Birmingham age-herald., 1894-12-04

fender oI American interests in the day Of conflict. The ancient provision Of our law denying American registry to ships built abroad and owned by Americans appears in the light of present conditions not only to be failure for good at every point, but to bo nearer relic of barbarism than any thing that exists under the permission of a statute of the United States. l earnestly recommend it's prompt repeal.
 THE GOLD RESERVE.
 During :he last month the gold reserved in the treasury for the purpose of redeem- tug the notes of the government circulating as money in the hands of tbe people bs- came so reduced, and it's further depletion in the near future seemed so certain, that in the exercise Of proper care for the public
 welfare 1t became necessary 10 replenish this reserve aud thus maintain popular faith in the ability and determination of the government to meet, as agreed, it's pe- cunlary obligations. IL would have been well If in this emergency authority had existed to issue bonds of the government bearing low rate of interest and maturing within a short period. But the congress
 having failed 10 confer such au ulhUrdy, re- sort was necess lrily had to tle resunp- ton act of 1875, and pursuant 10 It's provisions bonas were issued drawing ia-
 terest at the rate Of per cent per annuin, end maturing ten years alter their issue,
 that being the shortest time authorized by the act. l am glad to say, however, that on the sale of these bonds the premium re-
 
 est to be paid by the government 10 less than 8 per cent.
 Nothing could be worse or further re- moved from sens be finance than the rela-
 tions exstsng between the currency. The government has issued the gold held for
 it's redemption as a means which must
 be resoTted to for the purpose o repenlsh-
 ing such redemption fund when impaired.
 Even if the claims upou this fund were confined 10 the obligations originally iu- 1 lg these ligations meant theifacIncellatiou lhe fund would be very small. But these obllga- tious, when received and redeemed in gold, are not cancelled, but are reissued aud may do duty many times by way of draw ing gold from the treasury. Thus we have
 an endless chain in operation constantly
 depicting the treasury's gold and never
 near a fnal rest. As II this was not pad enough, we have by statutory declaration that 1t Is the policy of the government
 to maintain the parity between gold and
 silver. Aided by 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 tbe subject to drain from every side. The demands that Increase our danger also increase the necessity of pro- tecting the reserve against depletion, and 1t is most unsatisfactory to know that the protection afforded IS only temporary paliation. IL is perfectly and ably plain thatthe only way under preseDt 1t con- ditions by which the reserve when danger ousiy depleted can be replenished is through the issue and sale of the bonds of the gov
 ernmeut for gold, and yet co ugress has not
 only thus Tar declined to authorize the issue of bonds best suited to such purpose, but there seems disposition iD some quarters to deny both the necessity and power for the issue of bonds at all.
 l cannot for moment believe that any of our citizens are deliberately willing that their government should default in it's pe-
 ,tar nhl nr haf financial operations should be reduced to silver
 basis. At any rate l should not feel that
 my duty was done il omitted any effort could make to avert such calamity. As long, therefore, as no 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 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 be- comes necessary to maintain su fheient gold reserve, and in abundant time to save tue credit of our country and Aako--Ts2oQu l the financial decl tration of our goveTn~ nient.
 Questions relating to our banks aud cur rehcy are closely connected with the suo- jact just referred to, and they also present some unsatisfactory features. Prominent among them is the lack of elasticity in our currency circulation and it's frequent con- centration in financial centers when 1t IS most needed iu other parts of the country. The absolute divorcsment- Of the govern-
 ment from the circulation of the currency Of the country should be made. This con- dition cannot be immediately reached, but
 step in that direction and as means of securing a more elastic currency and ob- viating other objections to the present arr engagement Of bank circulation, the SECRETARY OF THE TREASURY
 presents his report. He has a scheme mod
 hat,I 7 lat md
 for the issue of circulating notes by state banks free from taxation under certain con- ditons. The secretary explains his plan SD plainly and it, advantages are developed by him with such remarkable clearness that any effort on my part to present an arr gument in its support would be upefhuous. 1 shall coutent myself with an unqualified jndorsement of the secretary's proposed changes in the law and brief and imper- feet statement of their prominent features. It is proposed to repeal all laws provid- ing for the deposit of United States bonds as security for circulating notes not ex. ceeding in amount 70 per cent Of their pald up and unim paired capitIl, provided they deposit with Ihe government as guaran- tee fund in United States legal tender notes, including treasury notes or lo9J, sum equal in amount to 30 per cent ol the notes they desire to issue, this deposit 10 be mai ntained at all times, and whenever any bank relires any pIrt Of it's circulation a proportionate part of it's guarantee fund shall be returoed to it to permit the secre-
 tsry of the treasury to prepare and keep on
 hand ready for issue, in case an increase in circulation is desired, blank national not,s for each bank having circulation, and. to repeal the provisions of the present law i'm posing limitations and restricI ions upon banks desiring 0 reduce or increase their circulation, thus permitting such increase
 or reduction within the limit of 70 psr cent of capital to be quickly made as emergen- cies arise.
 In addition to the guarantee fund re- quired it is proposed to provide safety und for the immediate redemption of the circulation notes of the failed banks by
 i'm posing small annual tax, say % of per cent upon the average circuiauon of each bank, until the fund amouuts to per cent of the total circulation outstanding.
 When bank fails its guarantee fund IS to be paid into this safety fund and lts notes are to be redeemed iu the first instance from such safety fund, thus augmenting any impairment of such fund caussd thereby to be made good from the imme- inta iInh1 h1a |, ag n