The Washington herald., 1908-04-27

S351. .921 ole United States notes, and 6S6,-
407 1856 national bank notes.
In proportions the composition Of the
stock is as follows: Gold, 4S.3 per cent
silver, 20S per cent; United States notes,
IO.4 per cent. and national bank notes, EOS
per cent In other words. over So per cent
of the stock is in specie, which includes
$150, 900 set apart by the act of March
Il, 1900 for the redemption Of legal-tender
notes. OF the national bank notes, S62S,-
S34 S36 are covered by ponds held by the
Treasurer in trust and s67,57S.Ols by like
amount of lawful money deposited with
the Treasurer for their redemption.
= In June last, the date of the latest in
ves1igation made by the Treasury Depart
ment relative to the location Of the money
stock, 35lk per cent was shown to be held
by national State, and private banks and
Il per cent in the Treasury as assets,
leaving 5Sls per cent not in the reporting
banks and Treasury, but In general cir
culatiOn or boarded
Money Is Ordinarily Ample.
Other statistics compiled by the Mint
Bureau show that the money stock of the
United States is greater than that of any
other country. and also that it IS greater
per capita than that Of any Of the princi-
pal nations of the world, With the exCep-
ton Of France, where specie is used 10
an unusual extent in lieu of checks.
drafts aud other instruments Of credit.
It would thus appear that the volume of
the circulating medium is ordinarily
ample
In time of financial distress. as in 1907,
there is such a sequestTauon OF currency
that business of all kinds is greatly ham
pered and in many instances suspended.
IL is claimed that if then the banks were
able to supplement the normal stock by
an emergency issue of circula ting medium.
the strngency would be materially al
leviated,
That emergency issues would relieve
the situation 10 a large extent is evil
denced by the relief afforded by the issue
OF clearing house loan certificates by the
New York and other clearing house asso-
Citations in the fan of 1851 the volume
OF these issues having been estimated at
S210. 100000 The situation was further re-
lieved by the Importation of about
sl000000O0 OF gold and the action Of the
Secretary of the Treasury in increasing
public deposits with depositary banks be-
tween August and the end OF the year
10 the extent of over s10O-00000.
During this period national bank cir
culation was increased about $0O00.O00
This evidences an addition 10 the avail
able currency funds of over Sl5oW0,e0
Proposed Emergency Laws.
While various propositions have been
brought forward 10 meet emergencies. but
two in principle, have had extensive sup
port one for the perpetuation OF the
bond-secured note system. and the other
a radical departure from that system by
authorizing the issue of notes based on
general assets a practical revival Of the
Suffolk plan.
For nearly half a century the country
: has had a bank circulation current at
par. throughout the length and breadth
of the land, regardless of the standing
OF the issuing bank the notes issued by
every bank, whether in active operation
or closed by voluntary liquidation or fall
ure, being redeemed in lawful money on
presentation at The Treasury OF the Unit
ed States.
The title of the law of 1864 reads. An
act to provide a national currency secur-
ed by a pledge of United States bonds,
ana 10 llOklAC ipE TIE CtfENidh4SH ana re-
demption thereof" This law has enabled
the government 10 borrow money at the
extremely low rate of per cent, and the
market price Of these bonds Is constantly
above par, a source of great satisfaction,
both 10 the administration of the govern
ment and 20 the public in general
The interest-bearing bonded debt OF the
government is SSS2. SCI. $50. and as S62s. S34,-
SS6 of the bonds are held in trust by the
Treasurer TO secure a like amount of cir
culation. there might be a further en-
largement OF the note issues of s254. .033, .
154. or a total issue of $3.50, ,S6T,490 This
increase would represent nearly 30 per
cent of the extraordinary increase In
available circulation during the closing
months of 1907
Issue Circulation Notes.
As a compromise plan. and as an ex-
- pertinent, every national bank having an
unimpaired capital and 20 per cent sur
plus, with United States bond-secured cir
culation to the extent of 90, per cent of
It's capital, the management of the bank
being known to be conservative and sue
eessful, might be permitted under condi-
tions which, in the judgment of a COM
mittee consisting of the Secretary Of the
Treasury, Comptroller Of the Currency,
and Treasurer of the United States, war
rant an increase in the circulating me-
dunn. to receive and issue circulation
notes to the extent OF 125 per cent Of its
bond deposit. the amount issued in ex-
cess of par OF the bond deposit 10 be
subjected 70 a monthly tax Of - per
cent, and the excess redeemed by a de-
pOsit OF lawful money, as now provided
by law, within a definite period-three,
six, or nine months-the period TO be
determined by the Comptroller. with the
approval of the Secretary of the Treas
ury.
This tax should be in Heu Of all other
faxes on such issues, and the proceeds OF
the tax set aside in the Treasury as a
special fund for the redemption of the
uncovered notes of banks which might
fail on the existing bond deposit, ma
tsrially in excess of 50 per cent of the
capital OF banks in the aggregate, about
sl50, ,000, 900 additional circulation might be
issued
Assuming that this amount would be
. kept in circulation for only three months.
redemption fund Of s, 2,250,000 would be
created. Up 10 and including october 81,
1907, there had been placed Ia the charge
Of receiver bat 455 national banks. a
yearly average Of about ten, the average
capital being $4,000.
The average capital of national banks
~ existenoe At present Is approximately