Monetary reform.
A national monetary conference, called at the request of the Indianapolis Board of Trade, and composed of representatives of similar organizations in all parts of the
United States, was held in
Indianapolis, Ind., in January, 1897.
Nearly 300 delegates were present.
Among the points made in the addresses and papers were: That the greenbacks should be retired; that national banks should be permitted to issue notes up to the par value of bonds deposited to secure their payment; that the country needed a stable tariff, stable government, and stable currency; that prosperity could only be restored by the establishment of a sound monetary system; that the government should base all its issues on the gold standard and replace all notes by coin certificates protected by a 25 per cent. gold reserve; that the government should withdraw from the banking business; that postal savings-banks should be established; and that legislation was necessary for the maintenance of the gold standard, cancellation of
United States legal-tender notes, and the creation of a safe and expansive currency on the basis of the plan followed in
Baltimore, where there had been no bank failure in sixty years. Under a resolution, the conference appointed a monetary commission, and charged it with the duty of making a comprehensive investigation of the existing currency system with a view to urging a currency reform measure on Congress at its session of 1897-98.
The commission consisted of
ex-Senator Edmunds, of
Vermont;
ex-Secretary Charles S. Fairfield, of New York;
C. Stuart Patterson, of
Philadelphia:
John W. Fries, of
North Carolina;
T. G. Bush, of
Alabama;
G. E. Leighton, of
St. Louis;
W. B. Dean, of
St. Paul;
Prof. J. Laurence Laughlin, of
Chicago;
L. A. Garnett, of
San Francisco;
Stuyvesant Fish, of New York;
H. H. Hanna, of
Indianapolis, and
Robert S. Taylor, of
Indiana.
At a session of the commission, Sept. 28,
President Edmunds announced the following committees: On Metallic Currencyβ
C. Stuart Patterson, of
Pennsylvania;
Louis A. Garrett, of
California; and
J. Laurence Laughlin, of
Illinois.
On Demand Obligations of the
Governmentβ
Robert S. Taylor, of
Indiana;
Stuyvesant Fish, of New York;
J. W. Fries, of
North Carolina, and
George Edmunds, of
Vermont.
On the
Banking Systemβ
Charles S. Fairchild, of New York;
T. G. Bush, of
Alabama;
W. B. Dean, of
Minnesota, and
George E. Leighton, of
Missouri.
In January, 1898, a second conference was held in
Indianapolis, during which the report of the commission was unanimously adopted.
The report, after reciting the facts as to the currency, the demand obligations of the government, and the banking system, gave the following plan of currency reform:
I.βmetallic currency and demand obligations.
1. The existing gold standard shall be maintained; and to this end the standard unit of value shall continue, as now, to consist of 25.8 grains of gold, nine-tenths fine, or 23.22 grains of pure gold, as now represented by the one-tenth part of the eagle.
All obligations for the payment of money shall be performed in conformity to the standard aforesaid; but this provision shall not be deemed to affect the present legal-tender quality of the silver coinage of the
United States or of their paper currency having the quality of legal tender.
All obligations of the
United States for the payment of money now existing, or hereafter entered into, shall, unless otherwise expressly provided, be deemed, and held, to be payable in
gold coin of the
United States as defined in the standard aforesaid.
2. There shall continue to be free coinage of gold into coins of the denominations, weights, fineness, and legal-tender quality prescribed by existing laws.
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3. No silver dollars shall be hereafter coined.
4.
Silver coins of denominations less than $1 shall be coined upon government account, of the denominations, weight, fineness, and legal-tender quality prescribed by existing laws.
5.
Minor coins shall continue to be coined upon government account, of the denominations, weight, fineness, and legaltender quality prescribed by existing laws.
6. Subsidiary and minor coins shall be issued and exchanged as prescribed by existing laws, except as hereinafter otherwise provided.
7. There shall be created a separate division in the Treasury Department, to be known as the
Division of Issue and Redemption, under the charge of an assistant treasurer of the
United States, who shall be appointed by the
President by and with the advice and consent of the Senate.
