The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1903-01-26

circulation with the treasurer of the
United States in the form of United
States notes and treasury notes. A
guarantee fund of per cent was to be
accumulated for the Immediate re-
demption of notes of failed banks,
eneroachments upon this fund to be
made good by assessment, pro rata, on
the other banks in the case of a final
deficiency in the assets of the failed
bank.
Lyman J. Gege, when secretary of
the. treasury, proposed that banks be
permitted to issue circulating notes up
to the amount of paid-up capital upon
the deposit of 80 per cent of the
amount in United States bonds and 20
per cent in United States notes, leav-
ing 80 per cent as q charge against
the general assets of the bank. This
unsecured portion of the circulation
he proposed should be further guaran-
teed by the establishment of fund to
which all the banks should contribute
through Semi-annua1 tax of 1s of /
per cent on their capital, which con-
tributions should be held in deposit
by the treasurer of the United States
and be used for the redemption Of
notes of failed banks.
Another plan, known as the Fowler
plan, was contained in q bill introduced
in the first session of the Fifty-sev-
enth congress (1901-2). The bill de-
rived its name from the fact that it
was introduced by Charles N. Fowler,
chairman of the banking and currency
committee of the house. This bill pro-
Vided for a gradual emission of bank
notes without bond security, beginning
in the first year with 10 per cent of the
paid-up capital, and increasing 10 per
cent year until a maximum of so per
cent should be reached. Permission
so to issue notes was to be conditioned
upon the assumption by the bank emit
ting the notes of the current redemp-
ton of an amount Of United States
notes equal to 20 per cent Of It's capt.
tai. A tax of Il Of l per cent, semi
annually, was to be imposed on the
hrSt 20 per cent Of notes taken out,
and 5s Of per cent, semi-anually, on
the succeeding 40 per cent. In addi-
ton, after six years, an extra "emer-
gency circulation" Of 20 per cent might
be taken out, subject to a tax Of "
per cent. semi annually, and after sew
en- years still another 20 per cent sub
Ject to tax of 21a per cent semi an
ually. There also was to be a guarantee
fund of per cent for the redemption
of notes of failed banks.
In the second session of the Fifty
seventh congress (1902-3) Mr.. Fowler
ity to national banks to issue notes to
the amount of 25 per cent Of their
paid-up and unimpalred capital, which
should be a first lien upon the assets
of the banks Issuing them. No other
security was to be eXacted except that
the banks were to be required to keep
on deposit in the treasury at Wash
ington government bonds or gold coin
or both equal to 5 per cent Of the notes
issued to provide for the redemption of
the notes as they should be present
ed. In addition, the banks were to be
required to pay a tax of Il of / per
cent, semi iannually, on the amount of
their outstanding notes, which tax was
to be added to and held with the 5
per cent redemption fund.
1t has also been suggested that safety
and elasticity might be obtained by
delegating the authority to issue notes
to the clearing houses of the large cit
les or to clearing houses to be estab-
hshed by states, thus giving to the
notes the security of the combined
strength of the banks so associated to-
gether