The western sentinel. [volume] (Winston-Salem, N.C.) 1887-1926, 1894-12-13
THE FINANCIAL QUESTION.

THE FINANCIAL QUESTION.
That there is something radically
wrong about our financial system is
very evident and we need not expect
return to solid, permanent pros
perity until better methods are de-
devised and put into practice. The
financial doctors agree that the
body polite is diseased but, while
thus far agreeing upon the diagnosis,
they do not agree upon the remedy.
Hence, the finding a panacea for
these ills is one OF the most import
ant, if not pre-eminently the most
important, task to which our law
makers have to apply themselves.
and, because of the perplexity and
/ seriousness of the subject, the views
and recommendations of experienced
fnanciers and of others who have
given the matter earnest considera-
ton, are of peculiar interest.
Our inferior system of financiering
is gravely recognized in his message
by the President, who says 'thus we
have an endless chain in operation
constantly depicting the treasury's
gold and never near final rest,
and, further; ''our small gold reserve
is thus subject to drain from every
side. The demands that increase
our danger also increase the necessi-
ty of protecting this reserve against
depletion, and it is most unsatisfac.
tory to know that the protection
afforded is only a temporary pallia-
ton"
Referring to the unsatis factory
| features relating to our banks and
currency, the President points outat
the same time a great need and d
great danger, in saying: "Promi-
nent among them are the lack of
elasticity in our currency circulation
and it's frequent concentration in
financial centres when it is most
needed in other parts of the country"
AS stated yesterday, the President
gives unqualified endor sement to the
measure of relief recommended by
Secretary Carlisle, which is similar
to what is known as "the Baltimore
plan," and is, also, somewhat in
conformity to the law in successful
operation in Canada.
Mr.. Carlisle's plan, as set forth in
the Presidents message, is as follows:
cit is proposed to repeal all laws
providing for the deposit of United
States bonds as security for circula-
ton; to permit national banks to
issue circulating notes not exceeding
in amount rs per cent. of their paid
up and unimpaired capital, provided
the deposit with the government, as
a guarantee fund, in United States
legal tender notes, including treasury
notes of 1890, a 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 bank retires any part
of it's circulation a proportional part
of it's guarantee fund shall be re-
turned to it; to permit the Secretary
| y
on hand ready for issue in case an
increase in circulation is desired
blank national bank notes for each
bank having circulation and to re
peal the provisions of the present
law imposing limitations and re
strictions upon banks desiring to
reduce or increase their circulation,
thus permitting such increase or re-
-
cent. of capital to be quickly made
as emergencies arise.
"In addition to the guarantee fund
required it is proposed to provide a
safety fund for the Immediate re.
demption of the circulating notes OIL
: failed banks by imposing small
annual tax, say one half of 1 per
cent, upon the average circulation
of each bank until the fund amounts
to 5 per cent. of the total circulation
outstanding. When a bank fails its
guarantee fund is to be. paid into
this safety fund and it's notes are to
be redeemed in the first instance
from such safety fund thus augment
ed, any impairment of such fund
caused thereby to be made good
from the Immediately available cash
assets of said bank, and if these
should be insufficient such impair
ment to be made good by pro rata
assessment among the other banks,
their contributions constituting a
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 pro-
vision fixing the individual liability
of stockholders is to be retained, and
the banks indebtedness on account
of it's circulating notes is to be made
a first lien on all its assets"
"Another very important feature
of this plan is the exemption of State
banks from taxation by the United
States in cases where it is shown to
the satisfaction of the Secretary of
the Treasury and comptroller of the
currency by banks claiming such
exemption that they have not had
outstanding their circulating notes
to the full extent of their ownership
of stock; that the liability of said
banks upon their circulating notes
constitutes under their State law a
first lien upon their assets; that such
banks have kept and maintained a
guarante fund in United States
legal tender notes, including treasury
notes of 1890, equal to 80 per cent.
of their outstanding circulating
| notes, and that such banks have
| promptly redeemed their circulating
| xrbov, xaraSor,fol ok kho;r