The Van Buren press., 1894-12-15
cARLIsLE,sa PLAN.
The Plan for Financial Relief Endorsed
BY the President lu his Message
to Congress.

w Y AVu8
The Secretary Of the Treasury presents in his
report scheme modifying present banking
laws, aud providing tor the issue Of circulating
notes by State banks. free from taxation. under
certain limitations. The Secretary xplains his
plan so plainly, and its advantages are developed
by him with such remarkable clcarness. that
any effort on my part to present argument In it's
support would be superfuous l shall, there
fore content myself with an unqualified indorse-
ment of the secretary's proposed changes in the
law, and brief and imperfect statement of their
prominent features
1t is proposed to repeal all laws providing for
the deposit Of United States bonds as security
for circulation, to permit national banks to issue
circulating notes not exceeding in amount75 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. including Treasury notes of 1890. a 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 retres any
part OF Its circulation proportional part of the
guarantee fund shall be returned to it; to
permit the Secretary of the Treasury to prepare
aud keep on hand ready for issue In case an In
crease In circulation 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 cir
culation, thus permitting such increase or
reduction within the limit of Is per cent of
capital to be quickly made as emergencies
arise.
In addition to the guarantee fund required, 1t
is proposed to provide 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 cir
culation of each bank. until the fund amounts to
per cent of the total circulation outstanding.
When bank fails Its guarantee fund is to be paid
iito this safety fund and 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 II these should be insufficient such impair.
ment to be made good by pro rata assessment
among the other banks. their contributions
constituting first lien upon the assets OF the
failed bank In favor OF the contributing banks.
As further security 1t is contemplated that
the existing provision fixing the individual
liability of stockholders Is to be retained, and
the banks Indebtedness on account ofits circulat-
ing notes is to be made first lien on all its
assets.
For the purpose of meeting the expense OF
printing notes. official supervision, cancellation
and other like charges there shall be imposed a
tax of say one-half Of per cent per annum upon
the average amount OF notes In circulation. 1t
is further provided that there shall be no
national bank notes issued of a less denomina-
ton than so; 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
st agencies to be designated by it, that no fixed
reserve need be maintained on 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 II is shown to
the satisfaction of the Secretary of the Treasury
and Comptroller of the Currency by banks
claiming such exemption that they have not
had outstanding their circulating notes exceed
ing IS per cent OF their pad-up and unimpaired
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 and maintained a guarantee
fund in United States legal tender notes, includ-
ing Treasury notes of 1880, equal to 80 per cent
Of their outstanding circulating notes, and that
such banks have promptly redeemed their
circulating notes when presented at their prin-
cipal or branch Offices.
1t is quite likely that this scheme may be use-
fully amended in some of its details, but am
satisfied it furnishes basis for very great
improvement in our present banking and
currency system.
conclude this communication fully appre-
ciating that the responsibility for all legislation
affecting the people of the United States rests
upon their Representatives in the Congress, and
and assuring them that whether In accordance
with recommendations have made or not
shall be glad TO cooperate In periecting any
legislation that tends to the prosperity and
welfare Of our country.
GROVER CLEVELAND.