The morning news. [volume] (Savannah, Ga.) 1887-1900, 1897-12-17

! TO the 10 per cent. redemption fund of
such associa lions under such regulations
as may be prescribed by the controller of
/ The currency with the approval of the
| Secretary of the Treasury.
Sec. H. That in lieu OF all existing
taxes, every national banking association
| issuing notes shall pay TO the treasurer
of the United States in the months Of
January and July Of each year a tax Of
one-fourth of / per cent for each half
year upon the average amount of its notes
in circulation.
Provided. however that during all the
period Of time intervening between the de-
posit of United States notes. treasury
notes and silver certificates, and the sub
Sututon of bonds by the Secretary Of the
treas 4ry, as in this act provided, the cir
culating notes specifically issued there
Tor and secured By said treasury notes
or silver certificates shall be exempt from
taxation under the provisions of this act.
Section - Section 5,l3S of the Revised
statutes shall be amended to read as To-
lows; No association will be organized,
WITH less capital than Sl00G0 except
mat banks with a capital not less than
$4,000 may, with the approval Of the Sec
retafy or the Ireasury, be organized in
any place the population of which does
not exceed 600 Inhabitants; and except
mat banks with capital of not less than
rotary of The Treasury. be organized in
any place the population of which does
not exceed 1900 inhabitants. No associa-
ton shall De organized in a city the pop
ulaton Of which exceeds 5000 persons,
with less capital than $4,000.
This act shall take effect on and after
the - day or eighteen hundred and ninety
-, and all acts and parts of acts incon-
sistent with the provisions of this act are
hereby repealed"
a wide range of discussion occurred on
section two of the secTe tary's bill. In an
swer TO inquiries, he said its general pur-
pose was the same as that set forth by the
President.
Mr. Brosius asked how parity of the
metals could be maintained if demand OBJ
legations were Withdrawn from circulation
and accumulated in the treasury.
Mr.. Gage said there would be ample de-
mand notes outstanding beyond the $780,
100000.
Mr.. Brosius insisted that it would i'm
pose on the banks. and not on the govern
ment. the obligation to maintain parity.
The secretary dissented from this, say
ing the demand obligations left outstand-
ing would be sufficient to maintain parity.
Mr. Brosius asserted that the banks
would be called upon to maintain the par
ity, and that if they were unable to do so
the country would at once be forced to a
silver basis.
MI. Gage smilingly remarked that he did
not see the situation In that light. He ap-
pretended no such emergencies
The discussion brought from Mr.. Gage
another brief statement of the demand OBJ
hgatons of the United States He said
he spoke from the experience Of a practical
banker in saying that all the demands
against the government would not be pre-
sented at one time. 1t was a tenet of
banking that all demands did not come at
once. If they did the banks would not
last long For that reason it was nee
essary only TO provide against a small per
centage of the demand. Mr.. Jordan, the
sub-treasurer at New York, had said to
him that al 1.-THE trouble in redemption was
caused by the last 5000, 900, 600 of demands
The secretary concurred in this view. If
therefore, S2000000 600 was set aside in a re-
demptIon fund it would to a large extent
relieve the demand
Mr.. Newlands of Nevada argued that q
contraction of the currency would occur
under the secretary's bill If the banks sur
rendered their notes and took the refund
ing bonds which We're proposed as a basis
for the notes.
Mr.. Gage conceded that this might oc-
cur, but he thought the chances of it were
excessively remote.
Mr.. Cox of Tennessee made the point
that under the bill the banks would get
circulation up 60 the par value of bonds de-
posted at a reduced rate of interest while
at the same time the government was to
pay 212 per cent. interest on the bonds
which the banks got their circulation with.
Mr.. Gage answered that the proposal
of his bin was but first step. 1t had to
recognize the fact that the national bank
ing law provided deposits of bonds as the
basis for circulation. That being the case,
he had deemed it wise as a first step to
reduce the interest on the bonds. When
that desirable end was accomplished fur
Their steps could be taken toward with
drawal of the governments guaranty for
bank note issues and the inter-dependence
between the banks and the government
In the course of his statement, Mr.. Gage
said his bin would be supplemented at a
later day by another measure carrying
out the recommendation of the President
that the Secretary of the Treasury be en-
powered to borrow, when circumstances
demand, $780, 600 for a term not exceed
ing one year This power would not be
exercised except at rare intervals, but it
would have a steadying effect from the
knowledge it gave the market that the
power existed. With this power to Dor
row in case of need and the measure pro-
vided by his bill, Mr.. Gage said he would
just as leave run the government finan-
ces as to run any bank, as there would
be no responsibility or hazard.