The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1898-01-07
GUARANTY FUND FEATURE.
ON THIS POINT THE PROPOSED ACT
GOES ELARORATELY INTO
DETAIL.
EARLY ACTION IS ANTICIPATED.
Arrangements for Hearings Made
by Chairman Walker, of the
House Ranking Committee.

monetary commission for the reform of
currency. The bill was referred by
Speaker Reed to the committee on
banking, and Chairman Walker has
arranged to give early hearings to SEN
ator Edmunds, the chairman Of the
commission, and perhaps to other
members. The bill contains forty-sev-
en- sections, and enbodes in legislative
form every feature of the recommenda-
tons of the commission. The earlier
portion, relating to the maintenance of
the gold standard, the crea ion of the
bureau of issue and redemption, and
the gradual retirement of the legal ten
der notes is embodied IN the bin in
almost the same language as in the re-
pert. The banking features are more
elaborate, and carefully define the
character Of the guaranty fund for the
protection of notes issued upon assets
and the manner Of redeeming the notes
of failed banks. The section dealing
with the guaranty fund is as follows:
That every national banking association
shall at all tines keep and have on deposit
Win the division of issue hereinafter speci-
fed sum in gold coin equal to per centum
OF It's outstanding circulation, The amounts
be known as the bIIknote guarantee fluid
which fund shall be held for the following
purpose, and for other, namely: When
ever the comptroller OF the currency shall
have become satisfied by the protest of the
waiver and admission specified in section 2556
or by the report provided for in section 1927
or the revised statutes, that any association
has refused to pay its circulating notes on
demand, in lawful money he shall direct
the redemption Of such notes from the bank
note guaranty fund aforesaid, and such notes
shall thereupon be so redeemed. After the
failure of any national banking association to
redeem its notes shall have been thus as
certained the bonds deposited with the treas
urer of the United States shall be sold as
porVlded oy law, and the proceeds of such
sale shall be paid into the bank note guaranty
fund. The comptroller Of the currency shall
forthwith collect for the benefit of the fund
from the assets of the bank and from stock
holders thereof. according to their liability
as declared by this act such sum as, with the
banks balance in the banking guaranty fund
shall equal the amount Of its circulating
notes outstanding. And for this purpose the
United States shall behalf of the bank
note guaranty fund, have q paramount lien
upon all the assets of the association, and
such fund shall be made good out Of such
assets in preference to any and all other
claims whatsoever, except the necessary costs
and expenses Of administering the same.
The next section of the bill provides. That
whenever the comptroller Of the currency
shall ascertain what deficiency if any, lies
between the aggregate collections for the
benefit of the banknote security fund in the
case OF each failed bank and the amount
of its outstanding notes redeemed and to be
redeemed from the said fund he shall assess
such deficiency upon all the national banks,
In proportion to their notes outstanding AT
the time of the failure of such bank
The provision for the assessment If
the tax upon the circulation above the
authorized limit is as follows:
mat every national banking association
shall pay on or before the last day of every
month to the division of issue and REDEMPTION
a duty, imposed at the rate of 2 per centum
per anum, upon the average daily amount
OF OF l n0 circulating notes outstanding in excess
OF 90 per cent of such capital stock. and a
duty imposed at the rate Of per centum
per anum upon the average daily amount of
such notes outstanding In excess Of "a nor
centum OF Its capital stock. Circulating notes
OF any national banking association shall be
deemed and held to be outstanding whenever
they shall have been supplied by the comp
troller OF the currency to such association in
blank, registered and countersigned accord
ing to law, and shall have not been returned
to the comptroller for cancellation or COW
ered by an equal amount of lawful money de-
posted WITH the assistant treasurer in charge
OF the division of issue and redemntion far
the retirement of such notes.
The present restrictions upon the
amount Of circulation which may be
withdrawn monthly. and also nnon
new issues of bank notes bv hanks
having made Withdrawals within SIX
months, are repealed
Section "a of the bill provides for re-
demptton Of notes in multiples of
$1,000 in lawful money, upon presenta-
ton at the treasury or subtreasurv
designated for redemption purposes, but
1t is provided that nothing in this act
contained shall be construed to impose
upon the United States any liability for
the redemption Of notes of any national
banking association beyond the proper
application of the redemption and
guaranty funds deposited with the di-
vision Of issue and redemption, and the
enforcement of the remedies by this
act provided"
Section 35 contains the provision that
one-fourth Of the reserve shall be held
in coin, with the specific mandate that
nothing In this section, except as ex-
pressly provided, shall be construed to
alter or in any way affect the provis-
ions Of existing law governing the
maintenance of reserves"
Section 81 authorizes the establish
ment of banks with capital Of $25 900
in towns not exceeding 1000 inhabi-
tants, and section SO declares that it
shall he lawful for any national bank
ing association to establish branches
under such rules and regulations as
may be prescribed by the comptroller
of the currency, with the approval Of
the secretary Of the treasury"
Section Al provides for at least two
examinations Of national banks each
year for the rotation of examiners
and for fixed salaries for examiners
The amount of the salaries Is to be
collected by assessments upon the
banks.
Provision is made for the entry Of
state banks into the new system, sec
ton As reading:
Any bank or banking association incorpo-
rated by special law Of any, or organized
under the general laws of any state, and hav-
ing a paid-up and unimpaired capital suffi-
cient to entitle it to become a national bank
ing association under the provisions of the
proposed act, may, by the consent in writing
of the shareholders owning not less than two
thirds of the capital stock of such bank
banking association, and with the approval CT
the comptroller of the currency, become
national bank under this system, under its
former name or by any name approved by
the comptroller. The directors thereof may
continue to be the directors of the association
so organized until others are elected or ap
pointed in accordance with the provisions
of the law. When the comptroller of the
currency has given to such bank or banking
association a certificate that the provisions
of this act have been complied with, such
bank or banking association, and all its
stockholders. officers and employees, shall
have the same powers and privileges, and
shall be subject to the duties, liabili-
ties and regulations, in all respects, as shall
have been prescribed for associations 0rigi-
tons under the proposed act.