The times. [volume] (Richmond, Va.) 1890-1903, 1898-01-04

paper money very great burden 10 the
Taxpayer by an increase of the pubic
debt These gold reserves are necessary
unless the government permits It's notes
io go to protest. The mere credit OF the
United States behind its notes U.s. 100
vague a thing; its power 20 tax IS 100
remote to provide cash on hand for in
slant use. So far as expense is concern
cd. this debt could have been more easily
borne by changing il into low interest
bearing bonds
RETIRE THE GREENBACKS.
For these and other reasons the COM
mission strongly urge the government 10
withdraw it's demand obligations now
used as money decline TO provide gold
for exporters. and put the burden ana
expense of maintaining rcdeemable
paucr circulation upon the banks. ln
order 10 meet the demand obligations the
present reserves of gold IN the Treasury
furnish a beginning 10 be- set aside IN The
division OF redemption. and 10 meet pos
sible contingencies the Secretary Of me
Treasury is authorized 10 sell bonds
whenever the reserve needs replcmsh-
nent In this way the surplus obliea-
lions. that is. United States notes and
Treasury notes Of 1880. can be gradually
removed and the cost TO the country can
be reduced while this process Will also
give the iucstimable advantage or ceds-
ing 20 use demand debts as money, or
simplifying our currency, and OF adding
10 confidence I'm the certainty OF our
standard by the plan Of the commits
sion government paper is withdrawn in
the first five years only so fast as the
banking currency expands so that con
traction cannot possible take place, II
United States notes are Cancelled their
place will be taken by the gold paid out
for them. or by the expansion OF BANK
notes under the new proposed SYSTEM,
and IN the following five years all the
remaining United States notes are TO be
retired.
The demand obligations OF the United
States We're put forth simply because
there were no funds III the Treasury TO
redeem them. The notes were the only
evidence that the property had been re-
ceived and used up for services or sup
plies or public buildings mo longer avail
able assets. The government by the ma
ture Of the operation did not retain, as
the notes went out, any property imme-
diately convertible into coin with which
TO redeem. its den and issues They were
not a money based on property; they
were only a debt. on the other hand
a bank note Is never issued-iraud. OF
course eNclUded-eNcept for q cOnslcers-
ton in negotiable property OF equal or
greater value. The bank note comes
action and is based on the active prop
erty Of the country which is passing be-
tween producer and consumer. This
property IS always negotiable and al
ways equal to the duty Of meeting the
note liability. Bank notes are as sound
as the business transactions Of the coun-
try The currency OF the country. more
over. should increase as the transactions
Of the country Increase; hence the rigid
uuchanging issues OF the government
make them an inelastic part OF the cir
CuldtiOn, while by the very process OF
their issue. bank notes alone can be au-
tomatically adjusted To the changing
transactions of the business community.
THE ISSUE OF BANK NOTES.
In view OF the scarcity Of United States
bonds they cannot long be regarded as
4 basis Tor circulation. Moreover. any
bond security OF a higher character
Yields q low rate Of interest aid In "A time
Of strngcl cy when borrowers need loans
and the market rate OF interest IS high'
there Is 10 inducement 10 buy these
bonds TO increase circulation. Hence
under the present system when notes
would be most needed. il IS least pro
ntable TO issue them. While providing
for a partial use OK bonds for securing
notes. per cent of the capitalize
commission proposed that notes beyond
this should be issued on all. instead Of
part of the resources Of bank. and NJ
ter ten years that no special bond 90
curity should be required. Banks may
| issue notes up 10 60 per cent. Of their
capital without restraint, for issues be-
yond 90 per cent. and up 10 50 per cent.
they pay a tax OF per cent for those
beyond so per cent. and up 10 le0 per cent.
they pay Il tax OF per cent. These
notes would be a prior lien upon all the
resources of the bank and. IN addition,
uDon the stockholders liability. More
over, all banks issuing notes contribute
; per cent OF their circulation as per
manent guaranty fund. For daily re-
demptions. banks should keep . per
cent redemption fund in the hands OF
the Controller OF the currency. Banks
OF $4,000 capital may be established In
places OF 1900 inhabitants. and branches
OF banks are also permitted.
II is apparent that the security 10 the
note holder under the proposed plan Is
greater than usually supposed IL notes
should be issued by ali national banks
20 the amount Of 80 per cent. OF their
present capital, security in the form OF
total assets-omitting consideration OF
stockholders liability or guaranty
fund-is more than s. 10 ST. In the 32.6
banks outside the reserve cities the pro-
lection would be $40 to 81 OF notes. The