The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1898-01-03
JANUARY s.

WHEN, anu tur the purpose IOf. WHICH,
they would be issuedlunder natural con-
ditions, II no, law prevented. Such a
system would more perfectly than any
other give the country circulating
medium; it would readily and quickly
adjust itself from season to season to
meet the wants of the business Of the
country requiring bank notes for it's
convenient transaction. Under the pres
ent system, the problem presented to
bank when it's customers call for cur
rency is not the amount Of it's own as
sets, but its ability and desire to make
an investment in something quite apart
from its usual business as bank, in
order that 1t may be in a position to
provide a man. who Wishes to move
property or employ labor with the tools
| most convenient at the time for this
purpose. Notes secured as herein pro-
vided cannot fail to be safe, because,
being based upon all the resources of
all the banks issuing them, they are
based upon the whole business of the
country, and that business Is the thing
which gives life and value to all secur-
tiles, government, municipal, railway,
and individual obligations. Should all
| the resources Of the banks ever $50
shrink in value as not, to oe ample Sc
curity for the amount Of notes that
could be issued under this plan, then ali
other securities even government bonds,
would become yaluless. The banks are
bound together for the security Of these
notes to accomplish the same purpose
that the deposit Of bonds is intended to
| accomplish, namely, to guard against
loss, through the misfortune or bad
management of single banks, and thus
earth peace, 'We praise thee, o God,
save the holder OF note the need Of
ascertaining the standing of.any bank.
| The objection that is sometimes made
that the larger banks in the great cities
would not issue notes because Of an
apprehended liability for other banks,
is shown by statistics6to be groundless
Eighteen, ninety-three was the year. or
largest bank failures but had all the
banks of the country then issued notes
up to so per cent. of their capital the
amount of their assessment to make
| good the ascertained deficienciesof that
year up to the time OF. the cpmptroller's
report of 1895, would have been only a
small fraction Of | per cent. Had 50
per cent. of the capital of all national
banks been issued in notes upon the
proposed plan since the beginning of
| the national banking system in 1858 the
assessment upon the banks annually
would have been an amount so insignif-
cant that 1t need not be taken into ac-
count Taking the country banks as
| whole. 1t is found that on october last
they had s401 ,0O0O of the 1851 100000 OF
national bank capital: should they issue
| notes up to so per cent. Of their capital,
! they would have 1921, 900. 900 OF notes,
and there would be s1,956 600 OF re-
sources against these notes, not count
ing stockholders liability. n
If these resources Of the country
banks are insufficient security for this
amount of notes. they will be INSULT
Client only because there would then be
such condition. f business paralysis
that government, municipal and rail-
way bonds would be valueless, and also
few il any banks in the reserve cities
would remain solvent. The occurrence
Of this disaster is SO improbable that
4 its consideration may be dismissed. In
some quarters fear. is expressed that
there would be an undue expansion UNI
der this plan. There is no danger, OF
Y this The system Of redemption not
only at the banks. but at the treasury
in Washington and at the sub-trsas-
uries, would strongly guard against
that The expansion over that which
could be effected were no notes issued
at all viii be found. upon investigation,
to be small. Dangerous expansion does
\ not take the form Of the Issue Of bank
notes, but OF the extension Of credits
Very few borrowers 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 it equally well for most pur-
poses IL the loan is placed to the credit
Of his account by the bank making the
loan to him, or by some other bank or
by private person.
The existing tax Of 1 per cent. pei
annum 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 a bank expresses its de-
mand liability. The other forn-depos-
its--is. under the development of mod
ern banking operations, of vastly great
er Importance, and the one which, III
cities and highly organized commercial
communities, is most used. In October
1897, the country banks issued more
than ~ per cent of all notes issued
The reserve banks, except those of thu
central reserve cities, New York, Chi
cago and st. Louis issued more than Il
per cent, New York more than s pei
cent, and Chicago and st. Louis to
gether about one-half of / per cent
Surplus and undivided profits and cap
ital show the profits and property o.
banks, and these are certainly more lie
Ultimate objects of taxation than the
mere instruments which banks may BIZ
called upon by their customers to issue
to serve chiefly the convenience of those
customers. This tax makes as equta
BILE an apportionment of the expenses O.
the system as can be devised.
Plan of Currency Reform.
l. The existing gold standard shall bt
maintained; and to this end the stand