Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1894-12-06


currency. This condition cannot be
reached, but, as step
IN tnat direction and as a means of
securing a more elastic currency and
oDylatlng other objections to the pres
ent arrangement of bank circulation.
the secretary OF the treasury presents
in his report a scheme modifyinr tho
present laws and providing for the is
sue of circulating notes by state banks
free from taxation under certain i'm
itation. The secretary explains the
plan SO plainly and its advantages
developed by him with such remark
able clearness that any effort on my
part to present an argument in its
support would seem Super1uouS. l
will therefore content myself with an
unqualified endorsement of the secre-
rary's proposed changes in the law
and a brief and imperfect statement
OF their prominent features. 1t pro-
poses to repeal all laws providing for
the deposit of United States bonds as
security for circulation, permit ma
uonal banks to issue circulating notes
not exceeding in amount 70 per cent
OF their paid-up and unimpaired CAP
ital, provided they deposit with the
government guarantee fund in
United States legal tender notes, in
Guiding treasury notes of 1890, a sum
equal in amount to 30 per cent. of the
notes they desire to isSue,-this de-
pOsit TO be maintained at all times,
but whenever any bank reduces any
part Of its circulation a proportional
part of its guarantee funds shall be
returned to it; to permit the secre-
tary of the treasury to prepare and
keep on hand ready for issue in case
of an increase in circulation desired
blank national notes for each bank
having circulating; and to repeal
the provisions of the present law i'm
posing limitations and restrictions
upon banks desiring to reduce or in
crease their circulation, thus permit
ting such increase or reduction within
a limit of rs per cent of the capital
to be quickly made as emergency
arises. In addition to the guarantee
fund required, it is proposed to pro-
vide a safety fund for the immediate
redemption of the circulating notes
of failed banks by imposing a small
tax, say One-half of one per cent. up
on the average circulation of each
bank until the fund amounts 20 five
per cent. of the total circulation out
standing; when a bank fails its guar
antee fund to be paid into this safety
fund and it's notes to be redeemed in
the first instant from such safety fund
thus augmented any impairment OF
Sch fund caused thereby to be made
good from the Immediately available
cash assets of said bank, and, if these
should be insufficient, such impair
ment to be made good by pro-rata
assessment among the other banks,
their contributions constituting a first
lier upon the assets Of the failed
bank in favor of the contributing
banks As a further security it is
! contemplated that the existing pro-
vision fixing the individual liability Of
,, stockholders shall be rescinded and a
banks Indebtedness on account of it's
circulating notes to be made first
lien on all it's assets. For the pur-
pose of meeting the expense of print
| ing notes, official supervision, cancel
latiOn and other like charges there
shall be paid a tax say of One-half Of
one per cent. per annum on the aver
age amount of notes in circulation. 1t
further provided that there shall be
no national bank notes issued in less
denomination than ten dollars, that
each national bank. except in the case
of a failed bank, shall redeem or re-
, tire it's notes in the first instance at its
own office or at agencies to be deSig
mated by it and 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 case where it is shown to
the satisfaction of the secretary Of the
treasury and the comptroller of the
currency by banks claiming such ex
emptions that they have not had out
standing their circulating notes ex-
ceeding seventy-five per cent. Of their
paid up and unimpaired capital; that
their stockholders individually are Ii
able for the redemption Of their cir
culating notes to the full extent Of
their ownership Of stocks; that the
liability Of said banks upon their cir
culating notes constitutes under their
state law a first lien upon the assets;
that such banks have kept and main
tanned guarantee fund in United
States legal tender notes, including
! treasury notes of 1890. equal to thirty
per cent. Of their outstanding circulat-
ing notes and that such banks have
promptly redeemed their circulating
notes when presented at their prin-
cipal or branch offices. It is quite
likely that this scheme may be use
fully amended in some Of it's details,
but 1 am satisfied it furnishes a basis
for a very great improvement in our
present banking and currency system.
81 conclude this communication full
ly approaching that the responsibility
for all the legislation affecting the
people of the United States rests upon
their representatives in congress and
assuring them that whether in accord
ance with the recommendations have
made or not, shall be glad to cooper
ate in perfecting any legislation that
would tend to the prosperity and wei
fare Of our county.
"Grover Cleveland"
HIS IDEA OF 1T.