New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-08-31
FOR CURRENCY Reform
A Bankers Plan for Securing Aus.
matte Elasticity of Circulation

banking conditions I'm every part Of tbA -"
states BY local and personal contact with I-
number OF bankers herewith submit a -,sss
thought out currency proposition. which 80
covers every essential point. and whose si,.-,.g
ana ease Of enforcement should recomn,ar5 ,4'g
favorable consideration. q;
PropOsition--A special increase OF cf-.,,1.,
20 % per cent OF capital. upon application - -
SuInoFi'y rom the Controller OF the Currency -
shutting a first lien upon all assets r.t,~
within six months OF issue by deposit vri,b $50
uoiIer OF an equal amount OF gold cur -
national bank bills. with governmental .,a -I 2
and redemption as at present: the bills n n. -
unguisnaoie from the present bank bills ana -. 80
sue 10 oe subject to tax OF per cent FER 49,
up to p per cent OF capital and OF a. per CO... -
. per cent to 30 per cent and an additio,a1 Non
per cent Per annum in cases where rsisg~..'
made within six months after redemptior -
sue a ,
Minor Suggestions.-The tax collected 2,
vide for sinking fund for redemption ~ br,s
failed banks, also 10 pay for all bank eya,,,., V
relieving banks from this expense: ais, IN -.
Tor the expenses OF a permanent con,r,issio.
hnance and currency. to investigate ana -
abreast Of financial conditions suggest s.1 40
pare bills for legislation. and disseminate 49,
information 'aleas
Inc above plan was suggested to me BY ts.
cesstul exDedent to create additional 49, ~
several times resorted to BIZ the Bank az ES-g
commonly known as the suspension OF tto -
act The issue OF the Bank Of E7els-t q,
tact lnfexibie in this, that it consists q. = -.
''4 amount or unsecured banknotes. called 49,
weight. and OF banknotes against each ~ -
its equivalent in gold must be deposited Fs-.-
though the volume Of banknotes in circ1lIa ,fo- -,
huctuate. il means only the huctuatior 20 ~
amount OF gold under the notes. the srDnlv !.
which gold depends on conditions similar 10 49,.
prevailing with In England. however m. -.
pound sterling Of government funds is ever Locked
up. all being deposited wit the bank which -.
them in its general business. the same a. n ~,
the money of other depositors In times a. -
treme siringency the bank was permitted To isr.
It's notes without the requisite gold deposit ~.
notes only standing as a liability against all ASSES,
but the permission had TO be given by speas
act IN each case suspeEding the fundamental Barr
act. hence the expression above quoted
My proposition does. not mean a new k,ns =.
hanknotes. or special emergency currency. Il.
very name OF which suggests weakness and dan
ger. IL enables bank in case OF pressure p,
apply 70 the Controller for permission TO issue ad
ditonal currency without the customary dsoe=t a,
bonds The Controller retaining the right OF p
fusaI. will grant permission only when raone,.--
conditions warrant The amount of currency thus .
issued is to constitute first lien on all assets n,
the bank is TO be compelled TO withdraw T. @ llos
date, the entire amount within six months ia.
date of issue by depOsiting with the Controllers
equal amount Of current money to be appllelw
him to the cancellation of incoming banknotss
until theentire amount Of the special issue has been
made good. Tie graduated tax OF Per cent and
~ per cent. respectively. will make for con-
servatism. and so Will the time limit because SPEC
ulation cannot thrive on high interest rates and
because bankers Will be careful to keep their assets
in absolute control 50 as TO be certain OF the funds
needful for redemption at fixed rate They viii
also endeavOr to keep their bills close at home n
order to facilitate withdrawal
As such issue viii not differ IN appearance
from the present one. 10 which the public has be-
come accustomed the latter Will remain ignorant
Of two important facts. first. that there actually
exists a business necessity for such an expedieat
and second. which OF the banks is availing Itself
OF the relief Consequently, there viii not be
created in the public mind any Uneasiuess as %
general business conditions or as to the financial
standing of any one particular bank. Such meas
would be far reaching and applicable TO TIE
cure Of the periodic scarcity OF funds caused By
legitimate demands for the movement OF crops and
products generally. and likewise Tor that OF any
stringeucy. local or national brought about hy
sporadic conditions Banks IN sections where
money rules so high as not 70 make per cert
and even a AZ per cent tax Drohihitive would
probably very generally and frequently avan then
selves Of the opportunity and make special issues
thereby lowering those high money rates and
bringing about greater prosperity, by making me
DEVELOPMENT OF dormant resources possible, Whicn
high rates forbid. But the additional tax Of per
against misuse. confning the practical uses Of
such issue more especially to the assistance Of ths
tilIers and workers OF the soil. \ toll or % pr
cent on circulation will make it unDrohtaols ever
In an per cent section As only a portion OF ts
national banks would ever make such issue az "
same time It IS impossible TO fOretel what "
pern,anent average aggregate increase OF the tola
circulation might be, under such a law. II Wo'"
constantly vary. according 10 demand EiVias "
what is so much required. ample fsxisH'
without arrangement of the present system.
The measure would be a compromising ealan
when our financial equilibrium becomes as'u.'
which it often is because OF the seograPai'4i y
tent OF our country the variety OF It's resauEes
and the fupetuosity Of its citizens and captains y
Industry The country banks would IN an AA9.
hood make regular use Of this medium 70 az.
the at present. universal borrowing rom -. j,
banks for crop purposes. or for the uo'eu17-'. -
products and livestock. generally. THEREBY tas 'i9
hanks will be relieved from the great strain p
rfodicaIIy put upon them. and they viii De aO''
accommodate legitimate local demands. U
great benefit Of al business interests Al - -.
ties viii participate IN the advantages 70 oe -.
because they will be saved the sharp oeclIl'7' -
sequent on the yearly ef1ux Of money rom -
centres toward the country 50 FAR as lH7 -
trolIer's Office is concerned. such measure -.
occasion little disturbance, being in large Uss''
q matter Of bookkeeping
Much more might he said in favor % tins p''.
but ! cannot do so IN a comm inicatloi' - a.
this II VIII. however, afford me pleasure y -
cuss the subject at length with any one me-
in it. More especially an / DESTROYS that l. -
attract the attention Of those members OF CoNs'ss
whose duty il is TO devise ways and means lo- i.
betterrnent Of financial conditions Ao''' -.
many that we do not lack in circulating ii.7'-
but only in the fexbllity Of the same w 80
sition provides for such in simple. anu -
thorough manner. and without greatly -
10
lust passed through a period OF eN,te 49, loves
yrOsperitv on the amount OF money Ne -
c,ea-Iy that there was TO lack OF II. ~ o-53ssua
win amend the Law so as 70 permit bafAs ~ 10
and v-itbdraw the present currency aeCv.u'1 !1rif
their re0uiremeuts and without mohtll 49, "a
ana nave an government funds deposited w. ths
tforaI banks SO that they may De hNSl ~, thls
yNc-ia rD,Icb good will De accomplished ~ ~. de-