The evening times. [volume] (Washington, D.C.) 1895-1902, 1901-01-28
LOWERING CURRENCY BILL.


pahihs Hearing of IT'S ProyISions.
\ statement regarding the operation OF
certain features Of the bill ITO make the
currency responsive to the varying needs
oi business at all seasons and in all sec
tons has been made by Representative
Lowering. who introduced the measure in
the House. Mr.. Lowering said that mis-
understanding seemed 10 have been caused
II regard to one or two points among Ger
tain bankers and other experts By reason
OF the bries abstracts of the bill which had
appeared where its exact details had not
been set forth. His attention being called
to the suggestion made by a leading Yer
mont journal that the bill would put it
into the hands OF three OF the Treasury Of
fcials to manipulate the money market By
putting notes in circulation and then sud
denly Withdrawing them, Mr.. Lowering
said:
L think this objection comes from a
misunderstanding OF the powers given by
the bill to the Secretary of the Treasury
and the Comptroller Of the Currency. They
ara given discretionary power to refuse to
issue notes 10 banks making application
for them when they believe such banks to
be subject to criticism in their manage
ment or when the general state of the
money market is such as to make addition
al issues Of currency seem iuadYiSable.
They have not the power, however. to
withdraw this currency at Will. That
comes about through the machinery of re-
deEnptiOn. The bank is the sole judge Of
the necessity for Withdrawing its curren-
cy under the Influences OF the market
a new and elastic form Of notes to satisfy
those who are t;mid about testing a
new system by giving power to the Secre-
taTy OF the Treasury and the Comptroller
Of the Currency 10 refuse such issues
when them deem them to be unNise. They
are not likely TO make frequent use of
this power after the new system has been
fairly tested and is in successful opera
tion. The banks themselves can then be
trusted to exercise sufficient control over
each other by demanding the prompt re
demptiOn of notes which may be issued by
a badly managed bank OF in excess of the
needs of business. Under a system which
makes each bank contributor to the
guaranty fund and throws uPcn it, there
fore. some share Of responsibility for the
soUHdness Of the currency the bank IS
likely to prove a better guardian of the
currency than any public Cffici9l, but in
order to quiet the fears OF certain persons
who diStrust any currency which is not
specially secured I thought best to grant
a supervisory power to the Treasury Off
Gals
1t is to be understood. then. that the
Treasury officials canE0t reduce the vol
unle of currency at their wiH2'
They cannot" was the reply. They
have no power to compel a hank to with
draw currency once issued. All that they
could do in any event would be TO compel
the bank to put up a sufficient sum Of
lawful money to cover its outstanding
notes as they might drift into the Treas
Ury for redemption. They are given nc
additional power in this respect by my
bill beyond what they have under exist
ing law, and they would not exercise this
power except il case OF an insOlvent
bank. which they would "a The same time
put into the hands of a receiver
Is not your bill subject then." waI
asked, TO the criticism that II would rer-
nit an increase OF the currency without
any means OF bringing 1t back within
proper limits. if undu, imitation we're
caused %
I am glad you asked NE that replied
Mr.. Lowering for I have seen that criti-
cism made IN several quarters The
qua ranteed notes 10 be issued b. banks
under this bill are practically bank
checks and have t. same tendency TO
return to the bank Of issue that ordinary
checks have to return to the drawer with
this difference only: That so long as
there is any demand fer them. and 50 long
as they viii pay their way as currency
they will continue TO circulate but the
moment they cease 10 circulate they VIII
seek the point Of redemption The ac-
ton viii be as automatic as the law OF
gravitation- To keep away from the
bank they must keep moving"