Coeur d'Alene evening press. (Coeur d'Alene, Idaho) 1907-1929, 1908-01-09
BACK DEPOSITS
AND BANK NOTES
House Currency Bill Will Have
Guarantee Features


If half billion dollars for the guar
anty of both the deposits and the out
standing bank notes of every nation
al bank is provided by a measure
soon to be presented to the house OF
representatives.
The subcommittee of the house
eommittee on banking and currency,
10 which was intrusted the framing
Of bill to increase the elasticity of
the currency, reached a conclusion
today and will report favorably to
the full committee.
The bill will be introduced by Mr..
4 Fowler, chairman, and referred to
his committee, where it will form the
working basis of the framing of
bill of possibly the same scope and
tenor.
The bill provides for the complete
retirement of all outstanding nation
al bank currency and authorizes in
lieu thereof a currency based upon
general measures to be worked out
In this way:
Redemption Districts.
The comptroller of the currency
will designate throughout the coun-
try certain redemption cities so that
there shall be redemption city with
in "a hours mail distance of each
national bank. The national banks
will indicate to the comptroller of
the currency to what redemption
city they wish to be joined.
The comptroller will then select
time and place within each redemp-
ton district for the organization of
that district in the following man
ner:
Each national bank in that dis
trict, regardless of its capital stock,
will be entitled to one vote Repre-
sentatiyes Of the banks will meet at
time and place designated and elect
a board of managers. to consist of
seven members. These seven will
elect a chairman who will become
deputy comptroller of the currency
and assume control of his redemption
district, except that he shall not have
charge of the enforcement Of the
criminal statutes.
Guaranty Deposits.
Each national bank is authorized
to present to the secretary of the
treasury national bank notes and
lawful money in lieu of other bond
secured notes. Then, if the bank s
application thereof is Endorsed by the
board of managers of the redemption
district to which it belongs, the bank
will receive guaranteed credit notes
to the amount of it's capital stock.
These notes will be subject to tax of
two per cent per annum. Each bank
will be required to deposit as a guar
anty fund with the treasurer OF the
United States D per cent of its aver
age deposits for the preceding II
months and per cent of the credit
notes which it takes out. The rev.
enue thus obtained is to create and
support a national fund of $780,
VVO,00O for the guaranty of both the
deposits and the outstanding bank
notes of every national bank. Eighty
per cent of this fund is to be invested
IN United States bonds drawing
per cent interest, while the remaining
~ per cent is to be deposited in
banks of the various redemption cit
les Tor the purpose of redeeming the
guaranteed credit notes of the banks
Vi the various redemption districts
When the national guarantee fund
reaches 100000. which would
De almost simultaneous with the
birth of the new law. the government
Is required to return to the banks
me United States bonds which the
government now holds as security
ior federal deposits. the object being
% cradle the banks TO get control OF
the bonds so that the government car
invest the so per cent of the guaran
y iund in per cent bonds and re
gain control.
IN buying those bonds the banks
nolding them shall be paid their or
'einal purchase price, providing theil
exact purchase price can be proven
II Is Mr.. Fowler's idea. as embed
'ea IN the bill. to have the new credi
uotes printed on a background. il
differentiation from the yellow back
stoand of the gold notes and whit'
background of the silver certificates