currency system and to increase the security afforded by the proposed law to the holders of bank notes. The banks will be required, when reserve notes and legal tender notes have alike disappeared, to fulfill all requirements of law calling for lawful money by keeping gold and silver coin, and the present quantity of silver is likely to be so completely absorbed for retail exchanges that the bank reserves will consist almost entirely of gold. This being the case, it is obvious that the issue of a banking currency based purely upon assets, without either bonds or reserve notes, will involve no risk of undue inflation or of loss to the note holder. The bill reported by your committee proposes no change in existing laws regarding reserves against deposits. The cash reserves required in reserve cities at the date of the reports of the national banks to the Comptroller on December 15, 1897, were $251,176,860, and the cash reserves required in country banks were $55,940,589, making a total of $307,117,449. The cash reserves held at the same date were $410,568,427. These amounts are now held largely in legal-tender notes, but the abolition of such notes would leave a void which could be filled only by gold. If the circulation of the national banks therefore, without allowing for any growth in the meantime, should rise to the amount of their capital on December 15, 1897, which was $629,655,365, the reserves held against deposits, with the requirement of the two special funds for current redemption and for the guaranty of the ultimate redemption of the notes, amounting to 10 per cent of the circulation outstanding, would in themselves exceed $463,000,000 in gold, or nearly 75 per cent of the outstanding notes. It is upon the solid rock of metallic currency like this, with additional metallic currency in circulation among the people, that your committee propose to plant finally, by the gradual evolution of events, the monetary system of the United States. We believe that the arrangements proposed in the bill will accomplish this result gradually enough to avoid any shock to any vested interest, to the banks, or to their patrons of any class, but that it will be accomplished so certainly that the United States almost upon the enactment of a measure promising such results will find their credit greatly enhanced abroad and placed upon unassailable foundations at home. JAMES T. MCCLEARY, JOHN MURRAY MITCHELL, H. R. 10289, FIFTY-FIFTH CONGRESS, SECOND SESSION. IN THE HOUSE OF REPRESENTATIVES, MAY 11, 1898.—Mr. Walker, of Massachusetts (by instruction of the Committee on Banking and Currency) introduced the following bill; which was referred to the Committee on Banking and Currency and ordered to be printed. A BILL To provide for strengthening the public credit, for the relief of the United States Treasury, and for the amendment of the laws relating to national banking associations. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That Issue and there is hereby created a division in the Treasury Depart- sion established. redemption diviment to be known as the division of issue and redemption. trollers of the currency. There is hereby created a board consisting of three Board of compmembers to be known as the comptrollers of the currency. The said board shall have the management of the division of issue and redemption, and shall take the place of the Comptroller of the Currency, performing all his duties as now defined by statute, and such others as are prescribed by this act. The office of Comptroller of the Currency is hereby abolished. The members of said board shall be appointed by the President by and with the advice and consent of the Senate, and shall be removed only with the consent of the Senate for cause stated in writing. The term of office of said Comptrollers shall be twelve years: Provided, however, That the terms of the members of the board first appointed shall be four years, eight years, and twelve years, respectively. The member appointed for four years shall be known as First Comptroller and the other members as associate comptrollers. Thereafter the associate comptroller who shall have only four years to serve shall by succession become First Comptroller. The First Comptroller shall be chairman of the board and shall have the custody of all the bullion, moneys, and securities held in the division of issue and redemption. He shall give to the United States a bond in the sum of two hundred and fifty thousand dollars, with not less than two responsible sureties, to be approved by the Secretary of the Treasury, for the faithful discharge of the duties of his office. The salary of the First Comptroller shall be at the rate of eight thousand dollars per annum, and that of each Associate Comptroller shall be at the rate of seven thousand five hundred per annum. 75 Funds in division of issue and redemption. Reserve against U. S. notes and silver. reserve. SEC. 2. That to the division of issue and redemption shall be committed all functions of the Treasury Department pertaining to the issue and redemption of notes and certificates, and to the exchange of coins; and in the said division of issue and redemption shall be held the guaranty fund and the redemption fund of the national banking associations, and through it shall be conducted the operations of redeeming the circulating notes of national banking associations, as prescribed by law; and to this division shall be transferred all gold coin held against outstanding gold certificates, all silver dollars held against outstanding silver certificates, all United States notes held against outstanding currency certificates, and all silver dollars and silver bullion held against outstanding Treasury notes issued under the act of July fourteenth, eighteep hundred and ninety, and such amount of subsidiary and minor coins as the Secretary of the Treasury shall consider necessary for the issue and exchange of such coins, and the funds deposited with the Treasurer for the redemption or retirement of the circulating notes of national banking associations. All accounts relating to the business of this division shall be kept entirely apart and distinct from those of the other divisions of the Treasury Department; and the accounts relating to the national banking associations shall be kept separate and apart from all other accounts in said division of issue and redemption. SEC. 3. That a reserve shall be established in the division of issue and redemption aforesaid by the transfer to it by the Treasurer of the United States from the general funds of the Treasury of an amount in gold, in coin and bullion, equal to twenty-five per centum of the amount, both of United States notes and Treasury notes issued under the Act of July fourteenth, eighteen hundred and ninety, outstanding, and a further sum in gold equal to five per centum of the aggregate amount of the coinage of silver dollars. This reserve shall be held as a common fund, and used exclusively for the redemption of said notes and in exchange for said notes and for silver dollars and subsidiary and minor coins, as hereinafter provided. Duty of the SEC. 4. That it shall be the duty of the Secretary of the