The Washington times., 1894-12-05
ELASTIC CURRENCY NEEDED
Continued from First Pagel

an amount not exceeding 10 per centum OF
their paid-up and unimpaired capital. but re-
quire each bank before receiving notes to de-
posit a guarantee fund, consisting OF United
States lega-tender notes, including Treasury
notes of 1890, TO the amount of so per centum
upon the circulating notes applied for This
percentage OF deposits upon the circulating
notes outstanding to be maintained at all
times. and whenever bank retires its circu-
lation, in whole or in part its guarantee fund
to be returned to 1t in proportion TO the
amount of notes retired.
"3. Retain the provision Of the law making
stockholders individually liable, and provide
that the circulating notes shall constitute a
first lien upon all the assets OF the bank.
"a. Impose a tax OF one-half of l per
centum per annum payable semi-annualy,
upon the average amount OF notes in circula-
tion, to defray the expenses of printing notes,
official supervision, cancellation, etc.
''5. No national bank note to be of less de-
nomination than ten dollars. and all notes of
the same denomination to be uniform In
design; but banks desiring to redeem their
notes in gold may have them made payable in
that coin. The Secretary of the Treasury to
have authority to prepare and keep on hand
ready for Issue upon application reserve of
blank national bank notes for each bankir !;
ASSOCIATION having circulation.
"6. Require each national banking associa-
tion to redeem its notes at its own Office or
at agencies TO be designated by it.
~. To provide safety fund for the imme-
/ diate redemption OF the circulating notes of
feiled banks, impose a tax OF per eentum
/ per annum upon the average circulation of
! each bank until the fund amounts to 3 per
! centum of the total circulation outstanding
Require each new bank. and each bank TAX
ing out additional circulation, to deposit its
proper proportion of this fund before receiv-
ing notes. When bank fails, its guarantee
fund held on deposit to be paid into the safety
fund and used in the redemption of its notes,
and if this fund shall be impaired by the re-
demption OF the notes Of failed national banks
and the Immediately available cash assets Of
such banks are insufficient TO re-estabIish tn G
fund, il shall at once be made good by pro
rata assessments upon the other banks. ac-
cording to the amounts of their outstanding
circulation; but there shall be first lien
upon all the assets OF the failed bank or
banks to reimburse the contributing banks.
The safety fund may be invested in outstand-
ing United States bonds having the longest
time to run. the bonds and the interest upon
them to be held as part of the fund and sold
when necessary to redeem notes OF failed
banks.
''s Repeal the provisions otthe reorganiza.
tion and extension act of July II. 1882 i'm
posing limitations upon the reduction and
increase of national bank cireulatian.
80. Repeal all provisions of the law re-
quirinG banks 10 keep reserve on account
| of deposits.
40. The Secretary of the Treasury may, in
his discretion. use any surplus revenue o.
the United States in the redemption and re-
| tirement of United States legal-tender notes
but such redemptions shall not in the aggre
gate exceed an amount equal to 20 PEI cent
OF the additional circulation taken out by
national and State banks under the system
herein proposed.
"1l Circulating notes issued by bank
ing corporation, duly organized under the
laws of any State and which tIansacts NJ
other than banking business, shall be ex
empt from taxation under the laws OF the
United States, when it Is shown to the salts
faction OF the Secretary of the Treasury anC
the Comptroller OF the Currency:
Ia That such bank has at no time ha(
outstanding its circulating notes in excess o
10 per eentum OF its paid up and unim pairet
capital
"Cb.) That its stockholders are individuall
liable for the redemption OF its circulating
notes to the full extent OF their ownership o
stock.
''(e) That the circulating notes eoustitut
by law first lien upon all the assets of the
bank.
Id That the bank has at all times kept
guarantee fund in the United States legal
tender notes, including Treasury notes of 1880
tGuhl ~ OU per CSutuin vi 4lo OUTSTANDING S4A
culating notes: and
''(e.) That it has promptly redeemed its note
on demand at its principal office, or at ont
or more OF its branch offices, if 1t ha
branches.
''I2. The Secretary of the Treasury may
under proper rules and regu .ations to b
established by him. permit State banks t
procure and use in the preparation OF thel
notes the distinctive paper used in printing
United States securities; but no State banl
shall print or engrave its notes in similitud
OF a United States note or certificate or ma
tional bank note.
The Secretary goes into detail in explana
tion of the purpose and advantages OF tn
different provisions OF this plan, and, as nigh
be expected, makes very strong and plaus
ble argument.
The proposition for the repeal of all statute
requiring national banks to hold a fixed re
serve against deposits is discussed next b
the Secretary. who closes with this referene
to silver:
} The experience of this country under tn
act Of February IS, 1878 which limited silve
! certificates TO denominations Of SO and ovel
! and under the act of August I, 1856, whic
removed that restriction, justiies tho belli
that the change now proposed would resu
in a greatly increased use OF silver coins an
certii -ates. and that they would be much le'
likely to return to and remain IN the Ireasur
than at present. AT the time OF pernlttln
the issue OF silver certificates in denomint
tions OF 81, 81, and SIS, standard silver do
lars not represented by certificates had a
cumuIated in the Treasury to the amount {
$50. .959, $50. although the total coinage up
that date was only S235, ,643. .266. Within fol
months aftea that date, although in Ii
meantime the coinage was progressing at tn
usua rate the amount OF free silver held l
the Treasury was reduced TO S71 ,25S, ,56S, an
it continued to decrease, on account OF th
demand for small certificates. until 1t becan
so reduced that further issues of the certit
Gates had to be limited, practically to the Gu
r rent coinage of the dollars.
e Revenue reform is treated in special cha
ter at the end of the report, as follows:
IF this country is to utilize to the fulle
extent the opportunities offered by its ge
graphical position. natural resources, and Il
mechanical skill and commercial enterpri
of its people, it must adhere steadTastly al
aggressively to the revenue policy inau
urated by the present Congress at its last Sc
sion. The reduction of taxation to the lo'
est point compatible with tie collection of
! revenue sufficient to maintain an eficie
public service is a duty which, upon {
plainest principles of justice, every COVER
ment owes to its citizens under all cIrcul
stances, but when the taxation is imposed
such form or at such rates as TO increase I
cost of living and ohstruct the processes
industry and trade, this duty becomes ST
more imperative. and failure to discharge
when the power exists is a gross violation
the public trust and confidence.
:. For many years our tariff laws have be
framed upon the theory that the wealth
the countrv could be increased by imposi