The Providence news. (Providence [R.I.]) 1891-1906, 1897-11-16

instead OF stimulated when most re-
qulred.
T. II bank notes issues be based exclu-
sivelv on assets 0f the bank, Is the nature
anu extent OF the security such ~ eifectu-
ally To protect the note holder? Wnat
limit should be sot TO such note issues
Answer. u nder proper regL Llaticns ami
limits. IA circulation based on assets la
the possession of a bank would be so
cured ms To adequately protect the note
sholder, especially with a safety fluid pro-
vision. such circulation should be linn
ited TO seventy five per cent of capital.
D. Since bank assets (including stock
holders liability, etc. must be- the means
OF ultimate redemption Of such itsues
what funds would you doom necessary TO
bv held rs cash reserve for the inme-
diate redemption OF the notes. and IN
what form; and in whose hands?
Answer. Twenty -fivo per cent In gold
Tor city banks, fifteen Per cent In gold for
country banks, the percentage To be based
ON the amount OF notes actually In cireu-
lation. This reserve 10 20 held in tho
bank. In addition live per cent Of au-
thorized circulation should pe held with
redemption agency 10 he established at
the commercial centre OF the country.
o. In case of notes based on bank assets.
what means can you suggest 10 obtain
and preserve high character OF dis
countsY
Answer The same means that now are
used examinations and strict enforce
ment OF law by the Comptroller of the
Currency.
T. Can any watchfulness of other banks
connected by locality or business con-
nectioDs be brought to bear On bank 10
prevent bad banking! Can such "a scheme
be devised as in cities where clearing
house associations detect and punish
weakness. by which country banks can be
guardedy
Answer. 1T is very doubtful wbeth,r
widely separated country banks could
tnd il convenient to form associations.
g. What plan of examination and in
spectiun would you recommendY
Answer. Examinations by competent
examines ana reports TO the Comptroller
of the Currency or similar central super
visury bureau
D. What methods would you suggest
by which uniformity of note issues based
on assets could be secured throughout the
country III by redemption, state where
and howf
Answer. The preparation and printing
of all notes should be under the super
vision Of central Federal bureau. All
notes should be issued on q similar Sc
curity plan whether on the general assets
OF the bank held by the bank, or on seq
regated assets deposited with the govern
ment Redemption should be made in
the commercial centre OF the country by
This should not supersede the necessity Of
redemption at "a banks own counter.
10. What If anything, beyond provision
for Immediate redemption is needed for
securing elasticity Of note issues in per.
iods OF normal business?
Answer. The experience Of the suffolk
Bank system and other cases whore gen
uine Immediate redemption prevailed,
has proved that such immediate reuemp-
tion will secure elasticity OF note issues.
IL. In times Of panic or sudden
strinQency, how would you provide for
additional issues by ths banks To enable
them To- continue discounts and prevent
commercial distress?
Answer -Vherc should bs fixed limit
To the issue OF each bank IN ordinary
times A good system OF redemption for
the notes of all banks, in the chief lnan-
cial centr1. would tend To prevent per-
iouicai strDgencies, but II stringeDcy
occurs banks may avert the worst, If per-
mittcd TO exceed their normal issues for a
time at least. These excessive issues
however, should be subjected to rate of
tax which will cause their retirement
when rates of discount no longer make
such issues profitable.
IL. OF what should the bank reserves
cOnsistY
Answer. Bank reserves on notes should
consist OF gold coin. On deposits any
current funds redeemable in gold.
l3. Should any National bank he per-
mittsd to pay interest on the current de-
posit OF other banksy
Answer. There should be no restric-
tion on the payment of interest
IL Should deposits of country banks
in reserve cities be authorized to bs
counted rs n part of the required reserve I?
Answer. Yes. This will aid in main
taining a system of redemptions.
10. What should be the minimum
limit OF capital for National banks?
Answer. Twenty five thousand dol
lars.
10. Should the existing 10 per cent tax
on state bank notes be repealed
Answer. 1t should not II any uni
formity OF bank issues is To be main
taired.
II. Should any National bank be- per-
mitted TO establish branches under its
single management? If SO under what
limitations, If anyy
Answer. There is no necessity for
branch banks in the United States.
49, Should branch banks be obliged to
redeem the notes of the parent bank ard
of other branchesg
Answer. The parent hank should be
required To redeem the notes OF all the
branches but "A branch bank miahs be
crushed by requiring IL To rcdeeIa the
notes of the rarent bank and other
branches AT short notice.
~. Should branch banks he required to
maintain any specified proportion of re-
serves TO liabilities, Independent of regu-
lations for the general accounts OF tho
parent bank?
Answer. The branch bank should re
under strict regulations so that it could
always maintain its solvcncv during tho
time required Tor receiving assistance
from tho parent hank.