be found except through changing existing relations between the banks and the Government as regards paper money, and to the great advantage of the banks, first; and finally, as I believe, to the very great advantage of the plain people of the country. The difference between what I propose and existing conditions is, briefly: First. That no Government bonds shall be used in the banking system. They were forced upon the banks as a war measure. Second. That the Government as effectually guarantee the payment of every currency circulating note, made by the Government and put in circulation by the banks, in case of insolvency that their assets do not meet, as in the use of bonds. Third. Far more flexible and abundant currency, especially in case of stringency or panic. Fourth. A uniform currency. Fifth. Far more complete daily reports by the banks themselves, sent in monthly, to the Comptroller of the Currency. Sixth. A complete relief of the United States Government from any responsibility for the "current redemption" of any circulating Government or bank currency notes whatever, thereby relieving it of all expense and risk of maintaining any coin redemption fund and coin measure of value, the risk and expense of both to be devolved upon banks by the operation of the bill. The will be: ADVANTAGES TO THE BANKS First. Larger profits on their circulation, notwithstanding one-half of it will be had by buying it from the Government and paying for it in lawful money. The other half to be issued to and put in circulation by the banks against their assets. No gain or loss will occur to banks on one-half and full interest will be had on the second half when in circulation. Second. A great advantage will be gained in the system of clearing houses provided for in the bill. They will firmly unite all the banks in the country into one system without increasing the financial responsibility of one bank for another. (See Appendix O, p. 60.) Third. In order to have a practical banking system, safe, comprehensive, and yet sufficiently flexible to meet the varying needs of this great country, the body of men who direct our finances must be removed not only from THE CONTROL OF PARTY POLITICS but from even its slightest influence. Such a board of governors, as 1 have said, must be made up of men of the highest patriotism and integ rity, of the brightest minds, greatest experience and skill in banking of any men that can be found in the country. Such a body of men is provided for in the bill in a board of seven expert advisers. The interests of the people are protected through the Comptroller of the Currency and the Secretary of the Treasury. This body will practically be the governing and legislative authority for the whole system of national finances and banking as well. The bill prepared by me is the existing system, so changed and enlarged as to give far cheaper money to the people and far greater freedom in banking. Please observe that there is no provision of the bill that is a new thing. Everyone of them has been worked out in banking and approved by the experience of bankers in the past. It accepts and adjusts itself to, without attempting to change or influence, EXISTING CONDITIONS AS TO SILVER COIN and legal-tender notes. A word as to the complexity of the bill. The subject of finance is thought to be complex, but this bill is not "complex" in the ordinary sense of the term. It is complex only in this: that every contingency likely to arise is thought out and its remedy provided for in the bill. In other words, it leaves less necessity for "construction" than any bill I have yet seen, in avoidance of courts. The national-bank act contains about 36,000 words, and is incomparably more complex and difficult to be understood, were the bankers not familiar with it, in practical experience, by working under it. My bill contains only 7,800 words. Of course my bill being founded on the bank act requires some less words. If the national-bank act be submitted to the five most intelligent bankers you meet, and also the bill drawn my me, I venture to say that every one of them will decide that my bill is more easily understood, and what may and may not be done under it is more clearly stated, even though they have acted under the national-bank act. This experiment has been tried on two or three occasions and produced the result indicated. Bankers Hambleton & Co., of Baltimore, Md., in their circular of February 29, 1896, say: Mr. Walker's bill is A SKILLFUL EFFORT TO MEET ALL OBJECTIONS and satisfy all objectors. The new circulating notes are to be called greenbacks to satisfy those who pin their faith on this class of currency and will hear of none other. The anti-national-bank element is placated with the imposition of the burden placed upon the banks of redeeming all circulation and maintaining the same on a parity with gold. The silver men are presented with a larger use of silver dollars through the inhibition of the issuance of any bank note under $3 and by the requirement permission to keep one-half of the bank reserves in silver. Those who desire to have bank notes issued upon the deposit of securities other than United States bonds are satisfied, and those who desire to issue circulation against a first lien upon bank assets and stockholders' liability are also remembered. We