Little Falls weekly transcript. (Little Falls, Morrison Co., Minn.) 1894-19??, 1895-11-01

experiments Id attempting to formulate
U plan of banking suitable to their coun.
try have apparently settled upona meth
Cd that seems well adapted for the ne
cessities Of commerce throughout the
dominion It has stood the test for
some years, and while all indications
point to q continuation of the system,
no severe strains have as yet been placed
upon it. In the main, however, judg.
Ing from the opinion Of its historian,
Mr.. Breckenridge, it can confidently be
affirmed that our <neighbors are well
satisfied with their banking facilities.
Some of the features Of the Canadian
idea can be utilized, think, in this coun.
try. Others would be entirely inn.
practicable. For instance, it would
not be possible to enact q
law chartering banks of $500.OO0
and over and allowing each institution
TO have as many branches throughout
the country as its stockholders desired.
While the branch bank has many ad.
vantages in the way Of distributing
loanable funds in different parts of the
country, in accordance with the de-
mallds Of commerce, thus maintaining
the equilibrium of rates Of interest, it
would not be possible, at least in the
present temper of the people. to inau.
gurate the incorporation Of banking in
stitutions with the right TO establish
branches. The Canadian law gives the
chartered banks the right to issue
paper money to the extent Of their paid
up unimpalred capital stock, and this
feature with some modification and va.
rious restrictions may be adapted to the
needs of the United States. Paper mon.
ey, issued by bank and redeemable in
gold, is the only logical circulating me-
dunn as part of the vast credit currency,
resultant from the varied and intricate
commercial and industrial systems of
our day. The conditions of trade have
forced upon us q highly organized plan
for the exchange. OF commodities
through the means Of checks, drafts,
bills Of exchange, etc. land we must now
supplement this with q paper money
that will perform this function as well
as it's larger counterpart. The condi-
tiols absolutely essential in the further.
u1lce OF any proposal for the issuance of
q paper money are:
Conditions Requisite for Issuing Paper
Money.
First-It must be safe and properly
secured.
Second-It must be redeemnb.e in
gold or it's equivalent, either ut the
pace of issuance or ut the great tinan-
cial centers Of the country.
Thlrd-It should circulate at par in
all parts of the United States.
Fourth-It should be sufficiently elas-
tic in it's character to accommodate it.
self to the varying conditions OF trade,
going forth from the business centers
during the active moments, when the
products Of the soil are being trans
ported from their sources Of supply to
the markets Of the world, and return
ing in natural way, and retiring when
its duties have been fulfilled.
Assuming that government bonds
will not be the basis OF the currency of
the future, and that the forced loan Of
non-interest bearing notes upon the part
or the government is to continue, aplan
that will practically absorb the ''gleen-
back" and provide as well for q bunk
circulation, based upon credit, will be
the natural one to adopt.
With an ample safety fund provided
by the different national banks in the
country, there would be no risk to the
government in guaranteeing notes OF all
banks under a national system, thus in
surfing absolute safety to the bill holder
and as well no risk to the guarantor.
A Careful System, Rigidly Observed.
In other words, let the suggestions of
the secretary of the treasury, and the
controller as far us applicable, be util-
lied. That, say, 40 per cent of the
capital stock Of national bank be i'll
vested in United States notes, and cir
culat1on be issued against the same, the
bills remaining in the hands Of the
treasurer, and currency to the amount
equal to the remaining 90 per cent of
the capital stock to be delivered
to the bank by the controller
for issuance when desired. Before
the unsecured currency is forwarded,
however each bank should pay into the
treasury Of the United States sum
equal to per cent Of it's capital stock,
which should remain in the hands
of the treasurer as Bank Cir
culation Safety Fund.-" upon which
money the government should allow in
terest at the rate of 3 per cent per an
mum. In case Of failure OF any national
bank, the government could at once re-
imburse itself out Of the redemption
pAON4uGu tAAO tS'oOto Va tAO
failed bank, upon which it
should have a first lien, and
the double liability Of stockholders
were not sufficient. The government,
in case the assets Of insolvent banks, in
Guiding the double liability Of stock,
and the deposit in it's hands as safety
fund, lie insufficient to reimburse it for
the circulating notes Of defaulting in
situations, may assess each bank in the
system pro rata to an amount sufficient
to fully indemnify it for any losses ill.,
Cured, but in any one year no institu-
ton shall be assessed more than l per
cent of it's average circulation for the
previous year.
How Details Could BE Arranged.
Inasmuch as there are likely to be at
least 1000 banks organized under any
national law, the treasurer might act as
redeeming agent for all of the banks, in
accordance with the present usage, and
each bank should at all times keep with
the treasurer, per cent Of it's capital
stock as redemption fund, which fund
should be in gold coin, and held in
trust for the specific purpose intended,
and not mingled with other moneys,
and not counted as part Of the funds Of
the treasury. AS fast as notes are
redeemed, the bank to at once