Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1894-12-06

|
maintain a sufficient gold reserve and i'll
abundant time to save the credit OF our
| country and make good the financial
| declarations OF our government.
| FOR A MORE ELASTIC CURRENCY.
Questions relating to orr banks and cur
| rencv are closely connected with the sub.
| j5ct just referred to, and they also present
| some unsatisfactory features. Prominent
among them are the lack of elasticity in
our currency circulation, and its freq q1ent
| concentration in financial centres When it
is most needed in other parts of the coun-
try. This condition cannot be imme-
| diately remedied. but as step in that
| direction and as means of securing d
more elastic currency aud obviating other
| objections TO the present arrangement of
| bank circulation, the Secretary of the
| Treasury presents in his report scheme
modifying present banking laws and pro.
| viding for the issue of circulating notes by
/ State banks, free from taxation under
| certain limitations. The Secretary eX-
plains his plan so plainly, and its advan-
tages are developed by him with such re-
markable clearness that any effort On my
/ part to preSeht argument in its support
would be supertiuous. shall, therefore,
content myself with an unqualified en-
/ dnr5ement of the Secretary's proposed
changes i.i the Law, and brief and I'M
| perfect statement of their prominent
| features.
1t is proposed to repeal all laws provid-
ing for the deposit Of United States bonds
as security for circulation; tn permit
national banks to issue circulating notes
/ not exceeding in amount Is per cent Of
| their paid up and unimpaired capital
| provided they deposit with the govern
mcrt as guarantee fund in United
| States legal tender notes. including
| Treasury notes of 1880. a sum equal in
tfNt
sire 10 issue, this deposit to be maintained
at all times. but whenever any bank retircs
amy part of its circulation u proportional
| part of its guarantee fund snail be re-
| turned to it to permit the Secretary of the
Treasury to prepare and keep in hand
ready for issue in case an increase in crctI
| lation is desired, blank national bank
notes for each bank having circulation,
| and to repeal the provisions of the present
| law imposing limitations and restrictions
| upon banks desiring to reduce or increase
their circulation, this permitting such in
crease or reduction within the limit of 75
per cent of capital to be quickly made as
| emergencies arise.
In addition to the guarantee fund re-
quired. it is proposed to provide q safety
| fund for the immediate redemption or the
circulation notes of failed banks by i'm
posing a small annual tax, say one half of
per cent, upon the average circulation
of each bank until the fund amounts to 5
per cent OF the total circulation outstand-
ing When bank fails its guarantee fund
Is 10 be paid into this safety fund and its
notes are to be redeemed in the first in
stance from such safety fund thus aug
mented. Another impairment of such
fund caused thereby to be made good from
the immediate available cash assets of said
bank, and If these should be insufficient
such impairment to be made good by pro
rata assessment among the other banks,
their contributions consisting of first lien
| upon the assets upon the failed bunk in
favor of the contributing banks.
As further security it is contemplated
that the existing provision fixing the in
dividual liability of stockholders is to be
retained and the banks Indebtedness on
account of its circulating, notes is To be
made first lien ON all its assets. For the
purpose of meeting the expenses of the
printing notes, official supervision, can
collation. and other like charges there
shall be imposed tax of say of one-half
of per cent per annum upon the average
amount of notes i'll circulation.
1t is further provided that there shall be
no national bank notes issued of less de-
nomination than ten dollars; that each
| national bank, except in case of failed
bank, shall redeem or retire its notes in
| the first instance at its own office or at
agencies to be designated by it, and that
account of deposits.
Another very important feature of this
plan is the exemption OF State banks from
taxation by the United States in cases
where it Is shown to the satisfaction of the
Secretary of the Treasury and the Comp
troller of the Currency by banks claiming
such exemption, that they have not had
outstanding their circulating notes exceed
ing 10 per cent of their paid up and unim-
paired capital; that their stockholders are
individually liable for the redemption of
their circulating notes to the full extent Of
their ownership of stock: that the liability
of said banks upon their circulating notes
constitutes under their State law first
lien upon their assets; that such banks
have kept ami maintained guarantee
fund in United States legal moneys includ-
ing Treasury notes of 1880 equal to 81 per
cent OF their outstanding circulating notes
when presented at their principal or
branch offices.
WILL LLsCo-oPERArE WITH CONGRESS.
1t is quite likely that this scheme may
be usetully amended i'll Some of its details,
but am satisfied it furnishes basis for Il
very great improvement in our present
banking and currency system. | conclude
this communication, fully appreciating
that tho responsibility for all legislation
affecting the people of the United States
rests upon their representatives III the
Congress and assuring them that whether
in accordance with recommendations
have made or not, | shall be glad To CO.
operate III perfectng any legislation that
tends 10 the prosperity and welfare of our
country. GROVER CLEVELAND.
EXECUTIVE MANSION, WASHINGTON, De-
cember Sd, 1924.
---------o