8. To this division shall be committed all functions of the Treasury Department pertaining to the issue and redemption of notes or certificates, and to the exchange of coins, and this division shall have the custody of the guarantee and redemption funds of the national banks, and shall conduct all the operations of redeeming national bank notes, as prescribed by law, and to this division shall be transferred all
gold coin held against outstanding gold certificates, all
United States notes held against outstanding currency certificates, all silver dollars held against outstanding silver certificates, and all silver dollars and silver bullion held against outstanding treasury notes of 1890, and all subsidiary and minor coins needed for the issue and exchange of such coins, and the funds deposited with the treasury for the liquidation of national bank notes.
All accounts relating to the business of this division shall be kept entirely apart and distinct from those of the fiscal departments of the treasury, and the accounts relating to the national banks shall be kept separate and apart from all other accounts.
9. A reserve shall be established in this division by the transfer to it by the treasurer of the
United States from the general funds of the treasury of an amount of gold in coin and bullion equal to 25 per cent.
of the aggregate amount of both the
United States notes and treasury notes issued under the act of July 14, 1890, outstanding, and a further sum in gold equal to 5 per cent. of the aggregate amount of the coinage of silver dollars.
This reserve shall be held as a common fund, and used solely for the redemption of such notes and in exchange for such notes, and for silver and subsidiary and minor coins.
10. It shall be the duty of the
Secretary of the Treasury to maintain the gold reserve in the division of issue and redemption at such sum as shall secure the certain and immediate resumption of all notes and silver dollars presented, and the preservation of public confidence; and for this purpose he shall from time to time as needed transfer from the general fund of the treasury to the division of issue and redemption any surplus revenue not otherwise appropriated, and in addition thereto he shall be authorized to issue and sell, whenever it is, in his judgment, necessary for that purpose, bonds of the
United States bearing interest not exceeding 3 per cent., running twenty years, but redeemable in
gold coin, at the option of the
United States, after one year; and the proceeds of all such sales shall be paid into the division of issue and redemption for the purposes aforesaid.
11. To provide for any temporary deficiency which may at any time exist in the fiscal department of the treasury of the
United States, the
Secretary of the Treasury shall be authorized, at his discretion, to issue certificates of indebtedness of the
United States, payable in from one to five years after their date, to the bearer, of the denominations of $50, or multiples thereof, with interest at a rate not to exceed 3 per cent. per annum, and to sell and dispose of the same for lawful money at the Treasury Department, and at the sub-treasuries and designated depositories of the
United States, and at such post-offices as he may select.
And such certificates shall have the like privileges and exemptions provided in the act to authorize the refunding of the national debt, approved July 14, 1870.
12. Whenever money is to be borrowed on the credit of the
United States the
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Secretary of the Treasury shall be authorized, instead of issuing the usual forms of engraved bonds, upon receiving lawful money of the
United States in sums of not less than fifty dollars ($50) in any single payment, to cause a record of all such payments to be made in books to be kept for that purpose in
Washington, and thereafter, from time to time, to pay to those so registered on such books interest not exceeding 3 per cent. per annum in
gold coin on the amount with which they shall severally stand credited on such books, in the same manner and at the same dates as if they were the holders and owners of
registered bonds of the
United States; and he shall also pay to those so registered the principal sum originally deposited, in
gold coin, at the date of maturity of such inscribed loans.
Suitable arrangements shall be made at each and every moneyorder post-office in the
United States for receiving such payments into the treasury on like terms, as well as for the transfer, on proper identification, of any inscription on the books in
Washington, or of any part thereof not less than fifty dollars ($50). No interest shall accrue or be paid on inscriptions which shall have been reduced below fifty dollars ($50). No charge of any kind shall be made by any department or officer of the government for any service in connection with the receipt or transmission of the lawful money, nor in the transfer of inscriptions on the books at
Washington.
13. The division of issue and redemption shall on demand at
Washington, and at such sub-treasuries of the
United States as the
Secretary of the Treasury may from time to time designate:
(a) Pay out
gold coin for gold certificates.
(b) Pay out
gold coin in redemption of
United States notes or treasury notes of 1890.
(c) Pay out silver dollars for silver certificates of any denomination.
