The daily journal. (Salem, Or.) 1899-1903, 1899-12-20
THE HOUSE BILL
How Currency Will BE Taken Up and
Bonds BE Issued
Philadelphia American.

! Philadelphia American.
Congressman Overstreet. 'of Indiana,
in the report which he prepared to ac-
company this bill, declares "there can
be no. contraction of the currency under
this system, for the reason that either
the note is in circulation, or, il redeemed,
its equivalent is in circulation That
is as the note came in gold would go out,
and ifthe gold was paid in again the
note would go out in its place. But
suppose the gold went out oithc country
altogether! Then would we not have
contraction? OF course, but tins would
be natural, healthy contraction, so they
say; it is folly to bring It up so let il
pass. But fifty million notes pass into
the reserve fund for redemption: fifty
millions Of gold pass out. There is no
contraction. But TO replenish the gold
in that reserve fftv millions of bonds
are sold for gold. And then do not fifty
millions OF gold get back into that re-
demption fund without anything being
paid out, and then have we not con.
traction? And suppose the process be
repeated Have we not further con-
traction? Every time bonds were sold
for gold there would be contraction
unless something happened apart from
the redemption fund.
But here It * that provision is made
for something to happen, here that we
come 70 see the very keystone that fills
out this plan, gives il great significance,
makes it II comprehensive scheme for
getting rid OF our national currency, is
suing bonds to get the gold To get rid Of
it, replacing the currency So got rid of
with bank notes. For this currency bill
provides for greatly encouraging the
banks to issue notes, makes it greatly To
the interest OF the banks to collect ma
tional currency, present such for pay
ment in gold, deplcte the reserve fund.
force the issue of bonds. Indeed it ar
makes il the interest of the
banks to force redempiions. For this
bill IL made law, would make the issue
of bank notes immensely profitable. As
the law now stand the banks find no
great inducement to issue notes, for as
q general thing they can make more
money 10y loanlng out their funds Ill.
rect.y than by using them to buy bonds
and then loaning out the notes issued
upon such bonds II is true that on
the bonds they draw interest. But in
buying bonds they must lock mp more
money than they could get, and this Ic-
duces their loaning power, and the notes
they take ont are taxed. The bonds
that the ,banks can now buy and
take out circulation upon tn the best
are the per cent. war bonds
payable ut the option Of the government
after about nine years. Aud these bonds
premium OF about y per
cent. Therefore the purchaser must
write off per cent. of this premium
every year, Tor by the time the bonds
o'tuult lANNult AhiH lithilhih NHlt ~
course, have disappeared, they being
payable at par, Now, II a bank invest
100000 in these bonds with purpose
nj issuing currency, what does il get? II
gets hundred thousand dollars of
bonds. paying three thousand dollars Of
interest year, Of which interest 81 600
must be set aside for account of depre.
ration Of the bonds. And il gets
10000 Of notes which, say, il loans at
d per cent. thus earning $500; out OF
which itmust pay however, tax on
Ihe notes OF per cent. or $500. Thus
here is left to the bank profit OF $i,-
400 on loaning these notes, which added
10 the $1,000 that it adds 10 It's income
n bondholder, makes $500. Now, II
/ had not gone into the note issuing
business and had loaned it's 100000
lirectly at o per cent. its earnings would
nave been $3.50. These are rough
igures, but they illustrate the point.
All druggists SuarYteo De. Miles PAIn
?Ii.ts To stop Headache, "Ono ceat fioso