The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-12-08
BANKING AMENDMENTS.
Amendments TO the banking Law

Amendments to the banking law are
suggested as follows:
First-Permit national banks to be organ
lied with minimum capital of $25 900. in
any place having population of 1000 inhab-
i itants less.
Second-Reduce the rate of taxation or cir
culating notes secured by deposit of bonds to
one-half of l per cent per annum.
Third-Permit banks now organized or
hereafter to be organized to issue circulating
notes to the par value of the refunding bonds
hereinbefore suggested when deposited by
them with the treasurer of the United States
and, further, allow such banks as shall avail
themselves of the opportunity. to deposit as
security with the treasury of the United
States greenbacks treasury notes or silver
certificates to total amount of $500 900, co.,
against which there shall at once be issued
to them by the comptroller of the currency
national bank notes to an equal amount, it
being further provided that from time to
time, at his convenience, the secretary of the
treasury shall substitute for the greenbacks
treasury notes and silver certificates so de-
posted to secure circulation, bonds of the
same class anil character as the refunding
bonds first named to the amount of 5000 Co.,
V0e. SUCH bonds to be chargeabe to said banks
and by them accounted for at such price mot
lees than par) as the market quotations may
indicate to be their fair market value. Dur
Ing the period of time intervening between
the deposit of greenbacks, treasury notes and
silver certificates and the substitution of the
bonds by the secretary of the treasury the
circulating notes specifically issued therefor
shall be exempt from taxation. Upon such
substitution of bonds the funds released there
by shall at once be transferred by the sec
rotary of the treasury to the issue and re-
demptfon division.
Fourth-After said banks have deposited
such bonds. greenbacks, treasury 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 so per
cent thus provided, to the extent of % per
cent of such deposit. which said % per cent
may be unsecured by an direct pledge of
nfC Of
bank.
Fifth-Extend the guaranty of payment by
the government, to all circulating notes of
security or against assets.
TWO PER CENT TAX.
Sixth-To secure the government against
loss. if any, attaching to it's guaranty tax
of per cent per annum unsecured circu-
lation 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 fur
Their protected by having first lien upon
all assets, in case of failure of the issuing
bank.
seventh-All notes shall be redeemed in the
city of New York, at the subtreasury, and at
such other subtreasuries may be designated
by the comptroller of the treasury, with
the approval of the secretary of the treasury
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 national bank
notes to the denomination of $40 and upward.
An examination of the plan herein proposed
will show that the amendments suggested are
not of a distinctly radical character, 1t is
believed that banks organized under the ma
tional bank act, with these amendments
would, within the limitations named, give
upon thoroughly safe basis a desirable cred
it currency, and lead, as the result of time
and experience, ultimately to freedom of is
sue. careful investigation OF the CONNER
cial conditions OF the country at different
periods of the year shows how essential to
those sections depending upon the prompt
moving of the staple crops of cotton wheat
and corn is bank note issue, which enables
the local bank to supply its customers with
the means necessary for such purpose with
in the shortest period of time and at the
lowest cost. Such an investigation will also
indicate how adequate is the government
note to meet these eXigencies. The govern
ment notes, like gold, coal, or salt or
lumber, exist at given time in fixed
amounts. The local bank note, on the con-
trary. is within legal limitations, subject to
increase at the point where needed and the
needs of the community unite with the motive
of the banker in supplying these wants as
they find expression. In illustration of this
point attention is called to the extent to
which the crop-producing sections of the
country are now dependent as borrowers of
money upon other sections.
The national banks located in the South
ern states have an aggregate capital of $685.
SO,CO0 On Oct. 6, 1896, they had borrowed,
largely from banks in the East. to assist in
handling the cotton CROP S13,54S, co., On
March following these loans had been re-
duced to 81, 516, zoo. They succeeded In borrow
ing for a part of their needs, but commercial
necessities required more. With proper bank
ing facilities the necessity for such borrowing
now existing would be reduced to a mini
mum.