Morning journal and courier. [volume] (New Haven [Conn.]) 1848-1894, 1890-01-07
A Plan by J. J. Knox.
WEIenTY SENATORIAL WORK
Two Disastrous Explosions.
VILLAINS DAsTARDlY WORK
A Lively Western Blizzard.
PORTUGAL LAYING ToRPEDOEs
BANK CIRCULATION.

NATIONAL BANK CIRCULATION.
John Jay Knox Proposes the Use OF
silver Bullion As q Basis-An InEe.
Nous scheme-Mr. Knox,s Explana-
ton Of lt-A Desirable Safety Fund.
New YORK, Jan. 6.-John Jay Knox,
president of the National Bank of the Re-
public, has prepared bill which will be in
troduced in Congress within the next few
days, principal object of which is to pro-
vide for the use of silver bullion as basis
for the National bank circulation.
In explanation of the provisions Of the
proposed legislation Mr.. Knox says: The bill
provides for the issue of bank circulation in
amount not TO exceed seventy five per cent.
of the capital Of each bank, seventy per cent.
of this circulation to be absolutely secured
by the deposit of United States bonds at
par, or of silver bullion at the market price.
The other thirty IL not to be secured by de-
post of each bank, but is to be fully secured
by q safety fund on deposit with the Treasure
or. This safety fund is to be opened by
crediting to the fund 81 SOC, 900 Of lost OF un-
redeemed National bank notes and the same
amount of lost or unredeemsd United States
notes. The fund will be further increased
each half year by adding to it the semi.an
nual tax of one-hslf of one per cent. upon
circulation.
The amount of insolvent bank notes each
year on the average was 5000. 900, 80 per
cent of which would be $3.50, 600 annually.
The tax on circulation during the past year
was 81, 410, 131, or little less than eight times
the amount of safety fund required. If the
amount of circulation is increased to two
hundred millions the tax to be added to the
safety fund will be two millions. If three
hundred millions it will be three millions, 80
that the amount to be added to the safety
fund annually from the tax on circulation is
about double and amply sufficient to provide
for 30 per cent. Of the notes of the national
banks in insolvency.
The profit on circulation under this propo-
sition would not be large, but 1t would be
sufficient to induce many If not all of the
smaller national banks, which depend upon
induce them to deposit silver bnllion with
the treasurer of the United States and take
out circulation.
Mr.. Knox estimates that at the end of the
next twenty years. or ct the date OF the pay
mont of the per cent. bonds in 1907,
safety fund would have accumulated of at
least $25, 600, 600, so that from that time on.
ward sufficient amount of national bank
circulation would remain permanently In ex-
istence we'll secured by gold or silver bullion
and sufficiently profitable to make the cirou.
lation large enough, in connection with the
present amount Of United States notes, to re-
spond to the demand of the business of the
country It would also give the banks in the
west as we'll as the east who have confidence
In the future value of silver an opportunity
to invest in that metal, and he believes that
such investments would be made for the next
three years equal at least to $20, 000. 600 an
nually, and thus relieve the treasury from
excessive purchases.