The Anaconda standard. [volume] (Anaconda, Mont.) 1889-1970, 1899-11-28

combined bills payable and rediscounts
! Of the entire national system outstaha-
| ing within that period.
AS the elastic and uncoVefsu ISSUES
of the joint stock banks OF Ensiand,
Scotland and ireland, comprising az
the uncovered bank notes there lssueu'
may be cited as Illustrating the ad-
vantages of an elastic circulation, the
comptroller would also call attention
to the fact that these entire issues are
but small amount more than pre W.
5000 bond-secured emergency clrcuia-
ton which would be Immediately avail
able on existing bond deposits IN the
United States under the legislation
recommended. And with an increase
in general bank note circulation, re-
sulting. from modified laws, we Woulo
probably have a bond-secufed emery
ency circulation in this country larger
than the emergency circulation of the
joint stock banks of England, Scotland
and Ireland, which is secured only by
the general assets of the bank. without
preference over other creditors.
Fourth. Even if a special uncovered
emergency circulation be PROVIDED, 10
be used only in cases of panics. the
plan here suggested of changing the
taxation and issues of secured bank
notes will afford an elastic circulation
of value in times of money stringency
not approaching the severity OF
panic.
With or without the legislation for
the special uncovered emergency cir
culation, the bond-secured emergency
circulation will be of great public use.
Fifth. If provision be made for an
uncovered emergency circulation Tor
use in times Of panic, subject ITO tax
so large as to be repressive at all other
times. the 10 per cent. bond-secured
emergency circulation herein recomy.
mended might be taxed at the rate OF IL
per cent per annum for the time issued
instead of at the rate of IS per cent.
thus allowing it's freer use}under more
normal conditions. But II no uncover
ed circulation for panics pc, provlded'7
the more repressiye tax of per cent.
seems desirable upon the bond-secureds
emergency circulation.
Sixth. There is no need, under nor
NAL conditions, of large amount OF
emergency circulation or high degree
of elasticity in bank note circulation.
The immense volume of checks, drafts
and bills of exchange, based upon the
assets of the banks and often called
bank-credit currency, expands and con-
tracts in accordance with the demand
of trade and business, and Is the med1-
UNI through which the great bulk of
the business of our country is trans
acted. 1t is extremely elastic, and
varies in amounts at different seasons
of the same year. 1t is generally
amply adequate to the business needs
of the country, except in times of dis
turbed confidence and financial panic.
Seventh. The issuance of bank as
set notes under normal conditions and
in the present development Of our bank
ing system cannot be justified by the
plea that without them the needed
elasticity of bank note currency can
not be obtained. Nothing except the
avoidance of panic can at present justi-
fly any experiments with bank asset
currency. When authorized for use in
times of panic they should be so heav
lily taxed that they can circulate only
while a panic lasts, and like clearing
house certificates, should be remedy
simply for rare emergency.
In seeking the theoretical advant-
ages of nuidity in bank circulation we
should take no risks with it's solidity.
Among other recommendations the
comptroller strongly urges laws author
izing the Incorporation of banks for the
purpose of carrying on international
and intercolonial banking as distingu-
ished from domestic banking. He also
recommends laws authorizing the es-
Enlistment in small communities of
national banks with a capital of $25,-
000 $f8
He repeats his reconm endation Of one
year ago relativeC.to a modification of
the law restricting loans to any one IN
dvidual to 10 per cent. of the capital
of national bank. and advises the at
taching of penalty for making excess
sive loans after the present section is
modified.
He also gives in detail the results of
an extended investigation into the de-
velopment of all the different banking
systems of the United States during the