The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-12-07

M.
| safe and proper way. of the Injurious in
| reference in currency system bv tina
ment.
IF it be conceded that the legaA-1ellasr
money issued by the government does not
| possess the qualifications to make 1t prop
er factor in the country's exchanges OF
! products and manufactures; If the fact also
be admitted that IL Is a deranging and dis
| turblng factor in its relation TO industry
| and commerce, then the time has come to
substitute for It currency which viii ade-
| quately, economically and safely meet the
| eVergrowing needs of the country, rapidly
| developing, as it Is, in the power of pro-
| duction IN the number of its people, and
| the Importance of its domestic and foreign
trade.
| which Will be adequate, economical and safe
| and thus serve in a better way than is now
served the public needs? Limited by space
| In this presentation, l point to the countries
| before named where these conditions are
realized. Our neighbor on the north, Cam
! ada, may be cited as a nearby witness in
the same direction With power to issue
notes profitable employment for their
use in productive industry can be found, the
| power has never been overtaxed or ex-
hausted. The rates of interest have varied
! but little between the richer provinces Of
| Ontario or Quebec and the sparsely settled
| districts of Manitoba. The terms of interest
| are substantially as favorable TO the farmer
| OF the West as to the merchant OF the
| metropolis.
while these conditions in contrast with
| our own, which stimulates the operation OF
| credit at the centers and starves 1t at the
/
| features of its banking system. the influence
| of the currency is most important. Certain
| 1t is that were bank-note issues in Canada
| repressed by restrictive laws as they are
! with us, and if the field of circulation these
| notes now occupy were filled with the legal
| tender notes of the Dominion the facilities
of banking now enjoyed on the frontiers
| would not be afforded. The same tendency
| toward congestion at the centers and scare
| ity in the outlying districts would be there,
| as 1t is here, plainly observable.
| THE CONTROLLERS WARMING.
''It is not intended by anything here said
! to offer the Canadian system a model
| from which we should make an exact copy.
In certain particulars it would not at pres
ent suit our different conditions. The right
| of the Canadian banks to issue their notes
without any special pledge of security for
| their redemption; the law which gives to the
noteholder. in case of bank failure priority
of claim over the depositors, while not OPP
erative to perceived injury, under their sys-
| tenn of large banks with small bran ches
| might, if adopted here with a multitude CT
| small banks, each independent Of The other,
| result in an unjustitiable INVASION of The
| equitable rights of the depostor. The dam
| gers in this regard are ably discussed and
| fully illustrated in the annual report of the
| controller of the currency. 10 nis argument
| nothing need be added While the question
| of terms is important in itsele, It Is never
| theless subordinate one. The facts set
| forth by the controller relate exclusively to
| the proposition that the notes Of a failed
bank shall be a paramount lien urcn the as
| sets for their full value before cry rights
| accrue to other creditors.
The issue of notes upon the general as
| sets of national banks may be made per-
| Iectly secure without the requirement that
| the notes be a first lien upon their assets.
| 1t would only be necessary to award to the
| note holder the same ratable proportion Of
| the assets which went to other creditors,
| and to provide that the amount required 10
| pay the difference be obtained by an ASSESS
| ment upon all the national banks, collected
| n in fha
| circulation Of this character. The vital ques-
| ton is, what percentage of assessment upon
| this circulation would be required in order
| to cover the losses to note holders in the
/ case of failed banks? The experience of the
national banking system demonstrates that
| the assessment would be insignificant
The total circulation of failed banks out
standing at the time of failure, up to oct.
| 81, 1897, was $40, S93, S27. The loss upon these
| notes, If the security for them had been
impaired in the same degree as the security
| dor other liabilities, would have been
| $9,Si9 100, or an annual average of about
| $4,000 This loss would have been made
| good by tax of about one-tWelfth of / per
cent. per year upon the circulation of the
solvent banks. A tax of one-fifth of / per
| cent upon the average circulation of the
national banks since the foundation of the
system n would would have paid such losses up to
| oct. 81, 1897 amounting to S. 379. l65. and
LETT a surplus of about $9,OO0,OOO in the
Whether preference be given to the note
| noloer, as IN Canada, or he be made to take
ms ms snare OF risk with the depoSiter, as in
| whether
the note holder shall be protected by tha
| special pledge of security as now provided
IN our national banking act, these consider
| atoms affect the question relatively. NOT
| absolutely. Under either of these conditions
| PROVISIONS may be made which will furnish
1 10 tne country paper money adequate to
| commercial needs, economical to the people
| ana safe in its general workings
| In the nature of things, the banker is the
| junction: He must have motive for his ae-
1IoH OF ne VIII not exercise it. Given this
| chant or the professional man. be diIieent in
| the employment of his powers That this
| 1 1iuve must be the motive Of gain does rot
| dlnerentiate the banker from other working
| forces OF society, whose actions are health.
ful and helpful to the social whole.
cifc my lasI report ysntured upon spe-
llollS,, IL ADOPTED and formulated into law
would; in my opinion, be curative of the
/ evils herein pointed out. In House bills
| 102S9 and 1888 are embodied series of meas
1 nTes IN some respects more meritorious.
suit of careful study by expert and experi-
| enced men. With some modifcations-the
reasS1naPle iruit OF full discllssion-they
would, l believe, meet the country's needs.
| commend the subject to the early and
earnest attention of Congress-
WAR TAXES
1.-The report Of the commissioner OF internal
revenue possesses peculiar interest indicat-
Ing, as it does, the operation of the war;.
| revenue act of June IS. 1893. 1t shows aui1e
|
| derived therefrom Will form a smaller total
than was estimated by the more sanguine OF
| its supporters
The commissioners estimate of $1,000 90
from this source seems to be fairly justified
| by the results of the treasury during the
period from July l to the present time His
report goes also to show the friction and
| embarrassments which have arisen from the
| need OF interpreting obscurities in the act
ltsef, and the application of such interpre-
tatlon 10 specific cases coming under the
same general head, yet differentiated from
! each other by more or less important par
ticulars. Many complaints have arisen from
| those unreconcfled to such Interpretations
or applications and, granted Wel-balanced
relation between revenue and expenditures
| it might be well to consider the proprety of
| repeating some of the more vexatious feat
| ures of the act. Until more setted condl-
| lions, however as TO extraordinary expen-
| ditures for the army ard navy are reached
even such repeal not be recommended
by this department. Some verbal amend
ments, making more clear the intentions Of
| Congress, are to be desired and representa-
tons in this direction may be made the sub
1ect of a separate communication to Con-
| gress at an early day"
UUEsVxC nVH UnNnnH