The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-12-18
CREDIT CURRENCY
PLAN TO RELIEVE THE COUNTRY OF
MONETARY sTRINGENCIEs.
Bill of Utmost Importance to the Busi-
ness world introduced in the
Lower Branch of Congress.
BANKS TO ISSUE NOTES
EQUAL TO 70 PER CENT. OF THEIR
CAPITAL STOCK,
To BE Redeemed I'm Gold and to Be
safeguarded by Guarantee
Fund of Per Cent.
TOTAL MAY BE $175,000,000
PROVIDING ALL NATIONAL BANKS
MAKE USE OF PRIVILEGE.
Representative Overstreet on the Ne
cessity of Preparing for Financial
Troubles In Times of Prosperity.
To Be Redeemed I'm Gold and to BE
Safeguarded by a Guarantee
Fund of Per Cent.
TOTAL MAY BE $175,Oo0,ooo
PROVIDING ALL NATIONAL BANKS
MAKE USE OF PRIVILEGE.
Representative Overstreet on the Ne
Troubles In Times of Prosperity.
ar corresnonasnce Of The journal.

WASHINGTON, Dec. 1.-THE Republic
an members of the House committee on
banking and currency took an advanced
step to-day to relieve the country from
possible monetary stringencies for period
of several years at least. They agreed on
bill permitting national banks to issue
credit currency notes equal to 25 per cent.
of their capital to be redeemed in gold and
to be safeguarded by a guarantee fund
of per cent. of the notes outstanding.
AS an additional measure of precaution
the bill requires banks to maintain a re-
serve against the notes equal to the re-
serve now held against deposits. The ex-
listing law which prevents national banks
from retiring more than 100000 in any
month is repealed so far as the credit
currency is concerned.
The notes are to be redeemed over the
counter of the issuing bank and New York,
Chicago and San Francisco are named as
redemption cities. No bank shall pay out
the credit currency notes of another bank
located outside of it's own district, but
shall forward them to some bank in the
district to which the notes belong or to
some bank in the redemption city of its
own district. If all banks i'm the national
system should avail themselves of the
privilege of the bill the total amount of
currency that could be issued under it
would be s175,000oO0.
The bill was introduced in the House to-
day by the chairman of the committee,
Mr.. Fowler, of New Jersey, and will be
laid before the full committee on Friday
of this week. On that morning it will be
reported to the House and an effort will
be made to get early consideration for 1t
after the holiday recess. 1t will be urged
in place of the currency bill reported to
the House at the last session.
THE BILL IN BRIEF.
Mr.. Fowler, in his statement of the pro-
visions of the bill, said it provided:
THAT any national bank may, with the
approval of the controller of the currency,
take out for issue and circulation an
amount of national bank notes not exceed
ing % per cent. of its paid-up and unim-
paired capital without depositing United
States bonds with the United States treas
ury in the manner provided by existing
law.
THAT said national bank notes shall be
pense of the respective banks issuing I'll them.
and shall be in the denominations of $40
and multiples thereof.
THAT before any national bank shall re-
ceive any of the bank notes referred to in
this act it shall first deposit in the treasury
of the United States as a guaranty of the
payment thereof an amount of United
States bonds or gold coin or both equal
to per cent of the amount of the notes
so taken out, and such deposit shall be
counted as a part' of the lawful reserve
of said bank against said notes. The in
terest upon said bonds shall be paid to the
bank so deposting them, and If said bank
shall retire said circulation or any portion
thereof an amount of bonds or gold coin
or both equal to per cent. of the notes so
retired shall be returned to said bank Pro-
| vided, however. that If ii should be neces-
sary to sell said bonds for the purposes
treasury is hereby authorized to dispose of
the same and use the proceeds in accord
ance with the provisions of law herein
contained"
paid on the 1st day of January and July
of each year in gold on the average amount
| of such notes in circulation during the
! preceding six months which tax, together
with the per cent deposited, shall con-
| stitute guarantee fund. The bill pro-
vides that these notes shall be lien on
the assets of the banks issuing them. Pro-
vision is made for the redemption of the
notes and the protection of the United
| States in case bank fails.
MR.. OvERSTREET'S VIEWS.
Representative Overstreet who is a mem
ber of the banking and currency commit
tee. and has taken prominent part in all
matters relating to currency legislation. in
discussing the necessity of financial legisla.
| ton said the the Journal correspondent
1T is very generally agreed that some
| legislation should be enacted at this ses.
sion which shall afford some measure OF
| relief to guard against the constantly re-
| curing money stringency and avoid i'm the
| future the necessity of the United States
treasury assuming the burden of such re.
| lief. While / am not an alarmist, never.
| theless, / realize the danger of the further
postponement of such legislation. The
rapidity with which speculation has fol.
| lowed on the heels of honest inyestmen,
and business growth emphasizes the Ger.
tainty with which the day of liquidation
| will come. We cannot hope for all our
days to be sunshine, and when clouds ap.
pear there must be some measure of pro.
lection against the storm.
1.-The burden of relieving a currency strin.
gency should be upon the banks and moi
| upon the treasury. The rigid condition OF
our currency, which prevents any response
whatever when currency panics occur. in
tensifies the difficulty of relief when the
| period of danger Is at hand. To remed,
| this defect some system of elasticity mus
be provided In our currency.
1T Is quite likely that early after tn,
holiday recess the full banking and cur
| rency committee will report back to tn,
| House the measure introduced to-day Thi
will provide a means for relief through tn,
banks by way OF authorizing very limite.
and properly safeguarded credit currency
1t is not at all likely that the amoun
which will be authorized will be in exces,
Of 25 per cent. OF the capital stock Of tn,