The herald., 1897-11-08
BULLITT'S
BIG BRAIN
Evolves a Scheme OF
Money Reform
THE FiNANCIERS ENDORSE 1T
AS SOLVING ALL THE KNOTTY
QUESTIONS
THE FINANCIERS ENDORSE IT
A Straight Bank Note Currency Re
deemable in Gold and Guar
anteed
Associated Press Special Wire.

Associated Press Special Wire.
WASHINGTON, Nov. 1.-THE none
tary commission is receiving answers
to it's invitation for propositions for re-
form of the banking and currency sys-
TENS Of the country, and among these is
one from John C. Bullitt, which, coming
highly Endorsed as it does by financial
authorities, has commanded great at
tention and study. Mr.. Bullitt's plan
touches every branch of the problem
before the commission and its provis-
ions in outline are as follows.
That all of the outstanding currency
obligations, amounting to about $780,
000, 900, shall be taken up and cancelled.
being replaced according to business
exigencies (under the direction of 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 selected bank of reserve, and these
notes are to be issued gradually to re-
place United States obligations as the
latter are retired. These notes are to
be secured by deposit of Is per cent
of gold in the treasury, by Is per cent
gold in the bank vaults and by first
lien upon all of the banks assets, as we'll
as by special provision giving the gov
ernment 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. A tax is to be laid upon the banks
to cover the expenses of the currency
board and the balance held to secure
redemption Of notes in gold, but if this
exceeds $10,000,00o the surplus may be
covered into the treasury to pay interest
on United States bonds and for general
purposes. This tax should be " 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 increase the note
issue when demands caused by unusual
financial emergency, such increase to
be subject to tax (to be determined
from time to time by the currency board)
upon the notes while in circulation, the
tax upon the notes to be at a rate which
would bring pressure on the banks to
take up the notes when the emergency
has passed.
Silver and subsidiary coins should be
redeemed in gold by the United States
government on demand. These amount
to about s1OO, 100000. No notes should
be issued for less than IS.
National banks should be constrained
to exchange notes now out for new issue
Iov.sv, tive,
them.
Customs duties and taxes Of all kinds
due to the government should be pay
able one-third in gold and two-thirds
in bank notes. This is necessary to sup
ply the government with the gold re-
quired by it to pay interest upon it's
bonds, redeem silver and for other pur-
poses.
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
government, 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 estab-
lished when and where and with such
amounts of capital as the board may
deem it proper and expedient, with
power also to increase the amount of
note issue by the banks required for the
normal conditions of business as the
country shall grow in population and in
business expansion. AS banking cap
ital may be increased by creation of new
banks the currency board should have
power to adjust the note issue, whether
normal or extraordinary, between the
new and old banks, no distinction being
drawn between them. The Upper cent
gold upon the note issue deposited in
the government treasury and the Is per
cent kept in bank vaults should be
counted as part OF the rs per cent re-
serve on deposit in national banks.
The system of clearing house certifi-
Gates adopted by the banks in the large
cities in time of panic should be legal
lied. They have proved to be most SAL
utary and there can be no better evil
dence of the needs of such a system than
the fact that it has been established by
volutary consent in times Of panic.
e