Omaha daily bee., 1902-12-19
RIDCELY WANTS MORE NOTES
Urges Law Authorizing Contraction and
Initiation Of Currency,
GOVERNMENT SHOULD SECURE ALL ISSUES
Bond Deposits and Taxes would Guar
Rntee Treasury AgRinst Loss a.
Congress Adopts idea of
Comptroller.

NEW YORK, Dec. 1S.-william Barrett
Ridgely. comptroller Of the currency ,
Woodrow Wilson, president Of Princeton
university; the Rev. DR.. Robert S. Nc
Arthur, Major General Adna r. Chaffee
and John s. Wise were the principal speak
ers at the annual banquet of the New York
State Bankers association given at the
Waldorf Astoria tonight.
Mr.. Ridgely spoke on Elasticity in the
Currency" and said in part:
The one great objection which can be
fairly made to our national banking system
Is the lack of elasticity i'm the currency.
Any complete and satisfactory solution Of
our present currency problems should In
clude some plan for the retirement of the
legal tenders. / believe the anknOt cir
culation 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 l urge every man who agrees
that these changes will improve the cur
rency to give his support to theieffort even
IL what Is proposed does not accomplish all
he wishes.
The act of 1882 prohibits the retirement of
more than $1,000, 600 national banknotes In
any calendar month. This prohibition has
prevented contraction of the currency when
notes became redundant and also prevented
expansion when It was needed. owing TO
this difficulty many banks refuse to in
crease their circulation when otherwise
they would do so. Whatever necessity
AANA tN0l a. AOA NAAAe ANohA ~ III ~.
tirement has long since ceased to exist, and
the restriction should be removed. II there
Is nothing else done in regard to the cur
rency this should be done at once.
The prime 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
a vast amount of currency which is prac-
tically infeXible in volume, legal tender
treasury notes, gold and. silver certificates,
as well as banknotes, that It is and will
continue to be difficult to introduce any
elasticity into 1t. 1t must all be supplied
by the banknotes.
I think the best plan which has been sug-
gested, is to allow these. banks to issue
more than par value of the bonds de-
posted, but tho. first consideration should
be to maxi these notes absolutely secure
to the holder. The government con safely
guarantee or secure them II protected by
bonds held for a part of their value and by
a guarantee fund raised ny tax or pre-
MUM for insurance levied on the bank
circulation. The restrictions of the ma
tional banking act in these regards have
been demonstrated to be wise and bene-
fetal.
1t would be much better for the business
of the country II its commercial banking
were done mainly by barks in a uniform
system under government supervision.
This should be encouraged by makin the
system as attractive and profitable as can
These additional notes should be exactly
the same in form and In al. respects as
those now issued. In fact the change should
De merely One increase. VI the. PCT
so that a bank might issue one and one
half times the par value of the bonds de
posted. the maximum amount OF bonds
remaining the same as now, equal to the
capital stock of the bank.
In the course of his address General Cl'af-
fee said the only two experiences he had of
banking he had never been able to under
otand. One was when he loaned a blank
check to a friend when he only had S1OO
In the bank and the check came back pro-
tested with $2.25 charges.
The other was in China Tho govern
ment deposited $40, 900 to. his credit and he
notified the bank that ne wanted 5000.
The bank sent him a dozen coolies With a
safe full OF, silver dollars and told him to
transfer 1t to any place he wanted. 'r
Fears He VIII Become tanker -
DIR. Lorenz, the Vienna surgeon, arrived
at the banquet and was called upon for an
address.
In response he said: 81 have had some
curious experiences in this country. Per-
haps the most curious was in Chicago. The
Board Of Health there made me undergo an
examination in medicine, although I think
l know something Of that branch Of my
profession. Curiously enough, some weeks
later they made me a doctor Of laws, al
though / know nothing Of law. Taught by
that experience, l shall not talk more to
you, gentlemen, because l fear II l stay
here longer you will make me a banker,
because l know nothing Of banking"