The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1894-12-04

fund in United States legal tender notes,
including treasury notes of 1890, a sum equal
in amount to 80 per cent of the notes they
desire to issue, this deposit to be maintained
at all times, but whenever any bank retlres
any part of its circulation a proportionate
part of its guarantee fund shall be returned
to it to permit the secretary of the treasury to
Prepare and keep on hand ready for issue,
in case an increase in circulation is desired,
National bank notes for each bank having Cir
culation, and to repeal tie provisions of the
present law imposing limitations and restrlc-
tons upon banks desiring to reduce or in
crease their circulation, thus permitting such
increase or reduction within the limit Of
seyenty-five per cent of the capital to be
quietly made as emergencies arise. In addl-
ton to the guarantee fund required it is pro-
posed to provide safety fund for the lmme-
diate redemption of the circulating notes OF
failed banks by imposing small annual tax,
say of one-half of one per cent, upon the
average circulation of each bank until the
fund amounts to five per cent OF the total cir
culation outstanding. When bank fails its
guarantee fund is to be paid into this safety
fund, and its notes are to be redeemed, i'll the
first instance, from such safety fund thus
augmented, any impairment OF such 1und
caused thereby to be made good from the I'M
mediately available cash assets of said bank;
and if these should be insufficient such I'M
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 it is contemplated
that the existing provision liking the lndl-
vidual liabilities of stockholders is to be re-
tanned and the banks Indebtedness on ac-
count of its circulating 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 tax OF
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 de-
nomination than $40; that each national
bank, except in case of a failed bank, shall
redeem or retire its notes in the first instance
at its own office or at agencies to be deslg-
mated by it, and that no fixed reserve need be
maintained on account OF deposits.
Another very important feature of this
plan is the exception of State banks from
taxation by the United States in cases where
it is shown to the satisfaction of the secre-
tary of the treasury and comptroller OF the
currency by banks claiming such exemption
that they have not had outstanding their cir
cuating notes exceeding 70 per cent OF
their paid up and unimpalred 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 first lien upon their assets; and such
banks have kept and maintained a guarantee
fund in United States egal-tender notes, in
Guiding treasury notes of 1890, equal to thirty
per cent of their outstanding circulating
notes. and that such banks have promptly re-
deemed their circulating notes when present.
ed at their principal or branch offices.
1t is quite likely that this scheme may be
usefully amended in some of its details; but
| am satisfied it furnishes basis for very
great improvement in our present banking
and currency system.
IN CONCLUSION.
conclude this communication fully APP
preciating that the responsibility TOR all
legislation affecting the people of the United
States rests upon their representatives inethe
Congress, and assuring them that. whether in
accordance with the recommendations have
made or rot, shall be glad to cooperate in
perfecting any legislation that tends to the
prosperity and welfare of our country.
GROVER CLEV ELAND.
Executive Mansion. Dec. 8. 1894.