembered that if it were
granted full force and yielded to ds Il
determinative objection. there is moth
ing whatever to prevent the lawmak
ing power from issuing at any time
and in any amount the legal tender
notes of the United States to circulate
as money Such is the final opinion Of
the supreme courts from wflieh1there is
no appeal. Neither must it be forgot
ten by such objectors that use and
custom gradually acquire a restrictive
power but little less binding than
statutory enactment or constitutional
prohibition.