Omaha daily bee., 1897-12-07

our demand obligations. or increase the gold
reserve for their redemption. We have $780,
0O0O 900 Of currency which the government by
solemn enactment has undertaken to keep
at par with gold. Nobody is obliged to re-
deem in gold but the government. The
banks are not required TO redeem in gold.
The government is obliged to keep equal
with gold all It's outstanding currency and
con obligations, while its receipts not
required 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 II
can get 1t in no other way when II most
needs It. The government, without any
fixed gold revenue. is pledged to maintain
gold redemption, which it has steadily and
faithfully done, and which under the author
ity now given 1t will continue to do.
FORCE THE ISSUE OF BONDS.
The law which requires the government
after having redeemed its notes to cay them
out again an current funds demands q con-
slant repenlshment Of the gold reserve. This
Is especially so in timea of business DaniC
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 maintain redemption
but through the Increase OF its bonded debt,
and during the administration of my prede-
cessor S2G2, ,313 400 of w per cent bonds were
Issued and sold and the proceeds used to pay
the expenses OF the government in excess of
the revenues and sustain the gold reserve.
While 1t Is true that the greater part OF the
proceeds of these bonds were used to surply
deficient revenues a considerable portion was
required to maintain the gold reserve.
with our revouues equal to our expenditures
there would be no deficit requiring the issu-
ance of bonds. But If the gold reserve falls
below $lOO COO how will 1t be replenlshed
except by selling more bends? Is there any
other way practicable under existing law?
The serious question, then, is, shall we con
tlnue the policy that has been pursued in
tho rast-that Is, when the gold reserve
reaches the point Of danger issue more bouds
and supply the needed gold or shall pro-
vide other means to prevent these recurring
drains upon the gold reserve? If no further
Legislation is mad and the policy of selling
bonds Is to be continued, then congress should
give the secretary of the treasury authority
to sell bonds at lcog or short periods, bearing
q less rate of interest than is now authorized
by law.
BREAK THE ENDLESS CHAIN.
earnestly recommend, as soon as the
receipts of the government are quite sunl-
Client to pay all the eNpenses of the govern.
ment, that when any of the United States
notes are presented for redemption iu gold
and are redeemed in gold, such notes sha
be Kept and set apart, and only Caid out ir
exchange for gold. This is an obvious duty
III the holder OF the United States note prefers
the gold and gets it from the government h,
should not receive back from the government
United States note without Caying gold il
return for 1t. The reason for this Is mad,
all the more apparent when the governmen
issues an interest-bearng debt to provid,
geld for the redemption of United States note
"a non-nterest bearing debt. Surely /
should not pay them out again except OF
demand and for gold. If they put out ic
any ether way they may return again, to b.
followed by another bond issue to redeem
them-another interest-bearing debt to re
deem non-interest bearing debt
In my view it is of the utmost importance
thnt ilnf oh. 4
the business of providing all the gold re
quired for exchanges and export. This re
sponsibillty is alone borne by the govern
ment without any of the usual and neces
sary banking powers to help itself. TIL,
banks Go not feel the strain of the gold re
oemption The whcle strain rests upor
the government and the size of the golt
reserve in the treasury has come to be, Will
or without reason the signal of danger OF
OF security. This ought to be stopped.
IL we are to have era of prosperity il
the country, with sufficient receipts for tn,
expenses of the government, we may fee
no great embarrassment from our presen
currency, bat the dar ger still exists and will
be ever present, menacing us so long as tn
existing system continues. And besides i
Is in times of adequate revenues and bust
ness tranquility that the government shoul
prepare for the worst. We cannot avo
without serious consequences the wise con
sideration and prompt solution Of this ques
tiOn.
PLAN FOR RELIEF.
The secretary of the treasury has out
lined plan in great detail for the purpcst
of removing the threatened recurrence of
depleted gold reserve and us from
future embarra ssment on that account. II
this plan l invite your careful considera
tion.
l concur with the secretary of the treas
ury in his recommendation that nationa
banks be allowed to issue notes to the fac
value of the bonds which they have deposited
for circulation and that the tax on circu
lating notes secured by deposit of sucl
bonds be reduced to one-half of l per cen
per annum. ] also join him In recommend
ing that authority be given ncr the establish
ment OF national banks with a minimum CAPT
tai CT $4,000. This will enable the smalle
villages and agricultural regions of tn
country to be supplied with currency t
meet their needs
/ recommend that the issue of nationa
bank notes be restricted to the denOmnatio
of $40 and upward. If the suggestions
have herein made shall have the approve
of congress then | would recommend tina
rational banks be required to redeem thei
notes In gold.
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