Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1898-01-06

bonds, would become valuelesB The
banks are hound together for the
| security. OF these note to accomplish
| the same purpose that thu deposit of
bonds is iDtenasd to accomplish,
namely, to guard against loss through
| the misfortune or bad Management of
single hanks. and thus save the holder
| OF the bank nu' The need of ascertain
| ing the stRndit i any bank. The oh
| lection that sometimes made that
| the larger hanns in the great citias
| would not issue Dotss because of an ap.
pretended liability for other banks ia
shown by statistics to be groundless
| This largest bank failures occurred ia
1888; bur had all the banks Of tie
| country then issued notes up to 50 per
! cent of their capital, the amount of
their assessment to mako good the as
! certained deficiencies Of that year up
to the time of the comptrol!er's report
| of 1896 would have been about one.
seventh of per cent Had so 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 1863 an
assessment upon the banks annually OF
only one-f ortieth of l per cent would
have been necessary. Taking the coun-
| try banks. it is found that on Octobsr
9th, 1897, they had S10l, 900. 600 OF the
$G3l, QUO, 00O of national bank capital:
| should they issue notes up to SO per
cent of that capital, they would have
1921, QUO, QUO of notes, ana there would
be 81, 95G, 600. 900 OF resources against
these notes tnot counting stockholders
liability or guaranty fund.-.
Ii the resources of the country banks
are insufficient security for this amount
OF notes, they will be insufficient only
because there would then he such
condition Of business paralysis that gov.
ernment, municipal and railway bonds
would be yalueless. and also few if any
banks in the reserve cities would re-
main solvent. The occurrence Of this
disaster is so improbable that Its con-
sideraton may be dismissen.
a sound paper circulation requires
not only hexibility in the case with
which it eSpanda, but also in the GER
tsinty of its contraction when the need
for IT'D issue has passed. since tho
banks aatisfy their customers bath by
the creation OF note liability and by
deposit liability, there should in JUS
tlce he no greater hindrance to the
creation of one more than of the other.
In tho nature of things thers is no
more reason why the note Of bank
should not be as safe as its cashiers
draft. Aud it should lie kept in mini
that in fact to-day a highly effective
medium of circulation is in use by
which over DO per cent of all transac-
tions arc carried on, and that this cir
culation is secured solely by the gan-
eral resources of the bank. There
shuuld, therefore, be equal reason for
J safety in securing the other form of
liability used as circulation, namely,
the note Issues, on the general RESOURCES
OF the bank.
In some quarters fear has been ex-
pressed that there would be undue eS-
pansion under this plan. There is no
danger of this The system of redemp.
tion moi only at the banks but at the
Treasury in Washington and at the
sub-treasuries, as recommended by the
commission, would strongly guard
against that. The expansion over that
which could be effected were no notes
issued at all will he found, upon inves.
tgation, to be small. Dangerous ex-
pansion does not take the form of the
Issue of bank notes. but of the exten.
sion of credits Very few borrowers
take their loans in the form of bank
notes. The bank note is only ons form
in which he to whom craGit ia give may
uss that credit He can use it equally
I we'll il the loan ia placed to his account
] by the bank making the loan to him,
or by some other bank or by private
person.
The plan increases stockholders' liza
. hility 30 that each stakeholder ia ahao-
! lutsly liable for assessment up to the
par OF his stock, and not ratably and
equally with every other stockholder as
) now.
The existing tax of per cent per an.
mum on circulation is repealed; in it's
Q ulace tax of Is of ] per cent OF CAPT.
tai, surplus and undivided profits it
provided. a tax upon circulation is
9 tax upon the chief instrument by which
3 hanks in certain, but not IN all, parts
Q OF thu country are used chiefly for the
convenience of their countrymen. THE
I is manifestly unequal and unjust. Sur
. plus and undivided profits aud capital
show tha profits and property of tho
: bank, and the tax upon them makes as
, equitable an apportionment Of the eX
9 penaos Of the system as can he devised.
u The comm isaion think bank notss
2 should he received by government in
9 payment OF debts ami dues under the
y same conditions as now. This provi-
i sion ia made not because it materially
= adds to the security at the notes, but
!, thar they may DO more, convenient TO
10 the people and in aid of their speedy
), redemption.
IS In as much as the character Of the
i banks RESOURCES under this plan be-
J. comes important, amendments to exist
3 ing laws are recommended in order to
2 provide for more frequent end thorough
- examinations of banks, for fixed sal
= aries for bank examiners, TO provide
n for rotation OF examiners to make it
!. penal for any bank to loan to an exami-
nsr, aud for frequent public reports.
This method Of passing from tbs
! present to the new system ia proposed
10 in order that the change may be
I gradual, and that the country may be-
= come accustomed to il in this way, and
! also to guard against the possibility Of
l, undue sale of United States bonds.
u Dnubtless, portions of the country lack
y ADEQUATE banking facilities, and to
, meet this a diminution of the mini,
y mum capital required for banks in
places OF Hmall population and authority
2 Tor the establishment of branch bankR
e are advised. Banks with capital of
u S25, 900 are permitted in places OF 4, 900
u population or less.
~ ---n----
- Re Of Good Courage.
o It is impossible to say when diseases of
y the respiratory system are past remedy.
IL Medical examinations are not conclusive in