The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1897-12-10

yuired to be paid in gold. They are paid
in every kind of money but gold, and the
only means by which the government can
with certainty get gold Is by borrowing.
1t can get it in no other way when 1T most
needs it. The government without anv
nXeo goIu revenue is pledged to MAINTAIN
gold redemption, which it has steadily and
faithfully done, and which under the
authority now given it will continue
to do.
Demands a Constant Replenishment.
The law which requires the govern
ment, after having redeemed its United
States notes, to pay them out again as
current funds demands q constant re-
punishment 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 government.
At such times the government has no
other way to supply its deficit and main
tain redemption but through the increase
of it's bonded debt as during the admins
tration of my predecessor when $362, 3l5,-
400 of ~ per cent bonds were issued and
sold and the proceeds used to pay the ex-
pense of the government in excess of the
revenues and sustain the gold reserve.
the proceeds of these bonds were used to
supply deficient revenues, a considerable
portion was required to maintain the gold
reserve.
Should Have Authority to Sell Bonds.
With our revenues equal to our expen-
ses, there would be no def it requiring
the issuance of bonds. But if the gold
reserve falls below 500, 100000 how will
1t be replenished except by selling more
bonds? Is there any other way practical
BILE under existing law? The serious
question then u.s. 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 pro-
vide other means to prevent these re-
curing drains upon the gold reserve? If
no further legislation is had and the pol
icy of selling bonds is to be continued,
then congress should give the secretary of
the treasury authority to sell bonds at
long or short periods, bearing a less rate
Of interest than is now authorized by law.
No Reissue of Notes Except For Gold.
I earnest recommend, as soon as the
receipts of the government are quite suf-
ficient to pay all the expenses of the gov
eminent, 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. If the holder of
United States notes prefers the gold and
gets it from the government, he should
not receive back from the government
United States note without pay Ing 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 it should not pay
them out again, except on demand for
gold. If they are put out in any other
way they may return again to be followed
by another bond issue to redeem them
another interest bearing debt to redeem
nOn-interest bearing debt.
Government the Only Sufferer.
In my view it is of the utmost impor-
lance that the government should be re-
lieved from the burden of providing all
the gold required for exchanges and ex-
port. 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 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
If we are to have an era of prosperity in
the country with sufficient receipts for
no. ~
feel no immediate embarrassment from
our present currency; but the danger still
exists and will be ever present menacing
US so long as the existing system con-
tinues. And besides, it is in times of ade-
quate revenues and business tranquility
that the government should prepare for
the worst. We cannot avoid without
serious consequences the wise considera-
ton and prompt solution OF this question.
Calls Attention to Mr.. Cages Plan.
The secretary of the treasury has out
lined plan in great detail for the purpose
of removing the threatened recurrence Of
a depleted gold reserve and save US from
future embarrassment on that account.
To this plan invite your careful consid-
Grafton.
l concur with the secretary of the treas
ury in his recommendation that national
banks be allowed to issue notes to the
face value of the bonds which they have
deposited for circulation and that tax on
circulating notes secured by deposit of
such bonds be reduced to one-half of |
per cent per annum. I also join him
in recommending that authority be
given for the establishment of national
banks with a minimum capital of $4,000
This will enable the smaller villages and
agricultural regions of the country to be
supplied with currency to meet their
needs.
l recommend that the issue of national
bank notes be restricted to the denomina-
ton of Slo and upwards. If the sugges-
tions l have herein made shall have the
approval of congress then l would recon-
mend that national banks be required to
redeem the notes in gold.
THE CUBAN QUESTION.
It II the Most Important of ANY Per-
tanning to Fore gn Relations.
The most important problem with which
this government is now called upon to
deal pertaining to its foreign relations
concerns it's duty toward Spain and the