The Iola register. [volume] (Iola, Allen County, Kansas) 1875-1902, 1894-12-07


the foreign carrying trade of the sen TIL c
ancient provision OF our law den wing American
registry TO ships built abroad and owned by
Americans appears. in the light of present
conditions. not only to be failure for good al
every point but to be nearer n relic of barbar-
Ism than anything that exists under the per-
mission OF statute OF he United States.
earnestly recommend its prompt repeal
The Bond issue.
During the ,2st month the gold reserves in
the treasury for the purpose OF redeemiuy the
notes OF the government circulating as money
In the hands of the people became so reduced.
and its further depletion in the near future
seemed so certain. that in the exercise OF
proper care for the public welfare il became
necessary to replenish this reserve and thus
maintain popular faith in the ability and de-
termination OF the government to meet. as
agreed. its pecuuiary obligations 1t would
have been well il in this emergency authority
had existed to issue the bonds of the gov
ernmcnt bearing a low rate OF interest
and maturing within special period.
but the congress having failed to confer such
authority resort was necessarily had TO the re-
sumption act of 1870 and pursuant to its pro-
Vision. bonds were issued drawing interest at
the rate OF > per cent. per annum and maturing
ten years after their issuing, that being the
shortest time authorized by the act lam glad
10 say, however. that on the sale OF these bonds
the premium received operated to reduce the
rate OF interest to be paid b. the government
TO less than per cent. Nothing could be worse
or farther removed from sensible finance than
the relations existing between the currency
the government has issued. the gold held
for its redemption and the means which
must be reSorted to for the purpose OF replen-
1Shing such redemption fund when impaired
Even II the claims upon this fund were con-
hned to the obligations originally intended.
and If the redemption OF these obligations
meant their cancel ellatiOn. the fund would be
very small. But these obligations when re-
ceived and redeemed ing gold are not cancelled,
but may be reisSucd and may do duty many
times by way Of drawing gold from the treas
GrE Thus we have an endless chain in opera
ton constantly depicting the treaSury's gold
and never near q final rest. As if this was not
bad enough. we have by statutory Geclara-
tion that it is the policy OF the government
10 maintain the parity between gold and silver
aided the force and momentum of this exhaust
ing process and added largely TO the currency
obligations claiming this peculiar gold redemp-
ton Our small gold reserve is thus subject 10
draw from every side. The demands that in
crease our danger also increase the necessity OF
this reserve against depletion, and
II Il most unsatisfactory to know that the pro-
lection afforded is only q temporary palliation
IL Il perfectly and palpably plain that
the only way under present conditions by
which this reserve. when dangerously de-
odeted- can be rcpleniShed is through
The ISSUE and sale of the bonds Of the
government for gold. and vet congress has not |
1nly thus far declined to authorize the issue of
ponds best suited 10 such a purpose. but there /
seems a disposition in some quarters to deDy /.
10th the necessity and power for the issue of I
bonds at all 1 cannot for a moment believe /
hat any of our citizens are deliberately willing /
hat their government should default in its /
obligations, or that its financ ial l
operations should be reduced to Il silver basis.
VI any rate should not feel that my duty was
lone il / omitted anv effort L could
make to avert such a calamity. As long
therefore, aS no provision is made for the
inal redemption or the putting aside of the
urrency obligation now used to repeatedly
nd constantly draw from the government its
old ami a. long a. no better authority for
ond issues il allowed than at present exists
UGH authority will be utilized whenever and
: often a. 1t becomes necessary to maintain
ufhcient gold reserve and in abundant time to
ave the credit OF our country and make good
he financial declarations OF our government.
questions relating to our banks and currency
re closely connected with the subject referred
D: they present some unsatisfactory features.
among them are the lack Of elasti-
lty in our currency circulation and its fire.
uent concentration in financial centers when
I .
he absolute enforcement of the government
'om the business of banking is the ideal rela
onShip OF the government to the circulation
the currency OF the country. This condition /
innot be Immediately reached but as a stepin
lat direction and AZ 4 means OF securing n
ore elastic currency and Obyiating other OBJ
ctions to the present Arrangement
bank circulation the secretary of | 1
le treasury presents his reported scheme
odifying present banking laws and
'oviding for the issue OF circulating notes by
ate banks free from taxation under certain
mutations. The secretary explains his plan
plainly and its advantages are developed by
m with such remarkable clearnesS that any
fort on my part to present arguments in its
lpport would be superfiuous. L shall therefore
intent myself with an unqualified indorse- .
ent Of the secretarys proposed Changes in
e law and n brief and imperfect statement OF
eir prominent features.
IL Is proposed TO repeal all llwS pruvidfny
r the deposit of United States bonds as Sc ,
rity for circulation: to permit national
inks to issue circulating notes not exceeding
amount - per cent. OF their paid up and un- ;
lpaired capital provided they deposit with
e government as u guarantee fund in United
ates legal tender notes, including treasury ,
'tes of 1890, u sum equal in amount to b per
mt of the notes they desire to issue this de-
'sit to be maintained at all times. but when
er any bank retires any part of its circuIa- ,
1n proportional part OF its guarantee
nd shall be returned to il; to per-
it the secretary of the treasury to
epare and keep on hand ready for issue in
SO an increase in circulation il desired blank I
tional bunk notes for each bank having cir .
iation. and to repeal the provision OF the
esent law imposing limitations and restric-
1ns upon banks desiring to reduce or increase C
cir circulation. thus permitting such increase {
vi. rh1.l limit Of =
pital to be quickly made as emergency may
ise. In addition tos the guarantee fund re-
ired 1t Is proposed to provide a safety fund r
r the immediate redemption of the circulating v
ties Of failed banks by imposing
lall annual tax say one-half
per cent upon the average circulation of
ch bank until the fund amounts 10 per cent S
the total circulation outstanding. When q :
nix fails its guarantee fund is to be paid :.
to this safety fund and its notes are TO be re-
emed in the first instance from such safety
nd thus augmented: any impairment OF such >
nd caused thereby to be made good from the
Imediately available cash assets Of said T
nix and if these should be insufficient such T
pairment TO be made good By prorata as l
ssment among the other banks, their y
constituting first lien v
on the assets OF the failed bank in
Vor OF the contributing banks
As further security il is contemplated that
e existing proposition fixing the individual S
billty Of stockholders is to be retained and n
e banks Indebtedness on account of its circu- n
ing notes iS to be made first lien on all its -
SETS For the purpose Of meeting the ex- -
nse of printing notes. officials supervision. "
mediation. and other like charges. there
all be imposed a tax OF say, y OF per cent
r annum upon the average amount OF notes ,,
circulation. II is further provided that "
ere shall be no national bank notes issued L
a less denomination than $40 s.
That each national bank. except in case Of a e,
led bank shall redeem or retire its notes in II,
: first instance at its own Office or at agencies -
be designated by il. that no fixed reserve
sd be maintained account of deposits. al
Other very important feature OF this plan is Il
exemption OF state banks from taxation by -,