Willmar tribune. [volume] (Willmar, Minn.) 1895-1931, 1897-12-14


less than par)sasy the market quotations
may Indicate to Sc their fair market value.
During he@ period of time Intervening be-
tween sAthe deposit of greenbacks. treas
ury notes and silver ceEtifcates and tho
substitutionsof the bondsshy the secretary
Of the trensury the circulating notes spe-
officially issued therefor shall be exempt
from taxation. Upon such substitution of
bonds the funds released thereby shall at
once he transferred. by the secretary OF
the treasury to the issue and redemption
Fourth. After said banks have deposited
such bonds, greenbacks. treasury notes or
silver certificates to the amount OF 50 per
cent; Of their cap:tal$t they shall be permit
ted to issue bank notessin additfonsto the
Is per cent. OF such deposit. which said
rs per cent. may be unsecured by any d.
rect pledge Of security. but issued against
the assets of the bank. s~,s
Fifth Extend the guaranty OF payment
by the government to all circulating notes
OF the bank. whether issued against de-
posted security or against asseta.s4.s#s :.
Sixth. To secure the government against
Joss. il any. attaching toSits guaranty d
tax of two per cent. per annum on unse-
cured circulation shall be levied to create
a safety fund. which fund shall be invested
comptrollersof the currency inSgovernment
bonds In addition to such funds the gov
eminent shall be further protected by hav-
ing q hrst lien upon all assets In case OF
failure Of the issuing bank. 80 11a1
Seventh. All notes shall besredeemed in
the city OF New York at the subtreasury
and8at such other subtrea suriessas may be
desfgna ted by the comptroller OF the cur
rency. with the approval Of the secretary
of the treasury. The control OF such re-
demption shall be under the direction Of
the comptroller Of the currency and made
frOyy orod NJ ~ ~
be provided and maintained by the banks.
Eighth. Restrict the issue of national
! bank notes to the denomination OF ten dol
[ lars and upward
Further Argument Advanced.
The important nature Of the subject I'M
der discussion tempts to fuller treatment.
I must, however, be content with referring
once more to that feature of this series of
recommendations which touches the Ques-
ton of note issues by national banks.
am moved to press the recommendation as
submitted. in view of the following consid-
erations:
Paper money Is the product Of an indus
trial. commercial and financial evolution
Its economizing effect in the use Of me-
tallic money precludes the idea of it's aban-
donment until society shall relapse into
anarchy. Credit is the base upon which it
rests. Paper money is the evidence that
thing Of value has passed into the pos
session Of the issuer, and that the holder
Of that paper Is willing to await payment
When payment Is made the evidence of the
transaction should be withdrawn, to ap-
pear again only when a similar transac-
1lon occurs.
The bank is an agency, the result also of
pure evolutionary movement, whose
function 1t is to issue its various forms OF
credit instruments. of which paper money
is one, against the pledges and promises
to 1t Of the less publicly known members
Of the Industrial community. =, 1t thus be-
comes an intermediary in much the larger
part Of all trade and industry. Whatever
operates to render the bank q safe. ef-
ficient and available agency to the people
operates to the general prosperity.
a TwOfOld Problem.
The problem is twofold one: How to
withdraw the specific form of security now
provided, since 1t will ultimately disa ppear;
how to provide substitution which will be
recognized by the people as adequate Sc
curity, and which will at the same time
allow to banks within well-guarded limits
the most useful freedom in their note is
sues. The problem Is too large. it's results
too far-reaching, to be solved offhand O.
by expert dictum. Its solution must be
gradually reached by the path of safe ex-
pertinent. To allow national banks to issue
circulating notes equal to Is per cent, d
their capital upon q payment Of two pei
cent. per annum as an insurance or safety
fund upon amounts so issued is, IL the DEM
onstration drawn from the comptroller's
office can be trusted, proposition wei
within the limits Of safety. Nevertheless
whatever risk there Is should be assumed
by the government, obnoxious as 1t may be
to the general principles Of governmental
action. 1t Is by such action that the stu.
alton as it exists has been evolved. Upor
the government, therefore, rests the duty
of seeing it properly solved. Some years
Of experience along the line suggested will
prove what is an adequate tax for the Sc.
curity Of noteholders and will allow such
amendments as time will justify, involving
as one Of it's features a complete with.
drawal Of the governments guaranty from
bank note issues.