Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-05-17
THE NATIONS FINANCES
ROBERTS TALKS AT
VIRGINIA BANKERS MEETING.
The Csuntry'sF Credit is Better Than
1t Ever Wa. Be-
fore.

Virginia Bankers Association here today.
Mr.. Roberts said in part
The act of March IA, 1900 marks new
era in finances and our currency.
This law makes unique rate of interest
on government bonds, and so affects the
earnings of capital in all uses 1t fixes. ex-
cept for small per cent. the denomina-
tons of silver certificates at so and below,
and of United States notes at $40 and above,
while it does away gradually with treasury
| notes and puts silver certificates in their
place. 1t opens the door wide for Increase
| in the notes Of national banks. 1t gives
parity to all currency. On the face of
all our money, paper and coin, white and
yellow. on all our bonds all wages, all
trade. all banking, all business. 1t brands
deep and sure. to be read of all men for all
| time. the pledge of gold.
interest Abroad and at Home.
The lowest rate Of interest borne by the
| bonds of any foreign nation is 2% per cent
| on British consols. This is to run until
| 1903. and then to be 21a per cent. On only
a part Of the debt Of Germany, France and
Russia Is the rate as low as per cent.
Denmark borrows at the same rate. Aus
| tria pays no less than per cent. and Italy
no less than ).
The average bank rate for money in the
European centers in the year ending with
dam, - in Paris. 81 in London and Tap
in Hamburg and Berlin. From July l, 1899,
to March 2. 1900 the average in Paris was
3.24: in London 40: in Berlin and Ham
| burg, 557. In the year ending with June
last the average for call money in New
York was 2.36 to 3.65. and for prime paper
3S4 to 40 For the months from July last
to March the average in New York was
for call money $50 to 6.51, and for prime
paper 4.75 to 5.S7.
The Older Bonds.
If we compare previous outputs Of bonds
by our government we shall find the figures
instructive. Refunding operations Of the
war debt began in June. 1871, and the ex-
change Of is for 6's on for nearly five
years. to March. 1876 reaching the maxi
| mum of 500. 0JO, $50. The largest transac-
tons in any two months were in January
and February. 1872 $50 S34. so.
The great loan was the per cent consols
of 1907 begun in September, 1877, put out
for about $JO,OO0.0O0 Gs and $2O0O0.O00
IS. 1t ran UP by the end of July. 1879, to
$40. 19l 100. nearly its maximum. In April
and May 1879, these consols
| changed for older securities to the amount
| of $40, f5S AGO. the nearest approach to the
dealings now in progress.
Under the act of July IL. 1882. SIS were
given for bonds continued at 31z per cent.
The bulk of these 3's, S231 G5533 200, appears
| in the debt statement for September of that
year. and the ma Ximum was touched in Au-
| gust, 1889 at $i05.5S1 80.
The Spanish war loan was subscribed for
| over seven times on its face. and the bonds
were put out between June 1898, and April,
| 1899 to the amount of very nearly $500,
100000.
| Fewer Kinds of Money.
Bankers will appreciate the feature of the
| law which simplifes currency. The
treasury now issues silver certificates of
denominations of so and below only, as the
| e., Il;
there will be only one kind of the smallest
| notes. United States notes go out of $40
| and upward only. The treasury notes,
which are legal tenders and have been re-
| deemed in gold as well as silver, will grad
ually pass out of use. and silver certificates
will take their place. By this process.
| about $50, 600 900 will after awhile be added
I to that class of paper. and the circulation
| besides subsidiary. based on silver, will be-
| come S492,0U,OuO-or more nearly one-fourth
| of all our currency. Gold certificates con-
tinue to stand for $50 and multiples of that
| sum. The problem of our paper thus loses
| some films of its complex web Other
| threads may in due time wisely be thrown
| away. We have come great ways from
the tobacco currency of early Virginia.
! EIasticIty of Bank Circulation.
| The charge is on all lips, that circulation
| under the national system Is rigid, not
elastic Is that quite true now7 Let us set
| aside notes for withdrawing banks for
which the treasury holds cash; these were,
| on April 30, S39.211 ,164. Notes for which
bonds pledged were at their maximum,
| S341, $50, 256. December 90. 1873; they were
| at their minimum, S122, 32s, 0S4 on October 2,
| 1890 Here is fall in seventeen years of
| S2lS 1893. IT,. leaving only 1901 per cent out
| standing. In this period in each of four
| years. there was an increase Of circulation,
| $50 per cent in 1877: lO7 in ISIS; 1896 in
| 1879 and 296 per cent in 1851. The fall
was as great as % IS per cent in 1885, 1888
| in 1887 11.:;9 in 1SSs. 1912 in 1880 and 376
| to the minimum. October 2, 1890.
The ten years since 1890 furnish more
! striking figures. In three of them the notes
| fell. Ago per cent in 1894 913 In 1897 and
| 1.9s per cent in 1890 In each of the other
seven years there was rise as high as
| 1898 per cent in 1893 and 1916 In 1896.
Since January l, 1900 to May l. the rise
has been 1870 per cent, and the bank cir
| culation is more than double its amount in
October, 1890.
These changes Indicate what could be
done always under the national system. A
simple clause now allows free ebb and
| flow Under previous law a bank which
| withdrew bonds pledged for notes could not
until after the lapse of six months increase
| its circulation. The repeal OF that restrc-
ton in this act permits withdrawal and
addition to alternate at pleasure gave that
no more than $30OO.00O in bonds can be
taken out in any month. The purpose is to
give elasticity to the currency. That result
follows also from the greater profit which
will come from circulation, SO that u bank
can afford to put out goodly volume Of
notes and in dull seasons lock up a part OF
them. 1t will be well worth while to watch
this process.
The Pledge of Gold.
These results are possible, this fruit
| ripens before us. because by the act of
March A. 1900. the practice of the govern
ment in paying its debts in gold and keep
| ing its currency at a parity. is written in
| the statutes. The policy of one administra-
| ton may be cast aside by it's successor
| Law is more enduring, cannot be changed
| so easily, has a certain sacredness and
force. .r
Not by statutes alone, however, has gold
| become the master element in our cur
rency. For three years, more than ever
| before, has the yellow metal been thrusting
| itself into our markets, our vaults into the
| pockets of the people. The stock in our
country passed the billion mark last De-
cember. Since this year began S27 515 80
| has been added. while the gold in coin and
certificates in circulation has been Increased
| by $311 962,J2s. and reached May 1 SSH
| UtS3 1910 per cent of all our money afloat
| including bank notes. 1t means a great
| deal that in each of the past four months
gold has gone into our currency at an
average Of IS. 100000 a month over S1OO-
| OOnO,O a year The tide Is rising rat her