The Kimball graphic. (Kimball, Brule County, Dakota [S.D.]) 1883-1905, 1894-12-08

ant to its provisions bonds were issued
drawing interest at the rate of S 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 operated 10 reduce
the rate of interest to he paid by the gov
IN to less than 3 per cent. Nothing
could be worse or further removed from
sensible finance h the relations exist
ing between the currency the govern
ment has issued, the gold held for
its redemption. and the means which
must be resorted to for the purpose OF re-
plenishing such redemption fund when
impaired even if the claims upon this fund
were confined to the obligations originally
intended III if the redemption of these oh
legations their cancellation the fluid
would be very small. But these obliga-
tions when received and redeemed in gold
are not cancelled but are reissuea and may
do duty many times by way of drawing
gold from the treasury. thus we have an
endless chain in operation, constantly de-
pleting the treasury's gold and never near
a final rest. ASST this was not bad enough
we have by IL statutory declaration that
it is the policy of the government
to maintain the parity between gold and
silver added to the force and momentum
of this ~exhausting process and added
largely to the currency obligations claim
ing this peculiar gold redemption. Or
small gold reserve is thus subject to drain
from every side, the demands that increase
our danger also increase the necessity of
protecting this reserve against depletion
md it is most unsatisfactory to know that
the protection afforded is only a temper
AIRY palliation. II is perfectly and palpably
plain that the only way unde present con-
ditions by which this reserve when danger
ouslydGpletedc can bereplcnishedi is through
the issue and sale of the bonds of the
government for gold, and yet congress has
ne only thus far declined to authorizes
the ISSUE of bonds best suited to such u
purpose. but there seems n disposition in
some quarters to deny both the necessity
and power for the Issue OF bok.ds at all. I
cannot for a homer believe that any of
our citizens are deliberately willing that
their government should default in It's
pecuniary obligations, or that its financial
operations should be reduced to n silver
basis. AT any rate ! should not feel that
my duty was done If l omitted any effort
! could make to avert such n calamity. As
long therefore rs no provision is made for
final redemption or the putting aside OF
the currency obligation now nsed to de-
pend ard constantly draw from the gov
authority for bond issue is allowed than at
present exists such authority will be util-
lied whenever and as often as it becomes
necessary to maintain a sufficient gold re-
serve and in abundance to save the credit
of our country and make good the ilnan-
carlislc's Currency Plan,
Questions relating to banks and cur
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
its frequent concentration i'll financial CEN
tiers when it Is most needed in other parts
OF the country. Tne absolute divorcement
Of the government from the business os
banking is the ideal relationship of the
circulation of the currency of the country.
This condition can not be Immediately
reached, but as n step in that direction and
as Il means of securing a more elastic cur
rency and obviating other objections
I bank the e,rcu} piGsen' ,h= arrangement nes,ata,y Of Of
the treasury presents in his report a
scheme modifying present banking laws
and providing for the issue of circulating
notes by state banks free from taxation
under certain limitations. The secretary
tages are developed by him with such re-
markable clearness that any effort on my
part to present arguments in it's support
would be superfuons. l shall, therefore,
content myself with an unqualified in
changes in the law and a brief and imper-
tect statement of their prominent features.
1t is proposed to repeal all laws providing
for the deposit of United States bonds as
security for circulation; to permit national
banks to issnc circulating notes not ex-
ceeding in amount rs per cent OF their
paid up and unin paired capital, provided
they deposit with the government as Il
guarantee fund in United States legal ten
der, including treasury notes of 1890, a
they desire to issue, this depositto he main
tanned at all times but whenever any bank
retircs any part of its circulation Il pro-
portionate part of its guarantee fund shall
be returned to it to permit
the secretary of the treasury to
prepare and keep on hand ready for issue
IN case an increase in circulation is desired
blank national Ian notes for each bank
having circulation and to repeal the pro-
vltlons OF the present law imposing limita-
tons and restrictions upon banks desiring
to reduce or increase their circulation,
thus permitting such increase or reduction
within the limit OF the rs per cent Of cap
ital to be quickly made as emergencies
arise: In addition to the guarantee fund
required it is proposed to provide a safety
Of the circulation notes. of
small annual tax; say 'po ona halt
OF l per cent upon the average circulation
OF each bank until the fund amount to $
per cent of the total circulation outstand-
Ing. When a bank fails its guarantee
fund is to be pnid into this safety fund and
Its notes are to be redeemed in the first in
stance from such safety fund thus aug
mentea, 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 insuficient
such Impairment to be made good by pro
rata assessment among other hanks, their
npon the assets of the failed bank
IN favor OF the contributing banks.
AS n further security 1t is contemplated
that the existing provision fixing the indi-
rlduai liability OF stockholders is to be TO-
tanned and the banks indebtedness on ao-
n first lien on all its asseta. For the pur-
pose OF meeting the expense Of printing
notes, official supervision, cancellation
and other like charges there shall be paid
tax, say, one half of l per cent per an,
nun on the average amount of notes in
circulation: 1t is further provided that
there shall be no national bank notes
issued OF less denomination than $40;
that each national bank except in case Of
a failed bank shall redeem or retire its
at agencies to be designated by it and thas
no fixed reserve need be maintained on ac-
count OF deposits. Another very impor-
tant feature of this plan is the exemption
OF state banks from taxation by tbs
United States In cases where it is shown
TO the satisfaction of the secretary Of
the treasury and comptroller Of the cur
Tency by banks claiming such exemption
that they have not had outstanding their
circulating notes, exceeding rs per cent Of
their paid up and unimpaired capital.
that their stockholders are individually
liable for the redemption Of their circt.
lating notes to the full extent of thpi,
ownership Of stock; that the liability al
aid banks upon their circulating notes
constitutes under their state laws a flrs,
lien upon their assets; that such banks
have kept and maintained u guarantee
fund n United States legal tender notes,
including treasury notes Of 1890, equal to
80 per cent OF their outstanding circulate
ing notes. and that such banks have
promptly redeemed their circulating notes
when presented at their principal or
1t is quite likely that this scheme NAV bo
nsefnlIy amended in some of it's details,
great improvement in our present bank.
ing and currency system.
! conclude this communication fully ap-
prectating that the responsibiIity for MI
legislation affecting the people of the
United states rests upon their representa-.