H. R. 13303. Fifty-sixth Congress, second session. IN THE HOUSE OF REPRESENTATIVES. JANUARY 7, 1901. Mr. LOVERING introduced the following bill; which was referred to the Committee on Banking and Currency and ordered to be printed. A BILL to make the currency responsive to the varying needs of business at all seasons and in all sections. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, GUARANTEED BANK NOTES AUTHORIZED. That, in addition to the circulation authorized by existing law to be issued to national banking associations upon deposits of United States bonds, the Comptroller of the Currency may issue circulating notes, to be known as guaranteed bank notes, in the amounts and under the conditions hereinafter set forth: Provided, That nothing herein contained shall be construed as compelling said Comptroller to issue such guaranteed bank notes if for any reason relating to the condition of the bank making application for such notes, the general state of the circulation, or the foreign exchanges he shall deem such action to be inexpedient. PRESENT ISSUES LIMITED TO TEN PER CENT. SEC. 2. That guaranteed bank notes may be issued to any national banking association under the provisions of this act to an amount not exceeding one-fifth of the face value of the United States bonds on deposit by said bank with the Treasurer of the United States to secure currency notes issued under existing law, but such guaranteed bank notes shall not be issued to an amount in excess of ten per centum of the paid up and unimpaired capital of said bank. BANK-NOTE GUARANTY FUND ESTABLISHED. SEC. 3. That every national banking association issuing guaranteed bank notes shall pay into the division of issue and redemption in the office of the Treasurer of the United States a sum in gold coin equal to five per centum of its outstanding guaranteed bank notes. This fund shall be known as the "bank-note guaranty fund," and shall not be reduced or impaired except for the purpose of redeeming the guaranteed bank notes of failed banks, as hereinafter prescribed. EMPLOYMENT OF THE GUARANTY Fund. SEC. 4. That whenever the Comptroller of the Currency shall have become satisfied by the protest or the waiver and admission specified in section fifty-two hundred and twenty-six, or by the report provided for in section fifty-two hundred and twentyseven, of the Revised Statutes of the United States, that any banking association has refused to pay its guaranteed bank notes on demand in lawful money he shall direct the redemption of such notes from the bank-note guaranty fund aforesaid, and such notes shall thereupon be so redeemed. The Comptroller of the Currency shall collect for the benefit of said fund, from the assets of the bank and from the stockholders thereof, such sum as, with the bank's balance in the bank-note guaranty fund, shall equal the amount of its guaranteed bank notes outstanding. And for this purpose the United States shall, on behalf of the bank-note guaranty fund, have a lien upon all the assets of the association ratably with other creditors of the bank. ANNUAL TAX UPON NOTES IN CIRCULATION. SEC. 5. That upon all outstanding guaranteed bank notes issued under the provisions of this act there shall be paid a tax equal as nearly as may be to one-half of one per centum per annum during the period for which such notes may be in circulation. Said taxes shall be levied under regulations prescribed by the Comptroller of the Currency, with the approval of the Secretary of the Treasury, and shall be assessed by the Treasurer of the United States. Such regulations shall provide for the assessment of the tax upon notes actually in circulation outside the issuing bank at convenient dates, not less than four in any month, as fixed by the Comptroller of the Currency, and said Comptroller may prescribe and require from any national banking association making application for circulation under this act such periodical or other reports as he may deem desirable for determining the condition of the bank. TAXES TO BE ADDED TO GUARANTY FUND. SEC. 6. That the proceeds of the taxes herein prescribed shall be paid into the bank-note guaranty fund and constitute a part thereof; but when such fund, after the deduction of all losses caused by the redemption of the notes of failed banks, shall be materially in excess of five per centum of the guaranteed bank notes then outstanding, the Comptroller of the Currency may from time to time, in his discretion, direct the reimbursement by the Treasurer of the United States to the banks, in such installments as said Comptroller may see fit, of the unimpaired portion of their original contribution of five per centum to the bank-note guaranty fund; and thereafter any excess in the fund of the proceeds of the taxes herein provided above five per centum of the guaranteed bank notes outstanding at the end of every six months shall be covered into the Treasury of the United States as a miscellaneous receipt: Provided, That in case of a deficiency in said fund at any time, caused by the redemption of the notes of failed banks, said fund shall be reimbursed from the amounts covered into the Treasury in such amounts as may be required to maintain it as nearly as may be at the amount of five per centum, and not less, of the guaranteed bank notes outstanding, but the Treasury