Elmore bulletin. [volume] (Rocky Bar, Idaho) 1889-1906, 1894-12-08

les Necessity Calls Forth Views ON Car
rency Matters.

DUEfHM tAt AHek fAAUAlN tAtt EONl fEnEAt 4
In the treasury for the purpose Of redeem !
ing the notes Of tho government ctrculat- /
Ing as money in the hands of the people 1
became 80 reduced, and Its further depie- |
ton Ia the near future seemed 80 csr-
tain. that In the exercise Of proper care
for the public welfare Il became neces-
sary TO repIeniBh the reserve and thus
maintain popular faith In the ability and
OF the government 10 meet,
as agreed. It's peeuniary obligations. IL
would have been well n. In this einerg-
cncy. the authority had existed 10 lssue
bonds OF the government bearing a low
rate OF interest and maturing within a
short period. Congress having failed TO
confer such authority. resort was neces-
sariiy had To the resumption act OF 1910
and pursuant 10 It's provisions bonds were
issued drawing interest at the rate of
per cent. per annum and maturing 10
years after their issue that being the
shortest time authorized by the act. am
glad to say. however. that on the sale of
these bonds the premium operated TO re-
duce the rate OF interest to be paid by
the government to less than 3 per cent
Nothing could be worse or further re-
moved from sensible finance than the re-
iations existing between the currency the
government has issued, the gold held for
les redemption and the means which must
be resorted to for the purpose OF replen-
ishing such redemption fund when i'm
paired Even N the claims upon this fund
were confined to the obligations originally
intended and II 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 reissued 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
trs.s
AS IL this We're not bad enough. we have
by statutory declaration that IL 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 cur
rency obligations claiming this peculiar
gold redemption. Our small gold reserve
is thus subject 10 drain from every side,
the demands that Increase our danger
also Increase the necessity of protecting
this reserve against depletion. and IL In
most unsatisfactory to know that the
protection afforded II Is only a temporary
palliation. II IN perfectly and palpably
plain that the only way under present
conditions by which this reserve. when
dangerously depleted. can be replenished
In through the issue and sale of the bonds
of the government for gold. and yet con-
gress has not only thus far declined TO
authorize the Issue of bonds best suited
to such a purpose. but there seems a dis
position In some quarters TO deny both
the necessity and power for the issue OF
bonds at all. I can not for moment be-
iieve that any of our citizens are deliher-
ately willing that their government should
default in its pecuniary obligations or
that its financial operations should be re-
duced 10 a silver basis. AT any rate ]
should not feel that my duty was done
IL / omitted any effort | could make To
avert such n calamity. As long. there
fore. no provision is made for the Anal
redemption OF the putting aside for the
currency obligation now used to repeated
ly and constantly draw from the govern
ment Its gold. and as long AS no better
authority for bond issues Is allowed than
/ M present exists, such authority win be
utilized whenever and as often as II be-
comes necessary to maintain sufficient
gold reserve and In abundant time 10
save the credit OF our country and make
good the financial declarations of our gov
eminent.
CARLISLE TOLD 1T ALL.
The questions relating TO our banks and
| currency are closely connected with the
| subject just referred to and they also
present some unsatisfactory features.
/ Prominent among them are the lack OF
elasticity In our currency circulation and
/ ITS frequent concentration In financial
centers and when II Is most needed In
| other parts OF the country. The absolute
/ enforcement OF the government from the
business of banking IN th@ Ideal relation
ship of the government TO the circulation
/ of the currency of the country. This con-
| dition can not be Immediately reached,
4 hut as a step In that direction and as a
means OF securing more elastic eur
| rency and obviating other objections "a
4 the present arrangement Of the hank cir
| culatlon. the secretary of the treasury
/ presents In his report n scheme for modl-
/ flying the present banking laws and pro-
viding for the issue OF circulating notes
| by state banks free from taxation, under
/ certain limitations. The secretary ex-
plains his plans so plainly and It's ad-
vantages are developed by him with such
/ remarkable ciearness that any effort on
/ my part TO present argument In Its sup
| port would be superfiuous. / shall, there
| fore. content myself with an unqualified
! endorsement of the secretary's proposed
changes in the law and a brief and Inn
perfect statement OF their prominent feat
ures.
| II In proposed 10 repeal all OF the laws
| providing for the deposit of United States
bonds security for circulation; to per
init national banks to issue circulating
notes not exceeding In amount rs per cent
| OF their paid-up and unimpaired capital
providing they deposit with the govern
mont as a guarantee fund In United States
legal tender notes. including treasury
notes OF 1890. sum OF equal amount to 81
| per cent. OF the notes they desire to IT,
\ sue this deposit 10 be maintained at al
times. but whenever any bank retires any
part OF It's circulation. proportionate
part of Its guarantee fund shall be re.
turned to II 10 permit the secretary of the
| treasury 10 prepare and keep on hand
ready for issue In case an increase In
circulation is desired. blank national bank
notes for each hank having circulation
! and 10 repeal the provisions of the pres
ent law imposing limitations and restric.
4 tons, thus permitting such Increase OF
reduction within the limit of the 70 per
| cent OF capital to be quickly made ns
\ emergencies arise. In addition TO tbs
guarantee fund required. Il ~ proposed to
provide a safety fund for the immediate
\ redemption OF the circulating notes OF
failed banks by imposing a small annual
tax, say ene-hah of per cent. upon the
| average circulation OF each bank. until
\ the fund amounts 10 5 per cent. OF the
Il total circulation outstanding.
When a bank falls Its guarantee fund Is
to be paid into this safety fund and It's
notes are 10 be redeemed In the first
instance from such safety fund. thus
augmented. any impairment of such fund
caused thereby 10 be made good from the
Immediately available cash assets of the
said bank, and u these should be insult
acient. such Impairment to he made good
by separate assessment among the other
hanks, their contributions constituting a
\ first lien upon the assets of the failed
bank IN favor OF their contributing banks.
INDIVIDUAL LIABILITY.
| As further security II Is contemplated
that the existing provisions hiking the In
dividnal liabilities OF stockholders Is 10 be
retained and the banks indebtedness on
4 a.