New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1898-05-16
THE NEW BANKING BILL.
ITS PRACTICAL OPERATION DISCUSSED
BY II. II. HANNA
HE CONSIDERS IT TO CONTAIN A SATISFACTORY
ADJUSTMENT Or THE CURRENCY CUES
TTON-THE TREASURY RELIEVED
HE CONSIDER
SAFE ASSET CURRENCY.



Washington May 1.-THE action and practi-
cal operation Of the new banking bill which
Will probably be reported 70 the House on
Wednesday by the Committee on Banking and
Currency. were set forth in an Interesting man
ner by II. II. Hanna. chairman Of the Executive
Committee OF The Indiana polls Monetary Con
Nehuon IN a conversation yesterday. Nr.
hanna has believed that any comprehensive ac-
tion by the committee would be "a step in the
right direction, because II would tend 20 pro-
woke discussion and crystalline public opinion
IL regard to the necessity for complete reform
OF the currency system. 1t Will be by what
he said that the bill TO be reported meets his
approval and contains. IN his opinion the ele-
ments 90 n satisfactory adjustment of the cur
rency problem In response 10 question as to
the general scope OF the bill, Mr.. Hanna said:
The two important features Of the measure
are those dealing with the greenbacks and the
bank note currency. There some other vau-
able improvements in the Banking law. but
could not discuss them in short talk without
detracting from the prominence which should
be given TO the leading features Of the bill
think the measure Is extremely clever from; a
political point Of view in It's manner OF deeling
with the greenbacks The Government Is prac-
ricaliy relieved Of all burden on account OF the
greenbacks without the necessity of bond issue
and without any other charge upon the Treas
ury. The banks have an opportunity 10 assume
the burden. for which they are much better
fitted than the Treasury. The proposed manner
Of doing II Is for the banks to pay into the
Treasury - per cent or more OF their capi'ai III
the greenbacks which they now hold or may
obtain They receive in return new form OF
note known as National reserve notes These
notes are available for their reserves or for any
hicl,r
They are legal tender. and their substitution
for the greanhacks does not reduce the legal ten
der money of the country nor the currency in the
hands of the people"
In what manner does the exchange OF notes
relieve ihe Treasury" he was asked
"'rha, is the very essence of the proposil'oh'
replied MY. Hanna, and am s'au 'ha' ~
asked that question Perhaps the best way "
make the matter clear is TO take the case Of
big demand for gold for export Under the
present system as 1t has operated since the
passage Of the Sherman law. the gold exporter
Gets together a mass o. greenhacks or SheTtna"
notes takes them to the Sub-TreasuTy az New
York and demands redemption in sold The
Government is bound 20 pay the gold III oioei I"
maintain the gold standard and prevent the
plunge OF the country to the silver basis Inc
only way OF obtaining the gold when he people
and the banks are boarding It il to sell bonds
imposing heavy interest charges upon me peo-
nile The pending hill proposes that the hanks
shall take care Of the current redemption or the
reserve notes.
PLEDGES ON RESERVE NOTES
Each reserve note will bear upon its back The
pledge az the hank 10 which it is issued To care
for its current redemption. : current redeInp-
ton fund equal 10 : per cent Of the outstanding
reserve notes VIII be held in the Sub-Treasury
for their redemption. but this fund VIII be con
trbuted by the banks. and must be Tnede s"'p
by each bank rs fast as any OF It's notes are re-
deemed. The presentation OF reserve notes.
therefore for REDEEM ption would simply result IN
calls upon the banks 70 replenish the r"dc;nj-
lion fund. These calls would not he seriously
felt for most Of The reserve notes would ne
eccureiy locked up In bsnk reserves. ana VII"
the Trcasur, out % the banking business, gold
would be songh; only for the ordinary pur-
chases OF settling commercial balances
The Treasury Is thus completely protected
so far as the reserve notes are issued in eN-
o..oc. for sreerhacks The greenbacks re
o4,,.ed for reserve notes arc cancelled and re-
.,roa and can never again become charge
upon the Treasury.
.e,yba, Inducements arc offered for the banks
o. ,ala reserve notes IN exchange for green
backs" was asked
There are two direct lnnGc"men's' "'"S -"
reply hut there is third. which think Is n"'
without inheritance. Ths Indirect inducement
&c tho general desire Of the banks 10 nave me
currency OF the country placed upon a sthne
foundation Doubt ana uncertainty reduce inc
,ol,rne OF bank business and impair the proh's
~ the banks Even II the current T'p'lpp''H
If tho g~cenhaclIs were assumed at small cost
~ the banks therefore, they could AFFORD 70 pay
L..
IL il much easier for the banks IN obtain s"'o
than for the Treasury. They are in the banking
hue,ncss and have a tremendous voluin" OF
cuick assets constantly at command
9TH. bill. however. sves the banks tNo I'M
,or,s,, privileges in return for their assump-
t,on of the current redemption "f the reserve
notes one 90 these Is q remission OF 'he lax
which il IMPOSED by the bill upon capital, sur
Mus and undivided profits This remission OF
taxstion is sufficient TO pay the interest upon
- refen,ntion fund Reid against the reserve
notee This is a matter which mainly concerns
fhe banks. The important consideration TOT 'ns
publ,c 10 the privilege OF Issuing asset
,rbis will give an elasticity TO our RANKING sHs-
ter which ought greatly to promote me eN'en-
sion Of credit -. ,r. >, ,,..s et1ed
.,hat some conservative bankers are dstrusttni
Of the asset currency to which you referF
SAFETY or ASSET CURRENCY
"The-e IS undoubtedly some feeling OF mat
kind among some OF those people VINO nave h0'
.o-erruv considered Ali phases Of the subject
uos the reply. Il cannot give you all the rea-
sons in a short talk for believing that the Amer
,cap banking system IL 50 conducted nj prese'"
,ba. q would be safe with asset currency
az the systems Of European countries paSen
,non the Same principle have proved to he. what
uould Ike TO lay stress on 10 the 'act tha''
.yen 1, asset currency were a doubtful expert
wan. which 1t Is not it is go carefully saie-
Guarded in the bill that II need not excite any
doubt The maximum amount oil currency
based upon commercial assets whlen oank