Evening star. [volume] (Washington, D.C.) 1854-1972, 1897-12-06
NO ACTION RECOMMENDED NOW
Prompt Ratification Of the Hawaiian
Treaty Urged.

| tainty get geld is by borrowing. 1t can get
| IT in no other way when it most needs il.
| The Government without any fixed gold
revenue is pledged to maintain gold re-
| demption. which it has steadily and faith
fully done and which under the authority
now given it will continue to do.
The law which requires the Government
| after having redeemed its United States
| notes to pay them out again as current
| funds dcmands a constant replenishment
| of the gold reserve. This is especially
so in times of business panic 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 redemp-
| ton but through the increase of its bonded
! Gebt, as during the Administration of my
| pre- decessor when SOC, 315, 400 of four-and-a-
| half per cent. bonds were issued and sold
and the proceeds used to pay the expenses
OF the Government In excess of the rev.
| enues and sustain the gold reserve While
II Is true that the greater part of the pro-
ceeds Of these bonds were used to supply
cenclent revenues, considerable portion
was required to maintain the gold reserve
W Aeh Jul lSNSHuSS SQusil 10 our expenses,
there would be no deficit requiring the is
suance of bonds. But if the gold reserve
falls below s1OO.OOOOOO, how will it be re-
plenished except by selling more bonds?
Is there any other way practicable under
existing law? The serious question then
Is, shall we continue the policy that has
been pursued in the past; that is, when
the gold reserve reaches the 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? If no further leg
1siation Is had and the policy of selling
bonds Is to be continued, then Congress
should give the Secretary of the Treasury
authority to sell bonds at long or short
periods. bearing less rate Of interest than
is now authorized by law.
His Recommendation.
I earnestly recommend as soon as the
receipts of the Government are quite suff1-
Gent to pay all the expenses of the Gov
eminent, 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 set apart, and only
paid out In exchange for gold This is
an obvious duty. If the holder of the
United States note prefers the gold ana
gets 1t from the Government, he should not
receive back from the Government a United
States note without paying gold in, ex-
cfarge for II. The reason for this is made
all the more apparent when the Govern
ment issues an Understanding debt to
provide gold for the redemption of United
States notes-a Eon-interest-bearing debt.
surely 1t should not pay them out again
except on demand and for gold If they
are put out in any other way they NAV
return again to be followed by another bond
issue to redeem them-another interest
bearing debt to redeem a non-interest-bear
ing debt.
In my view It is of the utmost import
ance that the Government should be re-
iieved from the burden of providing all the
gold required for exchanges and export
This responsibility is alone borne by the
Government without any of the usual and
necessary banking powers to help itself.
The banks do not feel the strain of gold
redemption. The whole strain rests upon
the Government and the size of the gold
reserve in the Treasury has come to be,
with or without reason, the signal of dan.
ger or Of security. This ought to be
stepped.
If we are to have an era Of prosperity in
the expenses of the Government we may
feel no immediate embarrassment from our
present currency; but the danger still exists
and will be ever present menacing us so
long as the existing system continues And
besides 1t is in times of adequate revenues
and business tranquility that the Gov
erLment should prepare for the worst. We
can not avoid without serious consequences
the wise consideration and prompt solution
Of this question.
The Secretary OF the Treasury has out
liz ed plan in great detail. for the purpose
Of removing the threatened recurrence of a !
depleted gold reserve and save us from
future embarrassment on that account To |
this plan I invite your careful considera-
ton.
I concur with the Secretary Of the Treas
ury in his Recommendation that National
banks be allowed to issue notes to the face |
value OF the bonds which they have depos- |
ited for circulation, and that the tax ON |
circulating notes secured by deposit of |
such bonds be reduced to one-haIf OF one |
per cent per annrm. alro Join him In /
recommending that authority be given for |
the establishment Of National banks with |
minimum capital Of $4,000. This viii |
enable the smaller villages and agricultural !