The times. [volume] (Richmond, Va.) 1890-1903, 1901-01-10
MAKE CURRENCY
MORE FLEXIBLE
Bill with this Purpose introduced
in House.
A NEW FORM OF BANK NOTES.
These Arc to BE Known us Quarterly
Notes, Bccaus. They Arc Secured
by Il Fund III the Custody OF
Treasurer OF United States.
Especial Dispatch to The Times,

WASHINGTON, JAN "a bill propos-
ing a step towards d flexible bank note
currency was introduced in the House on
Monday by Representative Lowering, of
Massachusetts. The bill bears a title de-
rived from the recommendation of PreSi-
dent Mckinley in his annual message
IAN act to make the currency responsive
to the varying needs of business at all
seasons and in all sections"
The measure begins by providing for a
new form of bank notes, TO be known as
guaranteed bank notes, because they are
secured by a guaranty fund in the GUS
tOdy of the Treasurer of the United
States. These notes can be issued at first
only to the amount of ten per cent. of the
paid-up capital of the national banks,
and not beyond one-fifth of the bonds on
deposit in the Treasury to secure the
present form of bank note circulation. In
other words a national bank having the
minimum bond deposit of twenty-five per
cent. of its capital may issue guaranteed
bank notes to the amount of five per cent.
of it's capital, and by increasing its bond
deposits may issue ten per cent. in guar
anteed notes upon fifty per cent. in bonds.
These issues are in addition to the bond
secured currency allowed under existing
law.
MAY BE INCREASED.
The limit of 10 per cent in the new notes
t>ii!icL NC tSSteucu ulllll lUt pan HAS
demonstrated its safety and success dur
ing u period of three years. The Comp
troller of the Currency may then, with
the written consent of the Secretary of
the Treasury authorize issues as high
as twenty per cent. of paid-up capital
upon bond deposits Of fifty per cent The
limit may be extended after six years to
forty per cent. in guaranteed bank notes
II the project has proved a success and
the extension is approved by the Secre-
tarT OF the Treasury. Full discretion is
given to the Comptroller from the outset
to refuse to issue notes unless the condi-
ton of the banks is satisfactory to hin,
and he believes that new issues will not
unduly initiate the currency or disturb
the foreign exchanges
ANNUAL TAX
The new form Of notes protected by
a fund to be known as the Bank Note
Guaranty Fund. which is to be raised in
the first instance by the payment of five
per cent. of the amount of the proposed
issues of guaranteed notes into the United
States Treasury. There is also to be an
annual tax Of one-nalf OF one per cent
upon the new circulation, and the pro-
ceeds OF this tax are to be paid into the
guaranty fund. Provision is made, how
ever. that the unimpaired portions of the
first deposits by the banks may be re-
turned to them if the fund rises materially
above five per cent. OF the outstanding
guaranteed notes. The Treasury OF the
United States Will get the benefit of the
excess OF taxes above the amount required
for the guaranty fund after it reaches {,
certain point, but the Treasury will be
liable to the fund for the amounts re-
ceived II they are needed to cover the
losses upon the notes OF failed banks
THE FRAN1EE.
Representative Lowering WIS a member
OF the Caucus Committee which framed
the Atlantic City bill, and is now a men,
Der of the House Committee on Banking.
He is a successful business man, and his
Judgment counts for much on business and
banking questions With the Republican
leaders in both Houses. He says that his
bill WIS framed for the purpose of a
modest experiment in a flexible currency
and was so guarded that i, would not
prejudice the bond secured circulation or
force the banks to throw their bonds
upon the market at a loss. On the con-
trary, he declared. there is an additional!
offered the banks TO increase
their holdings OF bonds, because of the
profits derived from the proposed guaran-
teed bank notes. Mr.. Lowering believes
that the new system will work admirably
in providing margin OF liexibility for the
if present business activity con-
tnues. and that it is wise TO test the
sof such currency as soon as
possible in order that it may be extended
from time to time as the growing business
OF the country cNlls for an Increased
volume OF the circulating medium