The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1902-12-19
CURRENCY NEEDS
MORE ELASTICITY
William B. RidgeIy, COmptroI-
Ter, Speaks to Bankers
ROOM FOR IMPROVEMENT
Solution Of Present Currency Prob
lens Should Include Some Plan
for the Retirement of the
Legal Tenders.
ROOM FOR IMPROVEMENT

New York December 1s.-William Bar
rett Ridgley. comptroller of the currency,
President Woodrow Wilson of Princeton
University, the Rev Robert S. Mac
Arthur. Major General Adna R. Chaffee
and John s. Wise were the principal
speakers tonight at the annual banquet
of the New York State Bankers associa-
ton given at the Waldorf-Astoria. Five
hundred members and guests of the as
ISOLATION were present.
Mr.. Ridgley spoke on Elasticity in the
Currency" and said In part:
THE one great objection which can be
fairly made to the national banking sys-
tenn, is the lack of elasticity in the cur
rency, which is issued:
Amy complete and satisfactory solution
of our present currency problems should
include some plan for the retirement of
the legal tenders. I believe the bank
note circulation can be greatly improved
by a few quite conservative changes
which will add to its elasticity or rather
introduce some elasticity where there Is
now practically none, and 1 urge every
man who agrees that these changes will
improve the currency to give his sup
port to the effort even If what is pro-
posed does not accomplish all he wishes
to see done. The act of 1882 contains
a prohibition of the retirement of more
than 100000 of national notes in any
calendar month
Has Prevented Contraction.
This prohibition has not only prevent
ed the contraction of the currency when
the notes have become redundant, but also
prevents expansion when It is needed.
Owing to this difficulty of retiring their
notes, many banks refuse to increase
their circulation, when otherwise they
would do So Whatever necessity there
ever was for this restriction on retire
ment has long ceased to exist, and the
restriction should be removed. If there
Is nothing else done in regard to the
currency, this should be done at once.
1.-The prerequisite for an elastic cur
reney is frequent redemption and free
dom of retirement To have proper and
true elasticity, contractibility Is as neces-
sary as expansibility. We have in circu-
lation such vast amount of currency
which is practically innexibie in volume,
legal tender notes, treasury notes, gold
and silver certificates, as we'll as bank
notes, that it is and will continue to be
very difficult to introduce any elasticity
into it. 1t must all be supplied by the
bank notes. This adds to the urgent neees-
slty for giving them the greatest possible
measure of this quality.
Can Issue Bonds.
81 think the best plan which has been
suggested for modifying our bank cur
rency is to allow the banks TO issue more
than the par value of the bonds deposited.
The first condition should be to make
these notes absolutely secure to the hold
err. The government can safely guard or
insure these notes If protected by the
bonds held for a part of their value, and
addition by a guaranteed fund to be raised
by tax or premium for insurance levied
on the bank circulation. The restrictions
of the national banking act In these re-
CARDS have been demonstrated to be
wise and beneficial. 1t would be much
better for the business of the country IL
its commercial banking we're done mainly
by banks in a uniform system under gts-
eminent supervision. This should be en-
couraged by making the system as at