Trust Companies Volume 3, Nos. 7-12 (Paperback)

This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1908 edition. Excerpt: ...by the artificial and unnecessary inflexibility of our currency due to restrictions which are placed by law upon the issue of bank notes. _ Under the existing law National banks can increase their issue of notes only in proportion as they increase their holdings of the United States bonds ivhich are deposited as security; and they cannot at will regain possession of the bonds by the deposit of lawful money for the retirement of their notes. On account of, the investment considerations regarding bonds which are involved in the issue of National bank notes, we find that this class of currency, which in most other leading countries possesses a uefu1 flexibility, is here issued and retired utterly without regard to the country's varying needs for currency. Notwithstanding the inadequacy of the bond-secured circulation of our National banks. our deliberations have brought us to the conclusion that it would be unwise to disturb this circulation or to recommend any substitute for it as it now exists, for such a course would lead to an ih'equitable depreciation of the United States bonds now outstanding. In, our opinion. hmvever, future issues of Goverment bonds should not be made available as a ba'sis for bank notes, for the great increase in the_ bond-secured circulation that has taken place within the last six years furnishes evidence that the existing system of note issue without adequate redemption might become dangerous. We have had brought before us for consideration-two classes of remedies for existing evils: (I) radical measures involving the creation of corporations with powers and privileges tmlike those now possessed by any American institution; (2) measures which would enlarge the privileges of corporations already in...