The Kootenai herald. [volume] (Kootenai, Idaho) 1891-1904, 1894-12-08

Prominent among them are the lack OF
eiasuclty in our currency circulation and
its frequent concentration in financial
centers and when it is most needed in
other parts of the country The absolute
enforcement of the government from the
business of banking is the ideal relation
SNIP OF the government to the circulation
OF the currency of the country. This con-
dltlon can not be Immediately reached
out as step in that direction and as a
means OF securing a more elastic eur-
rency and obviating other Objections 10
the present arrangement of the bank cir
culatlon, the secretary of the treasure
presents in his report scheme for rnodi-
Tying the present banking laws and pro-
Vldlng Tor the issue of circulating notes
by state banks free from taxation. under
certain limitations. The secretary ex-
pains MS plans so plainly and it's ad-
Nantages are developed by him with such
remarkable clearness that any effort on
my part to present argument in its sup
port would be superf1uous. I shall. there
lore, content myself with an unqualified
Endorsement of the secretary's proposed
changes in the law and brief and i'm
perfect statement of their prominent feat
ures.
IL IS proposed to repeal all of the laws
providing for the deposit of United States
bonds as security for circulation; to per-
NIT national banks to issue Circulating
ACNC9 AAoi 6AtttOlnB Ill amount cent
OF their paid-up and unimpaired capital
providing they deposit with the govern
ment as guarantee fund in United States
legal tender notes, including treasury
notes of 1880, sum Of equal amount to 30
per cent. of the notes they desire to is
sue, this deposit to be maintained at AL
times, but whenever any bank retires any
part of its circulation, a proportionate
part OF its guarantee fund shall be re-
turned to it to permit the secretary of the
treasury to prepare and keep on hand
ready Tor issue in case an increase in
circulation is desired, blank national bank
notes for each bank having circulation,
and TO repeal the provisions of the pres
ent law imposing limitations and restric-
lions, thus permitting such increase or
reduction within the limit of the rs per
cent. of capital to be quickly made as
emergencies arise. In addition to the
guarantee fund required, it is proposed to
provide a safety fund for the Immediate
redemption of the circulating notes of
failed banks by imposing small annual
tax, say one-half of per cent, upon the
average circulation of each bank until
the fund amounts to per cent. of the
total circulation outstanding
When bank fails it's guarantee fund is
to be paid into this safety fund and it's
notes are to be redeemed. In the first
instance from such safety fund, thus
augmented, any impairment of such fund
caused thereby to be made good from the
available cash assets of the
said bank, and if these should be insult
hcient, such impairment to be made good
by separate assessment among the other
banks, their contributions constituting a
hrst lien upon the assets of the failed
bank in favor of their contributing banks.
INDIVIDUAL LIABILITY.
AS a further security it is contemplated
that the existing provisions fixing the in
diVidual liabilities of stockholders is to be
retained and the banks indebtedness on
account of it's circulating notes is to be
made first lien on all its assets For
the purpose of meeting the expense of
printing notes, official supervision, can
collation. and other like charges, there
shall be paid tax of say one-half of per
cent per annum on the average amount of
notes in circulation 1t is further pro-
yided that there shall be no national bank
notes issued of less denomination than
40; that each ational bank, except in case
Of failed bank, shall release or retire
IS notes in the first instance at it's own
>iIlce or at agencies to be originated by
t and so fixed reserve may be main
aimed on account of deposits
EXEMPTION FROM TAXATION.
Another very important feature of this
)lan is the exemption of state banks from q
AVIATION by the United States in cases
he secretary of the treasury and comp
roller of the currency by banks claim
ng such exemption, that they have not
lad outstanding their circulating notes
exceeding rs per cent. of their paid-up and
lnimpaired capital; that their stockhold
rs are Individually liable for the re-
emption of their circulating notes to the
ull extent of their ownership of stock:
hat the liability of said banks upon their
REGULATING notes constitutes under their
tate law first lien upon their assets;
hat such banks have kept and main
aimed a guarantee fund in United States
egal tender notes, including United States
reasury notes of 1890, equal to 30 per cent
I their outstanding circulation notes;
nd that such banks have promptly re-
eemed their circulating notes when pre-
ented at their principal or branch offices.
1t is quite likely that this scheme may
e usefully amended in some of it's de-
ais but am satisfied that it furnishes
basis for very great Improvement in
ur present banking and currency sys-
EN-.
IN CONCLUSION.
| conclude this communication. fully
ppreciating that the responsibility for
II legislation affecting the people of the
mted States rests upon their representa-
yes In congress, and assuring them that
neither in accordance with the recon-
lendations have made or not 1 shall be /.
lad to cooperate in perfecting any legis-
lton that tends to the prosperity and
elfare of our country.
GROVER CLEVELAND.
Executive Mansion, December 9, 1894.