The Anaconda standard. [volume] (Anaconda, Mont.) 1889-1970, 1897-12-08

1 such bonds to be chargeable to said
( banks and by them accounted for at
such price (not less than par) as the
u market quotations may Indicate 70 pc
/ their. fair market value. During the
period of time intervening between the
\ deposit of greenbacks, treasury notes
I and silver certificates. and the subsutu-
/ ton of the bonds by the treasury, the
! circulating notes specifically issued
! therefor shall be exempt from taxation.
/ Upon such substitution of bonds the
| funds released thereby shall at once be
! ira nsferred by the secretary of the
| treasury to the issue and redemption
1 division.
.sFourth-After said banks have de-
posted such bonds. greenbacks, treas
ury notes or silver certificates TO the
amount of 80 per cent of their capital.
they shall be permitted to issue bank
notes in addition to the so per cent thus
provided to the extent of % per cent of
such deposit. which said Is per cent
may be unsecured by any direct pledge
of security. but issued against the as
sets 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.
''Sixth-To secure the government
against loss. if any. attaching to its
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 secre-
tary of the treasury and the comptrol-
Ter of the currency in government
bonds. In addition TO such funds. the
government shall be further protected
by having a first lien upon all assets
in case of the failure of the issuing
bank.
..Seventh-All notes shall be redeemed
Il ff,.. .FaAa
treasury and all such other sub-treas-
uries 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.
..Eighth-Restrict the issue of nation
al bank notes to the denomination OF
$40 and upwards.
To illustrate the benefits of this plan,
the secretary cites the fact that the ma
tional banks with a capitalization or
Sos $50. o0O have a circulation of only
SIS $50. 900. and were compelled to Dor
row s1354s 600 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 hgureS
from the records of the comptroller
office TO show the per cent tax on
unsecured circulation would more
than reimburse the government for It's
losses by failed banks; that the loss
since the first organization of national
banks would have been S1a4.s24 while
the fund produced by the proposed
tax would have amounted to 81,
1404S
Objection to Greenbacks.
The secretary then goes on TO argue
that the greenhack in its present status
is a constant menace to the gold reserve
and the nations credit and that the
necessity being for a reduction Of the
demand liabilities of the government
those offer the most convenient agents
for that action. He says The prop
oSitiOn to retire a large portion OF these
notes into an issue and redemption ui-
vision. there To be held until he pub
lie is willing TO offer for them IN far
exchange an equal sum in gold. rs
proposition to dignity them with the
honor of actual gold equivalency when
they are passed cut. as they have hlth-
erto been honored with actual gold
equivalencY when pushed in upon the
treasury for redemption. The PROPOSE
ton is therefore quite different from
a proposition 70 retire and destroy
them"
After answering possible objections
from those who demand the permanent
retirement of these notes he says Il
am moved to press the recommendation
as submitted. in view of the folio wing
| considerations: Paper money is the pro-
! duct of an industrial. commercial and
| financial evolution. Its ecanomizing ei-
! feet in the use Of metallic money pre-
| eludes the abandonment until society
| shall relapse into anarchy.
| Credit the base nDDn which 1t
| rests. Paper money is the evidence that
| a thing of value has passed into the
| posse ssion of the issuer and that the
| holder of that paper is willing To wait
\ payment When payment is made, the
evidence of the transaction should he
/ withdrawn. to appear again only when
! a similar transaction occurs. The bank
| is an agency the result, also, of pure
| evolutionary movement. whose function
| 1t is to issue it's various forms of credit
! instruments. of which the paper money
| is one against the pledges and prom
ises to it of the less publicly known
! members of the industrial community.
| 1t thus becomes an intermediary in
much the larger part of all trade and
industry.
Whatever operates to render the
bank safe. efficient and valuable
| agency to the people, operates to the
| general prosperity.
The requirement that the bank shall
invest its capital in public securities, as
a precedent to the issue Of its credit in
struments-paper moneys a require
ment which operates Ivy 50 much to re-
duce its efficiency TO commerce and in
dustry. 1t cannot use its capital in two
: directions at the same time. Only a
necessity to control the banks capital
for the public use or an indispensab bic
need for security in such form to the
note holder can justify this require
ment
: The exigeneIes Of the government
. finances in 1868 induced congTeas To re-
quire from all note issuing banks a PIE
limnary investment of their capital II
the governments bonds The many dis
aStroi,s losses incurred Nv lie ,,an,,l,