The evening herald. [volume] (Shenandoah, Pa.) 1891-1966, 1897-12-10
IAN the News That's Fit to Print"
Evening Herald
FRIDAY. DECEMBER 10, 1897
The Currency Question.

W y
gress, are clear, concise and simple
so plain that every citizen may un-
derstand them, yet so complete in
their scope that they meet all present
requirements of what is looked upon
as an extremely complicated situa-
tion.
The President recommends, i'm |
brief, that so soon as the revenues Of /
the government equal the eXpeudi-
lures new system be adopted by
which all United States notes which
are redeemed in gold shall be set
aside as a separate fund and not re
issued except for gold. This process
would break the so-called 'endless
chain" by which the gold has been ON
former occasions pumped out OF the .
Treasury. The greenbacks are upon |
their face redeemable i'm gold upon /
presentation, while the declaration |
of Congress that the policy of the /
government is to maintain all of its /
currency at par with gold has been
looked upon as indirectly at least
bringing the notes issued under the
so-called Sherman act within that
category.
The law as it now stands requires
that greenbacks when redeemed i'm
gold, shall be reissued by the govern
ment in current business transactions,
and this of course makes it practica
bile to use them again for drawing
more gold out Of the Treasury thus
they become what is popularly known
as the endless chain for the constant
Withdrawals of gold Should the
Presidents recommendation be
adopted, those notes which are re
deemed in gold would not be reissued,
and thus the opportunity for con
tinued Withdrawals of gold would
soon cease.
The criticism which is made by
those desiring to criticise this PROPOSE
ton is that it would result in a con-
traction of the currency, because
those notes thus redeemed and re
tanned in the Treasury would not
again go into circulation, and thus
the circulating medium Of the
country be practically reduced to
that extent. This objection is met,
however, by a further recommends
ton by the President that the ma
tionaI banks be permitted to issue
currency up to the par value OF the
bonds deposited as security for their
circulation instead of 80 per cent. OF
their face value as at present; also
that the Government tax upon ma
tional bank circulation be reduced to
one-half of one per cent. instead OF
one per cent. as at present
1t is believed that this, if adopted,
would lead the national banks to in
crease their currency to greater eX
tent than the reduction in currency
which might come from the retention
Of the United States notes redeemed
in gold. The national banks al pre-
sent utilize as basis for their cur
rency less than one-half of the Gov
ernment bonds outstanding. /
would thus, in case of an increased
demand for currency, be practicabl
for them to increase very material,
the amount of their currency.
DIP to this time they have utilize'
only a small proportion of the bond
available for that purpose, becaus
of the fact that there is not suflicien
profit ia the issuance of their note
to warrant such action, and if tn
Presidents recommendations ar
carried out, and they are permitte'
to issue notes up to the par value O
the bonds, and the tax upon thei
currency is reduced, it is believe
that 1t will certainly add to the cul
rency OF the country more than an
reduction which would follow the re
tention in the Treasury of the Unite
States notes redeemed in gold.
The President also recommend
that the banks themselves be re
uuired to redeem their own notes j
gold. Thus, by the gradual retire
meut of those obligations of TIA
Government upon which gold ca
constantly be demanded and maxim
the obligations of the banks payabl
by those banks in gold, the founda
tion is laid for a gradual transfer t
the banks Of the burden of supply
ing the gold demanded by tn
country
This general proposition, whic
LAYS the foundation for a final retire
ment Of the gold-demand obligation
and transfer Of this burden to tn
banks, as is the case in other parts c
the world, is looked upon as simple
plain and easy beginning Of a systeI
which will gradually and finally brin
the desired result, and do so in wa
which will not disturb business COZ
ditions or require radical action j
the way of an increase in the inte
est.bearing obligations Of the govern
ment.
This view Of the Presidents pre-
position renders it generally aecep