shall not be liable in the aggregate to said fund beyond the amounts covered into the Treasury under the provisions of this section. SEC. 7. That the Secretary of the Treasury be, and is hereby, authorized, in his discretion, to cause to be invested in bonds of the United States any portion of the guaranty fund hereinbefore provided for; and such bonds shall be held and disposed of for the benefit of such fund. SEC. 8. That whenever the Comptroller of the Currency has sold at public auction under the provisions of section fifty-two hundred and thirty of the Revised Statutes of the United States the United States bonds held to secure the currency notes of any failed bank, any excess in the amount received for said bonds above their par value shall be applied to the payment of the outstanding guaranteed bank notes of said bank, and for this purpose the United States shall have a paramount lien upon any such excess, but any further excesses above the amount required for this purpose shall be covered into the general assets of the bank. CURRENT REDEMPTION FUND ESTABLISHED, SEC. 9. That national banking associations taking out guaranteed bank notes under the provisions of this act shall, in addition to the bank-note guaranty fund, deposit and maintain in the Treasury a fund of five per centum of their outstanding guaranteed bank notes, subject to the laws governing the redemption fund held under existing law for the current redemption of national bank notes; but such fund shall be paid and kept in gold coin of the United States, and shall constitute a separate fund for the current redemption of guaranteed bank notes: Provided, That the Comptroller of the Currency shall, with the approval of the Secretary of the Treasury, have authority to provide for the redemption of guaranteed bank notes at any or all of the subtreasuries of the United States, and guaranteed bank notes issued under the provisions of this act shall be redeemed in gold coin on demand at the counter of the issuing bank. SEC. 10. That the guaranteed bank notes furnished to national banking associations under the provisions of this act shall be in such form as the Comptroller of the Currency, with the approval of the Secretary of the Treasury, may prescribe, and of the denominations and under the limitations prescribed for national bank notes by section twelve of the act of March fourteenth, nineteen hundred, entitled "An act to define and fix the standard of value, to maintain the parity of all forms of money issued or coined by the United States, to refund the public debt, and for other purposes. METHOD OF REDUCING CIRCULATION. SEC. 11. That any national banking association desiring to withdraw from circulation any of its guaranteed bank notes may transmit the same to the Treasurer of the United States for cancellation, or may pay into the Treasury an amount equal to the amount of the notes to be withdrawn, in the manner prescribed by sections fifty-two hundred and twenty-two, fifty-two hundred and twenty-four, and fifty-two hundred and twenty-five of the Revised Statutes; but such payments shall be in gold coin of the United States. The taxes upon such guaranteed bank notes thus withdrawn from circulation shall thereupon cease, and the Comptroller of the Currency shall direct the repayment to such bank of whatever sum may be the unimpaired portion of its original contribution to the guaranty fund on account of said notes, but nothing paid in taxes upon such notes under section five of this act shall be thus repaid. EXTENSION OF NOTE ISSUES AFTER THREE YEARS. SEC. 12. That after three years from the passage of this act guaranteed bank notes may be issued to any national banking association under the provisions of this act to an amount not exceeding two-fifths of the face value of the United States bonds on deposit by said bank with the Treasurer of the United States to secure currency notes issued under existing law, but such guaranteed bank notes shall not be issued to an amount in excess of twenty per centum of the capital of said bank; and after six years from the passage of this act guaranteed bank notes may be issued to any national banking association to an amount not exceeding four-fifths of the face value of the United States bonds on deposit by said bank with the Treasurer of the United States to secure currency notes issued under existing law, but such guaranteed bank notes shall not be issued to an amount in excess of forty per centum of the capital of said bank: And provided, That nothing herein contained shall be construed as compelling the Comptroller of the Currency to issue such guaranteed bank notes or to increase the ratio of such issues to the bonds deposited by any national banking association if for any reason relating to the condition of the bank, the general state of the circulation, or the foreign exchanges he shall deem such action to be inexpedient; and said Comptroller shall not increase the ratio of issue of guaranteed bank notes in any case beyond the amount provided in section one of this act until after the Secretary of the Treasury shall have declared in writing that the general policy of such an increase will not be detrimental to the monetary standard and to the public interests, and is approved by him. SEC. 13. That this act shall take effect upon its passage. |