The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1903-01-03
AN ELASTIC CURRENCY

bill has been introduced in the House by Representative
Pugsey OF New York. the aim OF which, the title states, is to
render the currency elastic and responsive the financial
and commercial requirements of the country Under its provs
ions the controller Of the with the consent OF the Sece
ary OF the Treasury authorized issue circulating
der certain prescribed conditions These circulating may
be issued any national bank the OF oneenh OF the
face value of bonds deposited by the bank with the treasury and
be secured by approved bonds bills receivable
double in value the amount OF issue.
The measure, its title implies intended give the present
system greater feasibility 1t currency based bonds,
and bills receivable but heavily taxed lead
natural contraction to the present bondsecured currency when
crises passed An address such currency recently
delivered by Mr. Pugsy before the convention OF the American
Bankers Association New Orleans and the praccaby OF
the views expressed that time led many prominent business
and bankers urge Mr. Pugy incorporate his views
in bill and present it at the opening of Congress.
Il do believe said Mr. Pugsey, speaking Of the objects of
his BILL that much in need OF currency OF
greater elasticity in our present system The report of the
OF the United States shows there is about $50 capita
in circulation, which, believe larger than in any other
try, with the possible exception OF France.
1T evident that the consensus OF opinion largely in favor
OF elastic currency and the introduction of bills and the
bringing forward OF plans may result in evolving such
may the requirements OF the country for elastic
system would undoubtedly be OF untold value to the business
interests OF the country such should be perfected
for sound stable and responsive system is the life
blood OF a nations commerce and prosperity.
The bill that have just introduced will believe give
OF elasticity whether the internal
nue. and custom receipts continue to How into the treasury or not
and whether national bannote secured by
bonds remains under existing law Thus for instance when
the moving of the crops impending financial panic de-
mands larger circulation, larger circulation be
had while when the occasion for the increase has ceased
st contraction will follow naturally until the circulation of the
several banks shall again be brought to the bondsecured
rency The latter will result naturally from the imposed upon
the circulating notes. the Secretary of the Treasury
has the power direct the retirement of the circulation which
may be accomplished under existing laws The provisions
such that makes difference whether the circulating notes left
outstanding the bOndsecured currency the issued
under the provisions this and otherwise secured Under
the working of the present redemption system the the
circulating outstanding Of each national banking
ton could easily be brought the normal bondsecured
by resisting the received for redemption The
controller if necessary could require the banks deposit lawful
money retire this supplementary circulation the banks of
their voon could make such deposit of lawful money and
the interest this heavily taxed and special circulation
Criticism be made that the securities left in the hands
OF the banks issuing the circulation but if the securities had be
forwarded the treasury time taken deposit them first in
the hands of trustee owing the time required the purpose
OF the bill might be defeated and its benefits lost And for this
would have the controller furnish to the banks blank
forms upon which the directors might certify the securities
that these FORMS properly certified might be forwarded the
controller of the currency without loss of time.
"A the of currency that might be issued if all the
banks in the country took advantage of the provisions of the BILL
should between $I4oOooooo and 100000 additional
circulation would be available, 80 per of the
banks capital circulating be kept hand by the
troer of the currency, as provided in the bill