Secretary of the Treasury to Treasury to maintain the gold reserve in the division of maintain such issue and redemption aforesaid at such sum as shall secure the certain and immediate redemption of all notes and exchange of all silver dollars presented, as hereinafter provided for; and for this purpose he may, from time to time, transfer to the division of issue and redemption any funds in the Treasury, not otherwise appropriated, in excess of an actual cash balance of fifty million dollars; and in addition thereto he is hereby authorized to issue and sell for gold, whenever it is in his judgment necessary to the ends aforesaid, and for no other purpose, certificates of indebtedness of the United States bearing interest at a rate not exceeding three per centum per annum, payable in gold coin at the end of five 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 purpose aforesaid. of the Treasury may transfer funds. SEC. 5. That the Secretary of the Treasury may, and he The Secretary is hereby authorized to, exchange gold coin held in the general cash of the Treasury for United States notes or Treasury notes of eighteen hundred and ninety held in the division of issue and redemption; and he is hereby further authorized to exchange such notes of one denomination for a like amount in notes of another denomination, or notes of either kind for a like amount in notes of the other kind, and may replace notes worn or unfit for circulation by new notes of the same kind; but none of these exchanges shall at any time alter the amount of money to be held in the said division. sion of issue and SEC. 6. That the division of issue and redemption shall, Duties of diviat Washington and at such subtreasuries of the United redemption. States as the Secretary of the Treasury may from time to time designate, on demand: First. Pay out gold coin for gold certificates; Second. Pay out United States notes for currency certificates; Third. Pay out gold coin in redemption of United States notes and Treasury notes of eighteen hundred and ninety; Fourth. Pay out silver dollars for silver certificates of any denomination; Fifth. Issue silver certificates of denominations of one dollar, two dollars, and five dollars, in exchange for silver dollars and for silver certificates of denominations above five dollars; Sixth. Pay out gold coin in exchange for silver dollars; Seventh. Pay out silver dollars held in the division of issue and redemption aforesaid, and not covered by outstanding silver certificates, in exchange for gold coin, United States notes, or Treasury notes; Eighth. Pay out United States notes or Treasury notes, not subject to immediate cancellation, in exchange for gold coin; Ninth. Pay out legal-tender money of the United States in exchange for subsidiary and minor coins presented in sums of twenty dollars or multiples thereof, and pay out subsidiary and minor coins in sums of twenty dollars or multiples thereof, in exchange for any legal-tender money of the United States; Tenth. Pay out in redemption of national-bank notes the moneys in the division available for that purpose. cates and cur SEC. 7. That gold certificates and currency certificates Gold certifi shall, whenever presented and paid or received in the Treas- rency certificates ury, be retired and canceled. All provisions of law author- retired and canizing the issue or reissue of gold certificates or currency certificates are hereby repealed. celed. United States SEC. 8. That when the division of issue and redemption Exchange of shall have paid out gold coin in exchange for United States gold coin and notes and Treasury notes presented for payment, it shall notes and Treas from time to time cancel such amounts of notes so paid as shall not exceed the amount of national reserve notes issued subsequent to the taking effect of this act. ury notes. notes may be SEC. 9. That the Secretary of the Treasury may, in his United States discretion, from any funds in the general Treasury not set transferred for apart under section four of this Act or otherwise appropri- cancellation. United States notes redeemed ated, transfer to the division of issue and redemption any United States notes or Treasury notes which, on such transfer, could then lawfully be canceled under the provisions of this Act if they had been redeemed on presentation; and when so transferred the same shall be canceled. And the Secretary of the Treasury, 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 canceled under the provisions of this Act, may exchange such notes with the division of issue and redemption for gold coin, and such notes shall thereupon be canceled. SEC. 10. That United States notes or Treasury notes in gold not to be once redeemed shall not be paid out again except for gold paid out except coin, unless there shall be an accumulation of such notes in for gold or United States bonds. the division of issue and redemption which can not then be canceled under the provisions of this act, in which case the Secretary of the Treasury shall have authority to invest the same, or any portion thereof, in interest-bearing obligations of the United States for the benefit of the gold reserve in the division of issue and redemption, such obligations to be held in the aforesaid division, subject to sale at the discretion of the Secretary of the Treasury for the benefit of the said reserve in the said division of issue and redemption, and not for any other purpose. No United States notes less SEC. 11. That no United States note and no Treasury than ten dollars. note issued under the act of July fourteenth, eighteen hundred and ninety, of a denomination less than ten dollars Silver certifi- shall hereafter be issued, and silver certificates shall herecates, one dollar, after be issued or paid out only in denominations of one dollar, two dollars, and five dollars against silver dollars deposited in the division of issue and redemption, or in exchange for silver certificates of denominations exceeding five dollars. two dollars, five dollars. Three classes of notes defined. Bank notes not SEC. 12. That the circulating notes provided for in this Act shall consist of three classes, namely, national reserve notes, national bank notes, and national currency notes. The words "national reserve notes," when used in this Act, shall be understood to mean notes issued to a national banking association in exchange for United States notes, and for whose current redemption in gold coin the banking association receiving the same shall be made immediately liable, and whose ultimate payment shall be made by the Government of the United States. That the words "national bank notes," when used in this Act, shall mean circulating notes issued by national banking associations, and secured by deposits of United States bonds. That the words "national currency notes," when used in this Act, shall be understood to mean circulating notes issued by a national banking association, and constituting a direct and ultimate liability of the said banking association, as provided in this Act. SEC. 13. That any national banking association, on comto exceed capital plying with the provisions of this Act, shall, if its capital be of |