The Portland daily press., 1890-01-17
MR.. KNox'S BILL.
The Ex-comptroIIer's Plan to Secure
National Bank Circulation.

WASHINGTON, January 16.-The full text
of the bill introduced in the Senate yesterday
by Senator Sherman, and which was pre-
pared by ex-Comptroller of the Currency J.
j. Knox, for permanent national bank cir
culation, is as follows:
Section THAT from and after the passage
OF this act, every national bank now organ
lied, or which shall hereafter be organized,
shall be authorized TO issue circulating notes
as now provided by law, in amount, not ex-
ceeding 70 per cent of the capital stock of
each bank.
Sec. 2 That not less than 70 ger cent Of
the circulating notes authorized to be is
sued by each bank under this act shall be Sc
cured by United States bonds at the rate of
100 per cent upon the par value of such
bonds, provided that Of one half of such cir
culation 20 per cent shall BE secured by q
deposit with the treasurer of the United
States under such regulations as may be
prescribed by the Secretary of the Treasury
OF gold coin, or bullion, or silver bullion, at
the current market price of such, bullion at
time OF the deposit Whenever the market
or cash value of bullion and of United
States bonds deposited with the treasurer is
reduced below the amount of its circulation
issued for the samv, the comptroller of the
currency may demand and receive the
amount of such depreciation in other bullion
or in gold or silver coin, to be deposited
with the treasurer as long as such deprecia-
tion shall continue, or the amount of the
circulating notes of such bank may be de-
Quoted by charging the excess of circulation
to the redemption fund provided by Section
8 of the act of June 20, 1874
Sec. 3-That an account be designat-
ed as 1.-THE national bank safety fund.- is
hereby authorized to be opened on the books
of the Treasurer of the United States, by re-
ducing the amount of the national redemp-
tion fund $1,000000 and crediting the amount
to the said national bank safety fund. To
this fund shall be added the duty of one
half OF per cent each half year upon the
average amount of national bank notes in
circulation, as provided in Section 8, 124 of
the Revised Statutes of the United States.
Sec. 4-That If any national bank after
the passage Of this act shall become insol-
vent, and any of the circulating notes of
such bank shall remain unpaid after the
bonds and coin or bullion of such insolyent
bank shall have been exhausted, such circu-
lating notes shall be redeemed and cancelled
and destroyed as now provided by law, aud
the amount OF said note shall from time to
time be charged to national bank safety
fund" as provided in this act. But any def
cheney in the proceeds of all the bonds, or
coin or bullion, or of the national bank safe
ty fund to pay such circulating notes, shall
be made good out of the assets and individu-
al liability of the shareholders of such insol-
vent national bank, in preference to any and
all claims whatsoever. excepting 1.-The neces-
Sary costs and expenses of the receiver
Sec. 8. That whenever any of the United
States bonds held as security for the circu-
lating notes under this act shall cease to bear
interest, such bonds. after 30 days notice
to the national banks which had deposited
the same, shall be withdrawn and pre-
sented to the Secretary of the Treasury for
payment, and the avails thereof shall be de.
posted In gold coin or bullion or silver bull
lion in place of such bonds as security for
such circulating notes.
Sec. 5. That whenever the amount in the
national bank safety fund provided for in
this act reaches the sum of l,000,0 900, the
same shall be invested by the secretary of
the treasury in United States registered
bonds, and If upon the date of the maturity
of the United States per cent bonds, the
total amount of the said safety fund invested
in United States bonds shall equal per cent.
of the total circulation then outstanding, the
tax upon the circulating notes may be re-
duced by the treasurer of the United States
upon the advice of the secretary of the treas.
ury to one quarter of per cent. semi-annual,
| ly, and the interest thereafter upon the bonds
in which the safety fund shall be invested
shall be distributed to the national banks, in
| proportion to the amount of circulation then
outstanding. ;cs
Mr. Knox went before the Committee or
| Banking and Currency of the House today
| for an informal talk in reference to the bill