The record-union., 1897-12-08

only for redemption purposes, and all
the silver dollars now held for redemp-
ton of silver certificates and all the
silver bullion and dollars coined there
from bought under the Act Of 1S9O,
should be passed TO the same account
Further, that the sum of S20O,o0O,OOO
| in legal tender notes of the United
States, known as greenbacks, be col
lected as hereinafter described and de-
| posted in the said issue and redemp-
ton division, to be disbursed therefrom
| only upon the receipt in exchange
| therefor Of an equivalent amount of
gold coin Such gold when SO secured
| to be held in said division as part of
! the general redemption fund.
"Second-I recommend that provision
be made for the issue of refunding loan
bonds, payable after ten years, at the
pleasure of the Government, such bonds
to bear interest at the rate of ~ per
cent. per annum, payable, principal and
| interest, in gold coin; and that the Sec
retary Of the Treasury be authorized to
issue such bonds and receive in pay
ment therefor, with an equitable allow
ance for the difference in interest, any
part or all of the outstanding loans OF
the United States, which mature by
J their terms of payment in the years
| 1904, 1907 and 1925"
Continuing, he says: 1.-THE advantage
| involved in the proposed action lies in
| this: 1t removes an ambiguity from our
| contract obligations-an ambiguity
which affects unfavorably the Gov
ernment credit. The word 'coin,' now
| used to express the obligation in the
&c hi p1101lG word.
1t is no doubt understood by the more
discriminating public creditor to mean
| gold coin, and the solemn act of Con-
gress pledging the maintenance of sill
yer coin upon parity with gold coin
makes it impossible to construe the
word coin as therein used to mean
anything other than gold or it's full
| equivalent. Yet, as this is a conclu-
sion of logic rather than a clear state
ment of fact, the simpler and more
| humble investors or would-be invest
ors in the public debt are confused and
| doubtful, and the public credit is the
weaker therefor"
| The Secretary then goes on to show
| that the course suggested has prece-
| dent in the Act of Congress of 1863,
pledging the Government to the pay
ment of all interest-bearing obligations
! in coin or its equivalent
To obviate the difficulties in the way
of this method of supplying the def
cheney, he recommends the following
changes in the national banking law:
First, permit national banks to be
organized with a minimum capital of
So, 600 in any place having a popula-
ton Of 1900 inhabitants or less.
Second reduce the rate Of taxation
on circulating notes secured by de-
posit of bonds to one-half Of l per
cent. Fer annum.
Third, permit banks now organized or
hereafter organized to issue circulating
notes to the par value of the refund
ing bonds hereinbefore suggested, when
deposited by them with the Treasurer
of the United States, and, further, al
low such banks as shall avail them
selves of the opportunity to deposit as
security with the Treasury Of the
United States greenbackS, Treasury
notes or silver certificates to a total
amount of 5000, 100000 against which
there shall at once be issued to them by
the Comptroller of the Currency ma
tional bank notes to an equal amount
it being further provided that from
time to time, at his convenience, the
Secretary of the Treasury shall subSti-
tute for the greenbacks Treasury notes
and Silver certificates so deposited to
secure circulation, bonds of the same
class and character as the refunding
bonds first named, to the amount of
$500, 900 900, such bonds to be charge
able to said banks and by them ac-
counted for at such price (not less
than par) as the market quotations
may indicate to be their fair market
value. During the period of time in
tervening between the deposit of green
backs, Treasury notes and silver cer-
tificatcs and the substitution of the
bonds by the Secretary of the Treas
ury, the circulating notes specially is
sued therefor shall be exempt from
taxation. Upon such substitution of
bonds the funds released thereby shall
at once be transferred by the Secreta-
ry Of the Treasury to the issue and re-
demption division.
Fourth, after said banks have de-
posted such bonds, greenbacks, Treas
ury notes or silver certificates to the
amount of 30 per cent. of their capi-
tai, they shall be permitted to issue
cent thus provided to the extent of 25
per cent. of such deposit, which said
- per cent. may be unsecured by any
direct pledge of security, but issued
against the assets of the bank.
Fifth, extend the guaranty Of pay
ment by the Government to all circu-
lating notes of the bank, whether is
sued against deposited securities Or
| against assets.
Sixth to secure the Government
against loss, if any, attaching to its
guaranty, a. tax of per cent. per an
mum on secured circulation shall be
| levied to create a safety fund, which
fund shau be invested by the Secretary
of the Treasury and the Comptroller
Of the Currency in Government bonds
In addition To such funds the Govern
ment shall be further protected by
having a first lien upon all assets in
case of failure of the issuing bank.
Seventh, all notes shall be redeemed
in the city of New York, at the SUBJ
Treasury. and a such other sub