have studied Mr. Walker's bill faithfully and earnestly, and without prejudice, but it appears to us that most every interest is better protected than the banks. Possibly we do not fully appreciate the advantages to the banks, but we are quite sure we appreciate their responsibilities. If the Walker bill ever gets up to the Senate, possibly that illustrious (1) body would take pleasure in relieving the Government of the responsibility of maintaining the circulation of the nation on a parity with gold and in imposing this task upon the shoulders of the banks. Mr. Walker's bill has many merits, and is drawn upon scientific lines, but it leans, we think, a little hard upon the banks. We fear that there is not much chance of any currency reform legislation this year, but we are fully satisfied that ultimately there will be accomplished that most desirable of all objects-the removal of the Government from the banking business. The opinions of seven New York bankers were given in interviews published in the New York Herald of Sunday, January 26, 1896, which showed that not one of them had read the bill H. R. 171, other than in the most superficial way. The general opinion gathered from the bankers, as expressed by the Herald correspondent, was in these words, as indicating the bankers' opinion: The bill seems better calculated to please THE FINANCIERS OF THE WEST than the men who control the affairs of Wall street. The bill is only the framework of a system, so liberally arranged that the banks of the country are left free to manage their own affairs, and to develop a more flexible and far safer and better system of banking than we now have or any other country has. It puts banking on as free, liberal, flexible, and a far safer basis than any other department of business in the country. In providing for a board of expert governors it makes possible an instant and uniform change of regulations in all the banking business of the country in times of exigency, such as is had in all other departments of business in such times, and as is done in the European systems. The enormous cost of maintaining the Treasury system, the gold redemption fund, and in redeeming paper money by the United States Treasury is shown by a few figures. It would cost banks nothing. It would rather be to their advantage. Gold earns full interest to banks in currency issued. It earns nothing now to anyone. Appendix A, page 37, shows that the net cash balance kept in the United States Treasury for the ten years ending 1890 was over $288,000,000. European governments suffer no such waste. Great Britain only carries an exchequer balance of $20,000,000 to $30,000,000. The United States, even under our present system, have kept about the same amount in banks, as will be seen by Appendix K, page 55. The interest on that money carried, etc., that ten years, averaged over $12,000,000 a year, against an actual gain to the British exchequer of about $1,000,000 annually. It cost, in interest, to carry the gold redemption fund alone, during that period and WHEN THE COUNTRY WAS IN NORMAL CONDITIONS, over $8,000,000 per year. (See Appendix P, page 63.) The cost of our banking and currency system, as compared with that of other nations, is equally wasteful. Everyone admits that when a man insists on using a thing that will sell for $100 in the place of a thing as efficient and acceptable to the user that costs nothing, he is losing a sum equivalent to the interest on $100. So with coin money. A sufficiency is enough. Every dollar the people will actually use as coin should be had; but every dollar used where a paper dollar is as acceptable to the user costs the country the interest on the value of the coin dollar used in place of the paper dollar, that costs nothing. The cost of maintaining our present financial and banking system is almost beyond belief. It is as bad as I have shown the needless expense of maintaining the United States Treasury, with its legaltender currency notes and gold redemption fund, to be. Appendix B (page 37) shows the net LOSS TO THE PEOPLE IN INDIRECT TAXATION in higher rates of interest to be about $53,000,000; adding the Treas ury loss makes a total of $65,000,000. Besides this $65,000,000 annual loss, the credit of the United States has been so damaged that over $40,000,000 have been lost in three years on $263,000,000 of bonds sold, carrying the increased, and more than useless, direct and indirect taxation of the people, in a little over two years, from our disgraceful and needlessly extravagant financial and banking system, up to over $75,000,000 a year. The normal price of our bonds is high enough to pay less than 2 per cent income to their purchaser. (See Appendix C, page 38.) The foregoing statements are incontestably true. Again, what a monstrous burlesque, as I have said, on good financial management, that vicious law should compel the Government to the sale of bonds, a day or two since, amounting to $100,000,000, with an admitted working surplus in the United States Treasury of $95,000,000. Probably there is not another government on the face of the earth that would rest a day under A FINANCIAL SYSTEM THAT COMPELS SUCH THINGS without reforming it. How many men are there in the country that have more than a very general but intense feeling that something is