(d) Issue silver certificates of denominations of $1, $2, and $5 in exchange for silver dollars, and silver certificates in denominations above $5.
(e) Pay out
gold coin in exchange for silver dollars.
(f) Pay out silver dollars in exchange for
gold coin,
United States notes, or treasury notes.
(g) Pay out
United States notes or treasury notes, not subject to immediate cancellation, in exchange for
gold coin.
(h) Pay out and redeem subsidiary and minor coins as provided by existing laws.
(i) Pay out
United States notes in exchange for currency certificates.
14.
United States notes or treasury notes once redeemed shall not be paid out again except for gold, unless there shall be an accumulation of such notes in the division of issue and redemption which cannot then be cancelled under the provisions of the act, in which case the
Secretary of the Treasury shall have authority, if, in his judgment, that course is necessary for the public welfare, to invest the same or any portion thereof in bonds of the
United States for the benefit of the redemption fund, such bonds to be held in the division of issue and redemption, subject to sale at the discretion of the
Secretary of the Treasury for the benefit of the division of issue and redemption, and not for any other purpose.
15. The
Secretary of the Treasury shall be authorized to sell from time to time, in his discretion, any silver bullion in the division of issue and redemption; and the proceeds in gold of such sales shall be placed to the account of the gold reserve in the division of issue and redemption.
16. The gold certificates and the currency certificates shall, whenever presented and paid or received in the treasury, be retired and not reissued.
17. No
United States note or treasury note of 1890 of a denomination less than $10 shall hereafter be issued; and silver certificates shall hereafter be issued or paid out only in denominations of $1, $2, and $5 against silver dollars held by or deposited in the treasury.
18. The
assistant treasurer in charge of the division of issue and redemption shall, on demand, pay in
gold coin all
United States notes and treasury notes presented for payment, and as paid cancel the same up to the amount of $50,000,000. After that amount shall have been paid and cancelled, he shall then, from time to time, cancel such further amounts of notes so paid as shall equal, but not exceed, the increase of national bank notes
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issued subsequent to the taking effect of the proposed act.
19. If at the end of five years next after the taking effect of the proposed act any
United States notes or treasury notes shall be outstanding, a sum not exceeding one-fifth of such outstanding amount shall be retired, and cancelled each year thereafter; and at the end of ten years after the passage of the proposed act the
United States notes and treasury notes then outstanding shall cease to be legal tender for all debts, public and private, except for dues to the
United States.
20. The
Secretary of the Treasury may, in his discretion, transfer from surplus revenue in the general treasury to the division of issue and redemption any
United States notes or treasury notes which on such transfer could then lawfully be cancelled under the provisions of the proposed act if they had been redeemed on presentation; and when so transferred the same shall be cancelled.
The
Secretary of the Treasury, in his discretion, whenever there may be
United States notes or treasury notes in the general treasury, which are not available as surplus revenue, and which, upon transfer to the division of issue and redemption, could then lawfully be cancelled under the provisions of the act, may exchange such notes with the division of issue and redemption for
gold coin, and such notes shall thereupon be cancelled.
21. All vested rights of property or contract, and all penalties incurred before the taking effect of the proposed act or any part of it, shall not be affected by the passage thereof, and all provisions of law inconsistent with any of the provisions of the proposed act should be repealed.
II.-banking system.
22. The total issues of any national bank shall not exceed the amount of its paidup and unimpaired capital, exclusive of so much thereof as is invested in
real estate.
All such notes shall be of uniform design and quality, and shall be made a first lien upon all the assets of the issuing bank, including the personal liability of the stockholders.
No such notes shall be of less denomination than $10.
23. Up to an amount equal to 25 per cent. of the capital stock of the bank (the whole of its capital being unimpaired), the notes issued by it shall not exceed the value of
United States bonds, to be fixed as hereinafter provided, deposited with the treasurer of the
United States.
The additional notes authorized may be issued without further deposit of bonds.
Beginning five years after the passage of the proposed act, the amount of bonds required to be deposited before issuing notes in excess thereof shall be reduced each year by one-fifth of the 25 per cent. of capital herein provided for, and thereafter any bank may at any time withdraw any bonds deposited in excess of the requirements hereof.
