The Evening Star. FRIDAY, AUGUST 16, 1872.

Evening Star, Issue 2962, 16 August 1872, Page 2

The Evening Star. FRIDAY, AUGUST 16, 1872.

The 32m1, 3 3rd, and 3 4th clauses of* the National Currency and Bank Bill are prohibitory. The 32nd is intended to prevent reckless or fraudulent borrowing, and provides that no -Association “ shall either directly or indirectly pledge or hypothecate” any of its notes in circulation for any purpose whatever, nor use them to increase oi “ create ” its capital stock. The 33rd clause is intended to prevent the appearance of fictitious prosperity by requiring that “ bad debts shall bo deducted before any dividend is paid.” By it no portion of the capital may bo withdrawn, for payment of dividends or otherwise, during the continuation of the business of the Bank. How far this clause nullifies the 11th clause may be worthy of consideration, Probably many such inconsistencies will appear on careful reading of the Bill. The clause further specifies what shall be considered bad debts in a banidng establishment, and defines them to be “ all debts due to any Association on which interest is past due and unpaid for a period of six months, unless the same be well secured and shall be in process of collection.” By the 34th clause Banking Associations are prohibited buying the notes of other Associations at a discount, or paying them away, if at the time “ they are not worth their nominal value,” or when the Bank issuing them has ceased to redeem them in coin. The 35th clause is a registration clause requiring an annual registration of shareholders. The 30th clause provides that the plates and dies for printing notes of an Association are to remain under the control and direction of the Colonial Treasurer, and also enacts that the cost of carrying the Act into operation shall be defrayed by an annual assessment on the’ Associations, levied proportionately to the amount of their issue of notes. Any Association neglecting to pay its proportion of assessment for thirty days after notice by the Colonial Treasurer is to be considered insolvent, and a receiver may be appointed to wind up the business. If the affairs of an Association are in course of liquidation, by the 37th section the securities deposited with the Treasurer may be redeemed by payment to him of the value of the notes in circulation in coin, when from that time the Colonial Treasury becomes liable for their being redeemed. By the 38th section any existing Bank in the Colony may become an Association under the Act if the owners of two thirds of the capital approve of such a course by resolution. By the 39th clause associations of this character may be appointed “ depositaries of public money,” under prescribed regulations, and they may also be employed as financial agents of the Government, on condition that “National Currency Bills” of all associations are received at par. The 40th clause prescribes the method of procedure if notes arc not redeemed in coin on presentation and demand. The holder must then protest them before a notary, who is required to forward the protest to the Treasurer, The Comptroller is then to examine the facts, and the Association must cease business, except such as is necessary to winding up, on notice being given. An exception is however made in case the holder of the notes is another bank, when an indorsed clearing house certificate is to be a “ lawful answer.” By the 41st clause, on default of an Association, the Colonial Treasurer, within sixty days after receiving notice of the failure, is to declare the securities deposited with him forfeited, and notice is to be given to the holders of notes to present them for payment at the Colonial Treasury, when they are to be paid as presented, in current coin. Should the securities not realise the value of the circulation, the deficiency is to be a preferential charge upon the assets of the Association. By the 42nd clause the Treasurer is empowered to sell instead of cancelling the securities, either by auction or private sale ; but in the latter case they are not to be sold under their “current value,” no until after thirty days’ notice to the defaulting Association. The 43rd, 44th, and 45 th clauses prescribe the course of procedure by the Government in case of the insolvency of an Association. The 46th section makes provision for the appointment of an Inspector of banking associations. He must not be a director or officer of any association he may be appointed to investigate ; he is to have the power to examine the officers upon oath. His pay is to be two pounds a day during the time given to the examination, and one pound per day travelling expenses if employed beyond three miles from his own residence—the expenses to be paid by the Association. The 47th clause exempts trustees of every character holding stock from personal liability as stockholders, and renders the estates or funds under their eon-

trol liable for the proportion of the debts of an association represented by the stock. The 48th clause empowers the Governor to appoint a Comptroller of the currency to carry out the duties imposed by the Act upon the Colonial Treasurer. By the 49 tb clause, it is provided that at the commencement of every session an annual report is to be laid before the General Assembly. 1, Upon the state of “all the Banks” within the Colony, with abstracts of their quarterly returns and comparative statements of three preceding years. 2. The amount of securities held by the Treasurer, and the amount of notes in circulation. 3. Suggestions of amendments of the law's on banking for improvement of the system. 4, The cost of working the Act. The 50th to the 53rd clauses, both inclusive, are penal, and relate to punishment for forgery of notes, embezzlement by officers, and other offences. The 55th clause provides that every “ foreign bank or banking company carrying on business within the Colony” shall set aside a definite portion of its capital for use within the Colony, which is not to be withdrawn without previous notice to the Treasurer, who, on receiving that intimation, shall advertise it; and from that time “ all rights and privileges as regards the issue of notes shall thereupon cease and determine.” By the 56th clause, every bank is required to publish half-yearly statements of profit and loss ; but so far as Foreign banks are concerned, the statement is only to have reference to business transacted within the Colony. By the 57th clause, one or more clearing houses may be established by proclamation.