The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1894-12-04
NEW CURRENCY SCHEME.
Proposed Change in the banking
Laws-Bond Issues.

LaWS-hon0
During the last month the gold reserved
in the treasury for the purpose OF redeem
ing the notes of the government circuiat-
ing as money in the hands OF the people
became so reduced and its further deple-
ton in the future seemed so certain that
in the exercise of proper care for the pub
lie welfare ii became necessary TO replen-
ish this reserve and thus maintain popu-
ular faith in the ability and determination
OF the government to meet. as agreed. its
pecuniary obligations. IL would have been
well if. in this emergency. authority had
existed to issue the bonds Of the govern
ment bearing a low rate of interest ana
maturing within a special period. But the
Congress having failed 20 confer such
authority. resort was necessarily had TO
the resumption act OF 1875 and. pursuant
TO its provisions, bonds were issued draw
ing interest at the rate of per cent. per
annum and maturing ten years after their
issuing. that being the shortest time au-
thorized by the act. l am glad to say.
however. that in the sale OF these bonds
the premium received operated 10 reduce
the rate OF interest to be paid by the gov
ernment TO less than per cent.
Nothing could be worse or further re-
moved from sensible finance than the re-
lations existing between the currency the
government has issued the gold held for
its redemption and the means which must
be resorted to for the purpose OF replen-
ishing such redemption fund when inn
paired. Even IL the claims upon this fund
intended. and if the redemption of these
obligations meant their cancellation. the
fund would b pc very rsva snail and But tnese ON
gold, are not Cancelled, but are reissued
and may do duty many times by way or
drawing gold from the treasury. Thus We
have an endless chain In operation con-
stantly depicting the treasury's gold ana
never near final rest. AS IL this were
aes Ssd sn0qs tsa e Iy posy Of hs
government TO maintain the parity be-
tween gold and silver. thus aiding the force
and adding largely to the currency obliga-
tions claiming this peculiar gold redemp-
tion. Our small gold reserve Is thus sub
ject TO drain from every side. Tne de-
msnds that increase our danger also ia-
crease the necessity OF projecting this
reserve rye, against depletion and i ., most most
tion 1t affords is only a temporary pallia-
ton.
MUST SELL BONDS.
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
ment 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 a disposition in some quarters
to deny both the necessity and power for
the issue of bonds at all i cannot for q
moment believe that any OF our citizens are
deliberately willing that their government
tions or that its financial opera
tions should be reduced 30 a silver
sut1 At any done ss Satss not 5se s
! could make TO avert such a calamity. AZ
long. therefore, as no provision Is made
aside OF the currency obligation now used
to repeatedly and constantly draw from
the government ts gold old ana 'ss as long as no
than at present exists, such authority will
be utilized whenever and as often as Il
becomes necessary to maintain a sufficient
gold reserve and in abundant time 10 save
the credit OF our country and make good
the financial declarations OF our govern
ment.
Questions relating TO oar banks and cur
rerlcy are closely connected with the sub
ject Just referred 70. and a,so present some
them are the lack OF elasticity in our cur
rency circulation and its frequent concen-
needed in other parts OF the country. The
absolute enforcement OF the government
from the business Of banking is the ideal
culation OF the currency OF the country.
This condition cannot be Immediately
reached but as a step in that direction and
as a means OF securing more elastic cur
rency and obviating other objections 20 the
present arrangement OF bank circulation.
the Secretary OF the Treasury presents in
his report a 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 SC plainly
and its advantages are developed by him
with such remarkable clearness that any
effort my part 10 present arguments IN
its support would be superfuous. I shall.
therefore. content myself with an naquali-
fed Endorsement Of the Secretarys pro-
posed changes I'm the law and a brief and
imperfect review OF their prominent fear-
ures.
TEE NEW SCHEME
1t is proposed 70 repeal all laws provid-
ing for the deposit OF United states bonds
as security for circulation; 10 permit nation
al banks to issue circulating notes not ex-
ceeeding In amount 75 per cent. of their
paid up and unimpatred capital, pFovl<o0