24. Every national bank shall pay a tax at the rate of 2 per cent. per annum payable monthly upon the amount of its notes outstanding in excess of 60 per cent., and not in excess of 80 per cent. of its capital, and a tax at the rate of 6 per cent. per annum payable monthly upon the amount of its notes outstanding in excess of 80 per cent. of its capital.
25. Any bank may deposit any lawful money with the treasurer of the
United States for the retirement of any of its notes; and every such deposit shall be treated as a reduction of its outstanding notes to that extent; and the tax above provided for shall cease as of the 1st of the following month on an equal amount of its notes.
26. The
Secretary of the Treasury shall annually fix the value of each series of bonds of the
United States bearing a rate of interest exceeding 3 per cent. as equalized upon the rate of interest of 3 per cent. per annum, and such valuation as fixed by the
Secretary on this basis shall be the valuation at which the bonds will be receivable upon deposit.
Bonds payable at the option of the government shall be receivable at 95 per cent. of their then market value as determined by the
Secretary of the Treasury.
If any bonds shall be issued hereafter payable at date named and bearing interest at 3 per cent. or less, they shall be receivable at par.
27. The comptroller of the currency shall from time to time, as called for, issue to any bank the capital of which is full paid and unimpaired any of the notes herein elsewhere provided for, on the payment to the treasurer of the
United States in
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gold coin, of 5 per cent. of the amount of notes thus called for, which payments shall go into the common guarantee fund, for the prompt payment of the notes of any defaulted national bank.
Upon the failure of any bank to redeem its notes, they shall be paid from the said guarantee fund, and forthwith proceedings shall be taken to collect from the assets of the bank and from the stockholders thereof, if necessary, a sum sufficient to repay to said guarantee fund the amount thereof that shall have been used to redeem said notes; and also such further sums as shall be adequate to the redemption of all the unpaid notes of said banks outstanding.
28. Persons who, having been stockholders of the bank, have transferred their shares, or any of them, to others, or registered the transfer thereof within sixty days before the commencement of the suspension of payment by the bank, shall be liable to all calls on the shares held or subscribed for by them, as if they held such shares at the time of suspension of payment, saving their recourse against those by whom such shares were then actually held.
So long as any obligation of the bank shall remain unsatisfied, the liability of each stockholder shall extend to, but not exceed in the whole, an amount equal to the par of his stock.
29. If the said guarantee fund of 5 per cent. of all the notes outstanding shall become impaired by reason of payment made to redeem the said notes as herein provided, the comptroller of the currency shall make an assessment upon all the banks in proportion to their notes then outstanding sufficient to make said funds equal to 5 per cent. of said outstanding notes.
Any bank may deposit any lawful money with the treasurer of the
United States for the retirement of any of its notes, or return its own notes for cancellation, whereupon the comptroller shall direct the repayment to such bank of whatever sum may be the unimpaired portion of said bank's contribution to the guarantee fund on account of said notes.
Any portion of the guarantee fund may be invested in
United States bonds in the discretion of the
Secretary of the Treasury.
The taxes on circulation, provided for in paragraph 24, as well as the interest accruing from investment of any part of the guarantee fund, shall be held in the division of issue and redemption in
gold coin or in
United States bonds, in the discretion of the
Secretary of the Treasury, and shall be a fund supplementary and in addition to the guarantee fund to be used in case said guarantee fund shall ever become insufficient to redeem any bank notes issued hereunder, and it shall not be taken into account in estimating the amount of assessments necessary to replenish said guarantee fund or in payments to banks of their contributions to the guarantee fund.
30. The present system of national banknote redemption should be continued, with a constantly maintained redemption fund of 5 per cent. in
gold coin, and with power conferred on the comptroller of the currency, with the approval of the
Secretary of the Treasury, to establish additional redemption agencies at any or all of the sub-treasuries of the
United States, as he may determine.
31. So much of the provisions of existing law as require each national bank to receive at par in payment of debts to it the notes of other national banks, and making such notes receivable at par in payment of all dues to the
United States except duties on imports, shall be extended to cover notes issued under the proposed plan.
