The record-union., 1899-01-01
Comptroller Dawes Discusses the
Financial Problem
At a Gathering Of Commercial Men OF
Whom Ne Was the Guest.
Approves the Recommendation or
the President in His Last Mes
sage to Congress on the Finan-
cial Problem, Pointing Out the
Results Beneficial to the Coun-
try With Favorable Congress
sional Action.

Try WIN EAVOraUAS OoA6A
sional Action.
CHICAGO. Dec 81 The Hon.
Charles G.. Dawes. Comptroller OF the
Currency, was the guest Of the Com
mercial Club this evening, and deliv-
cred an address on Currency Reform"
He said in part:
'.At the election of 1896 the chief is
sue before the American people for set
Element was that OF the maintenance
of the gold standard and a sound Gov
ornamental currency. The commercial
crisis of 1898, with the consequent re-
duction in Governmental revenues, had
developed an inherent weakness In our
present monetary system, which before
that time had been latent. This weak
ness was largely due to two causes:
First, the disproportion existing be-
tween demand Governmental cur
fency liabilities and the gold held by
the Treasury fort heir redemption; Sec
ond, the fact that these demand cur
rency liabilities, like greenbacks being
once redeemed in gold, could be paid
out again for Government expenses,
thus making possible a further presen-
tation for gold redemption, and Great
Ing what has become commonly known
as the endless chain
LAS pointed out in the Presidents
last message, the proportion Of net
gold holdings to demand currency La
bilities of the Treasury November l.
1898, was 25.35 per cent, as compared
with 1886 per cent on November J,
1897. Recognizing these conditions,
the President in his last annual mes
sage to Congress makes a recommen-
dation which, if enacted into law.
would break the endless chain and still
further strengthen the condition of
Governmental currency, also so greatly
improved by the Treasury operations
of last year. His words are as fol-
lows:
I'm my Judgment, the present con-
dition of the Treasury amply justifies
the immediate enactment Of legislation
recommended one year ago, under
which a portion of the gold holdings
should be redeemed upon presentation;
but, when once redeemed, should not
thereafter be paid out except for gold
"The words of his recommendation in
1897 were that when any of the United
ton in gold and are redeemed in gold,
such notes shall be kept and set apart
and only paid out in exchange for gold.
a.This is an obvious duty -F@
This is the Interpretation placed by
the President of the United States
upon the nature of the demand of the
people in 1896 for monetary reform;
and, while not denying, as his message
RI, Of
ton, which he leaves to the wisdom Of
Congress, he strongly urges its enact
ment into law Before consideration Of
any of the banking bills upon which
there is such diversity and conflict of
both expert and popular opinion, this
plain, practical and simple solution of
the Governmental currency situation
suggested by the President should pass
into law. To his plan, easily compre-
hended by the great body of our citi-
zens, all those in favor of currency re-
form should give their unqualified and
loyal support.
ITO press the consideration of other
proposed remedies at this time will
prove a hindrance and obstruction to
the adoption of this recommendation,
which is plainly a step in advancr-
After this recommendation is enacted
into law, those who have what seems to
them more complete remedy can then
present it for consideration. There are
many sincere and able men who main
tain that the Government can, to its
own advantage and for the common
good. avail itself indirectly of the note
issuing function of national banks.
They believe that this can be accom-
plished by removing the present re-
striction required as security for bank
notes, the specific deposit of Govern
ment bonds, so that the banks will
assume the burden of gold redemption
of Government notes, in order to secure
the profit from the issuing Of bank
circulation to take their place.
1T must be remembered, however,
that the present condition of the reve-
nues. finance and credit of our Govern
ment clearly indicate that there is no
excuse to be found in Governmental
necessities for any legislation which
would be unwise If the interests of the
people and business community alone
were considered. If the improvement
in Governmental currency could not be
secured except by radical change in
banknote currency, there would be
ground for demand for the concur
rent consideration of Governmental
and banking currency legislation. But
when the improvement of Governments
al currency is possible otherwise, the
chances for 1t should not be jeopardized
by the refusal Of the advocates of bank
asset currency to present their case
upon its own merits alone
At present among those who favor
a system of bank notes secured by the
commercial assets of banks, there does
not seem to be that definite agreement
upon and acceptance Of terms which
viii enable any of these plans to re-
ceive even the united support Of those
who believe in the practicability under
our banking system of bank asset cur
rency. Some Of the plans Of one year
differ from those advocated to-day
The two bills having their source in
the House Committee on Banking and
Currency differ materially from each
other and neither commands the united
support of that committee.
Each Of these bills differ from other
plans suggested. Evidently time must
elapse before even the friends of these
particular kinds of currency can be
united on a measure. I maintain that
the fundamental proposition which un-
derlies all present bills providing for
bonds as security namely, the prefer
ence of the note holder over the de-
positor in the distribution OF the assets
Of an insolvent bank, would work =