New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1898-01-03

consequence Of the existence OF the Government
notes and 100000 OF reserve lying idle in the
Treasury. the saving in interest by the United
States notes is small gain compared with the ~
ending burden of providing for their redemption
We have already redeemed them In gold nearly
twice over-s5is, GS cls since 1s7s-and they all
outstanding set.
Worse than this. however. is the injury which re-
suits from the Element Of uncertainty which is tn
separable from such currency. Such injury Is
none the less real because it may be unpcrceved.
II may go long unnoticed like friction in machinery
or malaria in the air. but 1t has Its effect. neverthe-
less. and when 1t reaches acute manifestation,
such as we have experienced within the last five
years the loss occasioned is beyond computation.
1t is part Of the plan submitted that the de-
mand Obligations of the Government shall be put
In course of retirement by a process which shall
be gradual in Its operation rs respects the current
money and business OF the country but which Will
lead ultimately to tho substitution OF other forms
OF money In their place. The demand obligations
properly called. consist OF the United states
notes or 'greenbacks." amounting to s4s6Sl-ol6
and the Treasury notes OF 1890. amounting TO Slos-
MseSo While the former arc not In terms payable
in gold, ahd the latter are by law payable In gold
or silver at the discretion OF the Secretary OF the
Treasury II is obviously necessary. in order to keep
good the pledge OF the Government to maintain the
parity OF the two metals as coined, to pay all It's
notes IN gold when gold Is demanded by the holder
30 that IN a praCtCal sense. tne note oohSato'S va
the Government payable in gold on demand must
be reckoned at the sum Of the greenbacks and the
coin notes. thatis s455 se4.2s6
The measures recommended IN relation to these
obligations may be briefly summarized as follows:
First--The separation OF the note issuing and re-
deeming operations Of the Treasury from its or
binary fiscal operations by the creation or a DiVis-
Ton OF Issue and Redemption. and the transfer 10
II OF the gold reserve and other resources held
against obligations; the Government notes 70 pc
paid In gold coin demand through that division.
Second-The reserve to be msntained from reve-
nue. when adequate and by sale Of bonds when nee
essary; the proceeds of such sales to be used for
that specific purpose. and no other
Third-Notes paid to be cancelled as paid up 10
the amount Of s5OoNo: the cancellation thereafter
for five years not TO exceed tho increase OF pahh-
notes After Ave years the notns paid to be re-
tired at a rate not exceeding 20 pr cent per ahhu
OF the amount then outstanding: at the end OF ten
years the legal-tender quality et the notes then
outstanding TO cease
Fourth-No note once paid. to be reissued other
wise than In exchange for gold except that In case
OF an, excessive accumulation Of redeemed and I'M
cancelled notes in the Division Of Issue ana fe-
demption the Secretary of the Treasury may use
them in the purchase of United States bonds TOT
the benefit of the Division Of Issue and Redempuon'
such bonds TO be held in that division and sold for
the benefit Of the redemption fund when directed
by the Secretary of the Treasury.
THE SILVER CURRENCY.
we have s35iS5S oSl Of notes Of s and under, and
s11es7ss Of silver dollars In actual circulation.
making a total Of s4li ISL .Sls of current money IN
use exclusive Of gold. in denominations OF 81 -
and S. Our total stock of silver dollars Is So-'
~, This Is an excessive quantity TO nave al 'he
existing discrepancy between their legal ana ac'uai
value But with further coinage of them oiscon-
tinued and their parity assured by the exchange u
gold for them on demand, 1t is better TO retain
them as they than TO attempt maj soiu'.on
at this time Of the problem which they present 10y
withdrawing all silver certificates over ~ ana an
other notes under $40. place Will be mace ioi
nearly all the silver dollars In way when VIII give
49, ,,r,rv the f,ll beneft OF them for current use
,,5,bout ,mposng upon the Treasury any serious
burden in thsir maintenance,
THE BANKING SYSTEM
1-rdo, the nresent system bank may Issue circu-
,o,,on not exceeding % per cent OF ts paidup cap
tai. and also not exceeding % per cent or 'he pax
value of the bonds deposited. Each bank Is required
10 deposit with the Treasury redemption iuna Oh
: per cent OF its outstanding circulation; ana the
notes are secured by first lien on Ill the assets or
the hank Including the liability Of the .harehoders
While in some cases shareholders Of and depositors
In National banks have lost by unskful or unfalth-
full management. yet the bank circulation mas peeh
so well secured that holder Of National oanK
note has ever had occasion TO inquire what bank
,ssued the note or has ever lost any part of the
amount OF the note. But the relative increase IN
the number OF the banks and decrease In the
amount Of the issue Of the circulation shows that
the system should be so amended that while the
notes issued hereunder shall be adequately Sc
cured as under the present system there will yet be
an increased issue Of bank notes. and an outflow
and inflow of those notes as the business OF the
country may require. ....
note circulation, issued under the present sys-
TEN, unquestionably satisfies the condition OF Sc
curiiy. but IS open TO grave objections.
First-It presUppOseS a continuing Issue OF Gov
eminent bonds when It ought TO be the National
policy steadily reduce and ultimately extinguish
the debt OF the United States.
Second-The investment In bonds dmin!shes the
funds OF the bank available for loans 10 It's
toners.
Third-such currency does not increase in VOL
with temporary demand for more currency.
decrease with the cessation Of the demand.
All the conditions can be met by
First-A National system with improved regula-
tons to examination. supervision. etc.
Second-The issues to be based upon those readily
convertible assets which represent the exchangeable
wealth of the country in its natural products and
manufactured goods
Thrd-A limitation OF the amount OF the issues
to the unimpaired capital OF the issuing bank.
Foarth--A further security In guar
antee fund
Fifth-The continuance OF the present redemption
fund and method of redemption. with the extern
sion Of the places Of redemption under the ap-
provA Of the Secretary Of the Treasury.
Sixth-A further security in the liability OF the
shareholders to the full amount OF the par OF their
shares.
The chief difference of the proposed from the ex-
listing system Of bank notes is that Il gradually
does away with the requirement that there shall
be deposit of bonds with the Government as a
condition for the issuance thereof. AS now the
notes are 10 be first lien upon all the resources
Of tho banks, including the stockholders liabni-
ties. This change is necessary because OF the
scarcity OF United States bonds: and the attempt
10 substitute other bonds would lead TO many
evils The change is WISE because 1t permits the
issuance OF notes in the way and al the time when
and for the purpose for which. they would be Is /
sued under natural conditions, II no law prevented
Such system would more perfectly than any
other give the country a circulating medium; It