The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1898-03-23
Is Given to Bimetallism in the
Banking Law
Reported by the Republican Sub
Committee on Currency
EXPRESSLY PROVIDES
That Silver Dollars Shall Be
Redeemed in Gold.
Provides For the Cancellation
of the Greenbacks.

Washington, March 23.-The report of
the Republican subcommittee to the
house committee on banking and cur
rency was made today before the full
Republican membership of the commit
tee. The subcommittee, which was
appointed month ago to report a gen
eral banking and currency measure,
consists of McCleary, of Minnesota,
chairman; Mr.. Prince, of Illinois and
Mr.. Mitchell, of New York. The bill
they have reported is entitled "A bill
to provide for strengthening the public
credit for the relief of the United States
treasury for the amendment of the laws
relating to national banking aSsOcia-
tions." The method of dealing with
the greenbacks, is not by direct retire
ment, but by the substitution of a le-
gal tender note, which the banks are
required to assume and for the redemp-
ton of which they are required to find
the gold, so long as they are conduct
ing solvent business. The principal
provisions of the bill are as follows:
L A division of issue and redemption
IS eSta bHShed in the treasury for which
the secretary of the treasury is author
lied to set aside the general cash bal
1ances in excess of $50, 900 600. This ex-
cess on March II, 1885, was $176, ,139, ,532.
United States notes received by this di-
vision for redemption in gold are to be
cancelled and retired in proportion as
certain substitute currency is issued
No note redeemed in gold is to be again
paid out except under exceptional con-
ditions.
2. National banks are required to as
sumo the current redemption of the
United States demand notes in order to
obtain circulation based upon their
commercial assets. A new class of
notes, called national reserve notes is
to be issued in lieu of the legal tender
notes deposited by the banks with the
treasury and these reserve notes are to
be redeemed upon demand by the banks
out of the redemption fund, which they
are required to maintain in gold. These
reserve notes are not treated in any re-
spect as bank notes, because the banks
are not liable for their ultimate re-
demption.
8. The basis of nation bank note
circulation will be the commercial as
reached after a series of years. Nation
al banks are to be permitted to issue
currency notes upon their commercial
assets to the amount of the reserve
notes issued to them in return for de-
posits of United States notes.
5. Treasury notes issued under the
act of July IA, $780, are to be dealt with
eventually on the same basis as United
States notes.
g. A tax of 2 per cent is levied up
on currency notes issued in excess of
sixty per cent of the capital of any ma
tional bank and of per cent, when ex-
cess of eighty per cent.
Z. The currency based upon CONNER
ciaI assets is to be secured by a bank
note guaranty fund, made up by the
contribution in gold coin of five per cent
of the entire circulation of the bank
and provision is made for replenish-
ment of this fund within certain limits.
8. The national reserve notes will
continue to be legal tender until re-
ceiVed into the treasury from failed and
HQuidating banks, when liability for
them will be assumed by the govern
ment and they will be redeemed and
cancelled.
9. Standard silver dollars are to be
redeemable in gold, but silver certif-
Gates are redeemable only in standard
silver dollars. The parity of silver
with gold is secured by a gold redemp-
ton fund.
10. Silver certificates are hereafter
to be issued only in denominations of
81, 81 and So. Legal tender notes, re-
serve notes and currency are not to be
issued in denominations below $40.
II. National banks are required to
pay tax of 7s of one per cent Seni-an-
nually on their capital surplus and un-
divided profits.
II. National banks are permitted to
establish branches under regulations
to be prescribed by the secretary of the
treasury
The committee say in explanation of
the provision regarding the assumption
of legal tender notes by the banks, that
they have endeavored to adopt a sys-
TEN, which would be subject to none of
the criticism made against the issue of
interest bearing bonds, or the taxation
of the people for the payment of this
demand debt.
They declare: THE system adopted
is such as to continue to govern all
profits of the loan without any of the
disadvantages of its character, as a, de-
mand obligation. The proposed bill i'm
poses upon the banks the whole burden
of carrying and sustaining this debt.
There is no profit or return to the banks
thus carrying the nations debt and
they are required by the bill to assume
the entire obligation as compensation
for the franchise and privileges granted
as national banking corporations.
1.-The heavy burden assumed by the
banks must be given it's due weight in
measuring any additional privileges,
which are given them by this bill. The
banks are required to redeem this debt
of the government now assumed by
them, upon precisely the same terms
as the redemption of their own notes,
while they are conducting a solvent
banking business. It is only when by
the refusal to pay such notes. they be-
recognizes, again its demand debt and
assumes it for the complete protection
of the holder of the note and for the
benefit of the creditors of the bank by
paying the remaining assets unimpair-
ed for the settlement of the just claims.
The form of note thus assumed by the
bank with the final redemption guar
anteed by the government combines,
the strongest OF all resources for its
ultimate payment. By the bill the coun-
try will be provided with an ample Ie-
gal tender currency, consisting of all
the notes substituted for the present
legal tender notes and of all the gold
and silver coin in circulation to the
maintenance of whose parity, the faith
of the government is sacredly pledged
The report states that there are sew
eral possible results which may follow
the authority given the banks to as