The Monticellonian., 1894-12-07
Nn l.NirencN.
TIE RECENT SALE aF BONDS.

 the treasury for tho purpose of fcdcrming the notes of tnc government circulating as money in lhs hands of the pednIe hEeat4e sa redneedt and IfS further dtplcuon Tn the near thiure seemed so certain. that in the exercise ot proper care for thi public welfare 1t became ] necessary to rep"Hisi7 this r"earre and thus maintain popular faith in tbe ability and de- termination of the government tu meet. as agreed, its pccunary obligations II would have been well if in this emergency authority ] had existed tO issue the bonds of the govern . mcnt, bearing low rate of interest and maturing within special period. But the congress having failed ta confer such authority, resort was necessarily had ta the re- . sumption act of ls55. and pursuant to its pE9Et- SIuns ponds were issued drawing interest at the rate of per cent per auuum and maturing ten years after their issuing, that being the . shortest time authorized by the act | am glad to say. however, that on the sale of theSe 4 bonds the premiums received operated to re- l duce the rate uf interest to be paid hy the goY- ] erumeut to less than per cent
 NOTHING COULD BE WORSE, or further removed from sensible finance than ' rthe relations existing between the currency ' the government has lstued, the gold held for l must be rcsOrted to for the purpose of repleR- iShiug such redemption fund when impaired. ] Even if the claims upon thtS fund were con- lined To the obligations originally intended. .,aHd if the redemption of these obligations fmeaut their cancellation. the fund would be i very small. But these obligations when re- i ceiyed and redeemed in gold are not cancelled, ] but arc rclS~ucI and may d0 duty many times by way of drawing gold from the treasury. IiH9 Nt HdFt dti tt'tiea9 tat+A Ill 3ii9H s#9lA ] constantly
 pEPLEriNG THE TREAsUKY's COLD
 and never near a final rest. As If thIs WAS not bad enough, We have by q statutory deelara> l tlou that it is the policy of the government | to maintain the parity between gold and silver aided the force and momentum of this exhaust ! ing process, and added largely to the currency obligations claiming this peculiar Eold re- demption. Our small gold reserve ts thus subs Iect tO drain from every side. The demands that increase our danger also increase the ne- CpSSltN of protecting this reserve against de- i pleton, and it is most unsatisfactory 10 know l that the protection afforded is only il temporary palIatlon It IS perfectly and palpabl} plain Chat
 THE ONLY WAY UNDER PRESENT CONDITIONS by which this reserve, when dangerously de- pIetcd. can be rcpleuishcd is through the l issue and sale of the bonds of the government for gold; and yet congress has not 1 only thus far declined to authorize the isSuc nt 1 bonds best suited to such purpose but there seems disposition Tn soms quarters te deny both the necessity and power for the issue of bonds al all. 1 cannot for moment believe that any of our citizens are delibcrateiE willing ] that their government should default i'll its pccuniary obligations, or that it's financial operations should bo reduced tu \ silver basis. At any rate. 1 should not feel that my duty done fl I omitted any effort l could make
 TO AVERT SUCH A CALAMITY.
 As long, therefore, aS no provision k made for the final redemption or the putting aside of i the currency obligation now Used to repeatedly and constantly draw from the government its gold, and Bs l CuE as no better authority for i bond issues is allowed than at present exists such authority will be utilized whencser and as often as it becomes necessary ta maintain Il sufficient gold reserve and In abundant tlIne . to save the credit of OUT country and make good the financial declarations of our goyeru- meuL
 BANKS AND CURRENCY.
