at its own office or at agencies to be designated by it, and that no
fixed reserve need be maintained on account of deposits.

Another very important feature of this plan is the exemption of State
banks from taxation by the United States in cases where it is shown to
the satisfaction of the Secretary of the Treasury and Comptroller of
the Currency by banks claiming such exemption that they have not had
outstanding their circulating notes exceeding 75 per cent of their
paid-up and unimpaired capital; that their stockholders are individually
liable for the redemption of their circulating notes to the full extent
of their ownership of stock; that the liability of said banks upon their
circulating notes constitutes under their State law a first lien upon
their assets; that such banks have kept and maintained a guaranty fund
in United States legal-tender notes, including Treasury notes of 1890,
equal to 30 per cent of their outstanding circulating notes, and that
such banks have promptly redeemed their circulating notes when presented
at their principal or branch offices.

It is quite likely that this scheme may be usefully amended in some of
its details, but I am satisfied it furnishes a basis for a very great
improvement in our present banking and currency system.

I conclude this communication fully appreciating that the responsibility
for all legislation affecting the people of the United States rests upon
their representatives in the Congress, and assuring them that, whether
in accordance with recommendations I have made or not, I shall be glad
to cooperate in perfecting any legislation that tends to the prosperity
and welfare of our country.

GROVER CLEVELAND.

[Footnote 9: See pp. 440-441.]

[Footnote 10: See p. 439.]

[Footnote 11: See p. 477.]

[Footnote 12: See Vol. VIII, pp. 517-518.]

SPECIAL MESSAGES.

EXECUTIVE MANSION, _December 6, 1894_.

_To the Senate of the United States_:

In compliance with the resolution of the Senate of the 24th of July,
1894, directing the Secretary of State to furnish copies of all papers,
correspondence, diplomatic or otherwise, on file in the State Department
in connection with the arrest and imprisonment at Arequipa, Peru, of
Victor H. McCord, I transmit herewith the correspondence indicated.

GROVER CLEVELAND.

EXECUTIVE MANSION, _Washington, December 10, 1894_.

_To the Congress of the United States_:

I transmit herewith a communication from the