The record-union., 1898-05-26
CURRENCY REFORM
BILL FOR STRENGTHENING THE
PUBLIC CREDIT.
What is Expected to be Accom-
plished by the Currency Reform
Bill Before Congress.

The bill reported by the House Com
mittee on 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 up
on the national banks the current re-
demption of the Government notes. The
amendment of the national banking
laws is intended to afford test, in a
conservative and limited manner, of
the system of basing note issues upon
the commercial business of the country,
with the ultimate purpose of affording
a sufficient supply of currency in every
part of the country at all seasons of
the year, extending credit accommoda-
tions. and thereby reducing the rate of
interest to borrowers.
WORK OF THE TREASURY DIVI-
DED.
The bill divides the operations of the
treasury. The fiscal operations of col
lecting revenues and disbursing them
for Government expenditures are left
as at present, but a new division is
created ito be known as the Division OF
Issue and Redemption. This division is
to be under the charge of three Comp
trollers of the Currency who take the
place of the present Comptroller. All
matters relating to the issue, redemp-
ton and exchange of currency, whether
coin, Government notes, or bank notes,
are entrusted to the Division of Issue
and Redemption. The Secretary of the
Treasury is authorized to transfer to 1t
all funds in excess of a cash balance
of $50 600. 600 and all gold and silver
coin and bullion now held in the treas
ury for the purpose of redeeming Uni
ted States notes, treasury notes and
certificates. The Secretary of the Treas
ury is also authorized to transfer to
this division from time to time such
surplus revenues as the treasury may
contain, and to issue short-term treas
ury certificates, if necessary, for the
sole purpose of replenishing the re-
serve.
Exchanges and Reserves-The Divis-
ion of Issue and Redemption is required
to redeem United States notes and
treasury notes in gold, to exchange gold
coin for silver dollars and silver dol
lars for gold coin or other lawful
money; to redeem silver certificates in
silver dollars, and to make other ordi-
nary exchanges of currency. United
States notes redeemed in gold are, from
{ -. +A hA cd IL
vision must maintain a gold reserve
of % per cent of the outstanding Uni
ted States notes and treasury notes and
3 per cent of the silver dollars which
have been coined.
THE EXCHANGE OF THE GREEN
BACKS.
The Reserve Notes.-The present out
standing issues of United States notes
known as "greenbackS' will cease to be
a burden upon the treasury for redemp-
ton in gold, so far as they are ex-
changed 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 for use IN
| the reserves of the banks in exactly
the same manner as the existing green
backs. National reserve notes are to be
issued to any national bank to any
amount not exceeding its paid-up capt.
tai, upon its surrender to the treas
ury of an equal amount of greenbacks.
The United States notes thus received
are Cancelled and destroyd. The banks
taking reserve 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
whenever it is reduced by the redemD-
tion of the reserve notes.
The money in circulation is not re-
duced by any Of the preceding pro-
visions. National reserve notes take
the place of the greenbacks for which
they are exchanged and gold coin takes
the place of greenbacks which are di-
rctly redeemed.
Conditions for Taking Reserve Notes
Existing national banks are required
to take reserve notes, to the amount or
| 25 per cent of their capital, but two
privileges are offered the banks in COM
pnsation for their assumption Of the
current redemption of the notes. One
of these is the privilege Of issuing cur
rency notes upon general assets, which
is set forth fully under the next general
head. The second privilege is partial
remission of the tax of one-fourth or
one per cent. per year levied by the bill
upon the capital surplus and undivided
profits of each bank. The remission
thus allowed is at the rate of one-half
of / per cent per year of the amount of
reserve notes issued to the bank.
Redistribution of Reserve Notes-Na-
tonal reserve notes may be recalled
from the banks to which they have
| been issued by the Secretary of the
Treasury in equitable proportions ana
distributed to new national banks,
which are required to pay for them in
gold coin after the United States notes
| cease to be available. The withdrawal
of reserve notes does not reduce the
limit of currency based upon CONNER
cial assets.
BANK-NOTE CURRENCY.
Bond Secured Circulation-Nationa
banks having charters under the old
law may continue to issue currency as
at present The minimum amount of
bonds required upon the passage OF the
bill is the same as under existing law
| % per cent. of the capital, but not ex-
| ceeding $50,000-but banks may issue
notes upon all their bond deposits to
the par value of the bonds, instead OF
90 per cent, as at present. Beginning
four years after the passage of the Act,
any bank may, withdraw the bonds de-
posted to secure circulation at the rate