Evening star. [volume] (Washington, D.C.) 1854-1972, 1899-10-19
A TALK TO BANKERS
Treasurer Roberts Address Before
the Pennsylvania Association.
The TREASURY AND THE CURRENCY
Gold Reserve Greater Than 1t Ever
Was Before.
CERTAIN NEEDED REFORMS

SCRANTON, Pa, October 19-The fifth
annual convention of the Pennsylvania
Bankers Associa ton opened here today,
and will continue two days. The feature
of the first session was the presence of
Ellis H. Roberts. treasurer Of the United
States, who, after routine matters had
been disposed of, made an address on 1.-THE
Treasury and the Currency" Mr.. Roberts
had evidently prepared his speech with
considerable care, bringing his calculations
up to within few days ago, and he was
listened to with much attention.
Mr.. Roberts said Your vocation as bank
ers and my position in the treasury of the
United States determine the theme which
we shall consider. Your invitation implied
that | shall speak to you of the treasury
and the currency. The currency situation
has some features of real and robust
strength. In the first place, as the corner
stone of all our money rests a volume of
gold in the treasury larger than ever be-
fore held. 1t is also true that in the banks
and the hands of the people the yellow
metal is held beyond all precedent. The
gold coin in circulation increased during
the year ending September / by $40. $50 926,
and during September, including gold Ger
tificates, by further sum of S. 612. 500.
The tide Of gold has flowed steadily into
the business of the country through the
and the general receipts OF the country.
For many years until March, 1898, the GUS
toms were paid almost wholly In paper,
with many months showing not a fraction
Of gold. In the fiscal year 1898 the percen-
tage of customs paid in New York in gold
was 20.4 in the fiscal year 1899 it 1885,
and from July 1 to october l, 1899, was
S42. For all of September just past this
percentage rose to M.3. The contrast in
the of gold in the general transactions
of the government in the fiscal years 1898
EarNh1 iG INV tpH n,,t
or receipts of 81, 076, 736.5S7 1903 per cent
was in gold coin. and Of 50, 1898, 01S dis
bursements, II So per cent, while in the lat
ter year, of receipts amounting to 50, $685.
1919, IA, 37.6 per cent was in gold coin, and
of 50, 81 2S3. go disbursements 1881 was in
gold coin In the quarter from July to Oc-
tober of the current year the percentages
Of gold were still larger.
Big Gold Reserve.
The result has been that the treasury
held the 1st of October, 1898, in gold
S27S. 691, ASP. gross, and this became $685.
OO2,3I9 at the opening of the current month.
On the nth of October the gross amount stood
at 1913, 10 9l5, the largest sum before the
present year being 1892, 551, 1906 while the
maximum net was reached October 12 at
S25S, 0Sl. 563. The gold certificates which
explain the difference between gross and
net had not been issued for several years,
and had long stood at from $50, 900 900 to
SIS, 100000. Since August Z, when the issue
put out to the amount Of $112 461, T30, and
stood October II at S117.906,6S0.
Stalwart health is shown by the fact that
of the total money in circulation at the be-
ginning of this month 1924 per cent was
in gold, including gold certificates. The
strength of government paper is proved by
the guarantee held against the legal ten
der or 6O.4i per cent in gold, excluding
gold certificates, which stand dollar for
dollar of the yellow metal
Another factor of strength in the currency
Is the strict limitation in the volume of all
government paper. The statute prescribes
that the United States notes shall not go
beyond 1916, GS1 o16 The silver certificates
cannot exceed the standard dollars against
which they are issued. The treasury notes
restricted to the amount of bullion plr-
chased for them are retired when redeemed
IN silver dollars. The gold certificates can
only stand dollar for dollar Of gold coin.
lhese limitations are like the bikes of HoI-
lahd-a defense against a threatening sea
Wh1ch otherwise might sweep over land
and city. farm and home.
Nhlie these bikes endure and initiation In
demand obligations other than gold Is pre-
vented peril is kept at the minimum and
the whole volume Of currency Is maintained
at level. so that no dollar is worse than
the best.
These Allow No Elasticity
But these limitations permit no elasticity.
Under the practice of the treasury denon-
nations are exchanged small for large
and the reverse, but not one kind of cur
fenoy Tor another In the absence of legal
restrictions government paper could only
be put out in public disbursements and
coulo return to the treasury only for GUS
IoiIS' lof taxes or miscellaneous receipts
Inc system does not provide for an ebb
aLu now according to the tides of business
me helght of wisdom fixes bounds within
inc neld OF safety, of necessity
Although not strength itself fitness for
use IN any direction Is its foster brother
mat qual1ty government notes possess be-
cause one denomination can readily be
changed for sma Ter or greater kind for
KIND. Exchange of one kind for another is
prevented by the limitations of volume
bankers well know the convenience of Sc
curing 81, 81 and So notes for those so
large that they do not serve the convent
ence of customers. BY redemptions of unfit
currency and direct exchange the denomi-
nations are adjusted to the varying de-
nands of the different business seasons
IhlS process causes a constant flow of
notes in and out of the treasury. 1t affects
every year at least one-half of all the gov
ernment paper. a certain elasticity is thus
produced, for the large notes are used
more as reserve than for current payments |
while the smaller denominations are active |
currency.
The treasury during the past two wears
has Always held available denominations
suitable either for division or concentration |
as business has required. The appeals for |
exchange Of one class of notes into an
other OF different size are constant proof |
of the advantage of such transactions. |
kind for kind.
Some Means for Expansion |
Somehow, somewhere should be lodged |
power to meet pressing demands for addi-
tional currency. The confession is newt
able that there is not general agreement |
how this can be done In the best way. The |
task invites students of finance, and es-
pecially bankers, to crystalline public opin- |
ion on this subject. They will be unani- |
nous in declaring that there must not be |
any increase of unsecured government OBJ |
legations.
In all civilized nations industry and trade |
require the circulating notes of banks The |
American people have become accustomed |
to them and will not dispense with them |
For long years to como the national banks |
must continue to be a part of our cur |
rency system. Wisdom directs that unnec- |
essary restrictions should be removed from