The Princeton union. [volume] (Princeton, Minn.) 1876-1976, 1894-12-06
NEW CURRENCY SCHEME.
Plan Suggested by Secretary Car
=. Isle La Endorsed.

Isle Is Endorsed.
Questions relating to our banks and cur
rency are closely connected with the sub |
ject Just referred to and they also present 4
some unsatisfactory features. Prominent
among them are the lack of elasticity In our
currency circulation and its frequent con-
centration in financial centers when it is
The absolute enforcement of the govern
meDt from the business OF banking Is the
ideal relationship Of the government to the
This condition cannot be immediately
reached, but as a step in that direction and
as means OF securing a. more elastic cur
rency and obviating other objee tions to the
secretary of the treasury presents In his re-
port scheme modifying present bank laws
and providing for the issue of circulating
notes by state banks free from taxation un-
der certain limitations.
1t is proposed to repeal all laws providing
for the deposit Of United States bonds as
banks to issue circulating notes not exceed
ing in amount IS per cent of their paid up
and uni1npaired capital, provided they de-
fund in the United States legal teEder notes,
including treasury notes of 1890 sum equal
in amount to 80 per cent of the notes they
tanned at all times, but whenever any bank
retireS any part of its circulation q proper
tiOnate part of its guarantee fund shall be
to- it. to permit the o9 Of
ready for issue in case an increase IN cir
culation is desired blank 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 increase their
circuation-thus, permitting such increase e
Of capital to be quickly made as emergencies
arise. -.
In addition to the guarantee fund re-
quired, it is proposed to provide safety
fund for the immediate redemption Of the
circulating notes Of failed banks by. impos-
ing small annual tax, say one-half Of
each bank until the fund amounts to 5
When bank fails it's guarantee fund is
notes are to be redeemed in the first in
stance from such safety fund thus aug
mented-any impairment Of such fund
Immediately available cash assets Of said
bank, and If these should be insufficient
such Impairment to be made good by pro
their contributions consisting a first lien
upon the assets Of failed bank in favor
Of the contributing banks.
AS Further Security.
AS further security it is contemplated
| that the existing. provision fixing the indiv-
| idual liability Of stockholders is to be re-
tanned and the banks Indebtedness on ac-
count of its circulating notes is to oe made
| first lien on all its assets.
| For the purpose of meeting the expense OF
| printing notes, official supervision. cance.la-
i paid a tax say, one-half of 1 per cent per
annum on the average amount Of notes In
/ circulation. It is further provided that there
i less denomination than ten dollars: that each
! national bank, except in case OF fallen
4 bank shall redeem or. retire its notes in
the first instance at it's own Office or at
4 agencies to be designated by it and that no
/ fixed reserve need be maintained on account
i Of deposits. &l tB5 ss
i plan is the exemption Of state banks from
/ taxation by the United States in cases
where it is shown to the satisfaction OF the
secretary of the treasury and the controller
Of the currency by banks claiming such
4 exemption that they have not had outstand-
ing their circulating notes exceeding g per
cent of their paid-up and unimpaired cap
ital; that their stockholders are individually
4 liable for the redemption OF their. clrcu
ating notes the fp extent tbe 81 shel1
said banks upon their circulating notes con
i stitutes under their state law u first lien
upon their assets: that such banks have
/ kept and maintained guarantee fund II
. | United States legal tender notes. Including
treasury notes Of 1890. equal to 80 per cen
i of their outstanding circulating notes ant
: that such banks have promptly redeemed
! their circulating notes when presented a
t | their principal or branch offices. 1t is quite
likely that this scheme may pc useful!
8 satisfied it furnishes basis Tor a Yer.
t great improvement in our present bankin,
and currency system. IS. 555
!, eating that the responsibility for all legis
: lation affecting the. people OF the Unite
s States rests upon their representatives, =
s the congress. and assuring them tina
IA whether in accordance with recommends
8 tons have made or not. q shall be gla
e to cooperate in perfecting any legislatio
i that tends to the prosperity and welfare Q
Q Executive Mansion, Dec. 5. 1904