Brenham weekly banner. [volume] (Brenham, Tex.) 1877-1907, 1891-10-08
ApEnmANENr BANK SYSTEM.


October Forum, presents plan for
a permanent banking system, taking
as basis the national banking sys-
tenn as ii exists:
The lisS of bonds as security for
circulating notes should be enlarged
so as to include state, county, city,
and railroad bonds, with the excep-
ton of street railroad bonds because
their franchises are usually short
and all bonds to be registered, and
the principle and interest payable
in gold, believing that there is
enough of these kind of bonds in ex-
istence to increase the circulating
medium several hundred millions of
dollars, providing that all these
bonds must have been listed five
years in some stock exchange in a
city having 100000 population, and
no bond that has ever been in de-
fault or has sold below par or at a
premium of less than 5 per cent to
be accepted, the result of this being
that the bonds would have market
value of over 100 which would
make them a better security for
bank-note circulation than U. S.
bonds were from 1862 to 1866. The
plan objects to state bond repre-
senting a per capita debt of over 50,
city SIS, county 81, being accepted
as security for the notes, the object
of this being to discourage the in
crease of county, state and city
debts-a consumation devoutly to
be wished. In lieu of all other U.
S. taxes each bank shall pay a semi
annual tax of two per cent upon the
average amount of its notes in circu-
lation.
This will produce large revenue
for the government, and will tend to
prevent the creation of new forms
of taxation, which will be required
to meet its present extrayagant ex-
penditures. When money on call
falls to one-half per cent or even to
one and a half per cent per annum,
this rate of taxation will cause
Eastern banks to deposit lawful
money at Washington for the re-
demption of their notes, and thus
impart an element of elasticity to
the general circulation. Experience
may prove that tax can be still fur
ther increased, adding to the income
of the. treasury, and giving still
greater fexibility to the volume of
paper money.
The amount of the notes issued
by any state bank shall be under
the control of the the State in which
it is located, and nothing in this
law shall restrict the circulating
notes of any state bank to ninety
per cent of the capital paid in; but
no bank shall issue notes in excess
of ninety per cent of the par value
of the bonds deposited by it to Sc
cure the payment of said notes.
This provision will be recognized
as sound by most competent bank
ers, and experience will probably
lead to its extension ultimately to |
national banks. It gives the banks
also the power promptly to increase
the money in circulation when
needed, such extra supply
being retired under the influence of
the tax burden unless there should
continue to be reasonable demand
for it; thus having a tendency still
further to develop fexibility in our
financial system.
State banks shall not be compelled
to redeem their notes anywhere but
at their own counters.
Should it be deemed desirable in
any State to make the circulation of
the notes issued by its banks local,
and to throw about it influences
which would tend to hold them
within the bounds of the State, this
part of the law would provide a way
for dong so.
ALI state bank-notes issued under
this law to be, like national bank
notes, redeemable in United States
legal tender, coin or notes.