The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-10-30

H.. - ~ u lub outstanding lOHlb VI -.
United States which mature by their terms OF
payment in the years 1904 and 1907. Inc
lies in this: First, it removes an am.
bigntty from our contract obligations; an
ernment credit, The word coin, now used to
express tho obligation in the public, debt, Is an
alnniRuous word, 1t is no doubt understood by
Tue more discriminating public creditor 10 mean
gold coin. and the solemn act OF Congress plcdg-
ing the maintenance OF silver coin upon n narity
the word co n as therein used TO mean any
hing other than gold or its full equivalent;
Yet, as this is a conclusion. OF logic rather than
2 clear statement OF fact, the simpler ana more
humble investors. or would.be, investors. IN thc
pupiic debt are confused and doubtful. and the
public credit is weaker therefor.
Nor IS such a course without wise preco,
gents. Tho earlier Issues OF our Government
bonds were payable in dollars with green.
backs a legal tender, with gold and SILVER on a
suos.an.ial commercial paritymnnt oo'n Mhiarr
question arose. What do dollars mean And
an is"S 10 remove nii apmo| upon tn he raith o;f
the United States TO the payment in coin or its
equivalent of all is Understanding ohliEnii9ns,
the law. The commercial disparity hetwccn
our legeltendcr dollars and coin dollars
ent, commercial DISPARITY, between silver
md gold, This act Of 1869 was j%uiicions.
coin .''I INTO 0SS cn Ss's ,%SsysSlS OiH IN gold: You'd
strengthen and confirm the public credit and
the world for our securities on the most advan-
tageous terms. 1t. may he objected that tn
| ulODIlOn OF u SItClnC luTW " pay tuGIl w lUC
public debt would DO ininicai 10 the spirit Of
qualifying, clause In the repeating act OF ls93,
And it is hereby declared to be the policy OF
the United States TO continue the use of both
gold and silver az standard money and to coin
trinsic and exchaugeable value
IF Thu objection be raised it loses all force
when we consider the only two methods by
which the gold and silver coins now in concur.
rent use with us can be so continued as to main.
coins, 'n and the equal i"I power "ip' of every dol.
lar lar at all times IN the markets GS and t,o in
methods is familiar to us, since it has
been in daily use in our financial system since
1879. The other method would consist in so ad-
vancing the coinage value OF silver, by inter-
national agreement or otherwise, as to lend n
p prsssnt ]aPP afihaitYy De @eiSoa t sSs iT be- s sofe 'eaS ab sne
doned. There is nothing in the proposition now
under consideration to interfere with the pnr-
pose to secure an Inauguration OF tho latter
method. 1t must. however, be admitted to be a
measure which, Il adopted, will operate TO throw
upon the governing body whatever measure of
risk may be involved in the experiment If
entered upon. and it is manifestly Just that
helpless and possible non.assenting creditor.
ITO accomplish the objects herein suggested
ton some other form of paper money must be
allowed to I'LL the vacuum which might other
wise be occasioned. The national bank note,
now familiar to our people, is the readiest and
most practical agent to accomplish that object,
found responsive to the call. An enlarged issue
Of bank notes thus contemplated would require
q NUMBER OF amendments TO the present National
Bank act. These amendments should be made
only upon such conservative lines as would.
whiles granting the Necessary aid to the business mes
weaken the system or lessen the stability OF the
notes to be issued.
The complaint uttered against the National
Bank act as 1t now stands Is not directed, to the
method of bank organization or tho absolute
safety guaranteed to the note holder. 1t is di-
rscted to those restrictions which i embodies;
that result in its failure to accomplish the full
benefit which otherwise would follow. The re-
QuirementO OF the law now makes IL impossible TO
organize a bank with n capital OF less than 800
900. no matter h W small tho place in which it
business there TO be transacted. Because OF
national and local. many communities are de-
prived Of the aid OF banks of issue. and bur.
dened with onerous rates OF exchange and
I'm order to obviate to as great an extent as
possible those objections and max the net more
harmonious with roper business conditions, /
recommend that it be amended in the following
FIRST. Permit national banks to be organized
with a minimum capital OF $25. 900 in any place
having a population Of 2 900 Inhabitants or less.
culating notes secured by deposit of bonds to
one:half of ! per cent. per annum.
Third. Permit banks now organized or here
after organized to issue circulating notes to the
par value Of the refunding bonds heIeinbetore
Of the Unitcd States, And, further. allow such
banks as shall avail themselvesDf the opportu.
the United States sresnbscks. treasury notes.o Or
silver certificates to the amount of $2O0,OOo, 900,
against which there snail NJ once issue TO tne1l
By the Comptroller OF the Currency national bank
notes to an equal amount, it being further pro-
yided that from time to time, at his convenience.
for the greenbacks, Treasury notes and silver
certificates so deposited to secure circulation
bonds OF The same class and character as the re-
funding bonds first named. TO the amount of
5000. 900. 900, such bonds to be chargeabIe to
at tt such al price mot less than par, as
the. market quotations may indicate to be
of time intervening between the deposit OF
greenbacks,. Treasury notes. and silver ccrtif'
Gates and the substitution of the bonds by the
Secretary OF the Treasury. the circulating notes
specifically issued therefor shall be exempt from
ffa ands PLEASED sppG thereby sqeH small snail al once be e. trans'
ferred by the Secretary OF the Treasury to the
B" AfoSr Of lssqs rHs sa Efds sRnfs have deposited
such bonds, greenbacks, Treasury notes. or sill,
yer certificates to the amount OF 80 per cent. OF
bank notes. lin addition 10 the 80 per cent. thus
provided. to the extent OF 20 per cent, OF such
cured by any direct pledge of security. but
issued ,gainst the assets of the bank.
l "~Fifth-E1tend the guarantee OF payment By
: the Government to all circulating notes of the
bank. whether issued against deposited security
, "Sixth-To secure the Government against
l loss, II any. attaching to its guarantee tax OF
!. shall hal belle be levied led to crea i" a safety fund, whici
: fund shall be invested by the Secretary OF the
in Government bonds. In addition to such fund
r the Government shall be further, protected by
! having n first lien upon all assets i'll case OF the
failure Of the issuing bank.
4 ."seventh,All notes shall be redeemed in ths
4 city OF New York NJ the Sub-Treasury thereof
and such other Sub-Treasuries RS may be dcsig'
D mated by the Comptroller of the Currency. will
the approval of the Secretary OF the Treasury
The control of such redemption shall be unde!
. the direction OF the Comptroller OF the, Cur
. rCncy, and made from n redemption fund of
: per cent, TO be provided by the banks.
Q ~ighth-Restr the issue OF national banl
. notes to the denomination Of $40 and upward.
n An examination of the plan herein suggested
i will discover that the amendments. SUGGESTED
are not OF a radical character. II ia believed
that banks organized under the National BanI
o act. with these amendments, would give. upon
{ thoroughly safe basis. the country n desirabl,
o credit currency, leading ultimately to turtle
r freedom of issue. as the result of time and cx
perience. A careful investigation Of the com
inercial conditions OF the country at diferen'
t periods OF the year shows how essential to thos'
r the staple crops OF cotton. wheat. and corn
s is a bank note issue, which enables the loca
r bank to supply within the shortest period o
time and at the lowest cost, It's customers will
the means necessary for such II purpose. In illus
tratiOu of this point attention is called 10 In