The Corvallis gazette. [volume] (Corvallis, Or.) 1862-1899, 1894-12-07

, lenge the rightful sovereignty of Nj,
aragua over the Mosquito Indian striI
Nicaraguan authorities having give
notice of the forfeiture of concession
to the canal company, on ground
purely technical and not embraced il
the contract, have receded from tha
position.
BONDS AND IMAGE.
Referring to the recent bond issue
the president says, that it is perfect,
and palpably plain that. the only wa,
under present conditions by which
this reserve. when dangerously de
pletel, can be replenished is through
the issue and sale of the bonds Of thu
government for gold. and yet congress.
has not only thus far declined to au
thorize the issue of bonds best suited
| to such a purpose. but there seems q
disposition in some quarters to deny
| both the necessity and power for the
issue of bonds at ALL I cannot for a
moment believe that any of our cit
| liens are deliberately willing that
their government should default in
it's pechniary obligations Or that it's
financial operations should be reduced
to a silver basis. At any rate. ]
should not feel that my duty was done
If l omitted any effort 1 could make
to avert such calamity. As long
| therefore, as no provision is made for
| the final redemption, or the. putting
| aside for currency obligation now
used to repeatedly and constantly
draw from the government, its gold
| and as long as 10 better authority for
bond issues is allowed than at present
exists, such authority will be utilized
whenever and as often as becomes
necessary to maintain a sufficient gold
reserve and abundant means to save
the credit Of oCr country and make
good the financial declarations of our
government.
Concluding, the president says, in
reference to the unsatisfactory feat
Tres of our bank and currency sys-
tom: Inc absolute enforcement of the
government from the business of
banking is the ideal relationship of
the government to the circulation of the
currency Of the country. This condi-
ton cannot be Immediately reached,
but as a step in that direction, as a
means Of securing more elastic cur
rency and Cbviating other objections
TO the present arrangement of bank
circulation, the secretary of tho treas
ury presents in his report, a scheme
modifying the present barking laws
and providing for the issue of circu-
Eating notes by state banks, free from
&axltiOn, under certain linlita tons.
The secretary explains his plan so
plainly and It's advantages developed
by him with such remarkable clear
ness that auy effort on my part to
present an argument in its support
would be supert1uous. I shall there
fore content myself with an unluali-
tied Endorsement of the secretary1S
proposed changes in the law and
brief and imperfect statement of their
prominent features.
1t is proposed to- repeal all laws
providing for the deposit of United
States bonds as security for circula-
tion; to permit rational banks to issue
circulating notes not exceeding in
amount rs per cent Of their paid up
and unimpaired capital, provided
they deposit with the government as
Il guarantee furd in United States le-
gal tender notes, including treasury
notes of 1890, a sum of equal amount
to 80 per cent Of notes they desire to
issue; this deposit to be maintained
1T all times, but whenever any bank
retires any part Of its circulation q
proportionate part Of IT'S 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 circula-
ton is desired, blank national bank
notes for each bank having circula
ton, and to repeal those provisions of
the present law imposing limitations
and restrictions thus permitting such
increase or reduction within the limit
quickly made as emergencies may
arise.
In addition to the guarantee fund
required. it is proposed to provide
safety fund for the immediate re-
demption Of the circulating notes of
failed banks by imposing a small an
nual tax, say one half of one per cent
upon the average circulation of each
bank until the fund amounts to five
per cent of the total circulation out
standing. When a bank fails its
guarantee fund is to be paid into this
safety fund and it's notes are to be re-
deemed, in the first instance, from
such safety fund thus augmented
Any impairment of such fund caused
thereby is to be made good from the
immediate available cash assets of
said bank. and if these should be in
sufficient, such impairment is to be
made good by pro rata assessment
among other banks, their contribu-
tons constituting first lien upon the
assets of the failed bank in favor Of
the contributing banks. AS farther
security, it is contemplated that the
existing provisions fixing the individ-
ual liabilities of stockholders is to be
retained and the banks Indebtedness
on account of it's circulating notes is
to be made first lien on all its as
sets.
For the purpose Of meeting the ex-
pense of printing notes, official super
vision. cancellation and other like
charges. there shall he paid tax, say
one half of one per cent per annum
ON the average amount of notes in
circulation. 1t is farther provided
that there shall be no national bank
notes issued of less denomination than
ten dollars. Another very important
feature of this plan is the exemption
of state banks from taxation by the
United States i'll cases where it is
shown to the satisfaction of the sec
rotary of the treasury and COMPTROLLER