Evening star. [volume] (Washington, D.C.) 1854-1972, 1899-11-28


THE controller believes that the levying
of tax Of one-s.,,th of i per cent upon
circulation to 90 per cent Of the par of the
bonds and allowing the banks to issue cur
rency to the par of the bonds by paying
tax At tire rate of OF , per cent per
mum on the excess up q the par when oGt
standing, will result in the desired increase
in our general bank-note issues, and pro-
vide a marked degree OF elasticity in our
circulation.
"In this connection the controller says
he cannot properly discuss the question of
taxation of banks as related to the public
revenues further than to say that the I'M
position of a tax upon the capital and sur
plus of the banks ia offset any reduction
III the tax on currency win remove any OBJ
lection to his recommendation on the
grounds that it lessons the share of the
public burden which the banks should prop
erly bear.
Increased Value of Bonds
In considering the probable effect on the
amount of bank circulation outstanding
which will result from a change In rates
OF taxation it must be remembered that
the calculation would properly include if
it could be safely made, an estimate Of the
increased price of government bonds. which
will probably he incident to a greater do
lnanl for these bonds from the banks seek
ing profit on circulation under the modified
rate of taxation.
This increased price OF bonds may be such
TO negative to some degree the desired
effect of an increased bank note circulation
since it will tend to lessen the profits On
circulation. 1t must be remembered. how
ever, that his objection cam be made TO
any method of increasing the apparent
profits ON bank-notc circulation. including
the method of authorizing issues to par
subject to a nnfoft~
THE controller h. that from the
passage of laws at' suggest ed tn.
rate and method m of national
bank notes, an incl case @. II least sim0ln
ESQ may be reasonably expected.
Based upon our rresan; bond secured
bank-nute- circulat ton, which amounts to
about $4t7 800, o%H, and this added amount
We woald have. under such laws, an avail
able bond secured emergency circulation of
at least $3o,G@Do0D.
Summary of Views
AS a summary of his views on this s,,h-
ject, the controller would call attention to
the following propositions:
First Whether or not legislation he
passed providing for an uncovered ener-
gency circulation for needed protection
from the disastrous effects of panics a
very much larger degree of elasticity can
be impaired to our present bnnd-secured
bank note currency thus making II 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 bv
the enactment into law of the Presidents
recommendation that national banks he al
lowed to issue to the par of the govern
ment bonds deposited by them AS security.
and by the modification Of the present tax
upon national banks as follows:
After determining approximate,y the
lowest rate Of profit which will can into cir
culation the additional amount of national
bank notes deemed necessary for puhIic
convenience, this rate of profit should be