32. National banks shall hold reserves in lawful money against their deposits of not less than 25 per cent. and 15 per cent. for the respective classes, as now provided by law, at least one-fourth of which reserve shall be in coin, and held in the vaults of the bank.
Neither the 5 per cent. redemption fund nor the 5 per cent. guarantee fund shall be counted as part of the reserve required.
No bank shall count or report any of its own notes as a part of its cash or cash assets on hand.
33. Permit the organization of national banks with a capital stock of $25,000 in places of 4,000 population or less.
34. Provision should be made whereby branch banks may be established, with the consent of the comptroller of the currency and approval of the
Secretary of the Treasury.
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35. For the purpose of meeting the expenses of the treasury in connection with the national-bank system, a tax of oneeighth of 1 per cent. per annum upon its franchise, as measured by the amount of its capital, surplus, and undivided profits, shall be imposed upon each bank.
36. To so amend existing laws as to provide:
(a) For more frequent and thorough examinations of banks.
(b) For fixed salaries for bank examiners.
(c) To provide for rotation of examiners.
(d) For public reports, regular or special, at the call of the comptroller of the currency.
(e) To make it penal for any bank to loan money, or grant any gratuity, to an examiner of that bank, and penal for such examiner to receive it.
37. Any national banking association heretofore organized may at any time within one year from the passage of the proposed act, and with the approval of the comptroller of the currency, be granted, as herein provided, all the rights, and be subject to all the liabilities, of natural banking associations organized hereunder: Provided, that such action on the part of such associations shall be authorized by the consent in writing of shareholders owning not less than two-thirds of the capital stock of the association.
38. Any national banking association now organized which shall not, within one year after the passage of the proposed act, become a national banking association under the provisions hereinbefore stated, and which shall not place in the hands of the treasurer of the
United States the sums hereinbefore provided for the redemption and guarantee of the circulating notes, or which shall fail to comply with any other provision of the proposed act, shall be dissolved, but such dissolution shall not take away or impair any remedy against such corporation, its stockholders or officers, for any liability or penalty which shall have been previously incurred.
39. Any bank or banking association incorporated by special law of any State, or organized under the general laws of any State, and having a paid β up and unimpaired capital sufficient to entitle it to become a national banking association under the provisions of the proposed act, may, by the consent in writing of the shareholders owning not less than twothirds of the capital stock of such bank or banking association, and with the approval of the comptroller of the currency, become a national bank under this system, under its former name or by any name approved by the comptroller.
The directors thereof may continue to be the directors of the association so organized until others are elected or appointed in accordance with the provisions of the law. When the comptroller of the currency has given to such bank or banking association a certificate that the provisions of this act have been complied with, such bank or banking association, and all its stockholders, officers, and employs shall have the same powers and privileges, and shall be subject to the same duties, liabilities, and regulations, in all respects, as shall have been prescribed for associations originally organized as national banking associations under the proposed act.
At the adjourned session of the conference in
Indianapolis, in 1898, after the report of the commission was adopted, a subcommittee of the commission, consisting of
ex-Senator Edmunds,
ex-Secretary Fairchild, and
C. Stuart Patterson, prepared a bill for introduction in Congress, based on the conclusions of the commission.
This bill was introduced into the House of Representatives by
Representative Overstreet, of
Indiana, on Dec. 4, 1899.
On Dec. 18, following, the measure was passed by the
House by a vote of 190 yeas to 150 nays.
On Dec. 9 the bill was laid before the Senate, referred to the committee on finance, and, after being considerably amended, was passed on Feb. 15, 1900, by a vote of 49 yeas to 46 nays.
The
House refused to concur in the Senate amendments, whereupon a committee of conference was appointed, which agreed upon a substitute, and its report was adopted, March 13, 1900, and received the
President's approval on the following day.
