St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-08-21
CURRENCY OF BANKS.
Mr.. BAiLEY. or TEXAS, HAS A Bill
TO PROPOSE.
IN INCREASE OF s5s.ooo,ooo
Proposed by This Measure-It Is
a Counter Proposition to the
Voorhees, Bill, Which Swells
the National Bank Circulation
Only SO, OOO,OOO-The Bill in
Detail.


| will within a short time pass the Voor-
I hees bill to increase the volume of ma
| ti0nal bank notes and send the measure
i tothe house for It's concurrence. Peo-
pie who expect the house to adopt this
proposition in toto and with prompti-
tude are likdly to be disappointed. 1t
will give rise to prolonged debate. and
the silver men are preparing to meet
the Voorhees, bill with an even more
liberal proposition. They are to pro-
pose a measure which, instead
of swelling national bank currency
100000. as contemplated by the
Voorhees, bill. would increase this
circulation s5S,0O0,OO0, and at the
same time satisfy the demands of a
strong element of the American people
by making it impossible for the national
banks to increase or diminish at will
the volume of circulating currency
The measure, which is being discussed
by the silver men as a counter PROPOSE
tIon, of the Voorhees, bill, has been
drawn by Representative Bailey, of
Texas, an ardent bilnetallist, who is
known in the secret camps of the free
coinage men to be the real author of the
free coinage bill now pending in the
house as the proposition to be offered
by Mr.. Bland as the substitute of the
Wilson repeating bill. Mr.. Bailey's ma
tional bank bill is as foloWs:
The Measure in Detail.
A bill to increase the currency and to
provide for the redemption thereof and
for other purposes.
Section l. From and after the pas
sage of this act any bank organized
under the laws CT the United States,
aud having on deposit with the treas
urer of the United States bonds bearing
interest ut the rate of per cent per
annuin, may surrender said bonds to
the treasurer of the United States to be
Cancelled, and receive in lieu thereof
an amount of national bank notes
which, added to the amount of notes
heretofore issued to said bank, shall be
equal to 120 cents for each dollar Speci-
fed in said bonds.
Sec. 2. Any bank which shall sur
render its bonds in accordance with the
first section of this act shall thereafter
be and remain exempt from the tax of
per cent now required to be paid upon
its circulation.
| Sec. 3. The treasurer of the United
States shall return to any 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 Unitdd States hereby as
sumes all notes issued under the first
section of this act, and all notes hereto
| fore issued by sucn banks as shall sur
/ render their bonds in accordance with
the first section of this act; and, in order
to provide for the redemption of said
notes, the secretary of the treasury is
hereby directed to have coined into
standard silver dollars
All of the silver Bullion
now in the treasury, except so much
thereof as may he sufficient to redeem
the coin notes Issued under the act of
July 4, 1890, entitled An act directing
the purchase of bullion and the issue
of treasury notes therefor, and for
other purposes, and the said silver dol
lars shall be reserved as special fund
to redeem such of said notes as may be
presented for redemption.
Sec. 3. The additional notes issued to
any bank under the first section of this
act shall be uniform in all respects
with the notes heretofore issued to the
same bank, and may be counted as
part of the lawful reserve which the
law requires national banks to hold,
and the said additional notes shall be
receivable the same as Is provided by
law for the notes heretofore issued,
and when received by the treasury
shall be reissued the same as is now
provided by law for United States notes.
Mr.. Bailey Explains.
In explaining his measure and the posi-
ton of himself and many of his free
coinage colleagues on the national bank
question, Mr.. Bailey today said:
"There are about 1852, 900. 900 of these
per cent bonds deposited to secure a
circulation of about Sl45. 100000. My
proposition would increase this circula
ton over sol 200, 900 directly, and would
Indirectly add over 100000 more by
releasing the sums held in the treasury
for redemption purposes, making total
increase of more than S5S.000,0 900. Be
sides this, il would save the tax
payers of the country over S6,00000O
in annual interest. The banks IN
every part of the country would find it
profitable to surrender their bonds and
take this additional circulation, but it
would be especially profitable to the
banks in those sections where the rate
Of interest is the highest, and these are
the very sections which stand most in
need of this increase. In Texas our rate
of interest is 10 per cent. Under the
present law bank which owns bonds
to the face value of $4,000 issues 80 per
cent or $4,000 in notes. 1t must keep
per cent, or 50, $50. of this amount in the
treasury OF the United States as
Redemption Fund.
leaving only s42,250 available for loan.
This sum at 10 per cent brings s4,25O i'll
interest, from which amount the cir
!. culation tax of per cent, or $50, must
be subtracted, leaving net interest on
the circulation of $500. Two thousand
dollars received from the government
as interest on the bonds, added to this
amount, makes a total of $3.50.
Under my plan, the same
bank, while 1t would have no
bonds. would have a circulation
per cent, would yield $4,000. The diff
ference in favor of the bank would thus
be 5000 per annum, besides the premium
of s1O.0 on its bonds. This arrange
ment would be even better for the peo-
pie than it would be for the banks, be-
cause these bonds have fourteen years
yet to run, and at per cent per annum
the people must pay Sc cents in inter-
est which, added to the principal of 100
cents, makes the total cost of redemp-
ton l56 cents on each dollar. If we can
diaab rna bop m, NOW for oapts fhuo
save the people SO cents in interest by
substituting bond which does not per-
form the functions of money with a
note which does. My bill will also utIl-
ize all of the bullion now in the treasury
except what is necessary to redeem the
notes issued under the Sherman act.