Kansas City journal. [volume] (Kansas City, Mo.) 1897-1928, 1897-11-08
MONETARY COMMISSION RECEIVING
MANY SCHEMES.
Mr.. JOHN C. BULLITTS PLAN.
WOULD RETIRE ALL CURRENCY BUT
BANK NOTES.
Outstanding Currency Obligations to
he Replaced With Per Cent
Bond.-A Currency board to
Have Full Control OF
the Issue.

Washington. Nov. I-The monetary corn.
mission is receiving in answer to its invi-
tation many interesting propositions for
reform of the banking and currency SyS-
tens of the country. and among these Is
enc from John c. Bullitt. which. coming
highly indorsed as it does. by financial au-
thorities. has commanded great attention
and study. Mr. Bullitt's plan touches every
branch of the problem before the commits
siCu. and its provisions. in outline, are as
fellows:
That all of the outstanding currency
Obligations, amounting to about 500. .NN0.o Geo.
shall be taken up and Cancelled. being re-
placed, according to business. eNiSenctes
turder the direction of Il currency board
composed of the president. secretary of the
treasury and comptroller of the currency.
by ) per cent bonds. There is TO be but
one kind OF currency, namely. national
bank notes redeemabIe in gold at the bank
o. issue and selected bank OF reserve. and
these notes are to he issued gradually TO
rerlace United States obligations as the
latter are retired.
These notes are to be secured by de-
posit of 10 per cent of gold in the treasury,
by u per cent of gold in the banks vaults
and by a first lien upon all of the banks
assets. as well as by a special provision
giving the government the right to assess
all national banks when needed to make
good notes of defauiting bank. the notes
OF which would then be redeemed by the
government. A tax is to be laid upon the
banks to cover the expenses of the cur
rency board. and the balance held to secure
redemption of notes in gold. but If this eX-
ceeds S10O10.Go, the surplus may be COW
cred into the treasury to pay interest on
United States bonds and for general pur-
pcses This tax should be one-hah of per
cent or per cent per annum, as the COM
mission shall elect.
Power should be given to banks. under
permission from the currency board, to in
crease the note issue when demand is
caused by unusual financial emergency.
such increase to be subject to a tax Ito
be determined from time to time by the
currency hoard0 upon the notes while in
circulation: the tax upon the notes to be
at a rate which would put pressure upon
the banks tO take up the notes When the
emergency has passed.
'SiIver and subsidiary coins should be
redeemed in gold by the United States rov-
ernment when demanded. These Ut
to about 500 900. No notes should be
issued for less than IS.
National banks should be constrained to
exchange notes now out for the new issue
by surrendering notes as they receive
them.
Customs duties and taxes of all kinds
due the government should be payable one
third In gold and two-thirds in bank notes.
This is necessary to supply the government
with the gold required by 1t to pay In
terest upon its bonds. redeem silver and
for other purposes.
THE legal tender quality Of gold and
silver should remain as now provided by
law and they should be the only legal
tender except to the extent of two-thirds
of customs duties and taxes due the gov
ernment. which should be payable in bank
notes. as above stated.
Confer upon the currency board power
to regulate the issue Of bank notes from
time to time in lieu of the government
currency retired, and to authorize new
banks and branch banks to be established
when and where and with such amounts Of
capital as the board may deem proper
and expedient, with power also to increase
the amount of note issue by the banks
as required for the normal conditions of
business as the country shall grow in pop
ulation and in business expansion. AS
banking capital may be increased by crea-
tion of new banks, the currency board
should have power to adjust the note is
sue. whether normal or extraordinary. be-
tween the new and old banks-no distinc-
ton being drawn between them.
THE 10 per cent gold upon the note Is
sue deposited in the government treasury
and the % per cent kept in bank vaults
should be counted as part of the 25 per
cent reserve on deposit in national banks.
THE system of clearing house certifi-
Gates adopted by the banks in the large
cities in times of panic should be legalized.
They have proved to be most salutary. and
there can be no better evidence of the
0f oh fha, fI.,
that it has been established by voluntary
consent in times of panic.''
Vice President E. o. Leech. OF the Ma
tional Union bank of New York. formerly
director of the United States mint has also
presented a paper to the commission, ad-
dressed not SO much to the merits of sny
particular form of banking system as to
needed reforms of the present min:ing and
currency laws. He favors branch banks,
but doubts the present advisability of
making the banks assets the sole basis of
issue, although that would be the true log
ical method. Nor does he believe IL neces-
sary to redeem all of the silver coin and
paper in gold. as the wants of the people
circulation the s4sO0OO.OOO Of this money
now afioat; as evidenced by the successful
and middle sections of the country, wnere
gold is not called for on export account,
a this form M OF money sufiiees for all business
in securing its redemption in gold. wien
wanted. through deposits in bank. More
over. the redemption by the government
of silver would require the locking up of
large gold reserve In the treasury ord
construct the circulation.
Mr.. Leech favors the repeal of the act
of May 81. 1873. requiring the reissue Ct
United States notes coming into the treas
ury. and would leave 1t optional with the
treasury to reissue these notes only in
case of need. This alone would insure the
stability OF the gold standard. He regards
as prospective. and not as imminent. dan
ger from the maintenance of the present
legal paper money circulation. and believes
that it can be gradually retired by the
coming of silver bullion both into dollars
and subsidiary coins. Money panics he
thinks. are aggravated by the accumula-
ton of country bank deposits In New
York, from whence it is withdrawn rap
idly just when needed there. Therefore,
he would abolish reserve cities and re-
quire national banks throughout the coun-
try to keep about Is per cent cash in re-
serve in their vaults. insuring unifoTn
distribution of money.
Chicago yiOlinist.
New York. Nov. THE first appearance
nf INT