The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1898-10-16


ernment for this purpose. and the question
presented is as to their sufficiency. This
may therefore be considered from the com
missions standpoint. and from the provis-
ions Of the Overstreet bill
OF course as long as a bank redcems It's
notes in silver or silver certificates or other
paper money while it Is outstanding. there
can be no call on the guaranty fund Tor
their redemption In gold Nevertheless the
guaranty fund is held out as the one great |
security for the maintenance OF the gold
standard. AS the report OF the commission
puts It. in TACT a guaranty fund seems to
give a security equal 10 that OF bond de-
| posit system, but at an intinitesimal rae
| ton OF the cost" Note this wording--it
/ seems to give a security" All through the
commissions report, although the stated
| primary purpose OF the bill is the ma nte
| nance OF the gold standard. the argument
| 10 addressed IN words TO 1.-The security OF
| the notes. thus:
| Since the notes are protected, not only ~
! the general assets. but by the combined
! guaranty of the other issuing banks Ia Inc
| system there can be no question as 20 the
| security of the noteholder That point may
| be regarded as entirely disposed ". tke-
| port, p. 236.)
THE INSURANCE BASIS.
| Now ,b,s d,sttrc,,or ho,,yeen sec,ri,v ,o~
| tho no,es uhich racessarllv mans ultima,
security and redemption in gold on demin1.
beco,,os a y,,ai dIs1rc,ion 40 to Tho snr-
bc,oncv =, tho ,u,ran,v and rod,,on,ion
funds which st,ra IN much tho same r,,o-
zion -, ,ho oo,a s,o,aa., ,h., h.,l, va.
.or,os IA ., Tho moin,erarca ~ ,,,m.,ts
oo,, =, u,,a Yraor ,,ts s,,sto,,,
!" '
the maintenance Oh the Bolu stanuaru nNhss
on these TWO funds, whch are zach per
cent OF the bank circulation. II must he
..a.s,, 49, ,.,,.,,,.'. ., 49,. 49,. +.
| "pP"'N " ""' 'u''"e'' "'h ''i's '"'s -
a very slender thread, and, In fiei II rs
less than was ever before contem plated In
| ,tts ,o,,,tr,, 10, ,bo ,,,r,o,t 20 ,,,, c,ra.,r
'
oacN currency aionc' reserve Oh 7i'o'V'v'-
900 was iixed us proper security ny = Gre
| ,arv Sherman although tho credit or tt.
-, -
.>"''"""' soFo' "i"e"N ""H ""'" VI IT, """ ~
had the legal tender quality. For the spP-
port OF the National bank currency at pres
ant olthnucb ,bo,, b,,o ~, burden 90 rcld
o"'' "'no"en 'hoE ndFe NO pui"'n VI WV
S redemption. per cent redemption ihhd
. is required, Notwithstanding the notes arc
, ehsolutelv socured Inv bond dcnosf.s apa
Z ,- -
y uepusi'ors Pro'ec'eu oy - per 'e"t re-
n serve IN the hands OF the bank. When tho
| com,uIssion nresants tts iustifiroti,n for
h,s - a ,,, - l., -, ,,,,,,.,,, -, ,ho
800 'V''' W. w az wy " ''e
Insurance system, based on the numos' OF
National banks that have failed IN this
country. (Renort pages q37 IN 80 Tne
: ,.u,,.,t. T.. ,,,a
ioiio"'hg 1T sulheieht extract 10 sho" luz
mathematical line of tho
From the inaugural on of The Nationa
7 banking system Ia November 1897 40,
a banks were placed in the hands of re
i, ceivers. Sixteen of them, however wer,
:, restored TO solycncy leaving $50 aetna
failures But of course in the cast
e OF some OF these banks moi collertlons from
n tae assets wcro largely in excess os an,
n amount of notes which those hanks eoul,
:, have nut In circulation under the plul
~ proposed bv tina commisslon such hank
'ulS In numborl should no excluded from
l. tho Investigation because they would no
n only protect the notchollers, hut even IA,
- something 10 The other creditors,
l. II each OF these ga banks In addition to It
actHai liabilities at the time OF its failure
1t IN this report. the nominal value Of it
assets woula nave been increased by Ia
mattrg ,,hat ,ron e.',o ,',a oas's ~, Va,
lied from these additional assets is the pro
portion actually collected from its other as
stn npp,s,us ,n's nethoo vi Is
~ collections had ench of these banks actuall
issued notes to tho amount of so per cen
49, OF Is oV,l'M, !, Is iouhu tnm, IN me oas
A., toned tnc nct roi,rrticns from, ia asset,
+. without resort to stockholders liabillt,
would nave been more than sufficient
~ ,rs h a., VI .hem 49, IN .oass ou.
on shareholders the collection therehy Oh
- tanned thus amounted to S2,56a,sS6 or MOI
=, .n na no enough TO cover pae dene'eney OF VI
yiaed Inv rnlicctinns from, assnts na svs s
or to meet their notes in full. This was n,
NJ true, however, OF the other group OF i
be ,~a,'N =, ,ss 10, va n w,,n 80, ~ W.
rae notes of only these banks we're not co,
a, cred by assets and Stockholders nabIliu
ms snn .ne hoses OF onis In. tnese Dam, Won
r. 1Renort panes Sho ~ o5s
:, THE FAIL.AcIous ASSUMPTION
- r,, 49,, -, =,