The record-union., 1894-12-05

tender notes, including the treasury notes
OF 1880 to the amount of 80 per centum
upon the circulating notes outstanding,
TO be maintained at all times, and when
ever bank retires its circulation in
whole or in part its guarantee fund to be
returned to IL in proportion to the amount
OF the notes retires.
iElrd-Retain the provision OF the
law making stockholders individually
liable, and provide that the circulating
notes shall constitute a first lien upon all
the assets of the bank.
Fourth-lmpose tax of one-half of
one per centum per annum, payable
semi-annually, upon the average amount
Oh notes IN circulation TO detray the ex-
penses OF printing notes, official super
vision, cancellation, etc.
"Fiith-No national bank note to be OF
less denomination than ten dollars,
and all. notes Of the same denomination
10 zee UNIFORM IN design, but banks de-
string to redeem their notes in gold may
have them made payable in that coin; the
Secretary OF the Treasury TO have author
lty 10 prepare aud keep on hand. ready
Tor Issue upon application, Il reserve
OF blank national bank notes for each
banking association having circulation.
SlXth-Require each national banking
ASSOCIATION 10 redeem It's notes at its own
o!ilce, or at its own official agencies, to be
designated by il.
5eveuth-Io provide 3 safety fund for
the immediate redemption OF the circu-
latlng notes Of failed banks; impose a tax
OF - percentum per annum upon the
average circulation Of each bank, until
the iund amounts TO i've per cent. of the
total circulation outstanding: require
each new bank, and each bank taking
out additional circulation, 10 deposit its
proper proportion of this fund before re-
celVlng notes; when "A bank tails, It's guar
antee fund held on deposit to be paid into
the safety fund, and used in the redenlu-
ton OF its notes, and il such fund shall
be impaired by the redemption OF the
notes OF the failed national banks, and
immediately available cash assets of such
banks are insufficient to establish the
fund, 1t shall at once be made good by
pro rata assessments upon the other
banks, according to the amounts of their
outstanding circulation. But there shall
be nrst lien upon all assets OF failed
bank, or banks, to reimburse the con-
trlbutlng banks. The safety fund may be
invested in outstanding United States
bonds having the longest time 10 run, the
DoEds and the interest upon them TO be
as part OF the fund, and sold when neces-
sary to redeem notes of failed banks
Elghth-Repeal the provisions OF the
reorganization and extension Act of July
II, 1872. imposing limitations upon the
currency.
"Ninth-Repesl all provisions of the
law requiring banks TO keep reserve on
account of deposits.
Ientn-The Secretary of the Treasury
may in his discretion use any surplus
revenue OF the United States in the re-
demptlon and retirement of United States
legal tender notes, but such redemption
Shall not III the aggregate exceed an
amount equal to 20 per cent. of the addi
tional circulation taken out by national
and State bonds under the system herein
proposed.
"Eleventh-Circuiating notes issued by
a banking corporation duly organized
under the laws of any State, and which
tranSactS no other than a banking busi-
ness, shall be exempt from taxation un-
der the laws OF the United States when it
is SHOWN to the satisfaction of the Secre-
tary of the Treasury and the Comptroller
OF the Currency, o. that such bank has
at no time mad outstanding its circulation
notes IN excess of 70 per cent. of its paid
up and unimpalred capital; % that its
stockholders are individually liable for
the redemption of its circulating notes to
the full extent OF their ownership of
stock; 81 that the circulating notes con-
stitute by law first lien on all the assets
OF the bank; az that the bank at all times
keep the guarantee fund in United States
notes OF 1890, equal TO 30 per centum Of it's
outstanding circulating notes; (5) that it
has promptly redeemed its notes on de-
nland and its principal on demand at it's
principal Office, or at one or more of it's
branch offices, if it has branches.
''Twelith-The Secretary of the Treas
ury may, under proper rules and regula-
tions to be established by him, permit
State banks 10 procure and use in the
preparation of their notes the distinctly e
paper used in printing United States
securities; but no State bank shall permit
or engraye its notes in similitude of a
United States note or certificate or ma
uOnai bank note
whatever may be the objections
to the issue and circulation OF United
States legal tender paper upon either con-
stltutlonal or financial grounds, il has
become SO incorporated into our cur
rency system, and constitutes so large a
part OF our active circulation, that it
could not be suddenly withdrawn with
out producing, in the present state of
our laws, considerable disturbance in
the financial operations OF the Govern
ment as we'll as the business OF the peo-
pie, and, therefore, the plan now sug-
gested provides for its gradual retire.
ment by the use of surplus revenues
hereafter received, a process which viii
probably require several years for it's
completion. AS Ln6So notes can not be
retired until other forms of currency to
an equal amount have taken their place,
there will be neither forced contraction
nor expansion OF the circulation on ac-
count OF the change.
''As the plan suggested proposes to ex-
empt the Government of the United
States from all liability for the redemp-
ton of national bank notes, and place tie
sole responsibility upon the banks them
selves, a guarantee fund of not less than
30 per centum upon the outstanding cir
culation IS regarded as very proper and
necessary feature of the system.
TAXATION OF NOTES.
SIN my opinion, the imposition of a
tax by the Federal Government upon the
use OF circulating notes lawfully issued
by State banks is an unjustifiable. if not
an unconstitutional, interference with
the authority Of the several States, but its
validity has been judicially sustained
and as it does not appear to be Practicable
TO repeal absolutely at this time. it is
proposed to avoid its prohibitory effect
by exempting from taxation the notes of