Audubon Republican. [volume] (Audubon, Iowa) 1894-1925, 1894-12-06

/ Tor good at every point, but to DO
nearer a relic of barbariansm than any
thing that exists under the permission OF
statute of the United States. | earnestly
recommend its prompt repeal.
| Our Gold Reserve.
/ During the last month the gold reserved
| IN the treasury for the purpose of redeem
| ing the notes of the government circulat-
log as money in the hands of the people
became SO reduced. and its further deple-
| ton In the near future seemed so certain,
that In the exercise of proper care for the
| public welfare it became neces sary to re-
| plenlsh the reserve and thus maintain pop
ular faith in the ability and determination
| or the government to meet. as agreed, it's
| pecunlary obligations. 1t would have been
Wen II In this emergency authority had
| existed to issue the bonds of the gov
| eminent bearing "a low rate of interest
and maturing within a short period;
but the congress having failed to confer
sucn authority, resort was necessarily had
| to the resumption act of 1878, and pursuant
| to its provisions bonds were issued draw
| ing interest at the rate of 5 per cent per
annum and maturing ten years after their
Issue, that being the shortest time author
| lied by the act. l am glad to say how
ever, That on The sale OF these bonds the
| premium received operated to reduce the
rate OF interest to lie paid by the govern
ment to less than 3 per cent. Nothing
could be worse or further removed from
sensible finance than the relations existing
between the currency the Govern
| 1nent has issued, the gold held
Tor It's redemption, and the means which
must be resorted to for the purpose of re-
plenlshing such redemption fund when inn
paired. Even if the claims upon this fund
We're confined to the obligations originally
intended and ii the redemption of these
obligations meant their cancellation, the
| fund would be very small. But these OBJ
| Igatlons when received and redeemed in
! gold are not Cancelled but are reissued and
may do duty many times by way of draw
! ing gold from the treasury. Thus we have
an endless claim in operation constantly
| depicting the treasury's gold and never
| near final rest. AS if this was not bad
| enough, we have, by a statutory declara-
tlon that it is the policy of the government
| TO maintain the parity between gold and
| silver, aided the force and momentum of
this exhausting process and added largely
to the cur, ency Obligations claiming this
peculiar gold redemption. Our small gold
reserve is thus subject to drain from every
side. The demands that increase our dan
ger also increase the necessity of protect
| ing this reserve against depletion, aud it is
| most unsatisfactory to know that the pros
lection afforded is only temporary pal I
liation: 1t is perfectly and palpably plain
that the only way under present condi-
| lions by which this reserve when danger
ously depleted can be replenished is through y
the issue and sale of the bonds.
| New Plan for Currency
Que stions relating to our banks and cur
rency are osely connected with the SUBJ
| Ject just referred to and they also present
| some unsatisfactory features.
Prominent among them are the lack of
elasticity in our currency Giro ulation and
| its frequent concentration in financial II
centers when it is most needed in other
| parts of the country.
! The absolute enforcement of the govern
| ment from the business of banking is the
| ideal relationship of the government toI
| the circulation of the currency of the coun-
| try.
This condition can not be immediately
reached; but as a step in that direction
| and as a means of securing a more elastic
currency and obviating other objec-
lions to the present arrangement of
! bank circulation, the secretary of theA
treasury presents in his report al
scheme modifying present banking laws
and providing for the issue of circulatingEX
notes by state banks free from taxatiopi
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 argument in
its support would be superfluous. / shall
therefore, content myself with an unquali
proposed changes in the law and
a brief and imperfect statemen
of their prominent feature 1t i.
proposed to repeal all laws providing
for the deposit of United States bonds al
security for circulation; to permit national
banks to issue circulating notes not exceed
ing in amount IS per cent of their paid uI
and unimpalred capital, provided they de
post with the government, as guarantee
fund, in United States legal tender notes
| including treasury notes of 1890, sun
equal in amount to 80 per cent of the note
they desire to issue, this deposit to be main
tanned at all times, but whenever any banl
retires any part of its circulation a propoH
tional part of its guarantee fun
shall be returned to it, to per-
| NIT the secretary of the treasury II
| prepare and keep on hand, ready for issu,
| in case an increase in circulation is do
sired, blank national bank notes for eac
| bank having circulation, and to repeal tn
provisions of the present law imposing limi
| atiOns and restriction upon banks deSirini
| to reduce or increase their circulationA
| thus permitting such increase or reductio
within the limit of IS per cent of capital
| be quickly made as emergencies arise In az
dition to the guarantee fund required, it
proposed to provide safety fund for ON
immediate redemption OF the circI
lating notes of failed banks, by in
posing a small annual tax, say one ha
! of per cent, upon the average circul
| ton of each bank until the fund amount
| 5 per cent of the total circulation outstand
| ing. When bank fails it's guarantee fun
is to be paid into this safety fund and i
notes are to be redeemed in the first il
stance from such safety fund thus aua
mented-any impairment of such fun
caused thereby to be made good from til
| Immediately available cash assets of SAT-
bank and if these should be insufficient Z
such impairment to be made good by pr \
rata assessment among the other bank
| their contributions constituting a first lie n
upon the assets of failed bar III
/ in favor of the contributing bank M
| AS further security it is contemplated tn III
the existing provision fixing the individuE
| liability of stockholders is to be retain&
and the banks Indebtedness, on account
| its circulating notes, is to be made fin
| lien on all its assets.
| Another very important feature of tbs
pan is the exemption of state banks frdn
taxation by the United States in CASES
where it is shown to the satisfaction of the
| secretary of the treasury and comptroller
of the currency by banks claiming such e.
emption that they have not hsd
outstanding their circulating noes
| exceeding 15 per cent. of thir
paid up and unimpaired GapitN;
that their stockholders are individually
liable for the redemption of their circuht-
| ing notes to the full extent of their ow1er-
ship of stock; that the liability of said