The Montgomery advertiser., 1903-07-14
NEW CURRENCY PLAN.
Loan of Cash Balance to Banks in
 Times of Emergencv,

Loan of Cash Balance to Banks in Times of Emergency. Washington Special to Brooklyn Eagle. Much interest Is being displayed here in | regard to the recommendations Secretary
 Shaw may make relative to financial legislation His attitude toward this sub tect will be of considerable importance. in view of the apparently hostile posi- ton assumed by Representative Cannon in regard to the plan advocated by
 Chairman Aldrfch of the Senate Finance Committee.
 Officials of the Treasury Department from the Secretary down are decidedly close mouthed on the subject of curren- cy legislation, and appear to scent trouble. It is the general belief at the department that there will be a stormy time next winter when the Republicans
 endeavor to pass currency bill, for
 everything goes to indicate that Cannon
 will attempt to block the efforts of Sem
 ator Aldrich in this direction.
 Secretary Shaw has talked with per- Sonal friends of late on the subject of
 currency legislation. In a recent con-
 versation of this kind he made a new proposition. It was that the government,
 in times of emergency, loan the cash ball
 ance of the Treasury to national banks | at high rates of interest This would PAONAAS 9 AottA OA COAAbAuCEhbAC | that would always be available, but at | such excessive rates of interest that | there would be no inclination to call for 1t except when money in Wall Street was at prohibitory rates. The Secretary figured that when the
 money stringency passed, the demand for government funds would cease, thus fur
 nishing an automatic safety valve for Wall Street. His plan has one import a mt nVa avurkNa a0Ir tTa kAak L.. Ak~ supposition that there will always be q
 surplus in the Treasury. At the present
 time there Is enough money In the Treas
 ury to permit of the loan of something
 like $70000.000 from the working cash
 balance. But with a deficit this would
 quickly disappear. and Secretary Shaw's
 plan for providing relief to Wall Street
 in times of stringency would go with it.
 spring reported a scheme for currency
 reform, involving a modified form of as-
 set currency, the impression given at the Treasury Department was that Secretary
 Shaw favored it. The proposition was in- tended as a relief measure only, and per-
 mitted the banks to take out asset cur
 rency at pretty stifr tax. The idea was
 that such currency would be issued only
 when 1t was necessary to provide addi- IHeuluIIls anu IndI uS soon as the emergency passed the banks
 would hasten to retire the currency thus
 issued in order to save the heavy tax
 This is the plan to which the prospective Speaker of the next House now ob- jects.
 MT. Cannon is backed up by official re- ports of the Treasury Department in his | statement that there has been a great l increase in the volume of the currency of the country in recent years. Late reports from the offices of the controller and the treasurer show that there have been | tremendous gains in the quantity of
 money in circulation in the United States
 The per capita circulation on July 1 was
 the greatest in the history of the coun- | try. being $29.39 on an estimated popula- ton of S0.s47,000. This is a clear gain of 99 cents in per capita circulation since July l, 1902. The total amount of money
 in circulation one week ago today was | g, ,376, ,323, ,210.
 Of coure, only a relatively small part
 of this is in actual circulation. The item
 of most importance in connection with possible financial legislation is that which shows the volume of national bank notes On July 1 the national bank circulation
 was $413,670000, as compared with S356,-
 0o0 600 for July 1I902, a gain for the year
 of more than $57. 1000 It may be added
 that the total bank circulation of the
 present is the greatest ever recorded for | the United States.