The Cape Girardeau Democrat. (Cape Girardeau, Mo.) 1876-1909, 1894-12-15
An EFFICIENCY.

the treasury for the purpose OF redeemtng 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 1t became
recessary to replenish this reserve and thus
maintain popular faith in the ability and de-
termination Of the government to meet, as
have been well il in this emergency authority
had existed TO issue the bonds Of the govern
ment, bearing q low rate Of interest
But the Congress having failed to confer such
authority, resort was necessarily had to the re-
sumption act Of 1875, and pursuant to its provi-
sions, bonds were issued drawing interest at
the rate Of 5 per cent. per annum 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
bonds the premiums received operated to re-
duce the rate Of interest to be paid by the gov
eminent to less than 3 per cent.
rHI COULD BE WORSE,
or further removed from sensible finance than
the relations existing between the currency
the government has istued. the gold held for
its redemption, and the means which
must be reSorte1 to for the purpose Of replen-
ishing such redemption fund when impaired.
Even il the claims upon this fund were con-
fined to the obligations originally intended,
and il the redemption OF these obligations
meant their cancellation. the fund would be
very small. But these obligations when re-
ceived and redeemed in gold are not cancelled.
but are reissued and may do duty many times
by wav OF drawing gold from the treasury.
Thus we have an endless chain in operation
constantly
DEPICTING THE TREAsURY's GoL
and never near q final rest. Ash this was not
bad enough, We have by q statutory declara-
ton 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 gold re-
demption. Our small gold reserve is thus sub
ject to drain from every side. The demands
that increase our danger also increase the ne
cessity OF protecting this reserve against de-
pletion. and 1t Is most unsatisfactory TO Know
palliation. 1t is perfectly and palpably plain
that
THE only Way UNDER PRESENT CONDITIONS
by which this reserve, when dangerously de-
pleted. can be replenished is through the
issue and sale Of the bonds Of tho
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 n disposition in some quarters to deny
both the necessity and power for the issue OF
bonds at all. L cannot for a moment believe
that any Of our citizens are deliberately willing
that their government should default in
its peeuniary obligations, or that Its
silver basis. At any rate, I should not feel
that my duty was done If l omitted
any effort I could make
TO AVERT SUCH A
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 / ong as no better authority for
bond issues is allowed than at present exists,
such authority will be utilized whenever and
as often as it becomes necessary to maintain .
sufficient gold reserve. and in abundant time
to save the credit OF our country and mako
good the financial declarations OF our govern
ment-
BANKS AND CURRENCY.
Questions relating to our banks and curren-
cy are closely connected with the subject Just
referred 10 and they also present some unsat-
4 4A .N,.ae 1nnD Nhnr .
the lack of elasticity in our currency. %circula-
ton and it's frequent concentration in fnan-
eial centers when it is most needed
The absolute enforcement of the
government from the business Of banking Is
the ideal relationship of the government to the
circulation OF the currency OF the country. This
condition can not be Immediately reached: but
as a step in that direction, and as q means of
securing a more elastic currency and obviating
other objections to the present arrangement OF
bank circulation, the secretary OF the treasury
presents in his report o scheme
MODIFYING PRESENT BANKING LAWS,
and providing for the issue of circulating notes
by state banks free from taxation, under GER
tain limitations. The secretary explains his
plans so plainly, and its advantages are de-
veloped by him with such remarkable clear.
argument in its support would be superiuous-
1 shall therefore content myself with an I'M
qualified Endorsement Of the secretary's pro-
posed changes in the law, anu q brief and i'm
perfect statement of their prominent features.
1t is proposed to repeal all laws providing
for the deposit OF United States bonds as Sc
curity for circulation: topermit national banks
to issue circulating notes not exceeding in
amount 20 per cent. Of their paid-up and unim-
with the government as guaran-
tee fund in United States legal tender
notes, including Treasury notes or 1894, q sum
equal in amount to 80 per cent. of the notes
thew desire to issue. this deposit to Be main
tanned at all times: but whenever any bank re-
tires any part Of its circulation q proportional
part OF its guarantee fund shall be returned to
1t to permit the secretary Of the treasury to
prepare and keep on hand ready for issue in
case an increase in circulation is desired
blank national bank notes for each
bank having circulation, and to repeal
the provisions of the present law imposing
limitations or restrictions upon banks de-
thus permitting such increase or reduction
within the limit Of IS per cent. of capital to be
quickly made as emergencies arise.
IN ADDITION TO THE
required. 1: is proposed to provide o safety fund
for the immediate redemption Of the circu-
lating notes Of failed banks by imposing
o small annual tax, say one half
| each bank until the fund amounts to 5 per cent
of the total circulation outstanding. When q
bank fails its guarantee fund is to be paid into
this safety fund and its notes are to be re-
deemed in the first instance from
such safety fund thus augmented.
any impairment Of such fund caused thereby
to be made good from the immediately-availa-
BILE cash assets of said bank. and il these
| should be insufficient such impairment to be
made good by pro rata assessment 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 sECURIr
1t is contemplated that the existing provision
fixing the individual liabilities OF stockholders
is to be retained and the banks Indebtedness
on account OF its circulating notes Is to be
made q first lieu on all its assets.
For the purpose Of meeting the expenses of
printing notes, official supervise on, cancellation
| and other like charges, there shall be Imposed q
tax of say one-half Of I per cent. per annum up
1t is further provided that there shall
be no national bank note issued
Of o less denomination than $40.
That each national bank, except In case OF q
failed bank. shall redeem or retire it's notes in
the first instance at its own ONCE or at agen-
serve need be maintained on n count
OF deposits. Another very important feature
OF the plan is the exemption Of state banks
from
TAXATIo BY THE UNITED STATES
In cases where it is shown to the satisfaction
OF the secretary OF the treasury and conptrol-
Ter of the currency by banks claiming such
exemption that they have not had outstanding
their circulating note exceeding 20 per cent.
OF their paid up and unImpaired capital;
that their stockholders are individually liza
BILE for the redemption Of their Circulating
notes to the full extent Of their ownership Of
stock; that the liability Of said banks upon
their circulating notes constitutes, under
their state law, a first liei. upon their
assets: that such banks have kept and
maintained a guarantee fund In United States
1890, equal to 80 per cent. of their outstanding
circulating notes, and such banks have