Lincoln County leader. [volume] (Toledo, Lincoln County, Or.) 1893-1987, 1894-12-06

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rlly had to the resnmntion oct !"
1870 and, pursuant to lis nrovisionS
tS Iohus were Issued drawing interest a,
Ihe rate OF per cent per annum anf
maturing lOyears after their issue, thai
oelhg the shortest time authorized by
the act. ! am glad TO say, however
tilat IN the sale OF the bonds tbe
premium received operated to reduce
the rate ot. interest to be paid nv the
government to less than 8 per cent
Nothlng could be worse or further re-.
moved from sensible finance than the
relations existing between the currency
the government has issued, the gold
held for its redemption and the means
whlch must be resorted to for the pur-
post, OF replenishing such redemption
iund when impaired. Even if the
claims upon this fund were con-
nned to the obligations originally
intended, and if the redemption OF
these obligations meant their cancella-
tlon, the fund would be very
small. But these obligations when re-.
ceived and redeemed in gold are not can
celled, 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 treasury's gold, and never
near final rest. As if this was not bad
enough, we have by statutory declara-
ton that it is the policy of the govern
ment to maintain the parity between
gold and silver, aided the force and mo-
mentum of this exhausting process and
added largely to the currency obligations
claiming this peculiar gold redemption,
Our small gold reserve is thus subject to
drain from every side.
DEMANDS INCREASING.
The demands that increase our danger
also increase the necessity of protecting
this reserve against depletion, and it is
most unsatisfactory to know that the
protection afforded is only a temporary
palliation. 1t is perfectly and palpablv
plain that the only way under the
present conditions by which this re-
serve, when dangerously depleted, can
be replenished is through the issue and
sale OF bonds of the government for gold,
and yet congress has not only thus far
declined to authorize the issue of bonds
best suited to such a purpose, but there
seems disposition in some quarters to
deny both the necessity and power for
the issue of bonds at all. | cannot for
a moment believe that any of our citiz-
ems are deliberately willing that their
government should default in its pecuni-
ary obligations, or that its financial
operations should be reduced to a silver
basis. At any rate, l should not feel
that my duty was done if |
omitted any effort l could make
to avert such a calamity. As
long, therefore, as no provision
is made for the final REDEEM ption or
the putting aside for the currency obli-
CATION now used to repeatedly and con-
stantly draw from the government its
gold, and so long as no better authority
for bond issues is allowed than at pres
ent exists, such authority will be
utilized whenever and as often as be-
comes necessary to maintain sufficient
gold reserve and abundant 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
in our currency circulation
and its frequent concentration in finan-
cial centers when it is most needed in
other parts of the country. The abso-
lutte divorcement of the government
from the business of banking is the ideal
of the government to the
of the currency OF the
country.
SECRETARY CARLIsLE's PLAN.
This condition cannot be Immediately
reached, but as a step in that direction
and as means OF securing more eas-
tic currency and obviating other objec-
tions to the present arrangement OF bank
the secretary OF the treasury
presents in his report scheme modify
ing 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 plan so plainly, and its ad-
vantages are developed by him with
such remarkable clearness, that
any elolI oh my pau " PiSSSh.
in its support would
be superfluous. shall, therefore, con-
tent myself with an unqualified indorse-
ment OF the secretary's proposed changes
in the law and brief and an imperfect
statement OF their prominent features.
1t is proposed to repeal all laws provid-
ing for the deposit of United States
bonds as security for circulation; to per-
nit national banks to issue circulating
notes not exceeding in amount % per
cent of their paid-up and unimpaired
capital, provided they deposit with the
government as a guarantee fund in
United States legal tender notes, includ-
ing treasury notes OF 1890, a sum OF
equal amount to 80 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 circu "a
ton proportionate part OF its
guarantee fund shall be returned to
it; to permit the secretary OF
the treasury to prepare and keep on
hand ready for issue in case an increase
in circulation is decried, blank national
bank notes for each bank having circu-
lation, and to repeal the provisions OF
the present law imposing limitations
and restrictions, thus permitting such
increase or reduction within the limit
of the IS per cent OF capital to be
as quickly made as emergencies arise;
In addition to the guarantee fund
required. it is proposed to provide a
safety fund for the immediate re.
demption of the circulating notes OF
failed banks by imposing small an
nual tax, say one half OF per cent
mon the average circulation OF each
hank until the fund amounts to D per