ÆäÀÌÁö À̹ÌÁö
PDF
ePub

bonds now held by national banks and deposited to secure their circulating notes. These bonds are to be taken over by the Reserve Association with the existing currency privilege attached and as fast as notes secured by these bonds are redeemed, notes to an equal amount issued by the Association will be substituted, the intention being to retire as rapidly as possible all bond secured circulation and to substitute therefor the notes of the Reserve Association. For a period of ten years the Association agrees to hold the bonds so purchased, but after two years, with the approval of the Secretary of the Treasury, it may dispose annually of $50,000,000 of the bonds held by it to secure circulation. If the government should issue bonds at a higher rate of interest than 2 per cent., the Reserve Association shall have the right to exchange at par the government bonds which it may have acquired from the national banks, but shall pay upon its notes secured by such new bonds an increased rate of taxation equal to the additional interest in excess of 2 per cent. The further right exists to issue additional notes with a graded tax beginning at 3 per cent. on the first $100,000,000 and reaching 6 per cent. for all amounts above $300,000,000. This second class of notes, however, must be covered to the extent of at least one-third by gold or other lawful money and the remaining portion by bonds of the United States or bankable commercial paper. The notes of the Reserve Association are made legal tender except for obligations of the government which are by their terms specifically payable in gold.

State Banks

It is conceded to be desirable that state banks, capitalized savings banks, trust companies, and mutual

savings banks should become members of the Reserve Associations and subscribe to its stock. The objection to their membership is based upon the lack of uniform and adequate regulations governing the amount of their capital and reserve, and the varying degrees of strictness in their supervision and management.

A plan has been suggested under which any of these banks may become a member provided it has a capital and surplus not less than that required for a national bank in the same location, and maintains against its demand deposits a reserve of like character in the same proportion as that required of national banks; also that each institution shall agree to submit to such examination and comply with such requirements as may from time to time be prescribed by the National Reserve Association.

Objects to Be Secured

The manifest objects to be secured by the Reserve Association are: first, a concentration of the reserves of banks and their utilization for the support of the banking institutions of the country; second, a safe and efficient currency system under which circulating notes can be issued in such quantities and at such times as shall be demanded by the requirements of business.

Comparison with Central Banks of Europe

The proposed reserve association differs materially from a central bank in that its capital is exclusively held by banks, and that in its dealings it does not enter into the same competition with them that an independent institution would. The plan recognizes

the advantages of a restriction of the note issuing privilege to a single institution-a method which has met with approval in most other countries. In this respect as well as in its proposed function as the fiscal agent of the government it resembles the central banks of Europe.

INDEX

« ÀÌÀü°è¼Ó »