Daily capital journal. (Salem, Or.) 1896-1899, 1897-12-07

the government The banks are not
required to redeem in gold. The grv-
eminent Is obliged t. keep equal with
gold all it's outstanding currency and
coin Obligations, while its receipts are
NOT required to be paid' in gold. They
| are paid in every kind Of money but
. %. and the only means by which the
| government can with certainty get gold
u ~ borrowing. II can get II in no
other way when II most needs H. The
gsrernmtBt without any fixed gold rev.
enue Is pledged GO maintain sold re-
demption which it has steadily and
faithfully done and which, under the
authority now given, Il viii continue to
do.
THE law which requires the govern
| mont. after having T,deomed = notes,
10 pay them out again as current funds
demands a constant replenishment of
the gold reserve. This Is especially 50 In
| dimes C business panic and Then the
revenues are Insufficient 20 meet the
| s,Innzes Of the gover1ment- At such
| times the government has no other way
| to supply It's deficit and maintain re-
| demptiOn but through the increase OF
| its bonded debt. az the urgent admins
tr8iion Of my predecessor, when Sz6z,-
| 315. 400 OF four and one-haf per cent
bonds were issued and sold and the pre-
| ceeds solo 20 pay the expensss VI the
government IN excess of the revenues
AMI sustain the gold reserve. While 1t
/ Is true that the greater part OF ne
proceeds Of these bonds were Iised to
supply deficient revenues, a ccnsidera-
BILE portion was required 60 maintain
the gold reserve
with our regsnues equal &c our ex-
rensse there would be no deficit reqUir-
ing the issuance Of bonds. But II the
gold reserve falls below 800. 900, 900, how
will IL be replenished, except by sell
ing more bonds? Il there any way
practical under existing law? The
serious question then rs, Shall we con-
tinue the policy that has been pursued
in the past; that Is, when the gold re-
serve reaches ths point Of danger. issue
more bonds and supply the needed
gold. or shall we provide other means
to prevent these recurring drains upon
the gold reserve. II no further lcgisla-
ton Is had and the policy Of selling
bonds Is 90 be continued, then congress
should give tte secretary Of the treas
ury authority to sell bonds at long or
short periods, bearing a less rate Of in
terest than Is now authorized by law.
earnestly recommend as soon as the
receipts Of the government are quite
sufficient TO pay all the expenses OF the
government 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
only paid out IN exchange for gold. This
Is an obvious duty. II the holder Of the
United States note prefers gold from
the government, he should receive back
frGm the government a United States
nOte without payins gold in exchange
for II. The reason for this Is made all
ths more apparent when the govern
ment issues an intersst-bearing debt
to provide gold for the redemption Of
United States nOteS-a non-nterest-
barring debt. Surely 1t should not pay
them oIt again except on demand and
for gold. II they are put out In any
other way they may return again to be
followed by another bond issue 10 re-
deem tfern-anOther interest-bsaring
debt 70 redeem a nOn-interesting-bear-
irg debt.
"In my view, II is Of the utmost i'm
portance that the government should
be relieved from the business OF pro-
viding for all the gold required for ex-
changes on export. This responsibility
Is alone borne by the government with
out any Of the usual and necessary
banking powers 10 help itself. The
banks d. not feel the strain Of the gold
redemption. The whole strain rests up
on the government and the size OF the
gold reserve In the treasury has come
to be with or without reason, the sig
ral Of danger OF Of security. This
ought 10 be stopped
III we are 10 have an era Of prosper
ity In The country with sufficient re-
csipts for the expenses OF the govern
ment, we may feel no immediate EN-
barrassment from our present currency;
but the danger still exists and win be
ever present. menacing US as long as
tho existing system continues. And, be-
sides, It Is In time3 OF adequate rev.
snuss and business tranquility that the
government should prepare for the
worst. We cannot avoid. without ser
ious cOnsequenczs. the wise considera-
ton and prompt colution OF this ques-
tion.
The secretary OF the treasury has
outlined plan in great detail for the
purpose OF removing threRtened recur-
renee Of a depleted gold reserve and
save US from future embarrassment on
that account. To this plan 1 invite
your careful consideration.
II concur with the secretary OF the
treasury In his recommendation that
national banks be allowed to issue
notes 10 the face value OF the bonds
which they Deposited for circulation
and that the tax on circulating notes
secured by the deposit OF such bonds be
4. q
annum- 1 also Join him In recommend
ing that authority be given for the es-
tabihshmsnt OF naticnsl banks with a
minimum capital OF $4,000. This viii
enable the smaller villsges and asri-
cultural regions % the country 90 be
supplied with currency - meet their
demands. l recommend that the issue
OF national banknotes be restricted 10
the denomination of ten dollars and up
wards. II the suggestions have here
In made shall have the approval OF con
gress. then 1 would recommend that ma
tional banks be required to redeem
their notes In gold
sThe most important problem with
which this country Is now called upon
70 deal. that pertaining TO It's foreign
relations. concerns ils duty toward
81 ain and the Clban insurrectl0n. Pro-
Dlems and conditions mOre or less IN
common with those now existing have
;onfrOnted this government at various
times In the past. The story OF Cuba
Tor many years bss been one OF unrest;
growing disOontsnt; an effort toward
he larger enjoyment OF liberty and
ieif-oOntrol. OF organized resistance 20
the mother country: OF depression and
warfare and of Intellectual settlement 60
- followed by renewed revolt. For no
enduring period since the enfranchtse-
aicnt of the continental POSSESSIONS Of
ipain In the Western continent has the
tnaillon of Cuba o. the policy OF spain
lcWards cuba DOT caused concern 10 the
Cultsd states The prospect from
lne 70 time that the weakness OF
SPAIN huld upon the ISLAND aud the
Jl.tic..l vleissltndes and egnbarTass-
.nsns % the hems gevsrnmsal might