The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1897-12-08

me, are taking it, and are much please'
there shall at once be issued to them
by the comptroller of the currency, ma
tional bank notes to an equal amount,
it being further provided that from
time to time, at his convenience, the
secretary of the treasury shall substi-
tute for the greenbacks, treasury notes
and silver certificates, so deposited to
secure circulation, bonds of the same
class and character as the refunding
bo2ds first named to the amount of
$500, COO 900, such bonds to be chargeable
to said banks, and by them accounted
for at such price mot less than par) as
the market quotations may indicate to
be their fair market value.
EXEMPT FROM TAXATION.
During the period of time interview
ing between the deposit of greenhacks,
treasury notes and silver certificates,
and the substitution of the bonds by
the treasury, the circulating notes sre-
officially issued therefore shall be eX-
empt from taxation. Upon such sub
stitution of bonds the funds released
thereby shall at once be transferred by
the secretary of the treasury to the is
sue and redemption division.
"Fourth.-After said banks have de-
posted such bonds, greenbacks, treas
ury notes or silver certificates to the
amount of so per cent of their capital,
they shall be permitted to issue bank
notes in addition to the 80 per cent
thus provided, to the extent of % per
cent of such deposit, which said 25
per cent may be unsecured by any Gil
rect pledge of security, but issued
against the assets of the bank
"Fifth.-Extend the guaranty OF pay
ment by the government to all circu-
lating notes of the bank, whether is
sued against deposited security or
against assets.
SAFETY FUND.
''Sixth.-To secure the government
against loss, if any, attaching to it's
guaranty, a tax of per cent per an
mum on unsecured circulation shall be
levied to create a safety fund, which
fund shall be invested by the secretary
of the treasury and the comptroller of
the currency in government bonds. In
addition to such funds, the government
shall be further protected by having d
first lien upon all assets in case of the
failure of the issuing bank.
"Seventh.-All notes shall be re-
deemed in the city of New York at the
sub-treasury, and at such other sub
treasures as may be designated by the
comptroller of the currency, with the
approval of the secretary of the treas
ury. The control of such redemption
shall be under the direction of the
comptroller of the currency, and made
! from a redemption fund of 10 per cent.
to be provided and maintained by the
banks.
TEN-DOLLAR RESTRICTION.
"Eighth-Restrict the issue of ma
tional bank notes to the denomination
of $40 and upward"
! To illustrate the benefits of this plan
| the secretary cites the fact that the
national banks, with a capitalization of
/ SOS, $4,000, have q circulation of only
| SIS, $4,000. and were compelled to Dor
row $13, 54S, 900 from eastern banks with
which to move last years cotton crop.
| His plan, he believes, would induce
them to issue sufficient circulation to
! transact all their business without Dor
| rowing. The secretary quotes figures
| from the records of the comptroller
office to show the 2 per cent tax on un-
secured circulation would more than
reimburse the government for its losses
! by failed banks. That loss, since the
! first organization of national banks
would have been $194S2 while the fund
produced by the proposed tax would
have amounted to $2,454, 14O.4S.
CONSTANT MENACE.
The secretary then goes on to argue
that the greenback in its present status
is q constant menace to the gold re-
serve and the nations credit, and that
| the necessity being for a reduction OF
the demand liabilities of the govern
ment, those offer the most convenient
agents for that action. He says:
THE Importance of banking in it's re-
lation to industry and commerce de
mands for it, in view of the considera-
ton thus enumerated, careful and
timely attention.
How to withdraw the specific form
of security now provided since it will
ultimately disappear; how to provide a
substitution which will be recognized
by the people as adequate security, and
which will, at the same time, allow
banks within we'll guarded limits the
most useful freedom in their note is
sues The problem is too large it's re-
suits too far-reaching to be solved off
hand or by expert dictum. Its solu-
ton must be gradually reached by the
path of safe experiment.
SAFE PROPOSITION.
ITO allow national banks to issue
circulating notes equal to 20 per CEN
of their capital upon payment of ::
per cent per annum,, as an insurance
or safety fund upon amounts so issued
is, if the demonstration drawn from
the comptroller's office can be trusted
proposition well within the limits O.
safety Nevertheless, whatever risl
there is should be assumed by the gov
eminent, obnoxious as it may be to tn,
general principles of governmental &C
ton. 1t is by such action that the stu
alton as it exists has been evolved
Upon the government, therefore, rest
~ !, 1fe Nn,Ix- e.AIx
IJ1NCE cApv,c DIAM