The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-03-15
THE NEW BANKING AND CURRENCY
BILL.

The new national banking and currency
bill which the committee has reported to
the House is a great surprise. Usually
such measures, while they are under prep
aration, are the subject of much exploita-
ton, but this bill has been perfected and
is now thrown upon the country as an
entirely new system of banking and cur
rency. 1t is as new to the country as was
the original national banking bill passed in
1863
One of the features of the bill which
will attract attention and doubtless call
forth opposition is that which is de-
signed to get rid OF the greenback. about
which some people have thrown a halo of
sacredness. 1t is nothing more than
note of the government which now can
not be reissued after being redeemed with
gold. which has destroyed it's old-time
characteristic as money, except while it is
in circulation. So few greenbacks are
now in circulation that they constitute lit
tie of the money which the people
This bill is designed to displace, in the
of two years or so, 195,0OO.0O0 of
the $3i6, $4,000 of greenbacks. AS the num-
Der of people who believe that the govern
ment should issue, if not redeem, all pa
per money is much smaller than ii was a
few years ago, there is little or no fear
that the retiring OF the greenbacks forever
will cause much lamentation.
The portion of the new bill which will
attract the greatest attention and excite
the widest criticism is the proposition to
authorize banks to issue notes upon their
assets or general credit Recollectlons of
the losses sustained by those holding the
notes of State banks which failed so fire.
quently before the national banking sys-
tenn was adopted make the older people
rather dubious about this scheme of al
lowing banks to issue notes to 20 or 40
per cent. of their paid-up capital. Every
safeguard will be placed about this bank
circulation TO make it safe. Every bank
must redeem its notes in gold over its
counter when asked to do so, and banks
notes will be first lien on its assets in
case of failure. The United States bonds
which are the security for the present cir
culation of national banks will be gradu-
ally surrendered TO the banks as the notes
which they make good shall be redeemed.
The tax upon the circulation is designed
to limit it. The tax upon an issue of notes
equal TO 20 per cent. of banks capital
will be one-fourth OF 1 per cent, but when
the issue shall be 10 per cent more the tax
will be Ia per cent, while in an emer-
gency of 40 per cent. more the tax will be
from to per cent, thus making the tax
so high that there can be no profit in
large percentage of circulation to capital
stock. This feature of the bill will meet
with the most opposition. The American
people Of to-day are not used 20 asset
banking, and those who are old enough to
have any recollection of it do not regard
such bank issues with favor To remove
all suspicion the safeguards must be made
as strong as the present security for bank
note redemption.
There will doubtless be the usual out
cry against permitting corporations TO
issue paper which can be used as money
as there are yet some people who will in
! sist that the government shall issue all
/ paper money and derive all the advan-
/ tages of such issue without taking the
responsibility OF its redemption This.
/ however, is the dying heresy of fatism
/ There is no reason why a government in
a normal condition should issue fiat money.
/ When it does il should. like bank make
| provision 10 redeem it. Under normal con-
| ditions the government should have moth
ing to do with money but to coin it from
metals. The issuing and redeeming of
notes is the function OF a banking cor
poration under the restrictions imposed
| by law.
The other provisions OF the bill simply
strengthen the gold standard by provid-
/ ing for the redemption OF silver or silver