The Jersey City news., 1906-05-03
Forcible Arguments On the
Side Of the Fowler Bill
FaVorably Reported By
Banking Committee
OBJECT OF THE LEGISLATION
IT WILL PUT SMALL NOTES AND
PART OF THE GOLD RESERVE
IN CIRCULATION

fayorably by the House Committee on
Banking and Currency, for authorizing
the Secretary of the Treasury to issue
gold certificates in denominations of five
and ten dollars. The smallest gold GER
tifcate now issued is a $40 certificate
The same bill allows the Secretary of
the Treasury to authorize national banks,
by regulation from time to time, to place
in circulation their own SIS notes in great
er amount than one-third their whole
circulation. as they are now restricted.
The object of the legislation is twofold
to put more small notes into circula
tion and to put part of the gold re-
serve into circulation. The latter section,
allowing the banks to circulate more of
their own $5 notes. seems to be in the
nature of an afterthought and was, 1
understand. put in to gain the approval
of Secretary Shaw to the So gold certii-
cate idea, which he does not appreciate
at it's full value for some reason.
While the need for small notes is so
great as to make any provision to meet
it wise, the idea of at the same time in
creasing the gold reserve of the country
by putting gold certificates of small de-
po,,i nat;r,, into cirouIa tinn i, ki1liuor two
birds with one stone. The country now
has more $5 bank notes than it can abb
sorb and keep in use. while the banking
interests demand certain amount in So
denominations which at the same time
can be used as lawful reserve, Bank
notes cannot be used as reserve. In the
committee report some reasons for the
bill are given as follows
eThere were outstanding March 81,
! 1906. silver certificates of the denomina-
ton of So amounting to 1924, ,752,9 ,937, and
only $40. .514,64O of silver certificates of
the denomination Of 50, and $96,T20,272
|
of silver certificates of the denomination
of 81. For the last two denominations
| the demand is most urgent; but they can
only be obtained in sufficient quantities
by cutting up the So silver certificates in
to ones and twos. This is so because
/ the remaining larger denominations of
! $40. $40 and $50, now amounting to
only about $3O,000,000, seldom come into
the Treasury, being held appargstly by
| the State banks, trust companies and
other banking institutions as part of their
reserves. However pressing the demand
| for the ones and twos may be, that for
| the $5 silver certificate is scarcely less
so; therefore we must provide something
to take the place of the hves before we
can cut them up into ones and twos. If
| this demand for So denominations is at
| the same time demand for So denomi-
nations which are lawful reserves, we
must supply such reserve 50 denomina-
tions either by cutting UP the United
States notes into So pieces or by provid-
ing for a S. gold certificate, as your com
mittee has done in this bill.
in the opinion of your committee the
latter course is the proper one to pursue;
.;,,a H. =, -, ,b = . -, Ii = rJgl
certificates in the country we shall in
crease the evident gold reserves of the
country. This is a most desirable result
to KEEP constantly in mind; for we now
have resting upon gold redemption 1885,
100000 Of United States notes, $3.50, ,434,-
S65 of silver certificates and S544, ,666, OCT
of national bank notes, or nearly $780,
000-to say nothing Of the gigantic super
structure of our commercial credits"
Something Of the necessity for notes
Of smaller denominations is shown in
recent statement made by United States
Treasurer Charles RI Treat, who says.
.@The fact is that We have no increase
Of IS denominations in the issue Of ma
tional bank notes. and our supply Of sil-
yer dollars. against which we issue silver
certificate, has been very much depleted,
in comparison with last year. the amount
available today being S7,171 400 as
compared with S15.912.692 year ago,
which shows ss.741 .22s less stock on
hand. thereby diminishing our ability to
furnish the small denominations Of ones,
twos and fives to this amount.
The demand for small denominations
from tine national bank redemption agen-
cv is from 100000 to ssoo,oQ per day.
and We are only able % supply at the
maximum. 100000, # our ability to