The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1894-12-03

government to less than three per cent
Nothing could be worse or further removed
rom sensible finance than the relations ex-
sting between the currency the govern ment
aas issued, the gold held Tor its
redemption and the means which
must be resorted 10 for the purpose Of replen-
shing such redemption fund when impaired
Even II the claims upon this fund were con-
1ned to the obi rations originally intended
and II the redemption of these obiiza tons
meant their cancellation the fund would DO
very small But these obi ations when re-
seived and redee med IN gold are not cancelled
but are re-issued and may do duty many times
oy way OF drawin< gold from the treasury.
Thus we have an endless chain In operation
constantly depicting the treas ury' gold and
aever near q final rest As il this was not
bad enough we have statutory declaration
that II Is the policy OF the governments
10 maintain the pariry.between gold and sn
yer aided the force aud momentum or the cx-
haustinz process and added largely TO the cur
rency obligations claiming this peculiar gold
redemption Our small gold reserve IS thus
subject 10 draw from every side The do.
mands that increase our dan ,er also increase
the necessity Of protecting this reserve
against depletion and it is most unsatisfactory
to know that the protection a4Qrded IS only
temporary pal liation It is 81 1rtly and pail
patty plain that the only way Under present
conditions BY which this reserve when
aanaerously depleted, can be repien.
sale or the bonds OF the gov
eminent for gold and vet congress his
not only thus far declined TO authorize the
Issue OF bonds best suited TO such purpose e,
but there seems a disposition in some qunr-
ters to deny both the necessity and power for
the issue Of bonds at all L cannot for
moment believe that any Of our citizens are
deliberately willing that their government
should default In its pecuniary OBLIGATIONS. or
Inat IT'S hnAneiai operations should be re-
uucea TO silver basis AT any rate 1
should feel that my duty was
done il I omitted any effort 1 could
make to avert such a calamity AS long
therefore provision 50 made for THE
final rede mptfon the putting aside OF tho
currency oougation now used to repeatedly
cor Gf from fIa.r
gold AID as long as no better authority Tor
bond issues is allowed than at present exists
such authority will be utilized Whenever ana
as often as II becomes necessary % ma ntnin
a suhcient gold reserve and in abundant time
to save the credit OF country and make
good the financial declarations or our Fovern-
ment Questions relatin To our banks and
currency are closely connected with the SUBJ
ject just referred to and they also present
New Banking system Advocated.
Prominent among them arc tho lack OF eaa-
ITCHY IN our currency circulation and its fre-
quent concentration in financial centres whom
II is most needed ia other parts Of the country.
The absolute enforcement of the government
from the business of banking is the ideal rela-
tionsnip Of the government TO the circulation
Of the currency OF the country This condi-
tion cannot b. Immediately reached but al a
step in that irection and as means OF secur-
in a more elastic currency and obViating
other objections to toe present arrange
ment OF bank circulation the secretary
OF the treasury presents ia his report a
providing for the ISIS ue 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 ia its
supports would be surpunOus. 4 shall there.
fore content myself with an unquali fed in.
dOrsement OF the secretarys proposed
CHANCES In the law and a brief ana imperfect
statement OF their prominent features
1t is proposed TO repeal all laws providing
70 the deposit Of United States bonds se-
eurity for circulation to permit national
banks 70 issue circulating notes OF exceeding
in amount Is per cent OF their paid Up ana un-
impaired capital provided they deposit with
the government as a guarantee fund "a United
States legal tender notes including treasury
notes of 1880. sum equal ia amount to lj
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 IT'S rir-
culation a proportional part of its guar
antee fund shall be returned to It, to
permit the secretary OF the treasury
TO prepare and keep on hand ready for issue
in increase in circulate on is desired
blank national bank notes for each bank hay
ing circulation and to repeal the provisions
OF the present law imposing limitations and re-
strfctions upon banks desiring TO reduce or in-
crease their circulation, thus permittins such
Increase or reduction within the limit Of
iseventy- I'VE per cent Of capital to he quickly
made as emer- ency arise In addition TO he
guarantee fund required it Is proposed to pro-
vide a safety fund for the immediate redemo-
tion OF the circulating notes Of fafied BANKS
by imposing a small annual tax say one half
o per cent upon the avera ge circu alton
OF each bank until the fund amounts to live
per cent OF the total circulation outstandint
When bank fails its guarantee fund Is 10 be
paid into this safety funds ana its notes are
to be redeemed in the FIRST instance from such
safety fnnd thus au mente1 any impairment
of such fund caused thereby to be made good
from the immediately available cash assets OF
said bank, and il these should be sllfeieut.
auch Impairment TO be made good bF pro-
rata assessment among the other banks. thel r
contributions con sttutIng first lien upon
the cts Of the failed bank la favor OF Tie
cOntr buting banks
As a further security ii IS contemplated
that the existing proposition hxlng the indi-
vidual liability OF stockho1Iers IS TO be re-
tanned aud the banks Indebtedness acc
hrst lien on all It's assets For the purpose 0f
meeting the expense Of printing notes. Ora-
Gals. supervision cancellation and other IlEo
charges there hall be ira posed a tax Of saw.
one half OF one per cen. per annum upon tho
average amount OF notes ia circulation II is
further provided that there shall be-
national bank notes issued ~
d less denomination tnan ten dollars
that each national bank. except ia case 81 "a
failed bank shall redeem or retire it's notes Ira
the first instance Al its own once
agencies TO De de ii-nated by il. that no fixed
reserve used be maintained on account or de-
posts
Another very important feature or this plan
is the exemption Of state banks from taxa
tion BY the United states ia cg where 10 is
shown 10 the satisfaction ORG sec rotary of
the treasury and com ptrolIefl - he currency.
by banks claiming such exc ptIon. that they
have not had outstanding rnslr circulatlnr
notes exceeding seventy hve per cent OK
their paid up and unimpaired capital
that their stockholders are individually liable
the full extent OF the owuershi OF stock
he az