Huntsville gazette., 1894-12-08
An Exigepcy.


in the hands of the people became so reduced
and its further depletion in the near future
seemed so certain that IN Inc exercise OF
proper care for the public welfare 1T 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 pecuniary obligations. it would
have been well il in this emergency authority
had existed to issue the bonds of the govern
ment, bearing low rate OF interest
and maturing within q special period
But the congress having failed TO confer such
authority, resort was necessarily had to the re-
sumption act of 1879 and pursuant to its provl-
the rate of per cent. per annum and maturing
ten years after their issuing that being the
shortest time authorized by the act. | am glad
to say, however. that on the sale OF these
bonds the premiums received operated to re-
duce the rate of interest to be paid by the gov
ernment to less than per cent.
NOTHING COULD BE WORSE,
or further removed from sensible finance than
the relations existing between the currency
the government has iStued the gold held for
its redemption, and the means which
must be resorted to for the purpose OF replen-
ishing such redemption fund when impaired.
Even if the claims upon this fund were con-
fined TO the obligations originally intended.
and if the redemption of these obligations
meant their cancellation. the fund would be
very small. But these obligations when re-
ceived and redeemed in gold are not cancelled.
but are reissued and may do duty many times
by wav OF drawing gold from the treasury.
constantly
DEPICTING THE TREASURY'S GOLD
and never near final rest. AS if this was not
bad enough, we have by statutory declara-
tion that 1t IS the policy OF the government
to 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 re-
demption. Our small gold reserve is thus sub
ject to drain from every side. The demands
that increase our danger also increase the ne
cessity OF protecting this reserve against de-
pletion, and it IS most unsatisfactory to know
that the protection afforded is only temporary
palliation. 1t is perfectly and palpably PLAIN
that
THE ONLY WAY UNDER PRESENT CONDITIONS
by which this reserve, when dangerously de-
peted, can be repenished is through the
issue and sale OF the bonds of the
government for gold: and vet congress has not
only thus far declined to authorize the issue of
bonds best suited to such purpose, but there
seems disposition in some quarters to deny
both the necessity and power for the issue OF
bonds at all. cannot for q, moment oelleve
that any of our citizens arc deliberately willing
that their government should default in
its pecuniary obligations or that its
financial operations should be reduced to a
silver basis At any rate, | should not feel
that my duty was done if | omitted
any effort could make
TO AVERT SUCH a CALAMITY.
As long. therefore As no provision IS made tor
the final redemption or the putting aside OF
the currency ODllgdtlOn now uSfG 10 repeatedly
and constantly draw from the government Its
gold and as | ong as no better authority for
bond issues is allowed than at present exists,
such authority Will be utilized whenever and
as often as it becomes necessary to maintain u
sufficient gold reserve, and in abundant time
to save the credit of our country and make
good the financial declarations Of our govern
ment.
BANKS AND CURRENCY.
Questions relating TO our banks and curren-
cy are closely connected with the subject just
referred to and they also present some unsat-
isfactory features. Prominent among them are
tion and it's frequent concentration in finan-
cial centers when it is most needed
IN IN other parts 81 ne country,
government from the business of banking is
the ideal relationship OF the government to the
circulation of the currency Of the country. This
condition can not be immediately reached; but
as a step in that direction. and as means OF
securing a more elastic currency and obviating
other objections to the present arrangement of
bank circulation. the secretary of the treasury
presents in his report scheme
MODIFYING PRESENT BANKING LAWS
and providing for the issue of circulating notes
by state banks fEee from taxation. under GER
tain limitations. The secretary explains his
plans so plainly, and its advantages are de-
veloped by him with such remarkable clear
ness, that any effort on my part to present
argument In Its support would be supertluous.
| shall therefore content myself with an un
ualificd Endorsement Of the Secretary'S s pro-
posed changes in the law, ami Il brief and i'm
perfect statement of their prominent features.
1t is proposed to repeal all laws providing
for the deposit OF United States bonds rs Sc.
curity for circulation: to permit rational banks
to issue circulating notes rot exceeding in
amount 70 per cent. OF their paid-up and uniu-
paired capital, provided they deposit
with the government as guaran-
tee fund in United States legal tender
notes. including treasury notes Of 1891, sum
equal in amount TO 30 per cent. OF the notes
they desire TO issue, this deposit 10 be Juain-
tanned at all times: but whenever any bank re
tires any part of its circulation proportional
part of its guarantee fund shall be returned to
it to permit the secretary Of the treasury to
prepare and keep on hand ready for issue in
case an increase in circulation is desired
blank national bank notes for each
the provisions of the present law imposing
limitations or restrictions upon banks de-
string to reduce or increasestheir circulation.
thus permitting such increase or reduction
within the limit OF IS per cent. OF capital to be
quickly made as emergencies arise.
In ADDITION 70 THE GUARANTEE
required. i. is proposed to provide safety fund
for the immediate redemption of the cilcu-
small annual tax. say one half
of per cent. upon the average circulation Of
each bank until the fund amounts TO per cent.
of the total circulation outstanding. When
bank fails its guarantee fund is to be paid into
this safety fund aud its notes are TO be re-
deemed in inc first instance from
any impairment of such fund caused thereby
to be made good from the immediately-availa
BILE cash assets of said bank, and if these
should be insufficient such impairment 10 be
made good by pro rata assessment among the
other banks, their contributions constituting
first lien upon the assets of the failed bank in
favor OF the contributing banks.
AS A FURTHER SECURITY
it is contemplated that the existing provision
fixing the individual liabilities of stockholders
is to be retained and the bank : Indebtedness
on account Of its circulating notes IS TO be
made q first lieu on all its assets.
For the purpose OF meeting the expenses Of
printing notes, official supervise on cancellation
aud other like charges, there shall be imposed
tax of say onc-half of per cent per annum up
on the average amount of notes in circulation.
1t is further provided that there shall
be no national bank note issued
of less denomination than $40.
That each national bank. except in case OF
failed bank, shall redeem or retire its notes in
the first instance at its own office or at agen-
cies, to be designated by it: that no fixed re-
serve need be maintained on account
of deposits. Another very important feature
of the plan is the exemption of state banks
from
TAXATION BY THE UNITED STATES
in cases where il is shown to the satisfaction
of the secretary of the treasury and comptrol-
Ter of the currency hv banks claiming such
exemption that they have not had outstanding
hafr nj IRON ll 0nrC i1rfr