The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1898-01-07

together Tor the security OF tneSe notes
to accomplish the same purpose that the
deposit of bonds'is intended to accom-
plish-namely, to guard against los;
through the misfortune or bad manage
ment of single banks-and thus save
the holder of bank note the need of .s.-
certaining the standing of any hanl:
The objection that is sometimes made
shat the larger banks i'll the great cities
would not issue notes because of an
apprehended liability for other banks,
is shown by statistics to be groundless.
The year of largest bank failures was
1898, but had all the banks Of the coun-
try then ISSUED notes up to SO per cent
of their capital the amount Of their as
sessmentl to make good the ascertaincd
deficiencies of that year up to the time
of the comptroller report of 1896
would have been only a small fraction
of per cent. Had so per cent of the
capital of all national banl:s been issued
in notes upon the proposed plan since
the beginning Of the national Blinking
system in 1868 the assessment upon the
banks annually would have been an
amount so insignificant that 1t need no,
be taken into account. Taking the coun-
try banks ;,a Il whole, it is found that OF
Oct ) last ;liuy had $40l, 600, 000of the
SOL coo 00G OF rational bank capikl.
Should tAry Issue notes up to 50 PEI
cent Of inlt capital they would have
I32 Goo, UUG Of notes, and there WculG
be 9J6, coo, 900 OF resources against
those notes, NOT counting Stockholders
liability
If thc- resources Of the country BAN;
are IL ulI:uieut security Tor this ;lnou:.t
of notes, they Will he insufficient only
because there would then be such con,
dition of iusiness paralysis tbat govern
ment, municipal and railway bonds
would be y&lEeieSs, and also few if any
banks IN The reserve cities would re-
main solvent. The occurrence of this
disaster is 50 improbable that Its con.
sideration may be dismissed In some
quarters fear is expressed that there
would be an undue expansion under this
plan. There Is 40 danger Of this. The
system OF redemption not only at the
banks, but 1T the treasury III Washing
ton and at the -subtrcasuries, would
strongly guard against that. The expan.
sion over that which could be effected
were no notes issued at all will be found
upon investigation to he small Dan,
gerous expansion does not take The form
of the issue OF bank notes, but Of the
extension Of credits, Very few borrow
ers take their loans in the form OF bank
notes. The bank note is only one form
in which he to whom credit is given
will use that credit. He can use ii
equally well for most purposes II the
loan is placed to the credit of his ac-
count by the bank making the loan Jo
him, or y.some other bank or by a phi
waite person *
The existing tax Of 1 per cent pr an
mum on circulation is repealed. IN its
place taxation Of capital, surplus and
undivided profits is provided The is,
sue of circulating notes is only one
form in which banll expresses its de-
mand liability. The other form, de.
posts, is, under the develQiment OF
modern banking operations, Of vastly
greater importance and the one which
in cities and highly organized CONNER
cial communities is most used III Ceto-
Der, 1897 the country banks issued
more than u per cent OF all notes IS
sued. The reserve banks, except those OF
the central reserve cities, New York,
Chicago and st. Louis, issued mCle
than is per cent, New York more than
s per cent, and Chicago and ST. Louis
together about One-haIf Of | per cent.
Surplus and undivided profits and cap
ital show the profits and property Of
banks, and these are certainly more le-
gitimate objects Of taxation than the
mere Instruments which banks may he
called upon by their customers to Issue
to serve chiefly the convenience of those
customers. This tax makes as equitable
an superintendent Of the expenses OF the
system as can be devised.
Plan of Currency Reform.
L-METALLIC CURRENCY DEMAND oBII-
CATIONS
/. The existing gold standard shall
be maintained, ana to this end the
standard unit of vaIJic Shall continue.
as now, to consist OF %. S grains of gold
nine-tenths fine, or 1922 grains OF pure
gold as now represented by the one
tenth part of the eagle All obligations
for the payinent.of money shall be per-
formed in conformity to the standard
aforesaid, but this provision shall not
be deemed to affect the present legal
tendeRquality Of the silver coinage Of
the United States or Of its paper cur
rency having the quality Of legal ten
der. All obligations of the United States
for the payment of money now existing
or hereafter entered into SHALL unless
otherwise expressly provided, be deemed
andAheld to be payable i'll gold coin OF
the United States, as defined in the
standard aforesaid.
2. In substance) Gold coinage as
now.
g. No silver dollars shall be hereafter
coined
4. and 6. (In substance.) Coinage
and redemption of subsidiary and minor
coins as now.
y. There shall be created a separate
division in the treasury department, to
he known IS the division of issue and