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

axnum upon the amount Of its average
circulation. 1t can at once be seen
that wherever and whenever the de-
mands for money are sufficiently &C
tive 10 enable lanks 10 lend their funds
at prices that will net them over Z per
cent, there will be an. incentive to put
out the currency, but when 1t Is worth
less than that amount, as it has been IN
New York and Boston for some months,
the unsigned bills would remain in
vaults. The government would re-
eeive several millions Of dollars per
ahnum into it's Golfers to aid in paying
IL bills, and as a return for the priv
|4ege, granted the banks In addition
the interest on one hundred millions Of
gold now maint aimed in idleness would
be saved, aud the gold put into active
us0 instead e being out Of the channels
Of trade, there being no further use for
"gold reserve" as the bulk of green
backs" and Sherman notes would be
absorbed as q basis for currency or as
u reserve against deposits in banks.
National BANKS Of small Capital.
That oil parts of the country IN ght
have the advantage of the national
system, banks should be permitted to
organize with capital Of $25, 900, or
even less, thus encouraging stale banks
to abandon their present charters.
Banks desiring to organize under this
plan should be examined by an agent
Of the comptroller, and be permitted to
begin business only upon certificate Of
the examiner, duly certifying that the
capital stock has been paid in, in actual
cash. The plan outlined is tenta-
tive, but is believed to be entirety
practicable, and would have the merit
Of not only furnishing sound elastic
currency, but also of providing for the
troublesome greenback and its com.
panion. the Sherman note The ai1var'
dollar, against which the government
las issued its warehouse receipt"
can be obtained at any time on pres
of the certificate may retain it, as he
may elect.
am well aware that any system Of
banking that may be devised will be
open to attack. Human forethought
has not yet been able to provide
against incompetency or fraud, but
that some plan can be attained that
will readily respond to the demands Of
commerce and ward Off many Of the
dangers that now menace us, am con-
fident. We emerge from tho depres-
sion growing out Of the tremendous up
heaval Of 1903, and all signs Indicate a
gradual return TO the normal condi-
ZION Of trade. As we approach the end
OF the century, may we not express the
hope that we are to deal with the ques-
ton Of q financial system in such u
forceful why AS to result i'll lasting ben.
eft to this country. Can we not be as.
sured that when tho morning of the
twentieth century dawns we shall be fa-
vored with the most needed potent fac
tor in our commercial life, sound me-
dium Of exchange.
Tho Plan Illustrated.
Mr.. Merriam also submitted the fol-
lowing demonstration Of the working Of
his plan. First the result SO far rs it
would affect the government, supposing
that all the national banks take out the
maximum Of circulation:
Total capitalization Of national
banks. about ............... $500 OOO,O00
Present national bank circula-
ton, about. .............." 1s5,OOO,0 GOO
Under proposed plan circula-
ton may be increased ...... SAFE, O0O, 900
Provided lhe maximum
amount of circulation is Ia.
ken out, 2dA,OOO,O'O Of legal
tender notes would be alb
sorbed 60 per cent of $780,
OJO,OO)
On basis Of present capital cir
culation could be increased
say. ..................... 475,OOO,ouo
Less absorption Of United
States notes ...... ...... 264,0Oo,ooo
Net increase in circulation. -. S21l 900, OOO
On 70 per cent of b O.OOOOO.
or $,9j,OJO, 900, the govern
ment would receive 2 per
cent-maximum-or. 100000
On err cent OF total capital
safety fund ray $33,OJu.OJO-
the government would pay
per cent, or. V9OUV
Net to the government. s6.93J,OOO
Under present system govern
men receives | per cent on
circulation of SIS ,ooo,oO0. or 1,s5o,oo0
Profit to govern ment on circu-
lution under tuis plan....... $5,OS0,OOO
He then submitted the following to
show how it would effect the banks,
using q single instance Of bank witha
capital of $l00,O00:
40 per cent of capital invested in
u. S. 'notes, which notes are to
be depos ted with US. treasurer,
and against which an equal
amount of bank notes will be
issued by the comptroller OF
the currency ..................... 10000
60 per cent (remaining capitaD.... 10000
100000
Less per cent of capital, to Re de-
posted with comptroller as re-
demption fund. .........."...... 5000
$4,000
Elastic Feature.
Ifbank elects may issue addition
al circulation equal to ~ per
cent Of capital, subject to 2 per
cent tax on average circulation
Maximum ....................... s6o,o'o
sl55,Loo
Lesss r cent as capital, to be de-
posted with u S. treasurer as
safety fund. Observation-Disclosures. 5000
Maximum loanable funds. 80. $50, 600