New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1890-01-16
A NATIONAL BANK MEASURE.
MIR. SHERMAN INTRODUCING IN THE SENATE
JOHN j. KNOWS BILL
PROVIDING FOR PERMANENT CIRCULATION
NEW FEATURES OF THE BILL-MR. KNOX
EXPLAINING ITS WORKINGS

NEW FEATURES OF THE BILL-MR kNOA
EXPLAINING ITS WORKINGS
Washington. JAM Ex-senator sherman 'ouaS III
PRODUCED o bill to provide for permanent Nalion"i
bank circulation. copy OF the measure VIII NO
introduced in the House by Mr.. Dorsey CHAIRMAN Vi
the Banking and Currency Committee Inc Dill,
which was prepared by John J. Knox, presuehl Vi
the National Bank of the Republic OF New-lorK'
has I'm its general features already been maze puDc
1t contemplates making not only Government oohuS,
but gold and silver bullion, a basis Tor Natioh"l
bank circulation. ,
New provisions. which have been added to the
bill since il was published provide that any
deficiency in the proceeds of all the bonds, or coin,
or million or of the National Bank safety Fund
10 nav circulating notes Of insolvent banks, shall
be made good out of the assets and Individual
liability OF shareholders of such nsolvcnt National
banks in preference to any and all claims whatso-
ever except the necessary costs and expenses oil the
recevership that bonds held security for oircuat
ing notes shall be withdrawn within thirty DAYS
after they cease to bear interest and the amount re-
ceived for the bonds deposited in gold or silver bullion
as security in place of the bonds that whenever the
National Bank safety Fund created by the bill shall
reach 81 900 it shall be invested by the secretary
of the Treasury in United states bonds; and that H.
upon the date of the maturity of the per cents, the
total amount Of the fund invested in Government
bonds shall equal per cent of the total circulation
then outstanding the tax upon the circulating notes
may be reduced by the Controller of the Currency upon
the advice of the Secretary of the Treasury 10 one
quarter of per cent semiannuay, ana the interest
upon the bonds thereafter shall be distributed TO inc
National banks in proportion to their outstanding cir
oulation.
In explanation OF the workings ana opJeo'S Vi '"o
bill, Mr.. Knox said:
The bill best be explained by taxing OahA nav
100000 capital This bank will be entitled 10 sSUoVVo
circulation Of which s105 900 Will be secured by Cleu
andS :
gold or silver bullion and the $50 600 remaining by he
National Bank Safety Fund. Tire Safety Fund Is oascu
upon the principle that least threequarte OF the
National banks managed with ability ana uhuer io
circumstances are likely become insolvenu one
hundred and thirty National banks having an aggregate
circulation Of s15 100000 have failed during the ast
twenty-five years an average annually OF soOoVVV
Thirty per cent this annual amount Is slSOoOo IL Is
to secure only that amount and this Is done by
semi.annual contributions by the banks OF the TAX on
circulation 1t estimated that the total amount OF IN
solvent which will lie necessary to charge u
this fund up to the year 1907 viii not exceed SiVoOVUo
and that the accommodations the Safety Fund from tho
tax on circulation Will net by that time at least
s25 900 00O having charged OF the insovent bank
notes.
If the Safety Fund should BY possibility. be eN.
hausted the unsecured nsolvent would be entitled
to preference in payment from the assets OF the oa
and the individual liability OF stockholders WhlIe ue
total OF insolvent National bank notes during the last
twenty-five years has been Sl5 100000 the amount DE-
rived from the assets and individual liabilities q nsoN tnt
banks has been more S16OO0O COO that these In
solvent notes II the banking system is conducted a.
safely in the future past would be secured VIII"
out the Safety Fund. The amount paid TO depostoiS.
however would reduced and the Safety Fund abundaii
provides against depostors in lnolvcn baH
The profit upon circulation the banks, under this Dill
will be Il per cent. derived from the interest ON per
cent at 215 Der cent, sinking the premium ana from I'
interest upon circulating notes which are unsecured
In the year 1907, by reducing the tax upon circulation.
onehaf the profit the is not materially reduced
The silver features Of the bill that with circua
ton of $500 900 O0O provides for the use OF slooVOuOO
OF silver bullion market If this silver should
decline 10 per cent value the amount would be- r'iI
bursed to the banks by the profit the total circulation
I'm three and years. II the bullion should rise ID
Che market 10 per the bank would not withdraw the
bullion for the purpose realizing the rise, because 1t
would lose the profit circulation not only Oh the silver
bullion but also the total circulation 1t would not
withdraw bullion for the reason also that H. III the
Judgment the Controller and the Secretary the rise
should be permanent the bank would have the night 10
withdraw the excess silver above the market value SO
that it is believed that sl05 100000 Of silver depos-
tied upon a circulation $500 coo 600 will remain pIa
nenty OF the Treasury The Secretary ana
the Controller both recommend the repeal Of the tax upon
circulation reduction to i Of cent; bat the
banks would willingly continue to pay this tax II the
circulation be made TO yield 70 Il per cent