The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-12-19
RIDCELY ON CURRENCY
ADDRESS BY THE CONTROLLER TO
NEW YORK BANKERS.
Suggestions as to Making Our Money
System More Elastic-Issue of
Bank Notes.

NEW YORK. Dec. 1S.-William Barrett
Ridgely, controller OF the currency, Presi-
dent Woodrow Wilson. of Princeton Uni
versity the Rev. Robert s. Macarthur.
Mai Gen. Adna r. Chaffee and John s.
Wise were the principal speakers tonight
at the annual banquet OF the bankers of
New York city given at the Waldorf-As-
toria Hotel. Five hundred members and
guests of the association were present.
Controller Ridgely spoke on Elasticity in
the Currency" saying in part:
1.-THE one great objection which can be
fairly made to the national banking sys-
TEN is the lack of elasticity in the curren-
cy which is issued. Any complete and sat-
isfactory solution OF our present currency
problems should include some plan for the
retirement of the legal tenders. L believe
the bank note circulation can be greatly
improved by 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 proposed
does not accomplish all he wishes to see
done.
of the retirement of more than 100000 of
national bank notes in any calendar month.
This prohibition has not only prevented
the contraction of the currency when the
notes have become redundant. but also
prevents expansion when il 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 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 price requisite for an elastic cur
rency is frequent redemption and freedom
of retirement. To have proper and true
elasticity contractibility is as necessary as
expansibility. We have In circulation such
vast amount of currency which is prac-
| tically infiexible in volume-legal tender
| notes, treasury notes, gold and silver GER
| tificates, well as bank notes-that il is
| and will continue to be very difficult to In
| troduce any elasticity into It. 1t must all
| be supplied by the bank notes. This adds
| to the urgent necessity of giving them the
| greatest possible measure Of this quality.
81 think the best plan which has been
| suggested for modifying our bank currency
| is TO allow the banks to issue more than
| the par value of the bonds deposited. The
first consideration 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 in addition
1
| or premium for insurance levied on the
| bank circulation. The restrictions of the
national banking act in these regards have
been demonstrated TO be wise and bene-
| ficial 1t would be much better for the
| business of the country If it's commercial
banking were done mainly by banks in a
| uniform system under government super
vision. This should be encouraged by MAX
| ing the system as attractive and profita BILE
as can safely or fairly be done. These adj
ditional notes should be exactly the same
L in form orrd In oil ,f1
| issued. In fact, the change should be mere
| ly the increase OF the permission SO that
a bank might issue one and one-half times
maximum amount of bonds remaining the
same as now. equal to the capital stock of
1.-THE Relation Of the University to Bush
ness" was the subject OF President Will
sons address. DR.. Macarthur spoke on
Bankers. the Promoters and Conserva-
Experience with Banks and Bankers" and
Mr. Wise on Something Which Bankers
| Don't Know"
fee said he had never been able to under
stand the only two experiences he had had
In banking; One was when he loaned a
500 In the bank and the check came back
| protested with s2.8 charges. His other ex-
| perience was in China. The government
fed the bank that he wanted 5000. The
| bank sent him dozen coolies with a safe
full or silver dollars and told him to trans
| fer 1t to any place he wanted
DR.. Lorenz. the Vienna surgeon, arrived
late at the banquet and was called upon
| for an address. In response he said: 81
| am very much embarrassed 1 really do not
know what to say to you. Still I think
you will not mind If tell you what q
great impression your country has made
upon me. The strongest impression I have
received In this great and beautiful coun-
try has been through the works of charity
| organized charity. have had some curious
experiences in this country. Perhaps the
most curious was In Chicago. The Board
| of Health there made me undergo an exam
ination In medicine, although I think
know something Of my branch OF my pro.
| fession. Curiously enough, some weeks
later they made me a doctor of laws, though
/ know nothing of law. Taught by thai
experience I shall not talk more to you
| gentlemen, because / fear IL I stay here
| longer you will make me q banker because
| know nothing of banking"