The provisions of the measure as finally adopted are as follows:
That the dollar consisting of 25.8 grains of gold nine-tenths fine, as established by Section 3,511 of the
Revised Statutes of
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the
United States, shall be the standard unit of value, and all forms of money issued or coined by the
United States shall be maintained at a parity of value with this standard, and it shall be the duty of the
Secretary of the Treasury to maintain such parity.
sec. 2. That
United States notes, and treasury notes issued under the act of July 14, 1890, when presented to the treasury for redemption, shall be fixed in the first section of this act, and in order to secure the prompt and certain redemption of such notes as herein provided it shall be the duty of the
Secretary of the Treasury to set apart in the treasury a reserve fund of $150,000,000 in
gold coin and bullion, which fund shall be used for such redemption purposes only, and whenever and as often as any of said notes shall be redeemed from said fund it shall be the duty of the
Secretary of the Treasury to use said notes so redeemed to restore and maintain such reserve fund in the manner following, to wit: First, by exchanging the notes so redeemed for any
gold coin in the general fund of the treasury; second, by accepting deposits of
gold coin at the treasury or at any sub-treasury in exchange for the
United States notes so redeemed; third, by procuring
gold coin by the use of said notes, in accordance with the provisions of Section 3,700 of the
Revised Statutes of the
United States.
If the
Secretary of the Treasury is unable to restore and maintain the
gold coin in the reserve fund by the foregoing methods, and the amount of such
gold coin and bullion in said fund shall at any time fall below $100,000,000, then it shall be his duty to restore the same to the maximum sum of $150,000,000 by borrowing money on the credit of the
United States, and for the debt thus incurred to issue and sell coupon or
registered bonds of the
United States, in such form as he may prescribe, in denominations of $50 or any multiple thereof, bearing interest at the rate of not exceeding 3 per cent. per annum, payable quarterly, such bonds to be payable at the pleasure of the
United States after one year from the date of their issue, and to be payable, principal and interest, in
gold coin of the present standard value, and to be exempt from the payment of all taxes or duties of the
United States, as well as from taxation in any form by or under State, municipal, or local authority; and the
gold coin received from the sale of said bonds shall first be covered into the general fund of the treasury and then exchanged, in the manner hereinbefore provided, for an equal amount of the notes redeemed and held for exchange, and the
Secretary of the Treasury may, in his discretion, use said notes in exchange for gold, or to purchase or redeem any bonds of the
United States, or for any other lawful purpose the public interests may require, except that they shall not be used to meet deficiencies in the current revenues.
That
United States notes when redeemed in accordance with the provisions of this section shall be reissued, but shall be held in the reserve fund until exchanged for gold, as herein provided; and the
gold coin and bullion in the reserve fund, together with the redeemed notes held for use as provided in this section, shall at no time exceed the maximum sum of $150,000,000.
sec. 3. That nothing contained in this act shall be construed to affect the legaltender quality as now provided by law of the silver dollar, or of any other money coined or issued by the
United States.
sec. 4. That there be established in the Treasury Department, as a part of the office of the treasurer of the
United States, divisions to be designated and known as the division of issue and the division of redemption, to which shall be assigned, respectively, under such regulations as the
Secretary of the Treasury may approve, all records and accounts relating to the issue and redemption of
United States notes, gold certificates, silver certificates, and currency certificates.
There shall be transferred from the accounts of the general fund of the treasury of the
United States, and taken up on the books of said divisions, respectively, accounts relating to the reserve fund for the redemption of
United States notes and treasury notes, the
gold coin held against outstanding gold certificates, the
United States notes held against outstanding currency certificates, and the silver dollars held against outstanding silver certificates, and each of the funds represented by these accounts shall be used for the redemption of the notes and certificates for
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which they are respectively pledged, and shall be used for no other purpose, the same being held as trust funds.
sec. 5. That it shall be the duty of the
Secretary of the Treasury, as fast as standard silver dollars are coined under the provisions of the acts of July 14, 1890, and June 13, 1898, from bullion purchased under the act of July 14, 1890, to retire and cancel an equal amount of treasury notes whenever received into the treasury, either by exchange in accordance with the provisions of this act or in the ordinary course of business, and upon the cancellation of treasury notes silver certificates shall be issued against the silver dollars so coined.
sec. 6. That the
Secretary of the Treasury is hereby authorized and directed to receive deposits of
gold coin with the treasurer or any assistant treasurer of the
United States in sums of not less than $20, and to issue gold certificates therefor in denominations of not less than $20, and the coin so deposited shall be retained in the treasury and held for the payment of such certificates on demand, and used for no other purpose.