 Questions relating to our banks and eurrea- cV are closely connected with the subject iuSt l referred to and they also present some unsat- | irfdctory features. Prominent among them are the lack of elasticity in cur currency etfeala- tun and its frequent concentration in Hnan- cial centers when it Is most needed The absolute diyoreement of j6e i government from the business of banking k the ideal relauonship.of the government te the circulation of the currency Of the country Fms i condition can not he immediately reached but | as step in that direction, and as MeaHs ef securing more elastic cUrfeuey and abXiatInz other objections to the present engagement of l bank circulation, the secretary of the treasury presents in his report a-SeheTHe
 MODIFYING PRESENT BANKING LAWS,
 and providing for the issue ofcirculatiug notes | by state banks free from taxation. under eer- | tain limitations. The secretary explains his plans so plainly. and it. advantages are de- ! yeloped by him with such remarkable clear ness, that any effort on my part ta present argument iu its support would be supertuouS. shall therefore content myself with aH tiff qualified indorSement of the secretary pro- posed changes in the law. ant brief and im- perfect statement of their prominent features.
 It is proposed to repeuI all laws providing for the deposit Of United States bonds as se- curIty for circulation; to permit national banks to issue circulating notes not exceeding in amount 75 per cent. of their patd-up and untm- paired capital, provided they deposit with the government as q gudrau- tee fund in United States legal tender notes including treasury notes of ls2i d sum equal in amount to 3O per cent, of the notes they desire to issue, this deposit to be main tained at all times. but whenever any bank re- tires any part of it's circulation q proportional part of its guarantee fund shall be returned to 1t to permit the secretary Of the treasury To Il case an increase in circulation is desired blank national bank notes for each bank having circulation, and 10 repent the provisions Of the present law imposing limitations or restrictions upon banks de- siring to reduce or iucreaSe.their circulation, 1 thus permitting such increase or reduction within the limit of D per cent. of capital to be quickly made as emergencies arise
 IN ADDITION TO THE GUARANTEE
 required, it is proposed Go provide safety fund for the immediate redemption Of the clreu- iating notes of failed banks by imposing small annual tax. say one half of per cent. upon the average circulation of i each bank until the fund amounts to per cent. of the total circulation outstanding. When q bank fails its guarantee fund is to be paid into 1 this safety fund and it's notes are to be re- deemed in the first instance from such safety fund thus augmented, any impairment of such fund caused thereby i to be made good from the mmediatclE-aXatta- l blc cash assets of said bank and if these should be insufficient such impairment To be made good by pro rata asses sment among the other banks, their contributions constituting first lien upon the assets of the failed bank in favor of the contributing banks
 AS A FURTHER SECURITY
 1t is contemplated that the existing provision fixing the individual liabilities of stockholders is to be retained and the banks indebtedness, on account of it's circulating notes Is to be made a hrSt lieu on nil its assets,
 For the purpose of meeting the expenses of printing notes, official SuperVlsi on cancellation and other like charges there shall be imposcda u ] tax of say onc-half of per cent. per anuutn up r4f in ef- gI-tf 1 It is further provided that there shall i be no national bank note issued 1 of less denomination than sl0 l That each national bank, except in case Of a failed bank. shall redeem or retire it's notes in the first instance at it's own office or at agen- i cles. to be designated by it. that no fixed re serve need be maintained on a count of deposits. Another very important feature of the plan k the exemption Of state banks from
 TAXATION BY THE UNITED STATES
 in cases where it is shown to the satisfaction i of the secretary of the treasury and comptrol- Ter of the currency by banks claiming Sueh i exemption that they have not had outstanding their circulating notes exceeding - per cent i of their paid up and unupafred capital: ] that their stockholders are individually Iia- ble for the redemption of their circulating notes to the full extent of their ownership of l stock that the liability of said banks upon ] their circulating notes constitutes. under ] their state law, a first lien upon their aSSctSt that such banks have kept and maintained a guarantee fund in United states legal tender notes, including treasury notes af i ls90 equal to go per cent. of their outstanding circulaling notes, and such banks have promptly redeemed their circulating notes when presented at their principal or branch ofhees
 IN CoNCLUsioN
 It is quite likely that this scheme mav he usefuHy amended in some of its d5f#iIs 6uf [ i aiH satisfied it furnishes basis faI a very great improvement in our present htl- -illes and currency system conclude this communities