wrong? How many men know what it is that stings and bites? How many actually know that the finances and banking of this country are in the condition I am revealing? Probably, until now, scarcely a man. And now that I have revealed these things to the country, do you think either political party can keep the hottest discussion of them out of the campaign of 1896, with crimination and recrimination, if nothing is now done to correct these evils? Is it desirable to do so? The Farmers' Alliance, the National Farmers' Grange, the labor organizations, as well as commercial organizations all over the country, are JUSTIFIED IN THEIR DEMAND FOR REFORM, rather than the men who refuse to assist to reform these admitted evils-men who are trying to belittle and excuse them, and who sneer at those seeking to correct them. The bill does not propose to save the whole of this $75,000,000, because a vast majority of the 70,000,000 American sovereigns, who complain of the hurt but mistake the cause, will not permit it. They must finally decide, as it is their right to do. What the bill would have saved if it had been the law in the normal conditions of 1881 to 1890 is about half that sum. On the currency issued by the banks against the assets, $100, 000, 000, at .... 34, 178, 792 Besides saving all anxiety as to a depreciation of our currency. LOWER RATES OF INTEREST TO THE PEOPLE through bank issues 6 per cent, or a saving of the sum of $48,000,000, and a net of $28,000,000, to which should be added the $12,000,000 interest, etc., on Treasury balances, making a total of $40,000,000. Congress can not be induced to enact a law providing for the selling of $500,000,000 bonds to retire legal-tender and Treasury notes, and if enacted it would soon be repealed. We have tried it twice. An act was passed on April 12, 1866, authorizing the Secretary of the Treasury to sell bonds and use the proceeds to retire and cancel the United States legal-tender notes, not to exceed $10,000,000 in the first six months and $4,000,000 per month thereafter. In two years and nine months, when only $59,164,318 were retired under that act, the act was repealed, in January, 1869, the act of repeal not receiving the signature of the President. The act of January 14, 1875, directed that all UNITED STATES LEGAL-TENDER NOTES in excess of $300,000,000 be retired and canceled, and after January 1, 1879, such notes should be redeemed and canceled as were presented for redemption. In three years and four months, when only $35,318,984 were canceled under it, the act was repealed, on May 4, 1878, and instead the Treasurer was required by law to pay out such notes as were received into the Treasury. As a law to use the surplus in the Treasury to redeem and cancel the greenbacks can not be enacted, the only possible solution for our troubles is for the banks to carry the Government legal tender notes, and to a profit to the banks. They are now carrying the whole $1,000,000,000 of currency. This will relieve them of $400,000,000 of their burden. The existing legal-tender notes would remain precisely the same after being assumed by the banks, as provided for in the bill, as they are now, and having the same legal status as the Bank of England notes, as is shown by the following quotations (statutes of Great Britain and Ireland, 3 and 4 Will. IV., 1833, chap. 98, sec. 6, p. 1026): VI. # a tender of a note or notes of the governor and company of the Bank of England, expressed to be payable to bearer on demand, shall be a legal tender, to the amount expressed in such note or notes, and shall be taken to be valid as a tender to such amount for all sums above five pounds on all occasions on which any tender of money may be legally made, so long as the Bank of England shall continue to pay on demand their said notes in legal coin; but the said governor and company shall be liable to pay and satisfy at the Bank of England, in London, all notes of the said governor and company, or of any branch thereof. Besides, bonds are fatal to any banking system. Their fluctuations in price make THE BANKS SPECULATORS IN BONDS, rather than doing a legitimate banking and currency business. Appendix D (page 39) shows conclusively what has been the position of the national banks for many years, and that their greater urgency for the repeal of the 1-per-cent tax at this time is because of the low price of the bonds recently sold. The damaged credit of the United States will largely increase the profits on their circulation taken out with bonds. These bonds, two or three years hence, that have sold in the market for 104 and 111 are sure to be worth in the market about 130-within three years. (See Appendix C, page 38.) Then the banks will sell their bonds and reduce their circulation, as they have always done heretofore. The managers of banks can not do otherwise. Banks are not very largely the property of their managers. Bank managers are only custodians of the resources of widows and children, and therefore it is their legal and moral duty to make what money they can in an honorable way for their wards. I beg of you to mark carefully the MARKET PRICE OF OUR BONDS IN PROSPEROUS TIMES, as shown by Appendix D, page 39. The Comptroller of the Currency recommends nothing promising any relief of the Treasury. He is as fully aware as any of us that |