The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1898-01-03

ana pay dlVldendS without regard TO
its ability to meet its pay rolls, as for
the federal treasury to try to transact
its banking business and it's other bust
ness without proper separation.
All the demand obligations Of
the government should, Of course, be
transferred to this department, which
is to take care Of their payment.
We consider it the one grave defect
and blunder Of this report that the sill
yer dollar and silver certificates are so
treated. 1t is properly recommended
that the silver certificates should be re-
deemed only in silver dollars, as their
understand why this commission, that
set itself to solve one difficult problem
Of the nation, should create for it an
other Of even greater embarrassment.
1t is perfectly clear that if, as pro-
posed, the whole body Of the silver dol
lars are to be considered as subject to
redemption in gold at any moment we
shall get rid of one "endless chain" by
the retirement Of the greenbacks only
to find in its place longer and more
active one. The recommendation that
5 per cent Of the aggregate amount Of
the silver dollars coined should be held
in gold as a reserve for their redemp-
ton is less than absurd. We have
found gold reserve Of 80 per cent in
sufficient to protect the treasury
against raids by the holders Of legal
tenders. This per cent reserve against
more than 400,000,OO0 silver dollars
would be no barrier at all. Any one
hereafter wishing at any time to
Corner gold, to embarrass the treas
ury and to cause fluctuations in the
money market, and to produce a crash
in prices and a financial panic, would
have only to collect a small volume of
silver dollars and demand their redemp-
ton in gold. This feature of the report
is absolutely impracticable, and the
only consolation is that no congress Is
likely to give any heed to it. Let the
silver currency stand on its own bot
tom. If no more dollars are coined the
people can take care of those already
outstanding, and no questions will be
raised.
One of the excellent features Of
the report Is the recommendation by
which subscriptions may be opened at
any time for popular registered loan.
Beyond question, this would take the
place, largely, of a system Of pos
tai savings banks; and one result Of
it would be that most desirable con-
summation, that the whole of the pub
lie debt of the United States would
eventually be held by its own citizens.
This is a tremendous anchor in times
Of apprehension, and an aid to national
prosperity, as well as to national credit.
The greenbacks are to be paid on
demand up to the limit Of $780, 900 900,
and for five years thereafter no greater
amount is to be retired than will equal
the increase Of national bank notes in
the same period. After the expiration
of five years one-fifth Of the remaining
notes are to be retired each year.
We come now to the most far-reach-
ing and important recommendations
" the whole report, which cover the
plan fer practically new banking sys-
tenn. The general scheme provides for
bringing all the banks of the country
under a modified national system. In
Mo Of A i,,I1t III
necessary is reduced to $4,000, and
every inducement is made to bring In
all the banks now operating under
state laws. Then a more careful sys-
TEN of examination and inspection Is
to be required, with frequent reports,
rotation in Office of bank examiners
and legal penalties for any collision
between an examiner and bank.
Banks would then be authorized to is
sue circulating notes in denominations
Of over $40, under the following regu-
1ations:
For the present, and for the present
only, the basis of United States bonds
would remain. These would stand be-
hind any issue of notes to the amount
of rs per cent Of the capital stock. For
five years after the passage of the act
the amount Of bonds required to be
deposited would be reduced one-ffth
each year. At the end of five years,
therefore, bank notes would be entirely
free from the requirement Of a bond
deposit, and would be issued wholly
against bank assets. The limit of the
volume Of such issues is the total paid
up and unimpaired capital Of the bank,
exclusive Of investments in real estate.
The security Of such notes is provided
for amply. In the first place, they are
to be lien not only upon all the assets
Of the bank, but upon the stockhold-
ers as we'll, and each stakeholder is
liable to the full amount Of his holding.
In the next place, a guarantee fund is
to be created by a tax on circulation
and another tax on capital, surplus
and undivided profits, out Of which
fund the bills Of insolvent banks not
honored after their affairs were wound
up and liability enforced would be re-
deemed.
The argument of the commissioners
that this would insure absolute SOL
vency is irresistible AS they very
properly say, If the banks Of the coun-
try collectively are not good for the