Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1894-12-07

! aggravations, to see every particle of differ
ential duty i'm favor of refined sugar strick-
en- out of our tariff law. If, with all the
! favor now accorded the sugar-refining in
! terest in our tariff laws, it still languishes
| to the extent of closed refineries and thou
! sands of discharged wOrkmen, it would
! seem to present hopeless case for reason
able legislative aid. Whatever else is done
or omitted, | earnestly repeat here the rec
ommendatiOu | have made in another por-
tion of this communication, that the addi-
tiOnal duty of one-tenth of cent per
pound laid upon sugar imported from coun-
tries paying bounty on its export b ab-
rogated. 1t seems to me that exceedingly
| important considerations point to the pro
priety of this amendment.
The President pleads for free ships. and
says that the ancient provision of our law
denying American registry to ships built
abroad and owned by Americans appears
in the light of present conditions not only
to be failure for good at every point, but
to be nearer a relic of barbarism than any
thing that exists under the permission of
statute of the United States He earnest
ly recommends its prompt repeal.
The Bond Issue.
The president declares the recent issue
OF bonds was made necessary by the reduc-
tions of the gold reserve which have been
made under the resumption act of 1875 in
default Of authority in the issue of low rate
short term bonds. He said that nothing
could be worse than the relations existing
between the currency issued the gold held
| for its redemption and the means necessary
to replensh such redemption fund, result
ing in an endless chain constantly depict
| inc the rpaSurv'S cold In addition, 4boro
is a statutory declaration of policy to main
tain the party between gold and silver.
The only way for replenishment of the gold
reserve is by issuing bonds. Yet Congress
has declined to authorize the issue of bonds
best suited thereto and there is disposi-
tlon to deny both necessity and power for
issue of bonds. The president expresses
himself unwilling to believe anyone is will
ing the government should default in its
obligations or its finances should be reduced
to a silver basis, and announces that so
long as no provision is made for final re-
dempton of currency obligations and
better authority for bond issues is allowed
than at present, such authority will be
utilized whenever necessary to maintain
sufficient reserve and in time to save the
country's credit.
Plan for an elastic Currency"
Prominent among the unsatisfactory
| features of the banking situation are the
lack of elasticity in the currency circula-
tiOn and its frequent concentration in
financial centres when most needed else
where. The absolute divorce of the gov
ernment from banking is the ideal relation
of the government to currency relation.
This condition cannot be Immediately
reached, but as a step in that direction and
a means of securing a more elastic curren-
| cy, the secretary of the treasury presents
a scheme modifying the present banking
laws and providing for the issue of circu-
| lating notes by state banks free from taxa
| tion under certain limitations. The Presi-
dent unqualitiedly endorses the secretary's
| proposed changes in the law and briefly
states their prominent features. 1t is pro-
posed to repeal all laws requiring deposit
of national bonds as security for circula-
| tion, to permit national banks to issue
notes not exceeding 70 per cent of paid up
capital on deposit with the government in
| legal tender notes, an amount equalling so
| per cent of notes to be issued, and to pro-
| vide for a quick increase or reduction of
| circulation within the above limits. In
| addition a safety fund for the redemption
| of notes of failed banks is proposed by
| tax of one-half per cent upon the average
| circulation until the fund amounts to five
| per cent of the outstanding circulation
| Upon failure the guarantee fund is to be
| paid into the safety fund and notes to be
! paid therefrom, the impairment to be made
| good from available assets and secondly by
| assessment among other banks, their con-
! tribution to constitute a first lien upon the
! assets of the failed bank. The existing
! individual liability to stockholders is to be
retained. To meet expenses tax of one
half per cent per annum is proposed upon
average notes in circulation No fixed re-
serve need be maintained on account of
| deposits. State banks are to be exempted
from federal taxation where the secretary
| of the treasury and the comptroller are
| satisfied that they have not had outstand-
ing notes exceeding Is per cent of paid-up
capital; that stockholders are individually
| liable to the extent of their stock, that the
| liability of banks constitutes said first lien
on assets, that they have maintained a
guarantee fund in legal tender notes equal
to 80 per cent of outstanding notes, and
have promptly redeemed their notes when
presented. This scheme may possibly be
improved in detail but furnishes basis for
great improvement in the present banking
and currency system.
In conclusion the President assures Con-
gress that, whether in accordance with his
recommendations or not he will be glad to
cooperate in perfecting any legislation that
tends to the prosperity and welfare of our
country. (Signed)
GROVER CLEVELAND.
Executive Mansion, Dec. 3, 1894.
| =