New-York tribune., 1900-01-08
THE REFUypIyG SECTION.

1t is a most worthy object to establish the
credit of the United States on a higher level
th9n that of any other nation. 1t is also emf
nently praiseworthy TO tighten the burden of
future generations by good use OF such surplus
revenue as the Government now has at COM
mand though there is room for some choice
regarding the wisest mode of diminishing future
burdens The refunding section of the cur
rency bill pending in the Senate has these OBJ
jects in view and will therefore be applauded
by many who do not consider with great care its
possible effects. But some Of the possible con-
sequences render it not entirely clear that the
measure as it stands is a wise one. One of
the most obvious is that Government bonds
bearing only per cent interest may not at all
times command their par value in the market
and il would be trying TO the country TO find its
bonds falling below par because of some
threatened foreign difficulty.
Especially would such fall be unfortunate if
2 great proportion of the paper currency in use
should be secured only by the deposit of pef
cent bonds at the rate of 100000 bonds at
par for every 100000 in paper issued. The
depreciation of bonds which any foreign diff
Guilty would be likely TO cause would leave the
paper issued against them without security for
IT'S fuil value Alarm about that currency
rapid redemption of it in order TO get gold in
stead and extreme disturbance in the money
markets among the consequences which
must be considered if bonds bearing so low
rate Of interest should be admitted as sufficient
security for circulation issued up TO their par
value. II viii hardly be claimed by any ex
perienced bankers that per cent bonds would
be reasonably certain TO remain above par if
war should occur between this Nation and one
or more great Powers. Past experience has
tIa h.
surdIy exaggerated precautions likely TO be
chosen BY many in such time of panic.
II is probable that the authors of this sec
ZION would not deny that the National banks
are expected 10 take large amount Of the
ner cent bonds In order TO get a cheaper basis
for circulation Other features Of the pending
bill are plainly designed TO make issues of bank
circulation more profitable; the reduction by
one-half of taxation on note issues and the III
crease Of issues permitted TO the par value of
bonds deposited would undoubtedly change the
situation for the banks materially. With all
added inducements the volume of bank clrcula-
ton is expected so to increase as to take the
place Of a part of the notes issued by the Gov
prnnepf. In that event it would be even more
tranorfant than It is now that the bank notes
sbouId be secured so completely that their
vaIue yvould no more be distrusted in time OF
manic than that Of the notes issued by the
Government itself. But it does not seem
possibIe TO avoid the conclusion that such notes
NAV be more distrusted in the event eontem-
Mated If issued in largely increased volume and
AGAINST bonds no longer equal in market value
- the mar value Of the notes issued against
them. tn
This difficulty could be met no doubt with
measures by a Secretary OF the Treasury
resolved to maintain the banking
issues But there is at least possibility that
an administration and Secretary OF different
may At some future time be IN
trusted with power. 1t would be In the highest
degree satisfactory TO a good many statesmen
:, the Democratic or Populist sort to see the
National banking system broken down with dis
honor. and SO completely as to compel an enor-