The Washington times., 1894-12-04

| credit of our country and make good the hhah-
| ciil declarations OF our government.
/ "Questions reiating TO our banks ana currency
are closely connected with the subject JUST re-
| ferred TO and they also present some uhs"tis-
/ factory features. Prominent among them ate
the lack OF elasticity in our cufrenty cfcuiatlon
and its frequent concentration in financial cen
ters when II is most needed IN other parts Oh
the country.
! The absolute divorcement OF the government
! from the business OF banking is the IDEAL ielf.
tionship of the government TO the circulation OF
the currency Of the country.
'sihis condition cannot be Immediately
reached, bat step in that direction and as a
means OF securing more elastic currency ana
| obviating other objections TO the present ar
rangeuIent Of bank circulation, the Secretary OF
the 1rsaSury presents in his report scnenle
/ modifying present banking laws ana providlng
for the issue OF circulating notes by state banks
1 Tree from taxation under certain limitations:
"lhe Secretary explains his plan SO PLAINLY
! and its advantages are developed by MN Win
such remarkable clearness, that any enort on
my part 10 present argument IN ITS support
would be superfluOus | shall, therefore, con-
tent myself with unqualified Endorsement OF
the Secretary's proposed changes in the law and
brief and imperfect statement oil their pro
minent features
at is proposed 10 repeal all laws providing for
the deposit of [ nited States bonds as security
Tor circulation; TO permit national banks TO issue
circulating notes not exceeding Ill amount
20 per cent Of their paid mp and pnlmpalted
capital provided they deDOsit with the govern
ment, as a guarantee upd, in JniJed States
legal-tender notes, including Treasury notes OF
1890, sum equal in amount TO 30 per cent OF
the notes they desire TO issue, this deposit 10 be-
maintained at all times, but whenever any bank
retlfes any part OF its circulation pfopornohaI
part OF its guarantee fund sAall be returned 10
IL; To permit the Secretary OF the Treasury to
| prepare and keep on hand ready for issue IN
case an increase in circulation is desired blank
national bank notes for each bank having circula-
tlon and TO repeal the provisions OF the present
law imposing limitations and restrict n upon
banks desiring 10 reduce or increase their cir
culation-thus permitting such Increase ORE
duction within the limit OF - per cent OF capital
to be quickly made as emergencies arise.
in addition 10 the guarantee fund required,
ii Is proposed 10 provide a safety fund for the
immediate redemption of the circulating notes
OF failed banks by imposing small annual tax,
say one-half Of 1 per cent, upon the average
circulation OF each bank until the fund amounts
10 per cent. of the total circulation outstand-
ing When bank fails It's guarantee fund IS To
be paid INTO this safety fund and its notes are to
be redeemed in the first Instance from such
safety fund thus augmented, any impairment
OF such Tund caused thereby 10 be made good
from the immediately available cash assets OF
said bank, and if these should be insufficient
such impairment 10 b5 made good by pro rata
assessment among the other banks their con-
tributions constituting first lien upon the
assets of the failed bank in favor OF the contrib
uting banks As a fur, her security it is conten-
plated that the existing provision fixing the
individual liability OF stockholders Is TO be re-
tanned and the banks Indebtedness on account
CT its circulating notes is 10 oe 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
tax OF say one-hat of ! per cent, per annum
upon the average amount or notes in circula-
tiou.
ut is further provided that there shall be no
national-bank notes issued OF a less denomlna-
ton than $40; that each national bank, except
IN case of failed bank, shall redeem or retire
It's notes in the first instance at its own ofice or
agencies to be designated by it, and that no
fixed reserve need be maintained ON account OF
deposits
Another very important feature Of this plan
is the exemption 0l ate banks from taxation
by the ulted States N caSes where II is shown
20 the satisfaction OF the scretery of the IRE 9
ury ana Comptroller OF the Currency by banks
! claiming such exemption that they have not had
outstanding their circulating notes exceeding 20
per cent Of their paid-up and unimpaiE eG cspl-
tai. that their so sAOlders are lndi i1uAlly
liable for the redemption OF their circulating
notes TO the fuII extent of their ownership Of
stock: that the liability Of said banks upon q cir
circulating notes constitutes under their state
law first lien upon their assets; that such
banks have kept and maintained guarantee
fund in nited states legal-i ender notes includ-
ing Treasury notes Of 1890 equal TO 80 per cent
OF their outstanding circulating notes and that
such banks have promptly redeemed their cir
culating notes when presented at their princl-
pal or branch Offices
ut is quite likely that this scheme may be
usefully amended in some OF its details, but
am satisfied 1t furnishes a basis for very great
improvement ia our present banking and cur
rency system.
Il conclude this communication fully appreci-
ating that the responsibility for all legis alton
affecting the people Of the United States rests
upon their representatives in the Congress, and
assuring them tnat, whether in accordance with
recommendations have made or not, shall DO
that tends TO the prosperity and welfare Of our
country"