Custer weekly chronicle. [volume] (Custer City, S.D.) 1890-1931, 1894-12-08

Hutu HutilOTltt. IttQII WI tiGAuerfkIttf tis<>s
To the resumption net of 1875, and pursu-
ant to It's provisions bonds were issued
drawing interest at the rate of 3 per cent
per annum. n 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 operated TO reduce
the rate OF interest to be paid by the gov
nme to less than 2 per cent. Nothing
could be worse or further removed from
sensible finance thnn the relations exist
ing between the currency the govern
ment has issued, the gold held for
it's redemption, and the means which
must he escorted To for the purpose OF re-
pienishing such redemption fund when
impaired even il the claims upon this fun
were confined to the obligations originally
intended n IL the redemption OF these OBJ
legations meant their cancellation the fund
would be very small. But these obliga-
tions when received and redeemed In gold
are not cancelled but are reissued aud may
do duty many times by way Of drawing
gold from the treasury. Thus we have an
endless chain in operation, constantly de-
pleiiDg the trcasury's gold n never near
a final rest. As If this was not bad enough
we have by "A statutory declaration that
it Is the policy of the government
to maintain the parity between gold and
silver added TO the force and momentum
OF this ~exhausting process and added
largely to the currency obligations claim
ing this peculiar gold redemption. Onr
small gold reserve * thus subject to drain
from every side, the demands that increase
our danger also increase the necessity OF
protecting this reserve against depletion
and il Is most unsatisfactory to know that
the protection afforded is only a temper
airy palliation. Ii is perfectly and palpably
plain that the only way under present con-
ditions by which this reserve when danger
nrtsly ,lan1atua t an On tn rapinpighpt IL fhrnnUh
the issue and sale of the 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 u
purpose, but there seems "a disposition in
some quarters TO deny both the necessity
and power for the issue Of boi.ds AT all.
cannot for n mn believe that any or
our citizens are deliberately willing that
their government should default in It's
pecuniary obligations, or that its financial
operations should be reduced TO a silver
basis. At any rate l shouid not feel hat
my duty was lone IL / omitted any effort
| could make TO avert such n calamity. As
long therefore as no provision is made for
final redemption or the putting aside OF
the currency obligation now used to de-
pend ard constantly draw from the gov
its sold. and as long as no better
authority for bond ISSUE is allowed than at
present exists such authority will be util.
lENh W NV diiAl ~ bilNt "a " biii
necessary TO maintain a sufficient gold re-
serve and in abundance To save the credit
of our country and make good the finan
cial declarations of our government.
Carlisle's Currency Plan.
Questions relating TO banks n cur
rency are closely connected with the sub
ject just referred to and they also
present some unsatisfactory features.
Prominent among them are the lack OF
nIazt .nts A. Il. nttn 80 ion md
its frequent concentration In financial CEN
tiers when il Is most needed in other parts
Of the country. TIE absolute enforcement
OF the government from the business OF
banking il the ideal relationship of the
circulation of the currency of the country.
This condition can not he Immediately
reached, but as a step in that direction and
as Il means OF securing a more elastic cur
rency n ~obviating other objections
10 the present arrangement or
bank circulation the secretary OF
the treasury presents in his report u
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 50 plainly aud its advan-
tages are developed by him with such re-
markable clcarness that any effort on my
part TO present arguments in its support
would be s~uperfiuous. | shall, therefore,
content myself with an unqualified in
dorsement Of the sccretary's proposed
changes In the law and n brief ani imper-
feet statement of their prominent features.
IL Is proposed TO repeal all laws providing
for the deposit of United States bonds as
security for circulation; To permit national
banks TO issue circulating notes not eN-
ceeding in amount IS per cent OF their
paid up and unimpaired capital, provided
they deposit with the government as a
guarantee fund in United States legal ten
der, including treasury notes OF 1880, u
sum equal TO 30 per cent OF the notes
they desire TO issue, this deposit tn he main
tanned at all times but whenever any bank
retires any part of its circulation "a pro-
portionate part of its guarantee fund shall
the secretary of the treasury TO
AgsRaara Sss9SSn kAaiaMsAsaa AAsSas1s s1aSar sns L.s"@
having circulation and to repeal lno pro-"
vitions of the present law imposing limita-
tions and restrictions upon hanks desiring
to reduce or increase their circulation.
thus permitting such increase or reduction
within the limit of the IS per cent OF cap
ital to be quickly made as emergencies
arise. In addition 70 the guarantee fund
fund for the immediate redemption
of the circulation notes of
failed banks by imposing "A
small annual tax, say one hale
or l per cent upon the average circulation
Of each bank until the FUND amounts to q
per cent of the total circulation outstand-
ing. When a bank fails its guarantee
fund Is to be paid into this safety fund and
its notes are to he redeemed in the first In
stance from such safety fund thus aug
mented, any impairment of such fund
caused thereby TO no made good from the
Immediately available cash assets of said
bank and IL these should be insufficient
gneb imnnlrmanf IN ln ma6a nnnt hu
rata assessment among other banks, their
contributions constituting "A first lien
upon the assets OF the failed bank
in favor Of the contributing hanks.
As a further security 1t Is contemplated
that the existing. provision fixing the indi-
vidual liability of stockholders Is to be re.
tanned and the banks indebtedness on 40.
count Of It's circulating notes is to no made
a first lien on all its assets. For the pur-
pose OF meeting the expense OF printing
notes, official supervision, cancellation
and other like charges there shall he paid
q tax, say one half of / per cent per an
mum on the average amount Of notes In
circulation. 1t is further provided that
there shall be no national bank notes
issued OF less denomination than $40,
that each national a except ia case of
a fai led bank shall red, en- or retire its
notes in the first instance at its own Office
at agencies to be designated by it and that
~ hAcu ftsSfNc hetu ot lldittdlutu Oh nc
count of ID deposits. Another very impor-
tant feature OF this plan Is the exemption
OF state banks from taxation by the
United States In cases where it is shown
to the satisfaction Of the secretary Of
the treasury and comptroller VI the cur
rency by banks claiming such exemption
that they have not had outstanding their
circulating notes, exceeding IS per cent OF
their paid up and unimpaired capital.
that their stockholders are individually
liable for the redemption of their circ1.
lating notes to the full extent of theis
ownership of stock; that the liability OF
said banks upon their circulating notes
constitutes under their state laws q firsl
lien upon their assets; that such hanks
nave kept and maintained q guaranter
fund in United States legal tender notes,
including treasury notes Of 1890, equal to
30 per cent OF their outstanding circnlat,
ing notes, and that such hanks have
promptly redeemed their circulating notes
when presented at their principal OF
branch Offices. =.
1t Is quite likely that this scheme may be
usefully amended in some Of its details
but [ am satisfied it furnishes a basis for
great improvement in our present bank,
ing and currency system.
conclude this comm cnication fully m.
preciating that the responsibility for ali
legislation affecting the people of the
United States rests upOn their renresenfa,