Kansas agitator. [volume] (Garnett, Kan.) 1890-1905, 1894-12-06

maturing ten years after their issuing that
being the shortest time authorized by the act
lam 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
government to less than three per cent
Nothing could be worse or further removed
from sensible finance than the relations ex.
isting between the currency the government
has issued the sold held Tor its
redemption and the means which
must be resorted to for the purpose of replen-
ishing such redemption fund when impaired
Even II the claims upon this fund were con-
fined to the obligations originally intended
and II the redemption OF these obliga tions
meant their cancellation the fund would be
very small But these obli cations when re-
ceived and redeemed in gold are not cancelled
but are re-issued 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 treasurys gold and
never near q final rest. AS II this was not
bad enough We have q statutory declaration
that 1t Is the policy OF the government
to maintain the parity between gold and sill
yer aided the force and momentum Of the ex.
hausting process and added largely TO the cur
rency obligations claiming this peculiar gold
redemption. Our small gold reserve Is thus
subject to draw from every side The de.
mands that increase our dan ,er also increase
the necessity of protecting this reserve
against depletion and 1t Is most unsatisfactory
to know that the protection afforded is only
temporary palliation. 1t is perfectly and pal
patty plain that the only way under present
conditions by which this reserve when
dangerously depleted, can be replen
fshed. is through the issue and
sale OF the bonds OF the gov
eminent for gold and yet congress has
not only thus far declined to authorize the
fsCn nf l.An A., a..s&x
but there seems disposition in some quar-
tiers to deny both the necessity and power for
the issue OF bonds at all l cannot for O
moment believe that any of our citizens are
deliberately willing that their government
should default in its pecuniary obligations, or
that Its financial operations should be re.
duced to o silver basis At any rate 1
should not feel that my duty was
done II l omitted any effort 1 could
make to avert such calamity 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 long Us no better authority for
bond issues is allowed than at present exists
such authority will be utilized whenever and
as often as 1t 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 Questions relating to our banks and
currency are closely connected with the sub
ject just referred to and they also present
some unsatisfactory features
New Banking system Advocated.
Prominent among them are the lack of elias
ITCHY in our currency circulation and its fire.
quent concentration In financial centres when
1t is most needed in other parts Of che country.
The absolute enforcement OF the government
from the business of banking is the ideal rela-
f,x . tla ID
Of the currency OF the country. This condi-
tion cannot be Immediately reached but as a
step in that direction and as means OF secur-
ing n more elastic currency and obviating
other objections to toe present arrange
ment OF bank circulation the secretary
OF the treasury presents in his report q
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
so plainly and its advantages are developed by
him with such remarkable clearness that any
effort on my part to present arguments in its
supports would be surpufious. 1 shall there
fore content myself with an unqualified In
dorsement OF the secretarys' proposed
changes in the law and brief and imperfect
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: to permit national
banks to issue circulating notes not exceeding
in amount 70 per cent Of their paid up and UNI
impaired capital provided they deposit with
the government as q guarantee fund in United
States legal tender notes including treasury
notes of 1900. a sum equal in amount to -
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 cir
culation proportional part OF its guar
antee fund shall be returned to IT, to
skA 80 -
to prepare and keep on hand ready for issue
I'm case an increase in circulation is desired
blank national bank notes for each bank hav-
ing circulation and to repeal the provisions
of the present law imposing limitations and re.
strictions upon banks desiring to reduce or in
crease their circulation thus permitting such
Increase or reduction within the limit OF
iseyenty-tve per cent Of capital to be quickly
made as emerg ency arise In addition to he
guarantee fund required 1t is proposedAto pro-
vide a safety fund for the immediate redemp-
ton of the circulating notes OF failed banks
by imposing q small annual tax say one half
OF one per cent upon the average circulation
OF each bank until tho fund amounts to five
per cent OF the total circulation outstanding.
When bank fails its guarantee fund is to be
paid into this safety funds and its notes are
to be redeemed in the first instance from such
safety fnnd thus au ;mented any impairment
OF such fund caused thereby to be made good
from the immediately available cash assets OF
said bank and ~ these should be insufficient,
auch 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
contr buting banks
As a further security 1t is contemplated
that the existing proposition fixing the indi-
vidual liability OF stockholders Is to be re-
tanned and the banks indebtedness on ac-
count of its circulating notes is TO be made a
first lien on all its assets For the purpose OF
meeting the expense OF printing notes. on.
Gals supervision. cancellation and other like
charges there shall be imposed n tax OF say.
one-half OF one per cent per annum upon the
average amount OF notes in circulation. II is
further provided that there shall be
no national bank notes issued OF
less denomination than ten dollars.
that each national bank. except in case oil n
failed bank shall redeem or retire its notes in
the first instance at its own ONCE, or at
agencies TO be designated by 1t, that no fixed
reserve used be maintained on account of de-
positS
Another very important feature OF this plan
is the exemption Of state banks from taxa.
ton by the United States in cases where 1t is
shown to the satisfaction Of the secretary OF
the treasury and comptroller OF the currency,
ny hanks claiming such exemption that they