Barton County democrat. [volume] (Great Bend, Kan.) 1885-1915, 1894-12-06

but the congress having failed to confer such
authority resort necessarily had to the
sumption act Of 1875. and pursuant to its pro-
vision, bonds were issued drawing interest at
the rate OF per cent. per annum and maturing
ten years after their issuing, 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 TO reduce the
rate Of interest to be paid By the government
20 less than per cent. Nothing could be worse
or farther removed from sensible finance than
the relations existing between the currency
the government has issued, the gold held
Tor its redemption and the means which
must be resorted to for the purpose of replen-
fishing such redemption fund when impaired.
Even il the claims upon this fund were con-
fined to the obligations originally intended,
and II the redemption of these obligations
meant their cancellation, the fund would be
very small. But these obligations when re-
eeived and redeemed in gold not cancelled.
but may be reisSued and may do duty many
times by way of drawing gold from the treas
ury. Thus we have an endless chain in opera
ton constantly depicting the treasury's gold
and never near final rest. As if this was not
bad enough. We have by q statutory declara-
ton that it is the policy OF the government
to maintain the parity between gold and silver
aided the force and momentum OF this exhaust
ing process and added largely to the currency
obligations claiming this peculiar gold redemp-
ton Our small gold reserve is thus subject to
draw from every side. The demands that in
crease our danger also increase the necessity of
protecting this reserve against depletion, and
1t is most unsatisfactory to know that the pro-
lection Afforded Is only temporary palliatiOn.
It 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 issue and sale of the bonds of the
government for gold. and yet congress has not
only thus far declined to authorize the issue of
bonds best suited to such purpose, but there
seems a disposition in some quarters to deny
both the necessity and power for the issue of
bonds at all cannot for a moment believe
that any of our citizens deliberately willing
that their government should default in its
pecuniary obligations, that its financial
operations should be reduced to a silver basis.
AT any rate should not feel that my duty was
done If omitted effort 1 could
make to avert such q calamity. AS long.
therefore, as provision is made for the
anal redemption or the putting aside OF the
currency obligation used to repeatedly
and constantly draw from the government it's
gold, and as long better authority for
bond issues is allowed than at present ~rsto
such authority Will ~ u,fIlzod Whenever ana
90 VlHVo as 1t bee.@&es necessary to maintain
euniote1b did reserve and IN abundant time to
s"so &c credit of country and make good
- Ell financial declarations OF our government
Questions relating to our banks and currency
. are closely connected with the subject referred
. TO; they present some unsatisfactory features.
Prominent among them are the lack OF elasti-
city in our currency circulation and its fire.
quent concentration in financial centers when
1t is most needed in other parts of the country.
1.-The absolute enforcement of the governments
from the business of banking is the ideal rela =
tionship of the government to the circulation
Of the currency of the country This condition
sannot be Immediately reached but step in
shat direction and as means Of securing a
more elastic currency and obviating other OBJ
jections to the present arrangement
OF bank circulation the secretary OF
the treasury presents his reported 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
support would be superf1uous. shall therefore
content myself with an unqualified indorSe-
gnent of the secretary's proposed changes in
the law and brief and imperfect statement of
their prominent features.
It is proposed to repeal all laws providing
for the deposit of United States bonds Sc
curity for circulation; to permit national
banks to issue circulating notes not exceeding
in amount 75 per cent. of their paid up and un-
impaired capital, provided they deposit with
the government as a guarantee fund in United
States legal tender notes, including treasury
notes of 1890, a sum equal in amount to 80 per
cent of the notes they desire to issue, this de-
posit to be maintained at all times, but when
ever any bank retireS any part OF its circula-
ton proportional part OF its guarantee
fund shall be returned to it; to per-
NIT the secretary of the treasury to
prepare and keep on hand ready for issue in
case an increase in circulation is desired blank
national bank notes for each bank having cir
eulation. and to repeal the provision of the
present law imposing limitations and reStric-
tionS upon banks desiring to reduce or increase
their circulation. thus permitting such increase
reduction within the'limit OF 75 per cent OF
capital to be quickly made emergency may
arise. In addition to the guarantee fund re-
Quired it is proposed to provide a safety fund
for the immediate redemption OF the circulating
notes of failed banks by imposing
small annual tax, say one-half
of per cent upon the average circulation OF
each bank until the fund amounts to per cent
of the total circulation outstanding. When a
bank fails its guarantee fund is to be paid
into this safety fund and its notes are to be re-
deemed in the first instance from such safety
fund thus augmented: any impairment of such
fund caused thereby to be made good from the
immediately available cash assets of said
bank, and if these should be insufficient such
impairment to be made good by prorata as
seSSment among the other banks, their
contributions constituting first lien
upon the assets of the failed bank in
favor of the contributing banks.
That each national bank, except in case of a
failed bank shall redeem retire its notes in
the first instance at it's own office agencies
to be designated by it, that no fixed reserve
used be maintained on account of deposits
Another very important feature OF this plan is
the exemption of state banks from taxation by
the United States in cases where it is shown
to the satisfaction OF the secretary of the treas
ury and comptroller of the currency by banks
claiming such exemption that they have
not had outstanding their circulating
notes exceeding IS per cent o
their paid up and unimpaired capital:
that their stockholders are individually liable
for the redemption of their circulating notes &c
the full extent OF the ownership of stock; that