Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1894-12-03

well if. in the emergency. au,bor,tr
,s'ed TO issue bonds BEARING a low,
".e ol interest and maturing within
snort period. but congress. HAVING
laiied to confer such autboritv res
sort must necessarily be had tn tho
resumption act of 1878. and on,
Eau 10 say that on the sale of the
oonus the premium received is oper.
a'ive TO reduce the rate of interest," tn
&c Pa'u oy the government to less
.nah per cent. Nothing could be
worse or farther removed from sem
si'ie hnance than the relations exist-
ing between the government cur
rency issued for gold held for its
redemption, and means of REDEEM n,;on
wheh impaired. Even if the claims
upon this fund we're confined to obli-
cations originally intended, and if
the redemption of these obligations
meant the cancellation of the fund
IL would be very small. But these
| opilSations, when received and re-
deemed in gold, are not cancelled.
| out reissued. and made tn do
Guty many times by wav Of
drawing the gold from the treas
ury.: Thus We have an endless
chain in operation, constantly deplet-
ing the treasury's gold, and never at
hnai rest. The demand that in
creased our danger also increased the
necessity OF protecting this reserve
against depletion, and it is most un-
satisfactory to know that the pro-
lection afforded is only a temporary
Paiilation, and. it is perfectly and
Palpaoly plain that the only way, un-
der present conditions, bv which this
reserve when dangerously depleted
can be replenished. is through the
issue and sale of the bonds of the
government for gold. While con-
gress has not only thus far declined
to authorize the issue of bonds best
suited to such a purpose. there
seems disposition in some quarters
to deny both the necessity and
power for the issue of bonds at all. I
cannot for a moment believe anv of
our citizens deliberately willing
their government should default in
It's pecuniary obligation, or it's finan-
cial operations should be reduced to
the silver basis. At any rate, |
should not feel my duty done if
omitted any effort / could make to
avert such calamity.
The Nations Credit VIII be Maintained.
LAS long therefore as no provision
is made for the final redemption or
putting aside of currency obliga-
tion now used repeatedly and con-
stantly drawing from the government
its gold, and as long as no better au-
| thority for the bonds issue is allowed
| than at present exists. such authori-
| ty will be utilized whenever and as
often as it becomes necessary to
maintain sufficient gold reserve and
in abundant time to save the credit
of our country and make good the
financia1 Declaration of our govern
ment. The question relating to our
banks and currency is closely con-
nected with the subject just referred
to, and they also presented some sat-
isfactory features. Prominent among
them are lack of elasticity in our
currency circulation, and it is a fire.
quent concentration in financial Gen.
ters when it is needed in other parts
OF the country.
New Policy Proposals.
Absolute enforcement of the gov
ernment from the business OF bank
ing is the ideal relationship of the
government to the circulation of the
currency of the country. This con-
dition cannot be Immediately Y
reached, but as step in that direction
and as means of securing a more
elastic currency and obviating other
objections to present arrangements
OF the banks circulation. the secreta-
ry of the treasury presents in his re-
port scheme for modifying the pres
ent banking laws, and providing for
the issue of circulating notes by the
state banks. free from taxation under
certain limitations. 1t proposes the
repeal of all laws providing for the
deposit of United States bonds
as security for the circu-
lation, and permits the national
bank issue of circulating notes not
exceeding in amount 75 per cent OF
their paid up and unimpaired capi-
tai. provided they deposit with the
government as guarantee fund In
United States legal tender notes. in.
cluding the treasury notes OF ls9o,
sum equal in amount to 80 per cen,
of the notes they desire to issue. and
to repeal the provisions OF the pres
ent law imposing limitations and re-
strictions upon the banks desiring to
reduce or increase their circulation
thus permitting each an increase or
reduction of the limit of 75 per cent
of the capital to be quickly made as
an emergency arises.
lin addition to the guarantee fund
required, it is proposed to provide
safely fund for the immediate re-
demption of the circulating notes ol
failed banks by imposing small an
nual tax-sav one-half OF ] per cen'
upon the average circulation o.
| -, Locl until the fund amounts t(