The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-11-08
TO REFORM THE CURRENCY
JOHN @. BULLITr OF PHILADELPHIA
OUTLINES A Plan.

OpIy one Kind or Notes, ara These 70 ne Is-
sued by tho National Banks-The $780,
900, 900 Government Paper 20 ne Taken
Up and Cancelled By the rssue OF Bends.
WASHINGTON. Nov. 7.-Among the many re-
plies to the series OF questions sent out by the
Indianapolis Monetary Commission. now sitting
in this city. TO formulate q plan for tho reform
Of the currency system Of the country, was one
from Mr.. John c. Bullitt Of Philadelphia. In
stead OF answering the questions seriatim, Mr..
Bullitt gives q general statement of tho plan
which seems to him most desirable. 1t makes q
pamphlet Of twepty-throe pages. A summary
shows that the scheme provides:
l. That all tho present outstanding currency
obligations OF the Government, amounting to
aboutRSso0 200. 900. shall be taken up and can
celled.
2. That there shall DO but one kind of note cir
culation-this to DO issued by the national
banks. These notes should be payable in gold
when demanded at the counter of the bank OF
issue, or at such reserve bank as may be Sc
lected by the hank Of issue, with the approval of
the Comptroller of the Currency, for tho pur-
pose Of such redemption.
8. Tho issue of the new bank notes to DO made
from time to time as the currency obligations Of
the Government now outstanding arc retired,
30 as to avoid producing either contraction. ON
s.S SHS ANAet vi bNsbaS ~ $500 SssN
amount Of currency actually In circulation.
4. The normal requirements Of business are
assumed to BIO 81, 900. 900. 900. The bank capital
is assumed to be $500. 00o, 900 lin point of fact It
is about S647. 0o0. O0o), and each bank should
therefore issue one and two.thirds of notes for
one of its capital.
8. These notes should be secured BY o deposit
in the United States Treasury Of Is per cent. Of
note issue In gold. by is per cent. reserve in
--1l T.. --yA - L-.A- - n--A H. .--- a
assets Of banks issuing them, by right Of United
States, Government to assess all banks when
needed to make good any notes of defaulting
pose, and the Government should agree to re-
deem these notes in gold after default by the
8. A tax should be paid by the banks upon
their note issue, to be applied to payment Of
expenses of Currency Board. and balance, Il
any, held to secure redemption of notes in gold.
But when this fund shall accumulate to $lo.:
100000 the accEaing surplus may be covered
tercst on its bonds and general purposes.
1t may be well to vest in the Currency Board
amount should be thus held as a reserve of the
funds accruing from this tax. and to order that
should be Covered Ss Il into oil the treasury. Af year
The rate of the above tax should DO one-half of
/ per cent, or l per cent. per annum. upon the
note issue, as your commission may determine
Z. The proposed plan would mako the notes
protect the Government and the associate banks
In tbeeir guaranteed of the redemption of the notes
g. A currency board should be provided which
! would have supervision and control of all cur
repey ana mdt rerals Won p Snd such nc m ordern ne as froT
should consist Of the President Tor such OH Ger Of
tho administration AZ he might selectl, Secre-
Currency Of the United States, with two experi-
Presidont. Their powers should be- ample to
enable them to deal with financial emergencies
9. Power should DO given to banks. under
permission from the Currency Board, to increase
thS eGte em ,ssnS wesn s aeha ineeeas ey to ab be SUD-
time by the Currency Board upon the notes
be at a rate which would put a pressure upon
the banks to taSe up the notes when the emer-
. 10. silver and subsidiary coins should b. re-
deemed in gold by the United States Govern
ment y demanded. These amount to about
II. No note should be issued for less than s5.
eel ali its currency ebiiration ssA AMOUNTING to
about $500. 900. 900. To furnish funds for this
turrency Board to direct and order the sale and
such times, and at such rates Of interest,
sales to be applied to the taking up and cancel.
lation OF the outstanding currency obligations
sold and paid for in such currency obligations
sepcy obligations now outstanding Should cease
to be legal tender and only receivable for bonds
or redeemable in gold by the United States.
ID. National banks should be constrained to
exchange notes nov out for new issue by sur
rendering notes as they receive them.
IA. Customs duties and taxes of all kinds due
the Government should DO payable one-third in
gold and two-thirds In bank notes. This is
necessary to supply the Government with the
gold required by it to pay interest upon its
bonds; redeem silver, and for other purposes;
Is, 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 ex'
tent OF two-thirds Of customs duties and taxes
duo tho Government, which should be payable
In bank notes, as above stated.
10. Confer upon Currency Board power to
regulate the issue OF bank notes from time to
time. in lieu of the Government currency re
tired, and to authorize new banks and branch
banks to DO established when and where and
with such amounts of capital as the board MAJ
deem 1t proper and expedient, with power also
to increase the amount Of note issue by the bank:
required for the normal conditions OF business
as the country shall grow in population and ii
business expansion.
AS banking capital may be increased by ere
alton of new banks, the Currency Board should
have power to adjust the note issue. whothel
normal or extraordinary, between the new RnC
old banks-no distinction being drawn, between
them.
II. The Is per cent. gold upon the note issu.
deposited in Government Treasury and the l!
per cent. kept in bank vaults should BIO countet
as part Of 20 per cent. reserve on deposit IL
18. The system of Clearing House certificate
adopted by the banks in tho large cities In time
OF panic should be legaliZed. They have PROVED
to be most salutary. and there can be no bette
evidence of the need Of such a system than tn
fact that 1t has been established by voluntar.
consent in times of panic.