The Bessemer indicator., 1893-08-26
BAILEY'S CURRENCY SCHEME.
A SUBSTITUTE FOR VOORHEES,
BILL.
1t Provides for Redseni Boads with
National Hank Notcs.-Wouid
Increase tho Circulation
About s5s,OOO. 900.

Congressman Bailey of Texas has formu-
lated plan which will probably be submitted
10 the House as substitute to the Senate bill
to increase national bank circulation when 1t
reaches tn, House The bill, which is re-
garded favorably by many representatives, is
Ms follows:
"A bill to increase the currency and TO pro
vide for the redemption thereof, and for other
purposes.
"Sectlon J.. From and after the passage OF
this act any bank organized under the laws of
the United States and having on deposit with
the treasurer of the United States bonds bear
ing interest at per cent per annum may sur
render -aid bonds to the treasurer OF tho
United States to be Cancelled and to receive in
lieu thereof amount OF national bank
notes, which, added to the amoun: OF notes
heretofore issued TO said bank, shall he equal
to 100 cents for each dollar specified In said
bonds
"Sec. Q. Any bank which shall surrender
It's bonds IN accord with the above, shall
thereafter be aud remain exempt from the
tax Of per cent, now required to be paid up
on its circulation.
Sec. D. The treasurer Of the United
States shall return to auy bank which has
surrendered its bonds in accordance with the
first section OF this act, the amount which
may be in the treasury TO the credit Of such
bank on account Of Its redemption fund.
sec. 4. The United States hereby assigns
all notes Issued under the first section OF this
act, and all notes heretofore issued by such
banks as shall surrender their bonds In ae-
cOrdancc with the first section OF this act;
and In order TO provide for the redemption of
said notes, the secretary of the treasury Ia
hereby directed to have coined Into standard
silver dollars all OF the silver bullion now in
the treasury, except so much thereof ms may
be sufficient to redeem the coin notes issued
under the act OF July "a, 1880, entitled: An
act directing the purchase of bullion and the
issue OF treasury notes thereon, and for other
purposes and the said sllvcrs dollar shall be
reserved as a special fund 10 redeem such of
said notes As may be presented for redemp-
ton.
"Sec. .. The additional notes issued to
any bank under the first section OF this act
shall bc uniform In all respects with the NOES
heretofore issued to the same bank aud may
be counted as a part of the lawful reserve
which the Law requires national banks to hold
and the same additional notes shall be re
ceivable the same as is provided by the law
for the notes heretofore issued, anil when re-
celved by the treasury shall be relssued the
same Is now provided by law. for United
States notes.
In explaining his measure and the position
of himself and many OF his free-coinasc col
leagues on The national bank question, Mr..
Bailey says:
There arc about SiG2 0)O OF these
per cent. bonds deposited TO secure circula-
tOn Of about Sli5 100000. My proposition
would Increase the circulation over .5l ,OoO,-
00O directly and would indirectly add over
S, ,Co0, 900 more by releasing The suns held in
the treasury of redemption, making total
Increase of more than sjs0oo0oO Besides it
would save taxpayers Of the country over So,
000,0eO Ia annual interest
THE banks in all parts OF the country
would find 1t profitable to surrender their
bonds and take this additional circulation,
hat it would lie especially profitable 10 the
banks In those sections where the rate of in
torcst is the highest and In every section
which stands most In need OF this Increase.
In Texas our rate OF interest Is 10 per cent.
Under the present law n bank which owns
bond. to the face value OF 5000 issues 90
per cent, or $4,000, in notcs. /, must keep
per cent, or ESQ Of this amount IN the
treasury a redemption fund, leaving only
si2, $50 available for loans. This sum at 10
per cent. brings $3.50 In interest from which
the circulatin tax Of per cent, or $3.50, must
be subtraeted, leaving A net interest on the
circulation Of s3 500 The 5000 received
from tho government as Interest on the bonds
added TO this amount makes total OF ;5. $50
"uuder my plan, the same bank, while It
would have no boni-, would have a circnla-
ton of So, 900, which, at tho rate Of 10 per
cent, would yield sG 900. The difference in
favor Of the bank would thus be 500 per an-
mum, besides the premium Of $1,000 on its
bonds. This arrangement would be even
better for the people than it would be for the
banks, because these bonds have fourteen
years yet to run. and at per cent. per annurn
the people must pay Sc cents In interest, which,
added to the principal OF 100 cents, makes the.
to'al cost Of redemption l56 cents on each
dollar If we eau discharge them now fos l20
cents, We thus save the people 81 cents in in
terrst, hy substituting bond which does not
perform the functions OF money with note
which does.
My bill will also utlllzc all Of the bullion
now IN the treasury. except what is necessary
TO redeem the notes Issued under the Sherman
act. The surplus Is something like $50, ,p0J,-
600. which will constitute reserve fund OF
about the same size as Is now held for the re-
dcmpt.un Of grceubacksn