The morning news. [volume] (Savannah, Ga.) 1887-1900, 1894-12-04


terest and maturing within a short pc
riod, but the congress having failed to
confer such authority resort was neces-
sarily had 10 the resumption act Of 1871,
and pursuant to its provisions bonds were
issued drawing interest at the rate OF
per cent. per annum and 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 oper-
ated 10 reduce the rate OF interest to be
paid by the government to less than per
cent Nothing could be worse or further
removed from sensible finance than the
relations existing between the currency
the government has issued. the gold held
for its redemption, and the means which
must be resOrted 10 for the purpose of re-
plenishing such redemption fund when i'm
paired. Even if the claims upon this fund
were confined to the obligations originally
intended and if the redemption Of these
obligations meant their cancellation. the
fund would be very small. But these obi
cations, when received and redeemed in
gold are not cancelled but are reissued and
may do duty manytimes by way OF draw
ing gold from the treasury. Thus we have
an endless chain in operation constantly
depicting the treasury's gold and never
near q final rest. As if this was not bad
enough we have by a statutory declaration
tt-c- IL - Allc pbllIJ VI lAlG spNNA AAAAlN-Ae
to maintain the parity between gold and
silver. aided the force and momentum 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. The demands that increase our dan
ger also increase the necessity of protect
ing this reserve against depletion, and it
is most unsatisfactory to know that the
protection afforded is only temporary
palliatlon. 1t is perfectly and palpably
plain That the only way under present con-
ditions by which this reserve when
dangerously depleted can be replen-
ished is through the issue
and the sale of the bonds of the
government for gold. as yet congress has
not only thus far declined to authorize
the issue of bonds best suited to such
purpose, but there seems a 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 it's pc
cuniary obligation, or that it's financial OPP
erations should be reduced to a silver
basis At any rate / should not feel that
my duty was done if l omitted any effort
l could make to avert such calamity.
As long, therefore, as no provision is
made for the final redemption, or the
putting dolut Ol the currency ObllEdllOn
now used to repeatedly and constantly
draw from the government it's gold, and
as long 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 a sufficient gold reserve, and in
abundant time to save the credit of our
country and make good the financial dec
larations of our government.
Questions relating to our Ia pks and crr-
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 elasticity in
our currency circulation and its frequent
concentration in financial centers when it
is most needed in other parts of the
country The absolute enforcement of the
government from the circulation of the
currency of the country is a condition
which cannot be Immediately reached; but
as step in that direction and as a means
of securing a more elastic currency and
obviating other objections to the present
arrangement of bank circulation. the Sec
rotary of the Treasury presents in his re-
port scheme modifying the 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 so plainly
and its advantages are developed by him
VI IN Sutn icuaIkdOle cleaGneSS that
EFFORT on my part to present an argument
in It's support would be superhuous. |
shall, therefore, content myself with an
unqualified Endorsement of the secretary's
proposed changes in the law and a brief
and imperfect statement of their promi-
nent features.
1t is proposed to repeal all laws provid-
ing for the deposit of United States
bonds as security for circulation to per-
mi al
notes not exceeding in amount Is per
cent. of their paid up and unimpaired
capital provided they deposit with the
government as guarantee fund in Uni
ted States legal tender notes. including
treasury notes of 1890, a sum equal in
amount to 80 per cent. of the notes they
desire to issue, this deposit to be main
tanned at all times, but whenever any
bank retires any part of its circulation
a proportional part of its guarantee fund
shall be returned to it; to permit the Sec
rotary of the Treasury to prepare and
keep on hand ready for issue in case of
an increase in circulation is desired.
blank national bank notes for each bank
having circulation, and to repeal the nro
visions of the present law imposing limi-
tations and restrictions upon banks de-
slring to reduce or increase their circula-
uon thus permitting such increase or re-
duction within the limit of rs per cent. Of
capital to be quickly made as emergen
cies arise. In addition to the guarantee
fund required, it is proposed to provide a
safety fund for the immediate redemn-
ton of the circulating notes of failed
banks by imposing a small annual tax
say one half of per cent, upon the aver.
age circulation of each bank until the
fund amounts to per cent. of the total
circulation outstanding. When a hank
fails its guarantee fund is to be paid into
this safety fund, and its notes are to he
redeemed in the first instance from such
SAFETY fund thus augmented. any inpair-
ment OF such fund caused thereby to he
made good from the Immediately availa-
pie cash assets of said banks and if suf
hclent, such impairment to be made good
py pro rata assessment among the other
banks, their contributions constituting
hrst lien upon the assets of the failed
pank IN favor of the contributing banks
AS further security it is CONTEMPLATED
tnal the existing provision fixing the in
dividual liability of stockholders is to he
retained, and the banks indebtedness ON
account of its circulating notes is to he
made first lien on all its assets.
For the purpose of meet the exnansa
OF printing notes, official supervision. can
cenauon and other like charges. there
shall be imposed a tax of one-haIf Of oro