St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1890-09-20
BONDS IN BANKS.
The House Bill Being Considered
by the Senate,

WASHINGTON, Sept. 19.-When the
senate reached house bill to reduce the
amount of United States bonds to be re-
quired of national banks, and to restore
to the channels of trade the excessive
accumulations of lawful money in the
treasury, Mr.. Sherman said that he be-
lieved It's passage would tend very
much to quiet even the present agitation
in the money market. The second sec
ton would allow an increase of bank
notes to the amount of 81, 1000, 600 OF
S12,000,000 by authorizing circulation to
the full face value Gnstead of 80 per
cent of the bonds deposited to secure
circulation. He could not tell, however,
what the effect of the first section would
be, which reduces the compulsory re-
Quirement of bond deposits lin order to
have the right to carry on buslnesS) to
$1,000; because bond to be withdrawn
was sold, that would tend to reduce
circulation. But. as the banks had now
the right to retire circulation and sell
their bonds, it seemed to him that the
process had been gong on and that the
passage of the bill would tend to check,
or would induce the national banks to
issue circulation to the full amount of
their bonds deposited. AS matter of
course, the national banks would have
to go out of existence when the per
cent bonds were paid. unless some other
method should be devised. UndOubt-
edly the effect of the bill would be not
only to prOlong, but to encourage the
national bank system. He did not
want, however, to press the bill unduly.
1t was not bill which could be consid-
cred under the five-minute rule. Mr..
Plumb said the bill had, to certain ex-
tent, merit. But he feared that it would
finally result in contraction of the
currency. While he agreed that the
national banking system. as a system
of discount and deposit, was wise, and
ought to be continued, it was plain to be
seen that it was not long to be system
having relation to the currency. The
banks themselves wanted to get out of
that business, and the public also had
some rights in the matter. Congress
could not afford to let the national bank
currency disappear without supplying a
currency in its place. He believed that
the business of the country was in
greater peril than it had been for years
from the lack of sufficient circulating
medium. Disaster might be avoided,
but the country was dangerously near it
now, and would continue so until it
had larger volume of currency.
Mr.. Power moved to strike out
the first section (reducing to
$1,000 the deposit of bonds to retain
charterS). Mr.. Sherman said he had no
objection to having the first section
struck out and to passing the bill with
the second section alone, which would
add 10 per cent to the bank circulation.
After further discussion the bill went
over until tomorrow. retaining its place
on the calendar. Senate bill for the
protection OF trees and other growth on
the public domain from destruction by
fire was taken from the calendar and
passed. The house bill to define and
regulate the jurisdiction of the courts
of the United States, with the amend
ment reported from the judiciary com
mttee, in the nature of substitute,
was taken up as 1.-The unfinished busi-
ness" and went over until tomorrow
without action. Adjourned.