Ottumwa semi-weekly courier. [volume] (Ottumwa, Iowa) 1899-1903, 1902-12-04

TEN is imperfect. During certain months
of the year interest rates dropped danger
ously low-dangerous i'll the sense that
speculation was invited thereby. When
the time arrived for moving crops, rates
advanced aarmngly high, Meantime, the
maintenance of national bank circulation
Improbable, and this class of currency
was retired with great rapidly. The de-
paltment eXerted every influence within its
authority to counteract this natural con
traction.
Buying Bonds.
Whenever there is surplus of public
funds in the treasury and financial condi-
tions make 1t advisable That it be released.
it becomes necessary to purchase govern
ment bonds AT present there is no other
promptly a p' in clrcninto aa' Ehe avaiable
bonds are not held hy banks or by business
concerns. So, whenever the government is
ed. Sould the bonds falling due in the
near future be permitted to mature, they
can be extended at a very low rate of in
terest, payable en- demand. and the hold
ers thereof can no longer dictate prices
| to the government.
Additional Circulation Necessary.
| Additional circulation will be necessary.
Outstanding government bonds are made
| value would justify their use by the banks.
1t is even doubtful if national bank cur
| rency based on government bonds can be
made advantageous to banks. lower tax
1 on its circulation would be counteracted
very promptly by corresponding advance
in the price of bonds. and the profit would
accrue to the present bondholders.
Circulation Based on General Credits.
/ II see 10 objection to the issuance of cir
properly safeguarded. Neither do | be-
| lieve 1t necessary to make currency thus
issued first lien upon assets. A very
small tax upon circulation would be sutti-
cient to cover any possible loss. The gov
ernment actuary has demonstrated that a
tax of one-eighth of one per cent upon cir
culation, would have covered all loss from
| the beginning of our national banking sys-
TEN to. the present time, had each bank
maintained its limit of circulation The
banks could be required to redeem their
| circulation at reserve cities, and the gov
1 eminent would never suffer injury or em-
| barrassment as insurer gainst ultimate
loss. The lowest tax suggested by anyone
would far exceed any possible loss, and
the government could assume responsible
ity TO the people and still realize profit,
When thus guaranteed and primarily re-
deemed by the government at the expense
of the, bank of issue, currency based on
general assets, would be acceptable and MS
secure as the present national bank notes,
based on specific assets.
No Currency to Limit of Banks Cap
ital.
Il doubt. however, the wisdom of max.
ing provision for the issuance. of credit
Not that would fear unfortunate results,
but in all financial legislation the greatest
caution must be exercised lest the cur.
rency be suddenly and nnduly inflated.
gradual increase in circulation Is well-nigl
Imperative. but a sudden and unnecessary
increase would be most unfortunate.
No Branch Bank Recommendation
Il am not prepared ut this time to rec
ommend branch banks. Recent events
confirm previous opinion that the pecu
liar conditions Of this country would not
be conserved by such policy. think q
far better course, for the present nt least
| tp
available in every banking community and
sufficient for the needs of that locality.