The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1894-12-04

to be nearer a relic of barbarism than
anything than exists under the permission
of a statute of he United States. l earn
estly recommend its prompt repeal.
During the last month the gold reserved
in the treasury for the purpose of redeem
ing notes of government circulating
as money In the hands of the people be-
came so reduced and its further depletion
In the near future seemed so certain that
in exercise of proper care for the public
welfare 1t became necessary to replenlsh
this reserve and thus maintain popular
faith in the ability and determination of
the government to meet as agreed its PEE
cuniary obligations. 1t would have been
well ii in this emergency authority had
existed to issue the bonds of the govern
ment bearing a low rate of interest and
maturing within a short period, but the
congress having failed to confer such au-
thority, resort was necessarily had to the
resumption act of 1875, and pursuant TO
its provisions bonds were issued drawing
interest at the rate OF per cent, per an
mum and maturing ten years after their
issue, that being the shortest time author
lied by the act. / am glad to say, how
ever, that on the sale of these bonds the
premium received operated to reduce the
rate of interest to be paid by the govern
ment, less than per cent Nothing could
be worse or further removed from sensi-
BILE finance than the relations existing be-
tween the currency the government has
issued, the gold held for its redemption
for the purpose of replenishing such re-
demption fund when impaired. Even II
the claims upon the funds were confined
to the obligations originally intended and
meant their cancellation, the fund would
be very small, but these. obligations
which received and redeemed in gold are
not cancelled, but are re-issued and may
do duty many times by way of drawing
gold from the treasury. Thus we have
endless chain OnprntiOn
depicting the treasury gold and never
near final rest. 1t is perfectly and pal
pably plain that the only way under pres
ent conditions by which this reserve when
dangerously depleted can be replenished
is through the issue and sale of the bonds
of the government and yet congress has
not only thus far declined to authorize
the issue of bonds, but there seems u dis
position In some quarters to deny both
the necessity and power for the issue of
bonds at all. | cant for a moment be-
lieve that any of our citizens are deliber-
ately willing that their government hould
default in its pecuniary obligations or
that its financial operations should be re-
duced to a silver basis. At any rate /
should not feel that my duty was done If l
omitted any effort | could make to avert
such a calamity. AS long, therefore, as no
provision is made for the final redemp-
ton, or he putting aside he currency
obligation now used to repeatedly and
constantly draw from the government its
gold, and az long as no better authority
for bond issues is allowed than at pres
ent exists, such authority will be util-
lied whenever and as often as IL becomes
Necessary to maintain sufficient gold re-
serve and in abundant time to save the
credit of our country and make good the
financial declarations of our government
Questions relating to our banks and cur
rency are closely connected with the
subject just referred to and they also
present some unsatisfactory features
Sccretary's Plans Indorsed.
Prominent among them are the lack of
elasticity in our current circulation and
its, frequent concentration in financial
centers when ii is most needed other
parts of the country. The absolute di-
vorcement OF the government from the
business of banking is the ideal relation
ship of he government to the circulation
of the currency of the country This con-
dition cannot be Immediately reached,
but as a step in that direction and as a
means OF securing Il more elastic currency
and obviatng other objections to the pres
ent arrangement of bank circulation, the
secretary of the treasury presents in his
report scheme modifying present bank
ing laws and providing for the issue of
circulating notes of state banks free from
taxation under certain limitations. The
secretary explains his plan so plainly anfi
its advantages are developed by him with
such remarkable clearness that any ef-
its support would be superfluous. | shall
therefore content myself with an unquali-
fled Endorsement of the secretarys pro-
posed changes in the law and a brief and
imperfect statement of their features. 1t
is proposed to repeal all laws providing
security for circulation, to permit ma
tional banks to issue circulation notes not
exceeding in amount Is per cent. of Their
paid up and unimpaired capital. provided
hoo .sst
guarantee fund in United States legal
tender notes, including treasury notes OF
1890, sum equal in amount to 30 pei
cent. of notes they desire to issue, this
deposit to be maintained at all times. TC
permit the secretary of the treasury &c
| prepare and keep on hand ready for issue
| in case an Increase In circulation is de.
sired, blank national bank notes for each
bank having circulation and to repeal the
provisions of the present law imposing
| Limitation and restrictions on banks de.
| string to reduce or increase their circu.
| lation, thus permitting such increase OF
| reduction within the limit of 70 per cent
| of capital to be quickly made as emergen.
| cies raise. 1t is further provided that
| there shall be no national bank notes is
| sued of a less denomination than ten dol
| lars; that each national bank, except In
| case of failed bank, shall redeem or re-
| tire its notes in the first instance at rs
| own office or at agencies to be designated
| maintained on account of deposits. An
mother very important feature of this par
| is the exemption of state banks from tax
alton by the United States in cases wher,
1t is shown to the satisfaction Of the sec
| retary of the treasury and comptroller OF
| the currency by banks claiming that they
have not had outstanding their circulat
| ing notes exceeding 70 per cent. of theil
paid up and unpaid capital; that theil
| stockholders are Individually liabl,
for the redemption of their circulating
notes to its full extent of their ownerstiI
of stock; that the liability of said b9nk
upon their circulating notes CONSTITUTES
| under their state law a first lien upol
their assets; that such banks have KEEP
and maintained u guarantee fund il
| ing treasury notes of 1890, equai to 30 pc
cent. of their outstanding circulatin,
| notes when presented at their principa
| or branch offices.
1t is quite likely that this scheme ma,
be usefully amended in some of its detail
| bu ! am satisfied 1t furnishes q basis TO
| q very great Improvement In our presen
| banking and currency system.
| | conclude this communication, fully ap
preciating that the responsibility TO
all legislation affecting the people of th
| United States rests upon their representa-
| tives In the congress and assuring then
that whether in accordance with recon
| mendations | have made or not | shal
| be glad to cooperate In perfecting an.
legislation that tends to the prosperlt!
| and welfare of our country.
GROVER CLEVELAND,
Executive Mansion, Dec, |, 1884.
After the reading of the message res
olutions We're offered on various sub
jects, including the alleged Armenia
outrages, the surrender of two Japanes
citizens to the Chinese authorities an