Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1890-01-09

cured by United States bonds, or at the
option of each bank one-half
Of said seventy-fve per cent. may be
secured by depost with the treasurer under
the regulations to be prescribed by the
secretary of the treasury. of gold coin or
bullion, or silver bullion, at the current
market price. Whenever the market or
cash value of bullion and United States
bonds deposited is reduced below the
amount of circulation issued, the comp
troller of currency may demand and re-
ceive such depreciation in either bullion,
or In gold or silver coin, to be deposited
with the treasurer as long
as such depreciation shall con-
tinue; or the amount of circulating
notes of such bank may be reduced by
charging the excess of circulation to the re-
demption fund. An account, to be desig-
mated the national bank safety fund, is
authorized to be opened ON the treasurer's
books by reducing the amount of United
States notes now outstanding 81 SOC, GOO,
and by reducing the national bank redemp-
ton fund the same amount, and crediting
three million dollars to the safety fund.
To said fund shall be added
the duty of one-half of one
per cent. each half year upon the avearge
amount Of national bank notes in %circula-
ton. If any national bank becomes in
solvent and any of It's circulating notes re-
main unpaid after the assets and individual
liability of the shareholders exhausted,
such circulating notes shall be redeemed,
cancelled and destroyed and the amount
charged to the safety fund. Mr..
Knox, in explaining the pro-
visions of the bill said: at
is estimated that the lost and unredeemed
national bank notes amount to at least
one per cent. during every twenty years,
but only one halt the amount estimated to
be lost is to be placed to the credit of the
SAT ty fund to cover thirty per cent. of the
circulation not secured by bonds or bull
lion. 1t is not necessary, how
ever, that this appropriation should
be used for the safety fund
if serious objections are made, as the tax
on circulation-which amounted in 1889
to 81, $40, 331-is abundant for creating
and maintaining a sufficient fund for the
absolute redemption of thirty per cent. on
all issues of all national banks. The
comptroller's report for 1889 shows that
during the last twenty-five years the
total circulation of insolvent banks
amounted to but fifteen million dollars.
The amount of insolvent bank notes
each year the average was $780, 90. thirty
per cent. of which would be S180,000. The
tax on circlation last year was nearly eight
times the amount of safety fund required.
If circulation is increased, the tax will be
correspondingly increased, so that the
amount to be added annually to the safety
fund from it is without doubt abundantly
sufficient to provide for thirty per cent.
of all the insolvent banks of the country.
The profit on the circulation under this
proposition would not be large, but would
be sufficient to induce many, if not all the
smaller national banks to deposit silver
bullion and take out circulation.
Mr.. Knox estimates that at the end OF
the next 20 years. or at the date of the
payment of the four per cent. bonds IL
1907, the safety fund would have accumu.
lated at least S25, 900 900, sc
that from that time onward
a sufficient amount of nationa
bank circulation would remain permanent
ly in existence well secured by gold or sill
yer bullion, and sufficiently profitable to
make the present amount of the United
States notes to respond TO the demand of
the business of the country. 1t would also
give banks in the west as well as the east
who have confidence in the future value Of
silver an opportunity to invest in that
metal. and he believed such investments
would be male for the next three years
equal to at least twenty million dollars
annually, and thus relieve the treasury
from excessive purchases.