Such certificates shall be receivable for customs, taxes, and all public dues, and when so received may be reissued, and when held by any national banking association may be counted as part of its lawful reserve: Provided, that whenever and so long as the
gold coin held in the reserve fund in the treasury for the redemption of
United States notes and treasury notes shall fall and remain below $100,000,000, the authority to issue certificates, as herein provided, shall be suspended: And provided further, that whenever and so long as the aggregate amount of
United States notes and silver certificates in the general fund of the treasury shall exceed $60,000,000 the
Secretary of the Treasury may, in his discretion, suspend the issue of the certificates herein provided for: And provided further, that of the amount of such outstanding certificates one-fourth at least shall be in denominations of $50 or less: And provided further, that the
Secretary of the Treasury may, in his discretion, issue such certificates in denominations of $10,000, payable to order.
And Section 5,193 of the
Revised Statutes of the
United States is hereby repealed.
sec. 7. That hereafter silver certificates shall be issued only of denominations of $10 and under, except that not exceeding in the aggregate 10 per cent. of the total volume of said certificates, in the discretion of the
Secretary of the Treasury, may be issued in denominations of $20, $50, and $100; and silver certificates of higher denominations than $10, except as herein provided, shall, whenever received at the treasury or redeemed, be retired and cancelled, and certificates of denominations of $10 or less shall be substituted therefor, and after such substitution, in whole or in part, a like volume of
United States notes of less denomination than $10 shall from time to time be retired and cancelled, and notes of denominations of $10 and upward shall be reissued in substitution therefor, with like qualities and restrictions as those retired and cancelled.
sec. 8. That the
Secretary of the Treasury is hereby authorized to use, at his discretion, any silver bullion in the treasury of the
United States purchased under the act of July 14, 1890, for coinage into such denominations of subsidiary
silver coin as may be necessary to meet the public requirements for such coin: Provided, that the amount of subsidiary
silver coin outstanding shall not at any time exceed in the aggregate $100,000,000. Whenever any silver bullion purchased under the act of July 14, 1890, shall be used in the coinage of subsidiary
silver coin, an amount of treasury notes issued under said act equal to the cost of the bullion contained in such coin shall be cancelled and not reissued.
sec. 9. That the
Secretary of the Treasury is hereby authorized and directed to cause all worn and uncurrent subsidiary
silver coin of the
United States now in the treasury, and hereafter received, to be recoined, and to reimburse the treasurer of the
United States for the difference between the nominal or face value of such coin and the amount the same will produce in new coin from any moneys in the treasury not otherwise appropriated.
sec. 10. That Section 5,138 of the
Revised Statutes is hereby amended so as to read as follows:
sec. 5,138. No association shall be organized with a less capital than $100,000,
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except that banks with a capital of not less than $50,000 may, with the approval of the Secretary of the Treasury, be organized in any place the population of which does not exceed 6,000 inhabitants, and except that banks with a capital of not less than $25,000 may, with the sanction of the Secretary of the Treasury, be organized in any place the population of which does not exceed 3,000 inhabitants.
No association shall be organized in a city the population of which exceeds 50,00 persons with a capital of less than $200,000.
sec. 11. That the
Secretary of the Treasury is hereby authorized to receive at the treasury any of the outstanding bonds of the
United States bearing interest at 5 per cent. per annum, payable Feb. 1, 1904, and any bonds of the
United States bearing interest at 3 per cent. per annum, payable Aug. 1, 1908, and to issue in exchange therefor an equal amount of coupon or
registered bonds of the
United States in such form as he may prescribe, in denominations of $50, or any multiple thereof, bearing interest at the rate of 2 per cent. per annum, payable quarterly, such bonds to be payable at the pleasure of the
United States after thirty years from the date of their issue, and said bonds to be payable, principal and interest, in
gold coin of the present standard value, and to be exempt from the payment of all taxes or duties of the
United States, as well as from taxation in any form by or under State, municipal, or local authority: Provided, that such outstanding bonds may be received in exchange at a valuation not greater than their present worth to yield an income of 2 1/4 per cent. per annum; and in consideration of the reduction of interest effected, the
Secretary of the Treasury is authorized to pay to the holders of the outstanding bonds surrendered for exchange, out of any money in the treasury not otherwise appropriated, a sum not greater than the difference between their present worth, computed as aforesaid, and their par value, and the payments to be made hereunder shall be held to be payments on account of the sinking-fund created by Section 3,694 of the
Revised Statutes: And provided further, that the 2-per-cent.
