The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1898-01-05

together for the security Of these notes
TO accomplish the same purpose that the
deposit of bonds is intended To accom-
plish-namely, to guard against loss
through the misfortune or bad manage
ment of single banks-and thus save
the holder Of bank note the need OF as
certaining the stanaing 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 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
sessment 90 make good the ascertained
deficiencies of that year up to the time
of the comptroller's report OF 1896
would have been only small fraction
of l 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 1868 the assessment upon the
banks annually would have been an
amount SO insignificant that it need not
be taken into account. Taking the coun
try banks as whole, it is found that on
Oct. last they had S40l 900, 600 of the
$631 900, 600 Of national bank capital.
Should they issue notes up TO so per
cent of that capital they would have
1921, 900, 900 of notes, and there would
be 81, $50, 900, 900 of resources against
these notes, not counting stockholders
liability.
If these resources of the country banks
are insufficient security for this amount
of notes, they will be insufficient only
because there would then be such con-
dition of business paralysis that govern
ment, municipal and railway bonds
would be valueless, 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-
sideration may be dismissed. In some
quarters fear is expressed that there
would be an undue expansion under this
plan. There is no danger of this. The
system of redemption not only at the
banks, but at the treasury in Washing
ton and at the subtreasuries, 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 be small. Dan
gerous expansion does not take the form
of the issue of bank notes, but of the
extension of credits. Very few borrow
%nI, 10, hn Of hay MI
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 we'll for most purposes If the
loan is placed to the credit of his ac-
count by the bank making the loan TO
him, or by some other bank or by a pri-
vate person.
The existing tax of l per cent per 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 bank expresses it's de-
mand liability. The other form, de-
posits, is, under the development of
modern banking operations, of vastly
greater importance and the one which
in cities and highly organized CONNER
cial communities is most used. In Octo-
Der, 1897, the country banks issued
more than 10 per cent of all notes is
sued. The reserve banks, except those of
the central reserve cities, New York,
Chicago and st. Louis, issued more
than Is per cent, New York more than
per cent, and Chicago and st. Louis
together about one-half Of / per cent.
Surplus and undivided profits and cap
ital show the profits and property of
banks, and these are certainly more le-
ultimate objects of taxation than the
mere instruments which banks may be
called upon by their customers to issue
to serve chiefly the convenience OF those
customers. This tax makes as equitable
an apportionment Of the expenses Of the
system as can be devised.
Plan Of Currency Reform.
I.-METALLIC CURRENCY AND DEMAND oBLI-
CATIONS
/. The existing gold standard shall
be maintained, and to this end the
standard unit of value shall continue,
as now, to consist Of %. 8 grains Of gold
nine tenths fine, or 23. 90 grains of pure
gold as now represented by the one
tenth part of the eagle. All obligations
for the payment Of money shall be per
formed in conformity to the standard
aforesaid. but this provision shall not
be deemed to affect the present legal
tender quality 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
and held to be payable in gold coin Of
the United States, as defined in the
standard aforesaid.
3. Gin substance.) Gold coinage al
now.
3. No silver dollars shall be hereafter
coined.
4, and 9. (In substance.) Coinage
and redemption of subsidiary and minol
coins as now.
z. There shall be created separate
division in the treasury department, Il
be known as the division of issue anC
redemption, under the charge of an as
sistant treasurer of the United States