The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-11-08
A NEW BANKING SYSTEM
CURRENCY BOARD PROPOSED TO RE-
LIEVE THE GOVERNMENT.
United States Greenbacks to he Done
en- Much Larger Powers.

| WASHINGTON, Nov. THE monetary
commission is receiving, in answer to it's
invitations, many interesting propositions
for reform of the banking and currency
systems of the country. and among these
is one 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
sion, and it's provisions in outline are as
follows:
That all of the outstanding currency OBJ
legations, amounting to about $500 100000,
shall be taken up and Cancelled, being re-
placed, according to business exigencies
(under the direction of a currency board
composed of the President secretary of the
| treasury and controller of the currency by
8 per cent. bonds.
There is to be but 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 United States
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 Is per
cent of godsin the bank vaults and by
first lien on all of the banks assets, as well
as by special provision giving the govern
ment the right to assess all national banks
when needed to make good notes of de-
faulting bank, the notes of which would
then be redeemed by the government. A
tax is to be laid on the banks to secure
redemption of notes in gold, but if this eX-
ceeds 100000 the surplus may be covered
into the treasury to pay interest on United
States bonds and for general purposes. This
tax should be one-haif of / per cent, or l
per cent. per annum, as the commission
shall elect.
Power should be given to banks under
from hoard
crease the note issue when a demand is
caused by unusual financial emergencies,
| such increase to be subject to a tax Ito be
determined from time to time by the cur
rency board) on the notes while in circula-
ton. the tax on the notes to be at rate
which would put a pressure on the banks
to take up the notes when the emergency
has passed
Silver and subsidiary coins should be re-
deemed in gold by the United States gov
eminent when demanded. These amount to
about 500, .000
No note should be issued for less than
| five dollars.
National banks should be constrained to
exchange notes now out for new issues 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 it to pay interest
on its bonds, redeem silver and for other
The legal-tender quality of gold and sill
yer should remain as now provided by law,
and they should be the only legal-tender.
except to the extent of two-thirds of Gus
toms duties and taxes due the government
which should be payable in bank notes, as
above stated
| Confer on currency board power to reg
| ulate 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 be established when and
| where and with such amounts of capital
a asd tine oqa it may deem it proper and ex
amount of note issue by the banks required
for the normal conditions of business as
the country shall grow in population and in
AS banking capital 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 10 per cent. gold on the note issue
| deposited in the government treasury. and
| the 10 per cent. kept in bank vaults, should
| be counted as part of rs per cent. reserve
on deposit in national banks.
The system of clearinghouse certificates
| adopted by the banks in the large cities
| in times of peace should be legalized. They
| have proved to be most salutary. and there
can be no better evidence of the need of
| such system than the fact that it has
! been established by voluntary consent in
| times of panic.
Vice President E. Q. Leech, of the Ma
tional Union Bank of New York, formerly
| director of the United States Mint, has also
| presented paper to the commission, adj
| dressed not so much to the merits of any
| particular form of banking system as to
needed reforms of the present mintina and
| currency laws. He favors branch banks
| but doubts the present advisabiIity of MAX
ing the banks assets the sole basis of issue
although that would be the true logical
method. Nor does he believe it necessary
to redeem all of the silver coin and paper
in gold as the wants of the people are
fully adequate to keeping in active circula-
ton the $3.50, 900 of this money now afloat
as evidenced by the successful practice of
France In the West, South and middle
sections of the country, where gold is not
| col nd fnT. nrf ~ Rarv~o -
money suff1ces for all business needs, and
practically there is no difficulty in securing
it's redemption in gold, when wanted
through deposits in bank. Moreover, the
redemption by the government of silver
would require the locking up of large gold
reserve in the treasury and construct the
circulation. Mr.. Leech' favors the repeal
of the act of May 81 1878, requiring the re-
issue of United States notes coming into
the treasury, and would leave it optional
with the treasury to reissue these notes only
in case of need. This alone would insure
the stability of the gold standard. He re-
CARDS as prospective and not as imminent
legal paper money circulation. and believes
that it can be gradually retired by the coin
ing of silver bullion, both into dollars and
subsidiary coins. Money pancs, he thinks
are aggravated by the accumulation of
country bank deposits in New York, from
needed there. Therefore, he would abolish
reserve cities, and require national banks
throughout the country to keep about Is
per cent. cash in reserve in their own vaults,
insuring uniform distribution of money.
RAGS MADE INTO CLOTHING.
|