Evening journal., 1897-11-08
MONETARY MATTERS
John @. Bullitt Sends an Opin-
ion to the Commission
FAyORS BUT ONE KIND OF CURRENCY.
National Bank Notes, He Says, to BE
RedeemabIe I'm Gold Also No
Note should BE Issued For
Less Than 50.

Less Than 50.
WASHINGTON. Nov. s.-The none
tary commission IS receiving In answer
10 It's invitation many interesting prop
ositions for reform OF the banking and
currency systems Of the country and
among these. is one, from John c. Bull
lit. which. coming highly indorsed as
II docs by financial authorities. has
commanded great attention and study.
Mr.. Bullitts plan touches every branch
of the problem before the commission,
and its provisions in part are as fol-
lowssa 1
That all OF the outstanding currency
Obligations. amounting TO about $780,
900 600. shall be taken up and Cancelled.
being replaced according to business
exigencies (under the direction of a cur
rency board composed of the president,
secretary OF the treasury and comp
troller Of the currency by per cent
bonds There is to be but one kind Of
currency--namely. national bank notes
redeemable in gold at the bank Of Issue
and a selected bank Of reserve, and
these notes are TO be issued gradually
TO replace obligations as the latter are
retired.
These notes are TO be secured by a
deposit OF Is per cent OF gold in the
treasury. by 10 per cent Of gold In the
bank vaults and by first lien upon all
OF the banks assets. as well as by q
special provision giving the government
the right to assess all national banks
when needed to make good notes Of
defaulting bank, the notes OF which
would then be redeemed by the govern
ment. 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 I'm gold, but
II this exceeds $40 0OOO the surplus
may be covered into the treasury 70
pay interest on United States bonds and
for general purposes This tax should
be one-half Of / per cent or ! per cent
per annum, as the commission shall
elect.
Power should be given to the banks
under permission from the currency
board 10 increase the note issue when
demand caused by the unusual financial
emergencies. such increase TO be sub
ject to a tax (to be determined from
time 20 time by the currency board
upon the notes while In circulation, the
tax upon the notes TO be at o rate which
would put q pressure upon the banks 10
take up the notes when the emergency
has passed.
Silver and subsidiary coins should be
redeemed I'm gold by the United States
government when demanded. These
amount to about 800 100000 No note
should be issued for less than IS. Ma
tionar banks should be constrained to
exchange inotesanow out for new Issue
by surrendering notes as they receive
them. Custom dues and taxes Of all
kinds due the government should be
payable one-thlrd in gold and two
thirds in bank notes This Is necessary
to supply the government with the gold
required by IL to pay interest upon its
bonds, redeem silver and for other pur-
poses
The system OF clearing house certih-
Gates adopted by the banks In the large
cities in times of panic should be legal
ized. They have proved to be most
saiutary. and there can be no better
evidence Of the need Of such a system
than the fact that II has been estab-
lished by voluntary consent In times
OF panic
Vice President +. o. Leech Of the Ma.
tional Union bank OF New York, for
merly director of the United States
mint, has also presented a paper TO th'
commission addressed not so much e
the merits of any particular form o.
banking system as to needed reforms
OF the present mnting and currenc,
laws.
He favors branch banks. but douht
the present advlsablity Of making tn
banks assets the sole basis of Issue. al
though that would be the true logica
method Nor does he believe It neces
sary TO redeem all Of the silver coin ant
paper in gold. as the wants of the peo
APPLE are fully adequate to keeping Il
active circulation the $3.50 900 Of thi
money now afoat, az evidenced by tn
successful practice of France. In tn
west. south and middle sections Of tn
country. where gold lis not called 70
on export dceopnf tins form sof tmone
sufiices for an. business needs. and prac
ticaily there Is no difficulty in securin
its redemption in gold when waate
through deposits In bank.
Moreover. the redemption by the gov
ernment OF silver would require tn
locking up OF a large gold reserve in tn
treasury and construct the circulation
Mr. Leech favors the repeal OF the &C
of May 81, 1875 requiring the reissue Z
United States notes coming into tn
treasury and would leave il option,
with the treasury to reissue these note
only in case OF need. This alone woul
insure the stability Of the gold stanc
ard. He regards as prospective an
not as imminent danger from the mair
tenance Of the present legal pap'
money circulation and believes that
can be gradually retired by the coinir
OF silver bullion both into dollars an
subsidiary coins.
Money panics, he thinks. are aggr;
waited by the accumulation Of counti
bank deposits In the city of New Yor
whence It is withdrawn rapidly ju
when needed there. Therefore he wou
abolish reserve cities and require NJ
tional banks throughout the country
keep about Is per cent cash in reser'
in their own vaults. insuring a unifor
distribution Of money.