The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1897-05-17

Gated for some years-namely, the law
permitting the issue of bank notes up
to par and reducing the tax on c1rcu-
latiOn from l per cent to a quarter of
per cent, they may become interested
in having more bonds issued to furnish
a basis for bank notes II they DO
the process is very easy. All they have
to do is to present greenbackS and
treasury notes and draw down the gold
reserve, and then raise the alarm and
proclaim that the credit is in danger.
IF the secretary of the treasury
yields, as there is no reason to doubt
he would, they can buy the bonds with
the gold drawn out, and then issue
notes upon the bonds purchased. BY
this simple process the banks would be
able to secure a safe Investment for
their money and then by issuing notes
up to the face of the bonds would be
able to use the money besides.
1t is difficult to conceive of a more
advantageous transaction that that.
Usually a man can either eat his cake
or keep it; it is left to the national
banker to both eat his cake and keep it.
While others must be content to use
their money, or if they invest in bonds
must be satisfied with the interest on
the bonds, the national banker can, by
investing in bonds, enjoy the interest
upon the bonds, and then by issuing
notes enjoy the use of the money also
4 have referred to the fact that gold
may be Withdrawn expressly for the
purpose of purchasing bonds. The rec
Ords of the treasury department show
that SIS, 600 were withdrawn for the
purpose of paying for the first $50, OOO,-
600 of bonds issued, and the proportion
has sometimes been greater than that.
No one except a gold standard financier
has been able to see the wisdom of
policy whereby bonds are issued to buy
gold, and then gold furnished to the
purchaser to be returned to the treaSu-
ry in exchange for the bonds. If the
Dingley bill, as finally passed, yields a
III above
the expenditures of the government,
that surplus can be converted into
greenbacks and the greenbacks with
held from circulation, but if the surplus
is used to purchase and retire govern
ment bonds the greenbacks will go into
circulation again. In other words the
greenbacks can only be kept in the
treasury by contraction of the cur
rency, unless bank notes are increased
as rapidly as the greenbacks are drawn
out.
1T is true that when gold is exchang-
ed for greenbacks the gold so replaces
the greenbacks in the circulation, but
if bonds are issued for the purchase of
gold the proceeds must lie idle in the
treasury if the revenues exceed the eX-
penditures. If the secretary of the
treasury continues to pay gold on de-
mand, and stands ready to replenish
the gold reserve by bond issues, 1t will
be possible for the national banks to
lock up all the government paper in
the treasury vaults, making, if they so
desire, a corresponding increase in the
volume of national bank notes.
THE national banks want to retire
the greenbacks. The question is: Will
they demand the passage of law pro-
viding for the retirement of greenbacks
or will they use the power which they
now have to lock the greenbacks up in
the treasury and burn them after
ward?
1T is to be regretted that the Repub-
icans do not announce their policy up
on the currency question There is no
doubt that many of the leading Re
publicans favor a retirement of the
greenbackS. and the presidents inaug-
ural address limited at that policy, but
there has been no formal announcement
of it.
1t would be better if the people were
advised in advance of the policy to be
pursued. so that they could be cOnsid-
ering it; but it has been the almost uni
verSa1 custom to rush through with
limited debate and with as little public
discussion as possible, the measures
which are a part of the gold standard
policy.
Mr. Cleveland urged through con-
gress the unconditional repeal of the
Sherman law, although no party had
advocated that measure before the peo-
pie. After the unconditional repeal had
been secured he recommended the re-
tirement of greenbacks by an issue of
gold bonds. That, too, was a measure
which was never discussed by the peo-
pie.
From the present indications the
Republicans intended to appoint
commission to consider the currency
question and then push through, if
possible. a bill providing for the retire
ment of the greenbackS after a COM
mission of eminent financfers, selected
for the purpose, has reported in favor
of such a plan"