The morning news. [volume] (Savannah, Ga.) 1887-1900, 1897-11-22
BANKING ON A NEW BASIS.
HON. w. L. TRENHOLM's PLAN OF
REFORM IN Tho CURRENCY.

Recommends Fusion of Greenbacks
deemRbIe in GOId-BanIs to he Au-
thOrized 10 Issue Circulating
Drafts Payable to Bearcr-Secur-
ity to BE Deposited Against the
Drafts and Only Released on Cam
cellntiOn of the Draft-IntcrnRtiOn-
al Regulation of the Price of sill
yer Proposed.
Washington, Nov. al.-Col. w. L. Tren-
holm, who was controller of the currency,
under President Clevelands first admin
istration, has submitted his views of cur
rency reform to the monetary commission.
They embrace a number of features en-
tirely different from those of other ex-
perts and have been carefully studied by
the commission during several recent ses-
sions.
Col. Trenholm recommends the fusion of
greenback and Sherman notes into one
form OF paper redeemable in gold. He
thinks that these notes should be issued
In denominations of 81, 50 and So in order
that the people may have confidence In
the money in current circulation. He be-
lleves that a redemption fund of $lOOO0O,-
600 would be sufficient to maintain the par
ity of the entire volume of about $50O00,-
900. The suggestions of Col. Trenholm re-
gardlng banking are as follows:
!. To make adequate provision for the
recognition of existing clearing houses and
the establishment of others, by allowing
them to be organized, in reserve and CEN
tral reserve cities, under the national
banking law, with defined powers and re-
sponslbilities.
2. To empower clearing houses thus
organized to license banks In their respec-
tive cities to accept circulating drafts
drawn by banks situated at places where
there are no clearing houses. Such
drafts to be free of all taxation, federal.
state or municipal and to be payable to
bearer.
3. To limit the maximum amount to
which any such bank may have accept
ances outstanding at any one time to a
certain proportion of its capital and sur
plus.
4. To prescribe that no such bank be
licensed to accept such drafts without
taking from the drawers adequate secu-
rity therefor to the full amount Of such
contemplated acceptances, which security
may be in the form of discounted paper;
also without having deposited with the
clearing house security to the amount of
the circulating drafts applied for, the suf-
ficiency Of such security, both In amount
and character, to be certified In each in
stance separately to the controller of the
currency by the proper authorities of the
clearing house and approved by the local
bank examiner Securities thus deposited
to be released only upon presentation to
the clearing house of cancelled drafts.
which drafts are to be delivered by the
clearing house to the controller of cur
rency for destruction.
5. The circulating drafts, authorized to
be accepted under the above conditions,
may be drawn by any national bank or
by any state or private bank, which will
submit to such examination by the local
examiner as may be prescribed by the
controller of the currency. The amount of
any draft of any such drawer outstand-
ing at any time to be limited to a pro-
portion of its quick assets, including those
held by The accepting bank.
6. The circulating drafts so authorized
shall be of uniform design, and may be
in denominations of ST. 81, SO and IS, and
multiples of s., having engraved upon their
face the name of the accepting bank the
blanks to be filed with the name of the
drawer.
7. The circulating draft to be prepared
by the controller of the currency and is
sued to each clearing house association
under its requisition, made from time to
time under regulations to be established
by the controller of the currency.
s. This plan, If accepted, is expected to
work in the following manner: A clear
Ing house association will from time to
time make requisition on the controller
of the currency for a certain amount or
such circulation drafts, to be accepted by
certain named banks, the members OF that
association. The banks for whose benefit
such circulating drafts are called for will
satisfy the authorities OF the clearing
house as to their compliance respectively
with the requirements 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 its acceptance upon the
face of the drafts. These drafts may then
be sent as incomplete currency is now
sent through the mails or by express at
moderate charge, as they will not be-
come effective for circulation until duly
signed by the drawers. When signed they
VIII De pald out Dy the drawing bank. or
banker for local uses, and will gradually
find their way back to the accepting
banks, where they will be redeemed anc
sent into the clearing house in order to
release a proportionate amount of the Sc
curities there held against such issue
The object of this suggestion is to en-.
able banks at remote points throughout
the country to meet the local demand for
currency when 1t arises and only as It
does arise, and, at the same time, to limit
and control such issues through the opera
tion of the principle Of self-protection,
which will assert itself In the manage,
ment of accepting banks.
Regarding the disposition Of the silver
dollars and the silver certificates, Col
Trenholm suggests that the silver now in
the treasury be constituted into reserve
fund for the guarantee of outstanding sill
yer dollars, and that the silver certificates
in excess OF the actual bullion value OF
the coins and certificates outstanding be
cancelled from time to time as they CONS
into the treasury.
He recommends that silver certifcat tes
be issued In denomina tions of $40 and over
and that some of them be issued In de-