The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1901-02-01
lowering 5 BILL
Representative Who Introduced Meas
gre Discusses Its Provisions.
The POWERS GIVEN TO COMPTROLLER
They Cause misunderstanding
and Result In Objections,
lit Is Said.

Washington, Jan. 30.-A statement re-
garding the operation of certain fea-
lures of the bill "to make the currency
responsive to the varying needs of busi-
ness at all seasons and in all sections
was made today by Representative Low
ering who introduced the measure in
the house. His attention being called
to the suggestion made by a leading
Vermont journal, that the bill would
put il into the hands of three of the
treasury officials TO manipulate the
money market by putting notes in cir
oulation and then suddenly withdrawing
them, Mr.. Lowering said:
II think this objection comes from
Misunderstanding of the powers given
by the bill to the secretary of the treas
ury and the comptroller of the currency.
They are given discretionary power to
refuse to issue notes to banks makingap
plication for them when they believe
such banks to be subject to criticism
in their management or when the gem
eral state of the money market is such
as to make additional issues of the
currency seem unadvisable. They have
not the power however, to withdraw
this currency at will That comes
through the machinery of redemption.
The treasury officials cannot direct any
bank under the terms Of the bill to
withdraw its currency. The bank is the
sole Judge of the necessity for doing
that, under the influences of the market.
BANKS ARE JOINTLY INTERESTED
"Under system which makes each
bank a contributor to guaranty fund
and throws upon them, therefore, some
oba Of ,cih ha
ness of the currency, the banks are
likely to prove better guardians of the
currency than any public official but
i'm order to quiet the fears of certain
persons who distrust any currency which
is not specially secured l thought best
to grant a supervisory power to the
treasury officials.
1.-The treasury officials cannot reduce
the volume of currency at their will
They have no power to compel bank
to withdraw currency once issued. Al
that they could do in any event would
be to compel the bank to put up a suff-
clent sum of lawful money to cover it's
outstanding notes as they might drift
into the treasury for redemption. They
are given no additional power in this re-
spect by my bill beyond what they have
under existing law and they would not
exercise this power except in the case
of an insolvent bank which they would
at the same time put into the hands of
q receiver.
THE guaranteed notes to be issued by
banks under this law are practically
checks and have the 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 for them and so
long as they will pay their way as cur
rency they will continue to circulate,
but the moment they cease to circulate
they will seek the point of redemption.
THE WORKINGS OF REDEMPTION.
THE notes having been put out let it
be assumed that business slackens and
that there Is more currency than is
needed. The result will be that the
banks. and especially the reserve banks
of New York, will have more currency
on their hands than they need The
country banks, If they find their supply
of money excessive, will undertake to
earn the interest allowed upon certain
reserve deposits in New York by de-
posting their surplus there. What will
happen then? Simply that a New York
banker, looking over his currency stock,
will see that he had, say, for illustration,
100000 in gold and other legal tender
money and s50O0OO in the guaranteed
notes issued under my bill. Now, the
guaranteed notes would be useful to
him If people were withdrawing de-
posts or making loans In currency.
He could pay them out as money. But
the very assumption with which we are
dealing Is that currency has become
excessive The banker has more than
he needs. What will he do? His first
impulse will be, if he has to carry sur
plus currency at all, to convert IL into
form which will be available for his
reserve. The new guaranteed bank
notes would not lie available for this
purpose, but they would be rclccmable
in gold at the treasury. He would,
therefore, send in all guaranteed notes
he could spare for redemption. He would
get gold or other legal tender money
for them and the notes would be cancel
ed. The banks which issue them would
be notified to put up additional sums OF
legal tender money in their currency
redemption fund to meet notes which
might be presented in future. They
could only reissue the notes redeemed
by keeping their current redemption
fund and their gold guaranty fund and
paying the tax imposed upon their notes
when in circulation"
Campaign Against Saloons.