Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1902-12-20
TELEPHONES.
NEW CURRENCY BILL.

AS stated in brief telegram from
Washington, day before yesterday, by
agreement of the Republican members Of
the House Committee on Banking. Chair
nan Fowler introduced substitute
ru7ency bill for the one his committee
reported last session, and OF which he
vas the author. The new measure
which was favorably reported yesterday. is
much less complicated than the old one
It does not aim at reform in as many
directions as its predecessor. but ii strikes
lis as an advance towards the solution Of
the banking and currency problem Ger
tainly 1t is well worthy Of the thoughtful
consideration Of every business man and
ti1ancier, for, like the original bill, it
bears testimony to the fact that Mr. row
Ter is a genuine and sincere currency re-
former In q sense. the measure is a
cornprcmise between the old Fowler bill
and the Lowering bill Ii discards some o.
tho features of the former, which were
especially antagonized by, the national
barking interests as intricate and cum
bersome and radical, and embraces, as We
more business-like details Of the latter.
1t goes further than the Lowering plan in
the matter of issuing credit currency dur
ing the first three years of the trial Of
ne proposed new system, but it does not
go as far as Mr.. Lowering de-
signed that his measure should
have gone to the end of six years. The
cd hat at
that period a bank might increase its
issue Of credit notes to 10 per cent of
its capital. The REVISED Fowler bill au-
sf1orizes an issue Of credit notes 10 the
maximum o: % per cent. Of the paid-up
rapital of the bank taking advantage of
she provision. This has no relation to
issue Of notes on a bond basis of security.
The notes can be put out, says the bill,
without dcpositinG United States bonds
with the United States Treasury in the
manner provided by the existing law"
But before any bank shall receive any OF
The credit notes in question, which vii!
pc supplied by the Treasury at the e2-
oenSc Of the bank, said bank 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 dcpos-
st shall be counted as a part of the law
ful reserve Of said bank against said
notes. The interest upon said bonds shall
be paid to the bank so depositing them,
and if said bank shall retire said circu-
alton, or any portion thereof, an amount
bonds or gold coin, or both, equal 10 5
per cent. Of the notes so retired. shall be
aturned 10 said bank
This per cent. is a guarantee fund.
md The fund is 10 be strengthened and
he note holder further protected by a tax
IA the credit circulation of one-lalf OF one
per cent per annum, which viii be added
TO the guarantee deposit. Moreover, the
credit notes shall be first lien upon the
assets Of the respective banks issuing
them, and shall be received upon deposit
and for all purposes OF debts and liability
by every national bank at par, and with
out any charge of Whatsoever kind, and
such notes shall be receivable for all pub
lie dues except duties on imports. and
when SO received shall be paid out again"
Ample provision is made for promptly
realizing on this lien in case of the failure
Of a bank, and taking The latest statement
of the banking capital of the country it
is estimated that the credit Issue would
permit of IN increase in circulation Of
t1S0,eo00 coo. But il is hardly probable that
such an increase would be made except
b extreme emergency. 1t would not be
sound financiering TO run TO the limit I'M
less conditions were such that the exercise
OF the privilege would not cheaper money.
The policy of the banks, it is argued,
would naturally be that Of availing them
selves OF the privilege on conservative
lines and as the demands of trade might
neccssitate
The first lien stipulation amounts as
NAH be seen, 10 virtua: government guar
ahtce OF the notes, and that the note
holder would be fully protected Is regard
cd as almost certain by no less authority
'iian the New York Journal of Commerce,
which says: There probably has no,
been IN The history of the nationa! bank
'hs system bank failure where the as
%'s would not pay % per cent. OF the
aNiai' IL such Claim were given pre-
!. 'sieiice over other obligations. The effect
- ms provision will be to make the safe
iNisp Almost a redundant and SUPER
',fous safeguard. since The demands upon
u snnst be rare and small"
3ho'hef important feature Of the bill
las resumption feature. For the pur-