The growth in the wealth of the country and in its ability to retain at home a large portion of the great gold production of the United States will tend to swell the gold resources of the country until gold coin is likely to become a common factor in daily exchanges among the people. This condition of affairs will operate at once to simplify and strengthen the currency system and to increase the security afforded by the proposed law to the holders of bank notes. The banks will be required, when reserve notes and legal-tender notes have alike disappeared, to fulfill all requirements of law calling for lawful money by keeping gold and silver coin, and the present quantity of silver is likely to be so completely absorbed for retail exchanges that the bank reserves will consist almost entirely of gold. This being the case, it is obvious that the issue of a banking currency based purely upon assets, without either bonds or reserve notes, will involve no risk of undue inflation or of loss to the note holder.

The bill reported by your committee proposes no change in existing laws regarding reserves against deposits. The cash reserves required in reserve cities at the date of the reports of the national banks to the Comptroller on December 15, 1897, were $251,176,860, and the cash reserves required in country banks were $55,940,589, making a total of $307,117,449. The cash reserves held at the same date were $410,568,427. These amounts are now held largely in legal-tender notes, but the abolition of such notes would leave a void which could be filled only by gold. If the circulation of the national banks, therefore, without allowing for any growth in the meantime, should rise to the amount of their capital on December 15, 1897, which was $629,655,365, the reserves held against deposits, with the requirement of the two special funds for current redemption and for the guaranty of the ultimate redemption of the notes, amounting to 10 per cent of the circulation outstanding, would in themselves exceed $463,000,000 in gold, or nearly 75 per cent of the outstanding notes.

It is upon the solid rock of metallic currency like this, with additional metallic currency in circulation among the people, that your committee propose to plant finally, by the gradual evolution of events, the monetary system of the United States. We believe that the arrangements proposed in the bill will accomplish this result gradually enough to avoid any shock to any vested interest, but that it will be accomplished so certainly that the United States almost upon the enactment of a measure promising such results will find their credit greatly enhanced abroad and placed upon unassailable foundations at home. Believing that this bill, if enacted into law, will relieve the Treasury by destroying the "endless chain;" will greatly diminish the amount of gold reserve required to be kept by the Government, and practically stop bond issues for its replenishment; will diminish the possibility and severity of panics; will provide a sound, ample, and elastic currency, responsive to the demands of trade in all sections and at all seasons; and will materially reduce interest rates, especially in the parts of the country where such rates are now high, the Committee on Banking and Currency respectfully recommend that the bill do pass, with the following amendments: On page 2, line 1, after the word "appointed" insert the words "by the President"; on page 9, line 18, after word "exceeding" add the words "in the sum of its bank-notes and currency notes"; and on page 24, line 5, strike out the words "such tax", substituting therefor the words "the tax imposed in section thirty of this act."

APPENDIX.

TABLE 1.-Apportionment of money in the Treasury on May 31, 1898, between the fiscal department of the Treasury and the proposed division of issue and redemption.

Less outstanding checks and drafts, disbursing officers' balances, etc... 52,713, 989

5 per cent of $461,180,422 (silver dollars)..

23, 059, 021

25 per cent of $346,681,016 (United States notes), and $101,981,280 (Treasury notes)

112, 165, 574

TABLE 2.-Redemptions in gold of United States notes and Treasury notes and exports of gold by fiscal years, 1879-1897.

TABLE 3.-Redemptions in gold of United States notes and Treasury notes, by months, January, 1892, to December, 1897.

TABLE 4.-Transactions of New York clearing house for forty-four years.
[Report Comptroller of the Currency, 1897, p. 550.]

1, 344, 758

2,866, 405

267, 467, 40031, 134, 201, 773, 780 353, 215, 844, 719 284, 127, 11623, 947, 177

1 The capital is for various dates, the amounts at a uniform date in each year not being obtainable. 2 Yearly average for forty-four years.

TABLE 5.-Clearing-house exchanges for years ending September 30, 1882–1897.

$2, 760, 946, 905
2, 794, 181, 748
2,664, 317, 901
2, 244, 194, 406
2,785, 875, 450
3, 186, 188, 935
3, 155, 190, 237
2,663, 592, 024
2,755, 523, 735
4,338, 693, 169
4,959, 861, 142
4, 970, 913, 387
4,263, 560, 459
4, 541, 435, 624
4, 538, 505, 883
4,318, 121, 413

TABLE 6.-Extent to which banks in different sections issue currency in excess of that corresponding to the minimum bond deposit permitted by law.

TABLE 7.—Value in gold of $100 in currency in the New York market, 1862–1878, aver

aged by months.

[Bureau of Statistics, "Finance, Commerce, and Immigration," October, 1895, page 518.]

Periods. 1862. 1863. 1864. 1865. 1866. 1867. 1868. 1869. 1870. 1871. 1872. 1873. 1874. 1875. 1876. 1877. 1878.

97.6 68.9 64.3 46.3 71.4 74.3 72.2 73.7 82.4 90.3 91.7 88.7 89.7 88.9 88.6 94.0 97.9 96.6 62.3 63.1 48.7 72.3 72.8 70.7 74.4 83.7 89.7 90.7 87.6 89. 1 87.3 88.2 94.8 98.0 98.2 64.7 61.4 57.5 76.6 74.1 71.7 76.2 88.8 90.1 90.8 86.6 89.2 86.6 87.5 95.4 98.8 98.5 66.0 57.9 67.3 78.6 73.7 72. 1 75.2 88. 4 90.4 90.0 84.9 88.2 87.1 88.5 94.2 99.4 96.8 67.2 56.7 73.7 75.9 73.0 71.6 71.8 87.2 89.7 88.0 85.0 89.9 86.3 88.8 93.5 99.3 93.9 69.2 47.5 71.4 67.2 72.7 71.4 72.4 88.6 89.0 87.8 85.8 90.0 85.5 88.9 94.9 99.2 86.6 76.6138.7 70.4 66.0 71.7 70.1 73.5 85.6 89.0 87.5 86.4 91.0 87.1 89.3 94.9 99.5 87.3 79.5 39.4 69.7 67.2 71.0 68.7 74.5 84.8 89.0 87.4 86.7 91.2 88.1 89.9 95.2 99.5 84.4 74.5 44.9 69.5 68.7 69.7 69.6 73. 1 87.1 87.3 88.1 88.7 91.2 86.4 90.9 96.8 99.6 77.8 67.7 48.3 68.7 67.4 69.7 72.9 76.8 88.7 88.3 88.3 91.8 91.0 85.9 91.2 97.3 99.5 76.3 67.6 42. 8 68. 0 69.5 71.6 74.4 79.2 89.8 89.9 88.6 92.1 90.2 87.2 91.7 97.3 99.8 75.6 66.2 44.0 68.4 73.2 74.2 74.0 82.3 90.3 91.5 89.1 90.9 89 6 87.8 92.6 97.3 99.9

1On July 11, 1864, $100 in greenbacks was worth only $35.09 in gold.

TABLE 8.-Paper currency of each denomination outstanding May 31, 1898.'

Total

Unknown, destroyed..

Net..........

347, 681, 016 101, 981, 280 227, 696, 369 37, 486, 149 397, 732, 504 1, 112, 577, 318
1,000,000
1, 000, 000

346, 681, 016 101, 981, 280 227, 696, 369 37, 486, 149 397, 732, 504 1, 111, 577, 318