The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-11-22
NEW CURRENCY SCHEME
EX-CONTROLLER TRENHOLM DIFF
FERs FROM OTHER EXPERTS.
Recommends Fusion of Greenbaclxs
and Sherman Notes in Paper
Redeemable in Gold.

WASHINGTON, Nov. N.-Col William l..
Trenholm, who was controller of the cur
rency under President Cleveland's first adj
ministration, has Just submitted his views
Of currency reform to the monetary commits
sion. They embrace a number of features
entirely different from those of other ex-
perts, and have been carefully studied by
the commission during several recent ses-
sions. Colonel Trenholm recommends the
fusion of the greenbackS and Sherman notes
into one form of paper, redeemable in gold.
He thinks that these notes should be issued
in denominations of 81, 81 and So in order
that the people may have confidence in the
money in current circulation. He believes
that redemption fund of $100,000,0O0 would
be sufficient to maintain the parity of the
entire volume Of about $45O,0O0,0OO The sug-
gestions of Colonel Trenholm regarding
banking are as follows:
First-To make adequate provision for the
recognition OF existing clearing houses and
them to be organized, in reserve and CEN
traI reserve cities, under the national bank
ing law, with defined powers and response
biIiues.
Second-To empower clearing houses thus
organized to license banks in their respect
i've cities to accept circulating drafts drawn
are no clearing houses, such drafts to be
free OF ali taxation, federal, state or munic-
Ipal, ana 10 De payable to bearer.
Third-To limit the maximum amount to
which any SUCH bank may nave acceptanceS
outstanding at any one time to a certain
proportion of its capital and surplus.
tourth-To prescribe that no such bank
be licensed to accept such drafts without
taking from the drawers adequate security
therefor to the full amount of such contem-
plated acceptances which security may be
in the form OF discounted paper; also with
out having deposited with the clearing house
security 10 the amount OF the circulating
drafts applied for, the Sut1ctency OF such
security, both in amount and character, to
be certified in each instance separately to
the controller of the currency by the proper
authorities of the clearing house and ap-
proved by the local bank examiner. Securi-
ties SO deposited TO be released only on pre-
sentation TO the clearing house of Cancelled
drafts, which drafts are to be delivered by
the clearing house TO the controller o. the
currency for destruction.
Fifth-1he circulating drafts. authorized
to be accepted under the above conditions,
may be drawn by any national bank or by
any state private bank which will submit
10 such examinations by the local examiner
as may be prescribed by the controller Of
the currency. The amount OF drafts of any
such drawer outstanding at one time to be
limited to proportion OF its quick assets
including those held by the accepting bank
SiAlh-lhe clrcu ating DRAFT, so auth zed
shall be OF uniform design ana may De IN
denominations of 81, 81, IS and 50 and multi
pies Of 50, having engraved on their face the
name OF the accepting bank, with blanks
10 be filled with the name OF the drawers
SeVenth-Such circulate g Oh ats 10 be pre-
pared by the controller Oh the currency and
issued TO each clearinghouse association
on it's requisitOn made from time to time
under regulations to be established by the
controller of the currency.
Eighth-rhiS plan, if adopted is expected
to work out in the following manner:
clearing house association Will, from time
to time, make requisition on the controller
of currency for certain amount or SUCH
circulating drafts, to be accepted by certain
named banks members of that association.
The bank for whose benefit such circulating
draft re 81 author
tiles of the clearinghouse association or
their compliance, respectively. with the re-
quirements of the system, whereupon issues
Will be made to such banks, and each OF
such banks will cause to be filled in the
name of the drawer and then execute It's
acceptance on the face of the drafts. These
drafts may be then sent as incomplete cur
rency is now sent, through the mails, or
by express, at moderate charge as they
will not become effective for c1rcula]on
until duly signed by the drawers When
signed they will be paid out by the drawing
bank or banker for local use nrst, ana VIII
gradually find their way back TO the ac-
cepting banks, where they will be redeemed
and sent into the clearing house, in order
to release proportionate amount OF the
The object of this suggestion is to enable
banks at remote points throughout the
country to meet the local demand for cur
rency when it arises and only as it does
arise, and, at the same time, to limit ana
control such issues through the operation OF
the principle of self-protecton which VIII
assert itself in the management OF the ac-
cepting banks.
Regarding the disposition of the silver
dollars and silver certificates, Colonel Tren-
holm suggests that the silver now In the
treasury be constituted into reserve fund
for the guarantee of outstanding silver
dollars and that the silver certificates IN
excess of the actual bullion value OF the
coins and certificates outstanding be can
ceed from time to time as they come into
the treasury. He recommends that silver
certificates be issued in denominations or
$40 and over, and that some of them be is
sued in denominations of $1,000, 5000 and
national banks in the proportion of &c per
cent of their lawful money reserves.
Colonel Trenholm suggests an interna-
tional agreement among silver producing
countries for steadying the price of silver:
He does not contemplate the restoration of
silver to parity with gold, but the regula-
ton OF the price so as to give the assur-
ance to the worlds commerce that there
can be no further material decline in the
price.