The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1899-11-28
HAS BETTER
MONEY PLAN


levying of tax Of one-sixth of / per
cent. upon circulation TO 80 per cent
of the par OF the bonds and allowing
the banks to issue currency to the par
OF the bonds by paying tax at the
rate Of or per cent. per annum on the
excess up to the par when outstand-
Ing, will result in the desired increase
in our general bank note issues, and
provide a marked degree of elasticity
in our circulation. The increase he es-
Inmates at 500, 900 900 and the margin
OF elasticity he estimates at $30,O00,O0O.
AS to whether this margin would be
sufficient, he says:
As the use of reeiscounts ana bills
payable on the part of the Western and
Southern banks at certain seasons Of the
year is regarded as evidencing the need
of an elastic circulation, and as bearing
upon the question of the measure of re-
lief which may be expected from the
bond-secured emergency circulation here
recommended, the comptroller will state
that without any general increase in
bank-note circulation as result of new
legislation, the possible emergency cir
culation Of 500 O00, ,0OO Immediately avail
able, based on bonds securing he pres
ent circulation, amounts to more than
counts of all the national banks of the
United States outstanding at any time
within the last three years. If the
cOmprollers' estimate of n possible bend
secured emergency circulation OF S3O,VOO-
600 be correct, this amount is about dou-
BILE the average combined bills payable
and rediscounts of the entire national
system outstanding within that period.
AS the elastic and uncovered Issues OF
ha nh pf England t.
land, and Ireland, comprising all the un-
covered bank notes there issued, may be
cited as illustrating the advantages OF
an elastic circulation, the comptroller
would also call attention to the fact that
these entire issues are but small amount
more than the $20,0O0O00 bond-secured
emergency circulation which would be
Immediately available on existing bond
deposits in the United States under the
legislation recommended. And with an
increase in general bank-note cirCula-
ton, resulting from modified laws, we
would propaby have a bond-secured
emergency circulation in this country
larger than the emergency circulation or
the joint stock banks of England, Scot
land, and Ireland, which is secured cnly
by the general assets Of the banks, with
out preference over other creditors.
There is no need, under normal condi-
tions, of a large amount of emergency
circulation or a high degree of elasticity
in bank-note circulation. The immense
| volume of checks, drafts, and bills or
| exchange, based upon the assets Of barks
and often called bank-credit currency,
expands and contracts in accordance with
| the demand of trade and business, and Is
! the medium 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 ade-
| quate to the business needs of the coun-
| try, except In times of disturbed confl-
dence and financial uanic.
| The issuance of bank-asset notes under
| normal conditions and in the present de-
velopment of our banking syst IN carnot
| be justified by the plea that without
| them the needed elasticity of bank-note
| currency cannot be obtained. Nothing
| except the avoidance of panic can at
| present justify any experiments with
| bank-asset currency. When authorised
for use in times of panic they should be
SO heavily taxed that they can circulate
only while a panic lasts. and like clear
| inghouse certificates should be a remedy
simple for a rare emergency. In seek
ing the theoretical advantages of fluidity
| in bank circulation we should take no
risks with its solidity.
other Recommendations.
Among other recommendations, the
comptroller strongly urges laws au-
| thorizing the incorporation of banks
for the purpose of carrying on inter-
national and intercolonial banking as
distinguished from domestic banking
He also recommends laws authorizing
the establishment in small commune
ties Of national banks with capital
of $25,OO0. He repeats his recommen'
dation of one year ago relative to q
modification of the law restricting
loans to any one individual to 10 pei
cent. Of the capital Of a national bank
and advises the attaching of penalty
for making excessive loans after tht
present section is modified. He alst
gives in detail the results of an ex
1 tended investigation into the develop
ment of all the different banking sys
TENS of the United States during the
last ten years.