Goldsboro weekly argus. [volume] (Goldsboro, N.C.) 1885-1909, 1894-12-06

vorcement of the government from
the circulation of the currency of the
country is needed. This condition can
not be Immediately reached; but as a
step in that direction and as a means of
securing a more elastic currency and
obviating other objections to the pres
ent arrangement of bank circulation,
the Secretary of the Treas
ury presents in his report a
scheme modifying the present banking
laws and providing for the issue of cir
| culating notes by State banks free from
taxation under certain limitations
The Secretary explains, his plan SO
| plainly and it's advantages are devel-
| oped by him with such remarkable
clearness that any effort on my part to
| present argument in its support would
be s~uperfluouS. shall, therefore, con
tent myself with an unqualified en-
| dorsement of the Secretary's proposed
| changes in the law and a brief and i'm
| perfect statement of their prominent
| features: .
CARLIsLE's PLAN
1t is proposed to repeal all laws pro-
viding for the deposit of United States
bonds as security for calculations; to
permit national banks to issue circulat-
ing notes not exceeding in amount rs
per cent. of their paid-up and unim-
paired capital, provided they deposit
with the government as a guarantee
fund in United States legal tender
notes, including Treasury notes of 1890,
a sum equal in amount to 30 per cent.
Of the notes they desire to issue, this
| deposit to be maintained at all times,
but whenever any bank retires any part
of its circulation a proportional part of
| its guarantee fund shall be returned to
it, to permit the Secretary of the Treas
ury to prepare and keep on hand, ready
for issue in case an increase in circula-
ton is desired, blank national bank
notes for each bank having circulation,
and to repeal the provisions of the pres
ent law imposing limitations and re-
strictions upon banks desiring to reduce
or increase their circulation-thus
permitting such increase or reduction
within the limit of rs per cent. of CAPT
| tai to be quickly made as emergencies
| arise.
In addition to the guarantee fund re-
/ quired, it is proposed to provide a
safety fund for the immediate re-
demption of the circulating notes
of failed banks, by imposing a
small annual tax, say one-half
or l percent. upon the average ~circula-
ton of each bank until the fund
amounts to 5 per cent of the total cir
| culation outstanding. When a bank
| fails it's guarantee fund is to be paid
into this safety fund and it's notes are
to be redeemable in the first instance
from such safety fund thus augmented.
Any impairment of such fund caused
thereby is to be made good from the
Immediately available cash assets of
said bank, and if the schedule be insult
ficient such impairment is to be made
good by pro rata assessment among the
other banks, their contributions
constituting a first lien. upon
the assets of the failed bank
in favor of the contributing banks
AS a further security it is contemplated
that the existing provision fixing the
individual liability of stockholders is to
be retained and the banks Indebtedness
on account of its circulating notes is
to be made a 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 a tax of say 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 denomination han ten dollars;
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 designated by
Il 1t, dIu lildU HO HAtu IcScTNC HSCu UO
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 cases where it is show to the
Secretary of the Treasury and Comp
troller of the Currency, by banks claim
ing such exemption, that they have not
had outstanding of their circulation ex-
ceeding rs per cent. of their paid-up
and ounimpaired capital; hat their
stockholders are individually liable for
the redemption of their circulating
notes to the full extent of their amount
of stock; that the liability of said banks
upon their circulating notes constitutes
under their State law a first lien upon
their assets; hat such banks have kept
and maintained a guarantee fund in
United States legal tender notes includ-
ing Treasury notes of 1890 equal to
80 per cent. of their outstanding cir
culating notes when presented 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 a
basis for a very great improvement In
our present banking and currency sys-
tenn.
I conclude this communication
fully approaching that h response
bility for all legislation affecting the
people of the United States rests upon
their representatives in Congress, and
assuring them that whether in accord
ance with recommendations l have
made or not, Ishall be glad to cooperate
in perfecting any legislation that tends
to the prosperity and welfare OF our
country.
TSigned1 GROVER CLEVELAND.
l Executive Mansion, Dec. Bird, 1894.