Evening star. [volume] (Washington, D.C.) 1854-1972, 1897-11-26

ress Of the masses regarding the with
drawal OF the greenbacks without putting
something adequate and better In their
place. While the commission have not put
their conclusions in definite form. It is prob
able they will provide fer a gradual retire
ment OF some Of the paper money Of the
government as other currency takes Its
place. This other currency will probably
be issued by the national banks. The
&C commissioners hope to disarm the preju-
dice against national banks by putting
1t in their power to extend a more gencr-
Gus accommodation to the public than has
heretofore been the case. Many of the
commissioners believe that the opposi-
ton to the national banks which exists in
some quarters is due to the very fact that
the banks have beeen restricted by exist
ing law in granting credit literally
they would be able to do under better
system Many arguments have been pre-
sented to the commission in favor of n
Currency based substantially upon bank
ing assets. This means that a bank may
issue notes for circulation as money with
out depositing United States bonds in the
custody of the United States treasurer as
required by existing lawn other words,
that bank shall have control of its bank
ing capital instead of surrendering 1t to
the custody of the United States or any
other person or corporation for non-bank-
ing purposes. 1t is not proposed, however
to permit banks to issue notes freely up
on their general assets without ample pro-
vision for their saftey. Safety is insured
In Canada, whose banking system is the
model of many of those recommended to
the commission, by the maintenance of a
general safety fund in the custody OF the
government. contributed by the banks, by
making the circulating notes a first lien
on the assets and by authorizing the as
SeSSment OF shareholders, If necessary to
redeem the notes. to the amount of their
holdings of the capital Of the bank.
Projects Ahead.
The issue of circulating notes upon bank
Ing assets prevails in nearly all the SOL
vent banking systems of Europe, but is
somewhat novel proposition in this coun-
try after thirty-three years of experience
with different system. Just how far
the commission will go in this direction has
not YET peen determined: Steps toward such
currency have been recommended in the
baltimore plan, the report of Secretary
Carl1Sle in 1884, several reports by Con-
troller Eckels. and the recently published
plan OF Secretary Gage. Some conservative
bankers are little timid in granting the
power to issue notes upon assets to the
small banks of the south and west and
may criticse such a policy if it is em-
bodied in the report of the commissions
The great weight of the opinion of nearly
all political economists and trained finan-
GERS Is likely to be thrown into the scale
IN favor OF currency based upon assets
although they may differ in regard to de-
talls The argument which is most power
III! with those who advocate this system of
ncte issues is the fact that it will promote
the creation of banks in the south and
west and will enable them to extend credit
on much lower terms than is now DONE
This is the case in Canada, where rates of
interest at the branch banks in remote
corners of Manitoba and the interior prov
inces are only fraction of per cent high
er than in Montreal and other commercial
centers.
The work upon a measure of currency re-
Term has been going on steadily since Sep
tcmber 10, when the commissioners held
their first meeting. Several days were de-
voted to general discussion of the currency
outlook and three subcommittee were then
appointed to consider the several subjects
of coinage, the government demand notes
and the banking system.