People's voice., 1894-12-06

| meet bearing n low rate OF interes,
and maturing within q special period.
but the congress havin, failed to confer luch
authority resort was necee arily had 10 ,he
resumption act OF 1875. and pursuant 10 its
provision bonds were issued drawing in terest
at the rate OF five per cent per annum and
maturin ten years after their issuing. that
being the shortest tims authorized by the act
lam 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
government to less than three per cent
Nothiny could be worse or further removed
from sensible finance than the relations ex.
isting between the currency the government
has issued. the gold held Tor its
redemption and the means which
must be resorted TO for the purpose OF replen.
ishing such redemption fund when impaired
Even II the claims upsn this fund were con.
fined to the obli,aiions originally intended
| and II the redemption OF these OBLIGATIONS
meant their cancellation the fund would be
very small But these obll ations when re-
ceiyed and redeemed in gold are not cancelled
but are re-issued and may DO duty many times
by way Of DRAWN, gold from the treasury.
Ah0o VIC nahC al CuulC,o Ouhlu OptE1ttOu
constantly depicting the trelsurys gold and
never near final rest As II this was not
bad enough we have q statutory declaration
that 1t Is the policy OF the government
to MAINTAIN the parity between gold and sil :
yer aided the force and momentum OF the ex.
haustiny process and added lar ELY 10 the cur.
rency obligations cliiming this peculiar gold
redemption. Our small gold reserve Is thus
subject TO draw from every side The dc.
mands that increase our dan ,er also increase
the necessity Of protecting this reserve
against depletion and II Il most unsatisfactory
TO know that the protection afforded Is only
temporary palliation It is perfectly and pal.
pasly plain that the only way under present
conditions by which this reserve when
dangerously depleted. can be replen.
ished Is throu,h the issue and
sale Of the bonds OF the gov.
ernment for gold and yet congress has
not only thus far declined TO authorize the
Issue OF bonds best suited 10 such purpose
but there seems disposition in some quar-.
teTs TO deny both the neces ity and power for
the issue OF bonds at all / cannot for
moment believe that any OF our citizens arc
| deliberately Willing that their government
should default in its pecuniary obligations, or
that its financial operations should be re.
duced to q silver basis At any rate I
should not feel that my duty was
done II omitted any effort could
make to avert such calamity As long
therefore as no provision is made for the
hnal redemption or the putting aside OF the
currency Obligation now used to repeatedly
and constantly draw from the government its
gold and as long as no better authority for
bond issues is allowed than at present exists
such authority will be utilized whenever and
as often as 1t becomes necessary 10 maintain
sufnelent gold reserve and In abundant time
TO save the credit OF our country and mako
sood the financial declarations OF our govern.
ment Questions relatin TO our banks and
currency are closely connected with the sub
leet iust referred to and they also present
some unsatisfactory features
New Banking System Advocated.
Prominent among them are the lack OF elias
ticity in our currency circulation and its fre.
quent concentration In financial centres when
II is most needed in other parts Of the country
The absolute enforcement OF the government
from the business Of banking Is the ideal rela.
tionship OF the government to the circulation
OF the currency OF the country This condl.
tion cannot be Immediately reached but as
step in that direction and as q means OF secur.
ing more elastic currency and obyiating
other objections to toe present arrange.
ment OF bank circulation the secretary
OF the treasury presents in his report
scneme modifying present bankiny laws and
providing for the issue Of circulating notes by
tate 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 to present arguments in its
supports would be surpufous / shall there.
fore content myself with an unqualified in.
dorsement OF the secretarys' proposed
changes in the law and brief and imperfect
statement Of their prominent features
1t Is proposed to repeal all laws providing
for the deposit Of United States bonds as SO.
curity for circulation TO permit national
banks TO issue circulating notes not exceeding
in amount IS per cent Of their paid up and un-
impaired capital provided they deposit with
the government as q guarantee fund in United
States legal tender notes including treasury
notes OF 1870. a sum equal In amount to 81
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 its cir.
culstion proportional part OF its guar.
antee 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 bank hay.
ing circulation and to repeal the provisions
OF the present law imposing limitations and re.
strictions upon banks desiring to reduce or in.
crease their circulation, thus permitting such
Increase or reduction within the limit OF
iseventy.hve per cent Of capital to be quickly
made as emergency arise In addition to tbs
guarantee fund required 1t Is proposed TO pro-
vide safety fund for the immediate redemp-
tion OF the circulating notes OF failed banks
by imposing q small annual tax say one half
OF one per cent upon :he average circulation
OF each bank until the fund amounts to iye
per cent OF the total circulation outstanding.
When bank fails its guarantee fund Is to be
paid into this safety funds and Its notes are
to be redeemed In the first instance from such
safety fnnd thus au mente1 any impairment
OF such fund caused thereby to be made good
from the Immediately available cash assets OF
said bank, and ~ these should be insufficient,
auch impairment TO be made GOOD by pro-
rata assessment among the other banks, their
contributions constituting q first lien upon
the as cts OF the failed bank In favor OF the
contr. buting banks
As further security It Is contemplated
that the existing proposition hxing the indi
vidual liability OF stockholders Is TO be re-
tained and the banks indebtedness on &C.
count Of its circulstin notes is 10 be made a
| first lien on all its assets For the purpose OF
meeting the expense OF printing notes, ON
| cials. supervision. cancellation and other like
charges there shall be imposed q tax OF say
one-half Of one per cen; per annum upon the
| average amount OF notes in circulation II Is
| further provided that there shall be
no national bank notes issued of
less denomination taan ten dollars:
that each national bank. except in case oil a
failed bank shall redeem or retire its notes in
! the first instance at its own ONCE or az
AGENCIES TO be desiynated by It. that no fix ed
reserve used be maintained on account OF de-
posits.
Another very important feature OF this plan
Is the exemption Of state banks from taxa.
tion By the United Stltss IN cases where 1t Is
shown TO the satisfaction OF the secretary OF
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