Section 79. That the American Reserve Bank shall, on the first days of January and July of each year during the life of the 2 per centum United States consols up to nineteen hundred and thirty, pay into the Treasury of the United States an amount of cash in equal payments which shall be equal to 1 per centum per annum of all the United States 2 per centum bonds or consols now aggregating about seven hundred and thirty million dollars.
Section 80. That when the American Reserve Bank shall have paid into the United States Treasury the first half of 1 per centum in accordance with the preceding section, the United States Government shall thereupon refund all of the 2 per centum bonds or consols into 3 per centum bonds or agree to pay 3 per centum thereon; and thereafter the Government shall pay 3 per centum interest upon all of said 2 per centum consols.
Comment:—By this section all the 2 per cent bonds will be converted into 3 per cent bonds and they will then be returned to the banks to which they belong. They can then be sold by them, bringing into the commercial fund of the country $730,000,000.
This change ought to enable the banks to loan money more cheaply to the people; we must remember that the more expensive we make banking in this country the higher the rates of interest will be; for, in the end, the people bear every added burden.
Section 81. That when the United States Government shall have made provision for refunding the 2 per centum bonds or consols into 3 per centum bonds and the American Reserve Bank Fund shall amount to the sum of five hundred million dollars, the United States Treasury shall transfer to and keep with the American Reserve Bank a sufficient balance—upward of fifty million dollars—to meet all of its checks and drafts; and thereupon the American Reserve Bank shall become the fiscal agent of the United States Government for all purposes, except for the collection and current daily deposits of its revenues, which shall not be deposited thereafter in the United States Treasury or Sub-treasuries.
Section 82. That from and after the date that said American Reserve Bank Fund shall amount to the sum of one thousand million dollars the Secretary of the Treasury of the United States shall deposit from day to day all Government receipts from whatsoever source received in the American Reserve Bank.
Comment:—According to these two Sections, 81 and 82, the United States Treasury will cease to be a disturbing factor in the commerce of the country; and it will do its business, precisely, as any municipality, by check and draft upon the American Reserve Bank, where its money will be deposited, from day to day, currently, as received.
Section 83. That beginning on the first day of January after the "American Reserve Bank Fund" shall amount to one thousand million dollars, every National bank shall pay to the American Reserve Bank a tax of one-fifth of 1 per cent upon all of its deposits held upon said first day of January, and upon the first day of January thereafter for two successive years a tax of one-fifth of 1 per cent upon the amount of deposits held.
Section 84. Every National bank shall thereafter contribute a sufficient amount on the first day of January in each year to make the total amount that it has contributed equal to three-fifths of 1 per cent of its deposits.
Section 85. The fund so created by the payment of the said three-fifths of 1 per cent to the American Reserve Bank shall constitute and be known as "The Depositors' Insurance Fund."
Section 86. Any bank that shall come into the National banking system at any time after the passage of this act shall immediately proceed to make its contribution to "The Depositors' Insurance Fund" as prescribed in sections eighty-three and eighty-four of this Act.