The weekly democratic statesman. [volume] (Austin, Tex.) 1871-1883, 1882-07-13

of renewal at twenty years by the
consent of shareholders owning not
less than two-thirds of the capital
stock, the condition of the bank to
be inquired into and certified to by
the comptroller of currency. 1t is
also provided that shareholders not
willing to continue their investment
into the extended term shall be paid
the cash value of their stock by the
association as assessed in the usual
form of arbitration and approved
by the comptroller of the currency.
New notes are to be issued in place
of the old notes at the expense OF
the banks extending their charters,
and the government is to Lave
the benefit of any gain that
shall arise from a failure
to present the old notes.
The bill recites that:
/. National banks may hence
forth be sued in state courts the
same as banks not organized under
United States laws, with the restric-
ton that no attachment, injunction
or execution shall be issued before
final Judgment in the state or local
court.
2. Banks with a capital of $780,
600 or less may reduce their circula-
ton to one-third of their capital,
provided that the amount of their
circulating notes shall at no time
exceed ninety per cent of the face
value of the bonds deposited
to secure the same. By another
section it is stipulated that a
bank withdrawing its circulating
notes in conformance with
this privilege shall not be permitted
to increase Its circulation within a
period of six months thereafter, and
that not more than $3,00O,OO0 of the
circulating notes in the aggregate
shall be Withdrawn during any one
month.
8. 1t Is provided that the secretary
of the treasury shall issue gold GER
tificates IN exchange for the deposit
of gold coin in the same manner that
silver certificates are now issued ;
that both gold and silver certificates
may be held by the banks and count
ed as a part of their lawful reserve ;
and that no such bank shall be a
member of a clearing house assOcia-
ton in which gold and silver certlfi-
Gates shall not be received in settle
ment of balances. To prevent the
withdrawal of gold from the treas
ury under the resumption act in
order TO deposit it in exchange for
certificates, the secretary of the
treasury is required to suspend the
issue of gold certificates whenever
the redemption gold reserve in the
treasury falls below the sum of $780,
100000.
4. The secretary of the treasury
is also authorized to exchange three
per cent bonds for the three and a
half per cent extended bonds. The
former, like the latter, will be redeem
able at the pleasure of the gov
eminent, with the restriction that
they shall not be called so long as
there are higher interest bonds out
standing which are subject to call.
There is some guarantee of longer
tenure of the bonds in this provision
which will probably induce the
banks to wish for the exchange as
soon as the bill shall become a law.
5. The overcertification of checks
is made a penal offense, and every
officer and clerk of a bank who shalt
be guilty thereof is subjected to a
fine of not more than $4,000 and i'm
prisonment for not more than five
years.
Should these provisions be en-
bodied in the bill as it finally passes,
the banking system will be greatly
changed, and much of the danger
which now attaches thereto will be
eliminated, The clause allowing
national banks to be sued in state
courts the same as banks not or
ganized under United States laws is
specially commendable. 1t brings
these institutions more directly in
subordinatlon to the state
governments, and thus largely
removes the principle OF
centralism from the system-a step
which must meet the approval of all
true friends of our system of govern
ment who are true to the principles
on which the republic was founded
The clause which restricts the powers
of the banks in the matter of with.
drawing their circulation at will il
good. The danger of the power
heretofore vested in their institu.
tons was demonstrated by
the banks themselves when
during the Hayes administrator
they threatened by concert of &C
ton to precipitate financial PAM,
upon the country unless Congress
would legislate to suit their wishes
or if the Legislative department
would not make itself subservien
to them and the executive veto
bills of which they did not sp
prove. This opened the eyes of the
whole country to the immense
power for eyll welded by the banks
and led 10 the curtailment Of iheiI
privileges as herein noted.