Perrysburg journal. (Perrysburg, Wood Co., O. [Ohio]) 186?-1965, 1894-12-08


visions bonds were issued drawing interest at
the rate OF per cent per annum and maturing
ten years after their ISSUE that being tho
shortest time authorized by tho act. am
glad to say, however, that on the sale of these
bonds the premium received operated to reduce
the rate of interest to be paid by the govern
ment to less than per cent,
Nothing could be worse or further removed
from sensible finance than the relations
existing between the currency the gov
ernment has issued, 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 IL the claims upon this fund were con-
fined to the obligations originally intended and
IL the redemption OF these obligations meant
their cancellation, the fund would be very
small But these obligations when received
and redeemed In gold are not cancelled but are
| ressued and may do duty many times by way
OF drawing gold from the treasury. Thus we
have an endless chain in operation constantly
depicting the treasury gold and never near
| final rest. AS II this was not bad enough, we
have, by statutory declaration that 1t is the
policy or the government to maintain the par
| tty between gold and silver, aided the force
and momentum OF this exhausting process and
added largely to the currency obligations claim
| ing this peculiar gold redemption. Our small
gold reserve is thus subject to drain from every
| side. The demands that increase danger
| also increase the necessity of protecting this
| reserve against depletion and 1t Is most unsat-
isfactory to know that the protection Afforded
Is only temporary palliation. 1t is perfectly
| ana palpobly plain that the only way under
| present conditions by which this reserve when
| dangerously depleted can he replenished Is
| through the issue and sale of the bonds of the
| government for gold; and yet congress has not
| only thus far declined to authorize the issue OF
| bonds best suited for such purpose but there
| seems disposition in some quarters to deny
| both the necessity and power for the issue OF
bonds at ALL
Icannot for a moment believe that nny of our
citizens are deliberately willing that their gov
ernment should default in its pecunary oSliga-
tions or that Its financial operations should be
| reduced to u silver basis. At any rate I should
| not feel that my duty was done II omitted any
effort could make to avert such a calamity. AS
long, therefore, provision Is made for the
| final redemption or the putting aside of the
| currency obligation now used to repeatedly and
constantly draw from the government It's gold,
| and as long us no better authority for bond is
sues Is allowed than at present exists, such au-
thority will be utilized whenever and often
as 1t becomes necessary to maintain o sufficient
gold reserve and In abundant time to save the
credit OF our country and make good the finan-
cial declarations of our government.
Questions relating to our banks and currency
are closely connected with the subject just re-
ferred to- and they also present some upsatis-
factory features.
| Prominent among them are the lack OF olas-
ticity In our currency circulation and its fire.
It Is most needed in other parts OF the coun-
try.
The absolute enforcement OF the government
from the business OF banking is the ideal rela-
tionshlp OF the government to the circulation
| of the currency Of the country.
This condition cannot be Immediately
reached, but as step in TINT direc-
tion and us ameans of securing q moro
elastic currency and obviating other obiec-
, | tions to the present arrangement of
I bank circulation, the secretary of the
| treasury presents in his report scheme
: modifying present banking laws and pro-
viding for the issue of circulating notes by
, state banks free from taxation under certain
limitations.
The secretary explains his plan so plainly
and its advantages are developed by him with
such remarkable clearness that any effort
on my part 10 present argument in its support
would be superiuous. SHALL therefore con-
tent myself with an unqualified Endorsement
e OF the secretary's proposed changes in the law
e and brief and imperfect statement of their
e prominent features.
( 1t is proposed to repeal all laws providing for
j | the deposit OF United States bonds as security
r for circulation; to permit national banks to
issue circulating notes not exceeding in amount
10 per cent OF their paid up and unimpaired
capital, provided they deposit with the govern
d ment, guarantee fund. in United States
= legal tender notes, including treasury notes OF
: 1880, q sum equal in amount to 80 per cent OF
| the notes they desire to issue, this deposit to
be maintained at all times; but whenever any
4 bank retfres any part OF its circulation
8 q proportional part OF its guarantee
= fund shall be returned to it; TO per-
s nit the secretary OF the treasury to
Y prepare and keep on hand ready for issue in
case an increase in circulation is desired blank
national bank notes for each bank having cir
7 | culatlon and to repeal the provisions OF the
o present law imposing limitations and restrict
II ions upon banks desiring to reduce or increase
= their circulation-thus permitting such in
r | crease or reduction within the limit OF 10 per
: cent. of capital to be quickly made as emer-
d gencieS arise,
t In addition to the guarantee fund required, 10
!. Is proposed to provide safety fund for the
immediate redemption ef the circulating
v notes OF failed banks by imposing a
q small annual tax, say one-hah of one
It per cent. upon the average circulation
r of each bank until the fund amount to i've per
IS cent. of the total circulation outstanding
-t When a bank fails It's guarantee fund Is to be
paid intothis safety fund and its notes are to be
Is redeemed in the first instance from such safety
fund thus augmented-any impairment of such
1t fund caused thereby to be made good from the
IT Immediately available cash assets of said bank
a and II these should be insufficient such impair
II nent to be made good by pro rata assessment
: among the other banks, their contributions
Il constituting first lien upon the assets of failed
= bank in favor OF the contributing banks.
d AS q further security, 1t is contemplated thai
l. the existing provision fixing the individual lia-
bility OF stockholders Is to be retained and the
A banks Indebtedness on account OF its circulat-
% ing notes is to be made u first lien on all its
ID assets.
D For the purpose of meeting the expense o.
10 printing notes, official supervision, cancela-
ID ton and other like charges, there shall be i'm
e. posed o tax of say one-half OF one per cent pei
IL annum upon the average amount OF notes IL
II circulation.
l. 1t is further provided that there shall be nC
Is national bank notes issued OF less denomina.
IS tion than ten dollars; that each national bank
I'd except in case OF q failed bank, shall redeem
~ or retire It's notes in the first instance at it,
ly own office at agencies to be designated BY
ty 1t, and that no fixed reserve need be main
'n tained on account OF deposits.
u Another very important feature of this plaI
as is the exemption of state banks from taxation
N by the United States In cases where it is showI
Id to tho satisfaction of the secretary OF tn,
g, treasury and comptroller OF the currency By