The Montgomery advertiser., 1902-12-19
DISCUSSED | CURRENCY 1 Comptroller Ridgely Makes Speech.
 THE NEED OF ELASTICITY Conservative Changes Will
 Bring About Results. Any Satisfactory Solution of the Pro- blem Should Include Some Plan for the Retirement of the Legal Tenders.

Ridgely. Comptroller of the Currency; President woodrow Wilson of Princeton University, the Rsv. Robert 8. MacAr- thur, Major General Adna R. Chaffes and John S. Wise were the principal speakers tonight at the annual banquet of the New York State Bankers Association given at the waldorf-Astoria. Five hum dred members and guests of the sssocia- tion were present.
 ''The relation of the university to busi- ness" was the subject of President WI sons address. Dr. MacArthur spoke Of Bankers, the promoters and conserva- tors of civilization" General Chance on Experience with banks and bankers" and MT. Wise on "Something which bank CTS know"
 MT. Ridgely 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.
 Legal Tender Retirement.
 Any complete and satisfactory solution of our present currency problem should include some plan for the retirement or the legal tenders. believe the bank note circulation can be greatly improved by a few quite conservative changes which will add to It's elasticity or rather introduce some elasticity where there IS now practically none. and urge every man who agrees that these changes wiii improve the currency to give his support to the effort even if what Is proposed does
 t,k nn hA rzTiahAG done. The act of 1882 contains a prohibition Of the retirement of more than $3.o0o,oo0 of '.ational notes n. any calendar month Thls prohibition has not only prevented the contraction of the currency when the notes have become redundant but also pre- vents expansion when 1t is needed. owing to this difficulty of retiring their notes, many banks refuse to increase tnelr clr- cuIation when otherwise they would do so. Whatever necessity there ever was Tor this restriction on retirement has long since 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.
 The process requisite for an elastic currency is frequent redemption and free dom of retirement To have proper and true elasticity, contractability. is as neo- essary as responsibility. We have in cir culation such a vast amount of currency which is practically inflexible in volume. legal tender notes, treasury notes, gold and silver certificates as well as bank notes that 1t Is and will continue to be very difficult to introduce any elasticity in 1t. It must all be supplied by the bank notes. This adds to the urgent neces- sity for giving them the greatest possible measure of this quality.
 Greater Issue by Banks.
 'I 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 holder.
 The government can safely guarantee or insure these notes If protected by the bonds held for a part of their value, and, additional by guarantee fund to be rais- ed by a tax or premium for insurance lev jed on the bank circulation.
 The restriction of the national banking act in these regards have been demon strated to be wise and beneficial. It would be much better for the business of the country if it's commercial banking were done mainly by banks in a uniform sys- tenn under government supervision. This WOulu Db Dg In6 ByS- tenn as attractive and profitable as can safely or fairly be done.
 These additional notes should be ex- actly the same in form and in all respects as those now issued. In fact the change should be merely the increase of the permission so that bank might issue one and one-half times the par value of the bonds deposited, the maximum amount of bonds remaining the same as now, equal to the capital stock of the bank"
 General ChafRee's Remarks.
 In the course of his address General Chaffee said he had never been able to understand the only two experiences he had had in banking. One was when he loaned a blank check to friend when he had only sl00 in the bank and the check came back protested with s225 charges, His other experience was in China. The government deposited $l0.0 to his credit and he notified the bank that he wanted 5000, The bank sent him a dozen coolies with a safe full of silver dollars and told him to transfer it to any place he wanted.
 Dr. Lorenz, the Vienna surgeon. was called upon for an address and said:
 ''The strongest impression I have re- ceived in this great and beautiful coun- try has been through the works of or ganized charity. I have had some curious experiences in this country. Perhaps the most curious was oin Chicago. The Board of Health there made me undergo an ex- animation in medicine although I think I know something of that branch of my profession. Curiously enough some weeks later they made me a doctor of laws tough know nothing of law Taught by nat experience I shall not talk more fN 1v,t t1at1 stay here lcEger yoll will make me a banker because | know nothing of bank ing