Daily Kennebec journal., 1894-12-04

ment, as IL guarantee fund. in United
States legal tender notes, including treas
ury notes of $780, 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 hank retires any
part of its circulation, 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
for issue in case an increase I'm circulation
is desired, 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 circu-
lation, thus permitting such increase or
reduction within the limit of as per cent.
| of a capital to be quietly made as emrr-
gencies arise. In addition to the guar,n
tee fund required, it is proposed TO provide
n safety fund for the immediate redemp-
ton Of the circulating notes Of failed
banks by imposing small annual tax,
say one half Of per cent, upon the aver
age circulation 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 into
deemed in the first instance from such
safety fund thus augmented, any impair
ment 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 tho other banks, their contrbu-
tions constituting first lien upon the AS
81 r. h.,.
tributing banks.
AS further security it is contemplated
that the existing provision 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 its first lien ON all its assets. For
the purpose of meeting the expense OF
printing notes, official supervision, cancel
lation and other like charges, there shall
be imposed tax of one half OF per cent
per annum upon the average amount of
notes I'm circulation.
! 1t is further provided that there shall be
no national bank notes issued of less
denomination than $40; that each ma
tional bank, except in case OF n 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 TINT
no fixed reserve need be maintained ON
account Of deposits. Another very impor-
tant feature of this plan is the exemption
of state banks from taxation by the Uni
ted States in cases where it 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 circil-
lating notes exceeding as per cent. OF their
paid -upand unimpaircd capital; that their
stockholders are individually liable for the
redemption Of their circulating notes 20
the full extent Of their ownership OF stock
that the liability of said banks upon their
circulating notes constitutes under their
state laws first lien upon their assets
and such banks have kept and maintaineu
D guarantee fund in United States legal
tender notes, including treasury notes OF
1890, equal to 30 per cent. of their out
standing circulating notes, and thar stch
hanks have promptly redeemed their CIR
culating notes when presented at their
principal or branch offices, and 1t is quite
likely that this scheme may bc usefuiy
amended in some Of its details; but am
satisfied 1t furnishes a basis for very
great Improvement in our present bank
ing and currency system.
conclude this communication fuiy
apprcciating that the responsibility ior
all legislation affecting the people OF tne
United States rests upon their retrasch'h-
tivcs in the Congress and assuring fh'h
that whether in accordance with recon-
have made or not, ] shall !"
glad to cooperate In pcrfecting any iegn
lation that tends to the prosperity an"
welfare Of our country.
GROVER CLEVELAND
Executive Mansion, Dec 8, 1921