The daily morning Astorian. [volume] (Astoria, Oregon) 1883-1899, 1898-01-04

Of notes, they viii be Insufficient only be.
cause there would t1Ien be sucn condl.
tson Of btslnass paralysis that govern.
ment municipal and railway bonds would
be vaiueleys. and also few " any banks IN
tils reserve citses would remain solvent.
Tbe occurrence Of this disrsster ~ 80 i'm.
probable that iis consideration may be
diamissed.
A sound paper circulation requires not
only GcxibHfty IN the ease with which n
expands. but also IN the certainty Of it,
contraction when ms neet FOR IT, issue
has parsed. Since tho banks satisfy tfieiT
customers both by the creation OF note
liabl4iy AMI by dep0dt liability there
shqild In Justice be 70 greater bndrauce
10 the creation Of one more than ~ no
other. In thr nature Of things th9e isI
10 reason why the nate of bank shoIn
not bo as safe as its cashiers draft And
II iGsoud be kep in mind that IN fact
cuiatlon IS IN use by which over - per
cent. Of all trangactions are carried on.
and tSnLt r'nis circulation IS secured solely
by me general resources Of the bank
Tv1ese should therefore. be- equal reason
for safety IN securing the other form OF
liability used as circulation. namely. me
note isgIgs. on the general resources Of
the bank.
In some quarters fear has been ex.
pressed thar there would be undue cx
panslon under this plan. There - no dan.
ger Of THIS. The system Of redemption
not only al the banks but a. the tr,.islry
80 Washington and al the ub-treasures. |
ne recommended by the commission.
would Btrnogly guard against that The !
expansion over that which could he ef.
fecte1 were no nOtes lssusi AZ All -illI
be found. upon investigation. 10 DE- small |
Dangerous expansion does not take the
form Of the itss1e Of bank notes but Of the
extension of credits. Very few borrower |
take thclr lcaEs In the form OF bank ootes
1'Ts bank note r. only one form in when
he 10 whom credit Is given may use that
credit. He can use II equally well if the |
lean 10 placed 20 Hrs account by the bank
making the oan to him. or to rome other
bank or by a private person.
Tha plan increas.s stockholders' la
bility so mat each stakeholder Is abso. |
lutely liable for assessment up 10 the par
Of his stock. and not ratabIy and equally |
wfrh every other suockholder as now
The existing tax Of 1 per cent. per an.
uum on circulation Is repealed; in lts
place a tax Of X Of per cent. Of capital. |
surplus. and undivided prodts u pro- |
vided. A tax upon circulation r. n tax
upon the chief instrument by which banks
in certain. bH not in al parts OF the |
country ara cs4ehy used for the convent
ence OF their country-men. This IL mani |
fes-ly unequal and unjust. Surplus ana |
undivided profits and capital show the /
profits and property OF the bark. and
the tax upon them makes them as equit |
able an apportionment of the expenses /
OF the system as can be devised. the |
commission thinks bank notes should be |
received by government in payment OF
debts and dues under the same conditions |
as nov. This provision is made not be-
cause ., materially adds TO the security |
of the notes. but that they may be more
convenient to The psaple and in aid OF
their speedy redemption.
Inasmurh as this character Of the
banks resources under this plan becomes |
important amendments to existing laws |
ara recommended in order to provide for |
more frequent and thorough examination:
of banks. for fixed salaries for bank ex-
amsners. 10 provide for rotatioa OF bank
examiners to make 1t penal for any bank
to loan 10 an examiner and for frequent
public reports.
This method OF passing from the pres.
ent to the new system is proposed in order
that the charge may be gradual. and that
tins, country may become ACCUSTOMED to
II in this way. and aso TO guand against
the possibility Of undue sale OF United
States bonds. Doubtless. portions of the
country Jack adequate banking facilities.
and TO meet this a diminution Of the
minimum capital required FOR banks in
places Of small population and authority
for the establishment OF branch banks
are advised. Banks with a capital OF
s25 900 are permitted in places OF 1910 pop
ualtion or less.
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