Gloucester County Democrat. (Woodbury, N.J.) 1878-1932, 1894-12-06

logical and imperative necessity that we
should at once remove the chief, if not
the only, obstacle which has so long pre-
vented our participation In the foreign
carrying trade OF the sea A tariff built
upon the theory that it is we'll to check
imports. and that a home market should
bound the industry and effort Of Arneri.
can producers. was fitly supplemented by a
refusal to allow American registry to YES
sells built abroad, though owned and navi-
gated by our people. Our new tariff pol
Icy is consistently supplemented by the
greatest possible liberty to our citizens In
the ownership and navigation Of ships in
which our products and manufactures
may be transported.
The ancient provision of our law deny
ing 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 be nearer relic of barbarism than any
thing that exists under the permission of
statute of the United States. l earnestly
recommend its prompt repeal.
The Bond Issue.
During the last month the gold re-
served in the treasury for the purpose OF
redeeming the notes Of the government
circulating as money In the hands Of the
people became SO reduced, and its further
depletion in the near future seemed SO
certain. that in the exercise of proper care
for the public welfare it became necessary
to replenish this reserve and thus main
tain popular faith in the ability and de-
termination Of the government to meet,
as agreed. its pecuniary obligations
1t would have been well If in this en-
ergency authority had existed to issue the
bonds of the government bearing a low
rate Of interest and maturing within
short period, but the congress having
failed to confer such authority, 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 annum and maturing
ten 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 received operat
cd to reduce the rate of interest to be paid
by the government to less than per cent
Nothing could be worse or further re-
moved from sensible finance than the re
lations existing between the currency the
government has issued the gold held for
its redemption and the means which must
be resorted to for the purpose of replenish-
ing such redemption fund when impaired
Even if the claims upon this fund were
confined to the obligations originally in
tended and if 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
pVa oh
constantly depicting the treasury's gold
and never near final rest. AS If this
was not bad enough, we have, by statu-
tory declaration that it Is the policy of the
government to maintain the parity be
tween gold and silver, aided the force and
momentum Of this exhausting process
and added largely to the currency ohliga
tions claiming this peculiar gold redemp
tion. Our small gold reserve is thus sub
Ject to drain from every side. The de
mands that increase our danger also in
crease the necessity of protecting this re-
serve against depletion, and 1t is mos
unsatisfactory to know that the protection
afforded is only q temporary palliaiit
1t is perfectly and palpably plain til;
the only way under present conditions u
which this reserve when dangerously de-
pleted can be replenished is through tbs
Issue and sale of the bonds of the govern
ment for gold, and yet congress has not
only thus far declined to authorize the
issue of bonds best suited to such pur
pose, but there seems disposition in some
quarters to deny both the necessity and
power for the issue of bonds at all
1 cannot for a moment believe that any
Of our citizens are deliberately willing
that their government should default in
H.
cial operations should be reduced to a
silver basis. At any rate, should not feel
that my duty was done If l omitted any
effort l could make to avert such oalam
Ity AS long therefore as no provision is
made for the final redemption or the put
ting 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 au
thority will be utilized whenever and rs
often as 1t becomes necessary to maintain
sufficient gold reserve. 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
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 when it is most needed in her
parts of the country.
State Bank Issues.
The absolute enforcement Of the gov
srnment from the business of banking is
fInxf Df kho ,aT1f
to the circulation of the currency of the
country
This condition cannot be Immediately
reached, but as a step in that direction
and as a means Of securing a more elastic
currency and obviating other objections
to the present arrangement of bank cirou
lation the secretary of the treasury pre-
sents in his report a scheme modifying
present banking laws and providing for
the issue of circulating notes by state
banks free from taxation under certain
limitations.
The secretary explains his plan so
plainly, and its advantages are developed
by him with such remarkable olearness.
that any effort on my part to present ar
gument In it's support would be superfu-
Gus. | shall therefore content myself
with an unqualified Endorsement Of the
secretary's proposed changes in the law
and brief and imperfect statement OF
their prominent features.
1t is S~oposed to repeal all laws provid
ing for the deposit of United States bonds
as security for circulation; to permit ma
tional banks to issue circulating notes
not exceeding In amount rs per cent oi
their paid up and unimpaired capital
provided they deposit with the govern
ment as a guarantee fund in United
States legal tender notes, including treas
ury notes of 1850. sum equal in amount
to 30 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 circulation proportional part
of It's guarantee fund shall be returned 20
it, to permit the secretary of the treasury
to prepare and keep on hand ready for is
sue in case an increase in circulation is
desired blank national banknotes for each
bank having circulation. and to repeal the
provisions Of the present law imposing
limitations and restrictions upon banks
desiring to reduce or increase their circu
lation, thus permitting such increase or
reduction within the limit of rs per cent
Of capital to be q Iickly made as emer
gencies arise.
In addition to the guarantee fund re-
quired 1t is proposed to provide safety
fund for the immediate redemption of he
circulating notes of failed banks by i'm
posing a small annual tax, say one half OF
/ per cent. upon the average circulation