The enterprise. [volume] (Wellington, Ohio) 188?-1899, 1898-05-25
SYNOPSIS OF CURRENCY REFORM,


banking and currency ''fOr strengthening the
public credit, for the relief of the United States
treasury, and for the amendment of the laws
relating to national banking associations" is
framed to accomplish these results, without the
issue Of interest-bearing bonds and without
cost to the treasury of the United States. The
protection of the treasury from demands for
gold and from the necessity for issuing bonds
is accomplished by imposing upon the national
banks the current redemption Of the govern
ment notes. The amendment of the national
banking laws is intended to afford test, in
conservative and limited manner, of the system
of basing note issues upon the commercial bus
iness Of the country, with the ultimate purpose
of affOrding sufficient supply Of currency in
every part of the country at all seasons Of the
year, extending credit Accommodations, and
thereby reducing the rate of interest to bOr-
TOwers.
The fiscal operations of collecting revenues
and disbursing them for government expendi-
lures are left as at present, but a new division
is created, to be known as the division of issue
and redemption. This division is to be under
the charge of three comptrOllers of the curren-
cy, who take the place of the present comp
trOller. All matters relating to the issue. re-
demptiOn, and exchange of currency, whether
coin, government notes, or bank notes. are en-
trusted to the division of issue and redemp-
tiOn. The secretary of the treasury is author
lied to transfer to this division from time to
time such surplus revenues as the treasury
may contain, and to issue shOrt-term treasury
certificates, if necessary, for the sole purpose
of replenishing the reserve.
The division of issue and redemption is re-
quired to redeem United States notes and treas
ury notes in gold, to exchange gold coin or
other lawful money, to redeem silver certificates
in silver dollars, and to make other ordinary
exchanges of currency. United States notes
redeemed in gold are, from time to time, to be
cancelled. The division must maintain gold
reserve of 25 per cent. of the outstanding
United States notes and treasury notes, and
per cent of the silver dollars which have been
coined
The present outstanding issues of United
States notes known as green" will cease to be
burden upon the treasury for redemption in
gold, so far as they are exchanged by national
banks for national reserve notes.
National reserve notes are a new form Of
currency provided by the bill in place of the
existing greenbacks. They are legal tender
and are intended for circulation as currency or
fnr uoa in tha racarvno nf tha honkc in avootlu
the same manner as the existing greenbacks.
National reserve notes are to be issued to any
national bank to any amount not exceeding its
paid-up capital, upon its surrender to the
treasury of an equal amount of greenbacks.
The United States notes thus received are
cancelled and destroyed. The banks taking re-
serve notes are required to contribute to the
current redemption fund held in the treasury
per cent. of the amount of their reserve notes
in gold coin and to replenish this reserve when
ever it is reduced by the redemption of the re-
serve notes.
The money in circulation is not reduced by
any of the preceding provisions. National re-
serve notes take the place of the greenbacks for
which they are exchanged and gold coin takes
the place Of the greenbacks which are directly
redeemed.
Existing national banks are required to take
reserve notes, to the amount of % per cent. of
their capital, but two privileges are offered the
banks in compensation for their assumption Of
the current redemption of the notes. One Of
these is the privilege of issuing currency notes
upon general assets, which is set forth fully
below. The second privilege is partial remiss
ion of the tax of One-fourth of one per cent. pei
year levied by the bill upon the capital, sur
plus and profits of each bank The remission
thus allowed is at the rate Of one-half of ont
per cent per year Of the amount of reserve note,
issued to the bank.
National reserve notes may be recalled from
the banks to which they have been issued b!
the secretary of the treasurer in equitable pro
portions and distributedJto new national banks
which are required to pay for them in gold coil
after the United States notes cease to be availa
BILE. The withdrawal of reserve notes does no
reduce the limit Of currency based upon com
mercial assets.
National banks having charters under the oil
law may continue to issue currency as at pres
ent, The minimum amount of bonds requireC
upon the passage Of the bill is the same as un
der existing law-25 per cent. Of the capital
but not exceeding $5O,OOO-but banks may is
sue notes upon all their bond deposits at tn
par value of the bonds, instead Of so per cent.
as at present. Beginning four years after tn
passage Of the act, any bank may withdraw tn
bonds deposited to secure circulation at tn
rate OF 25 per cent. Of the required deposits pc
year, and may withdraw those in excess Of tn
minimum requirement at any time.
The privilege Of issuing currency based upol
commercial assets, without the deposit Of Unit
ed States bonds is granted to national banks t
the amount Of 40 per cent. Of their paid-up cap
ital, but only upon condition that notes secure
by bonds and national reserve notes are take
in equal amounts. Thus, bank organize
undar this hill having a capital of 300 OOO