The record-union., 1897-11-22
The Monetary Commission Has Been Care
fully Studying Them.
Colonel Trenholm Recommends
the Fusion of the Greenback
and Sherman Notes Into One
Form Of Paper Redeemab1e in
Gold, and Suggests System
Of Clearinghouse Circulating
Drafts by Which the Currency
Can be Expanded and Contract
ed as Needed.

VIM. l.. Trenholm, who was Comp
troller of the Currency under President
Cleveland'S first Administration, has
just submitted his views of currency re-
form to the Monetary Commission. They
embrace a number of features entirely
different from those of other experts
and they have been carefully studied
by the commission during several recent
sessions. Colonel Trenholm recon-
mends the fusion of the Greenback and
Sherman notes into one form of paper
redeemabIe in gold. He thinks that
these notes should be issued in denomi-
nations of 81, 50 and So, in order that
the people may have confidence in the
money current circulation. He believes
that redemption fund of 800 100000
would be sufficient to maintain the par
ity of the entire volume of about $3.50.
100000. The suggestions of Colonel
Trenholm regarding banking are as
follows:
Ito make adequate provision for the
recognition of existing clearing houses
and the establishment of others, by al
lowing them to be organized in reserve
and central reserve cities under the ma
tional banking law, with defined powers
and RESPONSIBILITIES.
2-To empower clearing houses thus
organized to license banks in their re-
spective cities to accept circulating
drafts drawn by banks situated at
places where there are no clearing
houses. Such drafts to be free from all
taxation, Federal, State of municipal,
and to be payable to bearer.
3.-To limit the maximum amount to
I h ,x.lo
tances outstanding at any one time to
certain proportion of it's capital and
surplus.
4.-To prescribe that no such banks
be licensed to accept such drafts with
out taking from the drawers adequate
security therefor to the full amount of
such contemplated acceptances, which
security may be in the form of dis
counted paper; also without having de-
posted with the clearing house security
to the amount of the circulating drafts
applied for, the sufficiency of such Sc
curity, both in amount and character,
to be certified in each instance separ-
ately to the Comptroller of the Cur
rency by the proper authorities of the
clearing house and approved by the
local bank examiner
Securities SO 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 Comptroller of the Cur
rency for destruction.
o.-The circulating drafts, authorized
to be accepted under the above condi-
tions, may be drawn by any national
bank, or by any State or private bank
which will submit to such examinations
by the local examiner as may be pre-
scribed by the Comptroller of the Cur
rency. The amount of drafts of any
such drawer outstanding at any one
time to be limited to a proportion of its
quick assets, including those held by
the accepting bank.
6.-The circulating drafts so author
lied shall be of uniform design and may
be in denominations of 81, 81, SO, So and
multiples of So, having engraved upon
their face the name of the accepting
bank, with blanks to be filled with the
names of drawers.
1.-Such circulating drafts to be pre-
pared by the Comptroller Of the Cur
rency and issued to each clearing house
association upon it's requisition made,
from time to time, under regulations to
be established by the Comptroller of the
Currency.
S.-This plan, if adopted. is expected
to work out in the following manner:
A clearing house association will,
from time to time, make reuuisition on
the Comptroller of the Currency for
certain amount of such circulating
drafts to be accepted by certain named
ho nj rff y>l,
banks for whose benefit such circulating
drafts are called will satisfy the au-
thorities of the clearing house associa-
ton of 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
be then sent as incomplete currency, as
now sent through the mails, or by ex-
press, at a moderate charge and they
will not become effective from circu-
lation until duly signed by the drawers.
When signed they will be paid out by
the drawing bank for local use first and
will gradually find their way back to the
accepting banks, by which they will be
redeemed and sent to the clearing house
in order to release a proportionate
amount of the securities 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 it arises and only as
it does arise, and at the same time to
limit and control such issues through
the operation of the principle of self pro-
lection. which will assert itself in the
management of the accepting banks.
papard;ne the, denoSit of tba silver |