The Washington herald., 1906-11-15

Heved, further, that they viii provide in
a safe and simple manner the fiexibiHty
necessary in the country's money supply.
The commission first adopted resolutions
declaring for currency reform. and then
formulated a series OF principles TO govern
il In the detail preparation Of bill, which
viii later be prepared. II was the aim 10
present the matter to the public in the
form OF a simple set Of governing princI-
pies, so that II would be readily under
stood
Bank Note Same as Deposit.
It has been determined. after discussion.
as one of the first principles 20 be borne
in mind. that a bank note is essentially
the same as deposit on demand. That
Is. the man who deposits 81 .0oO on demand
and takes a certificate for it holds the
same claim against the institution as the
man who takes its bank note. Each con-
stitutes a demand liability
Il was the view Of the commission that
the privilege Of issuing credit currency
should be extended to all national banks
on the same terms. in some fixed ratio 10
the bOnd-Secured circulation. and this "a
ito, it was decided after much discussion,
should be limited to the amount of capital
stock.
Il was further agreed that the burden Of
the expense Of operating the plan Of issue
and redemption OF this circulation shall be
borne by the banks and not by the gov
ernment.
As It has been agreed that a bank note
is to be regarded as Of the same character
as a certificate Of deposit il will be pro-
vided that the regular reserve must be
held against issues of the credit circuia-
ton: that is. = per cent in central re-
serve cities and il per cent in others. This
reserve IS 60 be held in legal tenders, as
the present reserve is held
plan Level Tax.
A level tax of probably per cent will
be imposed on the credit issues. 10 was
apparent, likewise. that "a guarantee fund
to meet the expenses OF operating the plan
would nave TO De provided, all the banks
which come within the new privilege con-
Jributing fixed percentage 10 this fund.
From this. the expenses of printing, isso-
ing. redemption, and circulation OF failed
banks viii be guaranteed. Will be paid.
The fund is 10 be held and administered
by the government
The reserve which viii be required 10
be held against the issues of credit cir
culation will serve in lieu of segregated
assets. The circulation viii thus become
a general lien on assets IL viii have the
same rights as other claims against the
bank. In case OF a bank failure, the as
sets would thus be shared among the
creditors. the circulation taking its
chances with the claims Of dspOsitOrs
and If there be a deficiency, the guar
antee fund contributed by all the banks
would make Il up and assure the imme-
dlate par redemption OF all circulation.
Two Ideas Eliminated.
Prior TO the meeting yesterday after
noon the scheme of "A central bank. TO be
established in Washington, TO take care
OF the emergency circulation. and the
plan Of the legislative committee pre-
sented at ST., Louis had been eliminated
from the discussions. That threw the
formulating Of a scheme OF currency re-
reform back upon simpler principles. and
it was decided 10 make the credit of the
bank security for the issue OF emergency
currency. and a scheme OF taxation
worked out which should control the
amount Of such currency 10 be issued and
keep It down 10 the limits OF actual
necessity.
Charles NJ Fowler. chairman OF the
Committee on Banking and Currency OF
the House Of Representative, and Comp
troller of the Currency Ridgley attend
ed the sessions yesterday Frank A Van
derlip, vice president OF the National
City Bank, OF New York, who has been
attending the meetings as a representa-
tive OF the chamber Of commerce, left
for his home late last night.
The commission VIII meet this morn
Ing when tie principles submitted 20 the
subcommittee viii be acted uDon and
adopted The complete plans. as they are
to be taken before Congress. VIII then be
given 10 the public