People's Pilot, Volume 4, Number 28, Rensselaer, Jasper County, 28 December 1894 — THE CURRENCY PROBLEM. [ARTICLE]

THE CURRENCY PROBLEM.

Salient Feature* aa It Develops Before the Lower House. On the 19th Mr. Johnson (rep.. Ind) admitted the delects of our currency system, but he said their correction could not be obtained along the lines suggested by the committee. It was much easier, he declared, to attack the present system than oiler a safe substitute for it While remedial legislation might be advisable. this was no time for experimental legislation. Mr. Johnson then contrasted the advantages of the national banking system with respect to prompt and satisfactory settlement against failed banks and of security to note holders, with those of the state bank system revived by the bill. Mr. Warner (dem.. N. Y ) advocated the pastage of the bill because of the proposed rehabilitation of state banks, and because of the [act that it took the government out of the business of issuing currency. Mr. Kills’ (dem., Ky.) opposition was largely based upon the fact that the bill provided for % reorganization and extension of the national banking system, when every state and national sonvention of the democratic party for years bad declared against it, and this at a time when the necessity for their services as fiscal igents. if it ever existed, had absolutely passed. Mr. Bland (dem.. Mo.) gave notice that he would move to amend by substituting for the bill bis free coinage of silver and coin note icheme. On- the 21st Messrs. Pendleton (dem.. W. Va.), Russell (rop.. Conn.), Sickles (dem., N. Y.). McLaurin (dem., S. C.) and Rawlins (dem., Utah), participated in the currency dislussion. Mr. Sickles said that he would like to see the measure perfected in order that he could give a cheerful vote for a bill intended to relieve the financial embarrassments of the country. Two evils, said he, threatened the nation. First, the serious drain of gold from the treasury as a result of the outstanding legal tenders. In this bill he found no remedy for this alarming menace. This fact constituted his first criticism of the hill. It was in this respect inadequate. The government paper was in reality a government debt which ought to be funded. ••‘Let us return,” said Mr. Sickles, “to the sound principles of the days before the war. Let us adopt the McCulloch plan of funding the greenbacks." Mr. Springer (dem.. III.) then offered a substitute for the pending bill. It consists of the imendments which have been agreed upon by the democratic members of the committee; others that were suggested by Socretary Car-lis-10, the author of tho bill that has been under consideration all the week, as well as certain features of the Carlisle bill which it has been deemed advisable to retain. After laying the substitute before the house. Mr. Springer briefly explained the important changes made in the Carlisle bill and their effect as follows: 1. Permitting the deposit of currency certificates issued under section 5,193 of revised statutes, to secure circulation as well as the deposits of legal tender notes and treasury notes. These certificates represent legal tender notes actually held in the treasury, and the effect of depositing certificates is, therefore, the same precisely as to require the deposit of notes. 2 So amending the present law as to permit state banks to deposit legal tender notes and procure these currency certificates in the same manner that national banks are now permitted to do. 3. Dispersing with the provision which authorizes an assessment upon the national banks to replenish the safety fund for the redemption of the notes of failed banks, and, in place of this provision, insert one providing that the collection of the one-fourth of a cent tax for each half year shall be resumed when the safety fund is impaired and continued until the safety fund is restored. 4 Authorizing the comptroller of the currency instead of the banks themselves to designate the agencies at which national bank notos shall be redeemed. Tho effect of this will be to secure the redemption not only at the office of the bank, but at other places accessible to note holders.

6. Dispense with the provisions compelling existing national banks to withdraw their bonds now on deposit and take out circulation under the new system, and in lieu of that provision insert one permitting the banks to withdraw their bonds, if they see proper to do so, by depositing lawful money, as now provided by law, and then to take out circulation under the new system if they choose to do so. 0. Providing that the notes of failed national banks which are not redeemed on demand at the office of the treasurer of the United States, or any assistant treasurer of the United States, shall bear interest at the rate of 6 per cent, per annum, from the date of tho suspension of the bunk until thirty days after public notice has been given that funds are on hand for their redemption. This imposes no obligation upon the part of the United States to use its own funds for the redemptions, as the safety fund is in the hands of the treasurer, and he will redeem notes out of that fund. On the 22d Mr. Coombs (dem., N. Y.) spoke in favor of the bill. Mr. Bell (dem.,Tex.) opposed the measure. Be said that he noticed that the practical direction of currency reform was toward contraction. Mr. Bowers (rep.,tal.) and Mr. Bryan (dem., Neb.) also opposed the bill. The latter attacked the administration viciously for dumping on the committee on banking and currency and the house a hastily considered hill like the one pending. Its weakness was demonstrated when, after four days of verbal bombardment, it has been practically withdrawn and another measure substituted. Mr. Bryan said that, stripped of its verbiage, this bill was a simple proposition to authorize tho government to loan banks money at a low rate of interest, or at no rate, to be in turn loaned by them at whatever rate they could secure. “Mr. Cleveland thinks,” said Mr. Bryan, “that the issuo of currency is a function of tho banks. Jefferson declared such an issue is a function of the government and thought the banks should go out of the issuing business. I am not ashamed to say that I stand by Thomas Jefferson and not Grover Cleveland-” Mr. Bryan said he had been and was now in favor of gold and silver money because the amount of money would depend on the law of supply and demand.