New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1890-03-10
BANK NOiL (IHCCLA iION.
A SCOTCH OPINION On NATIONAL BANK LEGIs-
From The Glasgow Herald, Feb. Il.

From The Glasgow Herald, Feb l..
y bill which has been drawn up by Mr. hiioA, 'o'
many Years Controller OF te ''1a thc s.,e b.
MT. Sherman, formerly secretary Oh inc l4"'uiS' an"
INTO t,e House OF Representatives By the chairman %.
the Currency Committee, must he Meaiued a. a
serious attempt 10 solve an urgent proticih; -,
treasury in'eicst-bcanA5 BONDS OF tle NV H' Ill.,
are permitted to Issue notes Oh uSpo1,it,,s. 49, ~.
Treasury interestlearng bonds Of The lnici sac
When. however. the bonds are PAD on .l'Nc' o."
banks must replace uien by Ouci hV"us y. ."':
must give mp corres ponding par OF 'neiT ilsN' %
nearly twOthirds of their circulation. IL J. orc"
complained that the banks are IN consequence no,
whether this be the not the loss OF circulation
80 on issuing silver certificates. Eut 'Eis is h'l
all. When the banks have To give mp any ph' "l
their right to issue they arc OBLIGED ~ ioosc id
The Treasury laval money oil tnc Nlh.eu S.at.
equal ia amount 70 the nOtco whl'h onSht 10 U'
called in and cancelled ana which cannot be 30 a''i'
with because no machinery ha' been p4"Niue" 10
doing it, That is one reason why money acc"mnia.'.
then the New ork money market is thrown mo CON
fusion, and II Is also reason why the United state
in gold No doubt it has 10 provide reserve ior It,
Treasury notes, ana also 10 insure me ic'Ht cA
change Of silver But the fund FOR the retirement oi
banknotes is another cause why the treasury h,eps p"
much gold locked mp The bill therefore Is 81 s''i'
Eu PoIsas also. and especaily to oai.ciyc,
stated very briefly ue biil PROVIDES thht ever
the extent Of 70 per cent Of II, capital At the pre-
ent time tbs aggregate capital Of all the National "nt,
dollars or one hundred and twenty millions sterling
IT, therefore, tho bill were 70 pas. ana The banks
T Ters al" Of is I Sro1sIoas "''{ ncy could
crease their circulation to over ninety millions
treble the present baninote circulation Of The United
states Tile bill further provides that 20 per cent Of
the notes issued shall be secured by the deposit ~
the Treasury, either Of interest bearing bond, Of the
United states or half by the deposit Of smch bonds
half by the deposit Of gold coin or bullion @? oi
silver bullion. But if the bonds 50 deposited are
called in By the Treasury ana redeemed, then tle
banks may replace them either by gold coin or bullion
or by silver bullion The author OF ne Dill igrese'
that silver bullion wond generally be- deposited ana
silver bnllion deposited must always be Of the mari et
value OF the notes Issued. II silver falls the &c
il be diminished only with the permission Of tl'e
secretary Of the Treasury. Thus, to the extent oi
secured either by United states Londs by gold, or
by silver worth in the market the full amount for
~ nnt NE hPsc' n"tn wh,r n ,aT Pre-
not required 70 secure by any depo.it. the
S PTovTT rea.d aS' r1 d by s" rcd f a
~ 100000 of lost banknotes;, and, secondly, by
crcditng 1t with the amount OF the tax now levied
notes, whether bank or Treasury do not bclon.
holders who were unfortunate enough to lorc them
that they cannot be identified and that, therefore the
to accnmusic II as fund for securing the exchange
ability Of the notes and ne goes into Lengthy ca
culaton to show that the fund would be amply suii
Gent to secure The notes, as no doub, It would
It is perfectly clear on carefully considering t'In
safe. There would first be the capital Of the bands
then there would be deposit equal 10 40 per cent Of
the circulation and. lastly, there would be The safe
fund in the Treasury But it il equally obvious tina; the
| notes would I'm part be silver notes. That doe
not appear however 10 be fJ TO be objection ia the
United states. The Treasury has been issuing silvc
certificates which are in reality silver notes. at In,
| rate of from 100000 10 100000 sterling pei
! annum for the past twelve years. And Mr.
Window Is proposing 10 Issue notes against all th'
silver raised in America and deposited with the mint
There seems 10 be, therefore. no disncna.iou 10 W
cent silver notes I'm the United states. and II th
bill would meet all the requirements OK the country
II would not only stop the rapid contraction o. th
| il would enable the banks to treble their prcscn
issues, and of course. IL might do much more stii
| If new banks were to be founded. ibis would h.
a very great advantage, doubt In the more recently
developed districts % the country, where lanhS a.
small and where neither the cheqne nor the deposi
system is well DEVELOPED but where ac' omnodntill
could he largely afforded II the banks were able |.
| Issue notes according TO the requirements o! tn
| locality. More important "a regards Europe
wonld be the influence Of the bill In enabling 1h'
Treasury pay ont the very large fund which 1t nov
stop I'm the future 70 the accumulation of -uch fund
Thus II would probably lead 10 the payment out .
the Treasury OF some OF the gold which Is now hex
In snch an excessive amount. and would. Therefore
tend 10 relieve the pressure upon the European none
markets But whether the bill will meet with th
approval Of Congress IS another matter. Possibly IN
Secretary OF the Treasury regard IL az ntcfcrin
with his proposal for the Issue Of silver notes
II he does not il Is well calculated 10 commend itscl
10 the silver party. and u token M by them. th
bin may be carried through both houses very quickly
|