The Washington herald., 1911-02-05
BANK
OF UNITED STATES
and ITS PURPOSES
~ AAsEun

one to establish corporation to be
called ''the Bank Of the United States"
with capital Of s1oo.ooaoo. divided into
1.000.000 shares. One-fourth Of these
shares would be subscribed for by the
Secretary OF the Treasury. and held al
the property Of the United States gov-
ernment- The rest would be offered for
subscription BY the banking institutions OF
the country. including not only the ma
tional banking associations. but State
banks and trust companies. Each OF
these would be entitled to take one share
and one additional share for each $500
OF its fully paid capital. Thus three
fourths of the share capital would be
held by the banks Of the country and
negotiable.
Provision il made for an Increase Of
capital to enable newly estah[shsa
banks to receive their quota Of shaees
and those Increasing their capital to
maintain their due propmtton: but ne
amount held by the banks could ne1er
exceed In the aggregate pr cent oe
the paid-up capital Of al ths han1tn4
institutions IN the United States eut-
tied to subscribe therefor"
This plan contains some features worth
hooking into. It provides for dividing
tho country into eighteen banking dis
tricts. In each Of these districts an
organisation would Be formed Of the
shareholding Institutions by the election
Of . president and secretary and nine
other persons chosen from among their
officers to constitute district board"
The central bank would have forty
eight directors. Of whom twelve would
be appointed by the President of tho
United States. with the advice and con-
banking shareholders in their several
districts, two for each district.
Central Office At the Capital.
The central Office would be at WASH
ington. where the directors would meet
at least once in each quarter. They
would choose q chairman. vice chair
man. and secretary from their own num-
bers. adopt rules and bylaws for the
conduct Of the business Of the bank and
Of the several district banking associa-
tions. appoint the necessary committees,
including an executive committee Of eight
members, two Of whom should be gov
ernment directors, to act as directors in
the intervals between meetings OF the
board. A governor and deputy governor
would be appointed by the board sub
ject to the approval Of the President Of
the United States. The Governor could
not be one Of the regular directors, but
would become a director ex ofdcio. with
out a vote, except In case of an equal
division.
A branch would be established at tho
center of each Of the banking districts
and placed in charge Of q manager ap-
pointed by the board Of directors, and
a submanager. q cashier, and subordinate
employees appointed in q manner to b
prescribed by the board and having such
duties as 1t may assign to them.
1t will be necessary to q clear UNDER
standing to treat more fully Of the de-
partments Of the banks activities That
affecting the currency is Of special in
terest. separate issue department would
be established, in which would be kept
all securities and reserve for circulate
ing notes and all accounts Of tranSac-
tons relating to their issue and redemp-
tion.
Reduction and Retirement.
A part Of tho issue could be secured by
United States bonds. acquired only in
a prescribed manner in connection with
the retirement Of the greenbaeks. the re-
duction Of the circulation Of the national
banking association to 80 per cent OF
their capital, and possibly in connection
with payment for the government shares
In the bank.
Besides the amount Of notes thus Sc
cured, there could be an additional is
sue not exceeding twice the amount Of
gold coin and bullion held in the Issue
department for their redemption. provided
the residue were covered by commercial
paper acquired In a prescribed manner,
the aggregate volume OF notes outstand-
ing never exceeding the bonds, the gold
per held against 1t in the issue depart
ment.
The bank could issue its notes in ex-
change for gold certificates and have
these redeemed In coin. and they would
thereupon be Cancelled and destroyed, and
a complete substitution Of the bank notes
for these certificates Is contemplated.
The Withdrawal Of the governments legal
tender notes, which constitute a debt.
would be accomplished by issuing notes
Of the bank In exchange for such a.
might be rendered to 1t or received by It
in the course Of its business, and pre-
senting them for redemption In gold COIN.
To acquire gold necessary to redeem
them. in excess Of the $150, 100000 now held
as a redemption fund. the Secretary Of
the Treasury would be required to issuos
bonds, which could be sold At not less
than par for gold coin. or could be de-
livered to the bank in exchange for
United States legal tender notes. which
would cease to be legal tender in pay
ment Of debts two years after the ap>
proval Of the act establishing the bank.
Might Sen Their Bonds.
In the process Of reducing the volume
Of note issues Of national banking asso-
Citations, those which had subscribed for
capital stock of tho bank to the fun
amount to which they were entitled
might. instead Of deposittng AwfW
money for the retirement Of the excess
over 50 per cent Of their own capital
and withdrawing . corresponding amount
Of the bonds deposited for security. sell
the bonds to the United States Bank. and
1t would be obliged TO buy them at not
less than par and accrued interest Tho
banking associations could have any OF
their own notes. on deposit with the bank
10 the Treasurer OF the
United States In lieu Of lawful money.
and have the corresponding amount OF
bonds transferred to Sfhe bank.
The banking department. Of this CEN
tral institution would receive deposits
from and make loans to only the United
States government and the banking IN
stttutions which held It's shares. and could
nay interest upon no deposits but those
AZ tha sovArnrnent II would be required