The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1894-12-04
BANKS AND CURRENCY.

Recommend IttOn OF I IN OiIef E 'kles
Heartily Endorsed.
Questions relating oar tanks and
currency are closely contested with the
subject just referred to, and they also
present some satisfactory features. Prom
inent among them are the lack Of elastic
ity in our currency circulation and its
frequent concentration in financial cen
ters when it is most needed in other parts
Of the country. =
The absolute enforcement of the BUSH
hess of banking Is the ideal relationship
of the government to the circulation OF
the currency of the country.
A State Bank Scheme.
This condition cannot be Immediately
reached, but as a step In that direction
and as a means Of securing a more elastic
currency and o6viating other objections
to the present arrangement Of bank circu-
iation, the secretary of the. treasury pre-
sents in his report a scheme modifying
present banking laws and providing for
the issue of circulating notes by state
banks free from taxation under certain
limitations.
The secretary explains hisplan so plainly
and its advantages are developed by him
with such remarkable c~learness that any
effort on my part to present argument in
Its support would be superfiuous. I shall
therefore content myself with
An UDequalled Endorsement
of the secretary's proposed changes in the
law and a brief and imperfect statement of
their prominent features. 1t is proposed
to repeal all avs providing for the de-
FNna1f nf Initial Gfufac hnrla N unx,-tx~x
for circulation; to permit national banks
to issue circulating notes not exceeding in
amount rs per cent of their paid up and
unimpaired capital provided they deposit
with the government as a guarantee fund
In United States legal tender notes, not
including treasury notes Of 1890, u sum
equal in amount to 30 per cent of the
notes they desire to issue, this deposit to
be maintained at all times; but whenever
any bank retires any part of it's circula-
ton, a proportionate part Of its guarantee
tee fund shall be returned to
of treasury prepare and keep on hand
ready for issue, in case on increase In cir
culation Is desired, blank national bank
notes for each bank having circulation,
and to repeal the provisions of the present
Jaw AI1ipOSlIk llAALbAtLUnS dlIu TtSlTlCIiO0S
upon banks desiring to reduce or increase
their circulation-thus permitting such In
crease or reduction within the limit of rs
per cent of capital to be quickly mande as
emergencies arise.
A Safety Fund.
In addition to the guarantee fund re-
quired, it is proposed to prouide q safety
fund for the immediate redemption of the
circulating notes of failed banks by impos-
ing a small annual tax, say one half
of l per cent, upon the average circula-
ton of each bank until the fund amounts
to 5 per cent Of the total circulation out
standing. When a bank fails its guaran-
tee fund is to be paid into this safety fund
n its 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
Immediately 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,
thsir contributions constituting a first lien
upon the assets of failed bank against con
tribnting banks.
A Further Security.
kAs - AuEtucE SSCuE1by III Is
that the existing provision fixing the indi-
vidual liability of stockholders is to be re-
tanned and the banks indebtedness on
account of It's circulating notes is to be
made q first lien on all it's assets.
& For the purpose Of meeting the expense
Of printing notes, official supervision, can
collation. and other like charges there shall
be paid a tax say one-half of 1 per cent per
annum on the average amount of notes in
circulation.
1t is further provided that there shall be
40 national bank notes issued of less de-
nomination than ten dollars; that each
national bank, except In case Of q failed
bank, shall redeem or retire its notes in
the first instan &c at its own Office, or at
agencies to be designated by it, and that
no fixed reserve be maintained on account
Of depository.
GROVER CLEVELAND.
Executive Mansion, Dec. 3, 1894.