The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1899-11-29
STORES SPLENDID Tne
r. Store
vi Rooms
nTNT on 1St
NAl\1o Ave. S.
The elise Investment Co.
7and 8 Boston Block,
Second Ave. and Columbio St.

&6SS43&SSS626SeScSSSeS6SSS Observation-Disclosures
parent profits on bank note circulation. in
GLIDING the method of authorizing issues
TO par. subject TO a uniform tax.
The comptroller believes that from the
passage Of laws altering, as suggested, the
rate and method OF taxation OF national
bank notes, an increase OF at least $780,
0o0.oeo may be reasonably expected.
Based upon cur present bond secured
about 500, oOo.Oo. and this added amount.
We would have. under such laws. an avail
able bond-secured emergency circulation
Of at least $50, cocoa
As summary Of his views on this SUBJ
Ject. the comptroller would call attention
to the following propositions:
Ffrst-Wh neither or not legislation be
passed providing for an uncovered emer-
from the disastrous effect Of panics, a
very much larger degree OF elasticity can
De impaired TO our present bond-secured
bank note currency. thus making it OF
greater use in seasons OF the year In which
the demand for currency is above the nor
NAL. and OF invaluable assistance in times
OF panic.
Second-This result can be obtained by
the enactment into law of the presidents
recommendation that national banks be
allowed to issue to the par Of the govern
ment bonds deposited by them as security,
and by the modification Of the present tax
upon natfona! banks, as follows:
After determining approximately the low
est rate of profit which will call into circu-
lalon the additional amount OF national
bank notes deemed necessary for pubic
convenience. this rate OF profit should be
reached by leSsening or shifting to the
franchise OF banks the present / per cent.
tax On circulation to 80 per cent. of the
par OF the government bonds securing 1t.
A tax of or 3 per cent. should then be
levied on the excess of circulation over
30 per cent. OF the bonds, which will make
nj xNf~ r1,xI i
gency circulation only to be used when II
becomes a public necessity. and not as a
means OF profit by the banks under normal
conditions.
The general increase in bank circulation
desired being possible of attainment
through the lowering Of the tax on the
30 per cent. circulation, this additional tax
on the 10 per cent. excess circulation to the
par OF the bonds viii not materially inter-
fere with such general increase. and will
only operate to create an emergency cir
culation OF great value.
Third-As the use Of rediscounts and bills
payable on the part of the Western and
Southern banks at certain seasons OF the
year Is regarded as evidencing the need
or an elastic circulation. and as bearing
upon the question of the measure of relief
which may be expected from the bond
secured emergency circulation here recon-
mended, the comptroller will state that
without any general increase in bank-note
circulation az result of new legislation.
WO0 Immediately available, based on
bonds securing the present circulation.
amounts to more than the combined bills
payable and rediscounts of all the national
banks of the United States outstanding
at any time within the last three years
III the comptroller's estimate of a pos
sible bond secured emergency circulation OF
$50 600 be correct. this amount is about
double the average combined bills payable
and rediscounts OF the entire national sys-
tenn outstanding within that period.
AS the elastic and uncovered issues OF the
joint stock banks of England, Scotland and
Ireland. comprising all the uncovered bank
notes there issued. may be cited as Illus
trating the advantages of an elastic circu-
lation. the comptroller would also call at
tention to the fact that these entire issues
are but a small amount more than the
f2ooto,0oo bond-secured emergency circua-
ton which would be Immediately available
on existing bond deposits I'm the United
States under the legislation recommended.
And with an increase in general bank note
circulation, resulting from modified laws,
we would probably have bond-securei
emergency circulation in this country larg-
er than the emergency circulation of the
joint stock banks Of England. Scotland and
Ireland, which Is secured only By the gen.
erai assets OF the banks without prefer
ence over other creditors
Fourth-Even tf special uncovered
emergency circulation be provided. TO be
used only In case OF panics the pan here
suggested of changing the taxation and
an elastic circulation Of value I'm times Of
money stringency not approaching the Sc
verify OF panic.
With or without the legislation 70, the
special uncovered emergency circulation
the bond secured emergency circulation
Will be or great public use.
F1fth--If provision be made for an I'M
covered emergency circulation for use In
times OF panic. subject to a Tux SO large asi
10 he repressive at all other times the
10 per cent. bond-secured emergency cir
cua'ior herein recommended might be tax
ed at the rate of per cent per annupa for
the time issued instead of at the rate OF
per cent. thus allowing It's freer use un-
der more normal conditions. But II no un-
covered circulation for panics be provided.
the more repressive tax OF per cent
seems desirable upon the bond secured
emergency circulation.
Sixth-There IL no need. under normal
conditions. Of a large amount Of emergency
circulation or q high degree OF elasticity
In bank-note circulation. The immense vol
urne of checks. drafts and bills of ex-
change, based upon the assets OF banks
and often called bank-cretiit currency ex-
pands and contracts I'm accordance with
the demand OF trade and business. and. IL
the medium through which the great bulk
Of the business Of our country is trans
acted. II Is extremely elastic and varies
IN amounts at different seasons OF the
same year. II TX generally amply adequate
10 the business needs Of the country excent
In times Of disturbed confidence ana anan-
SeventhThe issuance II hank-aseat
notes under normal conditions ana in the
present development Of eur banking system
cannot he Justified by the plea that with
out them the needed elasticity Of bank-nota
currency cannot ~ obtained. Nothing ex-
cept the avoidance Of panic can al present
Justify any experiments with hank sset
currency. When authorized for use In
times OF panic they should be SO heavily
taxed that they can circulate only while a
panic lasts, and like clearinghouse c4rttfl-
cafes should be remedy simply for rare
emergency.
In seeking the theoretical advantages NJ
Hdictty In bank circulation we should take
no risks with It's solidity.
Among other Tecarary3e ndations the comm
troi!*y strongly urges lAws authorizing the
incorporation of hanks for the PURPOSE OF
carrying on international and !nie~colonIal
banking as distinguished from Domestic
banking. He also recommends laws author
lzins tb@ establishment IN small comynunl-
iiss ol national hanks with a capital CT s25.-
rta
Ha repeats his recornue nda;fon cf ana
year ago relative 70 "a modification az ths
law restricting loans 70 airy one Individual
20 II PER cent. Of the capital NJ a nation Al