The morning call., 1894-12-04

side. The demands That increase our danger
also Increase the necessity of DEOtecting this
reserve against depletion and IL is most unsat-
isfactory TO know that the protection afforded
is only temporary palatlon. Ii is perfectly
and paIpably plain that the only way under
present conditions by which this reserve when
dangerously depleted, can be rapenshed is
through The issue OF the bonds OF the Govern
ment and yet Congress has not only thus FAR
declined TO authorize the issue OF bonds best
suited to such purpose, but there seems dis
position in some quarters TO deny both the ne
cessty and power for the issue OF bonds at all.
! cannot for moment believe that any OF
our citizens are deliberately willing that their
Government should default in its pecuniary
Obligations or that its financial operations
should be reduced TO a silver basis At any
rate should not feel that my duty was done il
L oml ted any effort could make 10 avert such
calamity. AS long therefore as no provision
is made for the final redemption or for the put
ting aside of the currency obligation now used
TO repeatedly and constantly draw from the
Government its gold, and as long as no better
authority for bond issues is allowed than at
present exists such authority will be utilized
whenever and as often as IL becomes necessary
10 maintain a sufficient gold reserve, and IN
abundant time to save the credit Of our cOun-
try and make good the financial declaration OF
our Government.
Carlisle's Plan of Finance.
Questions RELAXING to orr banks and currency
are closely connected with The subject just re-
1erred to and they also present some unSatis-
factory features
tclty III our currency circulation and its fire.
quent concentration In financial centerS when
II IS most needed in other parts OF the country.
l lie absolute enforcement OF the Government
from the business OF banking is the ideal re-
latlon ship OF the Government to the circulation
OF the currency OF he country. This condition
cannot be Immediately reached. but as step
In mat direction and as means of securing a
more elastic currency and obviatiDg other
o91eetlons 70 the present arrangement
OF bank circulation, the Secretary OF
the treasury presents in bis report a
scheme modifying the present banking laws
ana providing for the issue OF circulating notes
by Slale banks free from taxation under certain
limitations. The Secretary explains his plan
so plainly and its advantages are developed by
nm mn win such remarkable clearness that any
eHort on my part 10 present argument in its
support would be supertiuous. l shall. there
lore, content myself with an unqualified in
dorsement OF the Secretary'S proposed changes
In the aW and brief and imperfect statement
OF their prominent features.
1t IS proposed 10 prepare and keep on hand,
ready Tor issue In case an Increase 10 crcula-
ton IS desired, blank national bank notes for
each bank having circulation. and 10 repeal
the provisions of the present law imposing
limitations and restrictions upon banks desir-
ing TO reduce or increase their circulation, thus
permitting such increase or reduction, within
the limit OF the 70 per cent OF their capital TO
be quickly made as emergencies arise. In ad-
dIilon 10 the guarantee fund required, it is pro-
posed o provide safety fund for the immed-
late redemption of the circulation notes of
failed banks by imposing a small annual tax
say half OF per cent upon The average circula-
ton OF such bank, until the fund amounts 10 5
per cent OF the total circulation outstanding.
When bank falls its guarantee fund is 10 be
paid into his safety fund, ana its notes are to
be redeemed III 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 pro rata
assessment among other banks, their contTi-
buttons constituting a first lien upon the assets
OF failed bank in favor OF the contributing
banks.
AS a further security it is contemplated that
the existing provision fixing the individual
liability OF stockholders is to he retained and
The banks Indebtedness on account OF It's cir
culatlnR notes is 10 be made first lien on all
Its assets. For the purpose of meeting the
expense of printing notes, official supervision,
cancellation and other like charges, there shall
be paid tax OF say one-haf Of per cent per
annum 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 SO, and that each national
bank, except in case of failed bank, shall re-
deem or retire It's notes 10 the first instance at
its own office. at agencies TO be designated by
IL, and that no fixed reserve need be main.
tanned or 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 IL is shown
to tDe satisfaction of the Secretary of The
Treasury ana the COMPTROLLER OF the Currency
by banks claiming such exemption that they
have not had outstanding circulation notes ex-
ceedng 20 per cent Of their paid-up and unim-
paired capital; that their stockholders are in
dividually liable for the redemption OF their
circula lug notes to The full rxtent of their
ownership of stock; that the labi Of SAID
banks upon their circulating notes constitutes
under their Stale law first lien upon their
assets; that such banks have Kept and main
taiDed a guaran ee fund in United States legal
tender notes, including treasury notes of 1890,
equal TO 80 per cent OF their outstanding circu-
lating notes. aud that such banks have
promptly redeemed their circulating notes
when presented at their principal or branch
Offices.
1t Is quite likely that this scheme may be
use1ully amended in some OF this detail; but |
am satisfied il furnishes the basis for very
great improvements in our present banking
and currency system.
Last Dig at Congress.
I conclude this communication fully appre-
ciating that tb- responsibility for all legisla-
ton affecting the people of the United States
rests upon their Representatives in Congress,
and assuring them that, whether in accord
aDce with recommendations / have made or
not, shall be glad to cooperate in perfecting
any legislation that eau add TO the prosperity
and welfare of our country.
GROVER CLEVELAND.
Executive Mansion, Dec. 3, 1894.