bonds, to be issued under the provisions of this act shall be issued at not less than par, and they shall be numbered consecutively in the order of their issue, and when payment is made the last number issued shall be first paid, and this order shall be followed until all the bonds are paid, and whenever any of the outstanding bonds are called for payment interest thereon shall cease three months after such call; and there is hereby appropriated out of any money in the treasury not otherwise appropriated, to effect the exchanges of bonds provided for in this act, a sum not exceeding one-fifteenth of 1 per cent. of the face value of said bonds, to pay the expense of preparing and issuing the same and other expenses incident thereto.
sec. 12. That upon the deposit with the treasurer of the
United States, by any national banking association, of any bonds of the
United States in the manner provided by existing law, such association shall be entitled to receive from the comptroller of the currency circulating notes in blank, registered and countersigned as provided by law, equal in amount to the par value of the bonds so deposited; and any national banking association now having bonds on deposit for the security of circulating notes, and upon which an amount of circulating notes has been issued less than the par value of the bonds, shall be entitled, upon due application to the comptroller of the currency, to receive additional circulating notes in blank to an amount which will increase the circulating notes held by such association to the par value of the bonds deposited, such additional notes to be held and treated in the same way as circulating notes of national banking associations heretofore issued, and subject to all the provisions of law affecting such notes: Provided, that nothing herein contained shall be construed to modify or repeal the provisions of Section 5,167 of the
Revised Statutes of the
United States, authorizing the comptroller of the currency to require additional deposits of bonds or of lawful money in case the market value of the bonds held to secure the circulating notes shall fall below the par value of the circulating notes outstanding for which such bonds may be deposited as security: And provided further, that the circulating notes furnished to the national banking associations under the provisions of this
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act shall be of the denominations prescribed by law, except that no national banking association shall, after the passage of this act, be entitled to receive from the comptroller of the currency, or to issue or reissue or place in circulation, more than one-third in amount of its circulating notes of the denomination of $5: And provided further, that the total amount of such notes issued to any such association may equal at any time, but shall not exceed, the amount at such time of its capital stock actually paid in: And provided further, that under regulations to be prescribed by the
Secretary of the Treasury any national banking association may substitute the 2 per cent. bonds issued under the provisions of this act for any of the bonds deposited with the treasurer to secure circulation or to secure deposits of public money; and so much of an act entitled βAn act to enable national banking associations to extend their corporate existence, and for other purposes, approved July 12, 1882,β as prohibits any national bank which makes any deposit of lawful money in order to withdraw its circulating notes from receiving any increase of its circulation for the period of six months from the time it made such deposit of lawful money for the purpose aforesaid, is hereby repealed, and all other acts or parts of acts inconsistent with the provisions of this section are hereby repealed.
sec. 13. That every national banking association having on deposit, as provided by law, bonds of the
United States bearing interest at the rate of 2 per cent. per annum, issued under the provisions of this act, to secure its circulating notes, shall pay to the treasurer of the
United States, in the months of January and July, a tax of one-fourth of 1 per cent. each half-year upon the average amount of such of its notes in circulation as are based upon the deposit of said 2 per cent. bonds; and such taxes shall be in lieu of existing taxes on its notes in circulation imposed by Section 5,214 of the
Revised Statutes.
sec. 14. That the provisions of this act are not intended to preclude the accomplishment of international bimetallism whenever conditions shall make it expedient and practicable to secure the same by concurrent action of the leading commercial nations of the world and at a ratio which shall insure permanence of relative value between
gold and
silver.
