The Washington herald., 1906-11-15

The monetary commission Of the Ameri-
can Bankers Association unanimously
agreed late yesterday afternoon on the
outlines Of q plan for emergency bank
note issues. which will be recommended
TO the next session of Congress
The following committee was appointed
to work out the details of the plan and
report back to the commission when il
meets again to-day: A. B. Hepburn. Of
the Chase National Bank, Of New York;
James 3. Forgan, Of the First National
Bank. Of Chicago ard John Perrin, OF the
American National Bank Of indianapolis.
Frank A. Vanderlip, of the National City
Bank of New York, and Charles A. CO.
nant. of the New York Chamber of Com
merce. were made associate members.
The subcommittee was in session until
nearly midnight. They have practically
agreed on the only two points unsettled.
the matter Of a guaranty fund 70 pro-
tect against the issues OF failed banks,
which il was decided should be per
cent OF the issue TO be deposited in the
Treasury; and the limit on the circula-
tioH 10 be issued. which it was agreed
should not exceed in all forms of national
bank circulation the amount of the capi-
tai stock Of the bank issuing g.
VIII Frame Bill.
With these points decided the work OF
the commission will be embodied in
bill prepared by q committee appointed
for the purpose. and submitted to the
commission to-day for approval The hll
is based on these princinIeS
It is undesirable for any national bank
TO be permitted 90 Issue circulation in ex-
cess OF IFS unmpaived capital
In addition to the 62l2 outstanding bond
secured circulation the banks now have,
they should be permitted IN issue an
emergency circulation equal to p per
cent Of their mimpaired capital A tax
Of ~ per cent is imposed on this addi-
JionaI circulation.
y this issue proved insufficient. banks
may issue an additional I2l5 per cent, or
whatever amount viii bring the total TO
sum equal TO the banks capital A
tax OF 8 per cent is imposed on the eX-
cess over the = per cent.
Must Be Year old.
National banks allowed this privilege
must have been in existence at least one
wear. and have a surplus Of not less than
- per cent
The operation Of the law is to be un-
der the Secretary Of the Treasury and
the Comptroller of the Currency.
A reserve against the credit currency
must be maintained. A fund will be
created. to which each bank must con
tribute per cent Of its emergency issue
to protect tine credit notes in circulation.
Redemption points viii be established
10. facilitate the Withdrawal from circula-
tion OF the emergency notes.
The bin recommends the repeal OF the
present redemption act limiting the re-
remption OF national bank notes to s., ,0J0,-
TO a month.
The afternoon session Of the commission
was given over to an interesting debate
It seemed TO be the object OF those present
"a provide for circulation which should
be strictly an emergency circulation, in
fact as well as in name. and which would
afford no inducement to banks 10 issue il
merely to gain profit
Guard Against Speculation.
The judgment of the members Of the
commission was that they had Insured
against any purely speculative issues. Of
bank notes
The series OF proposals. II is confidently
believed are such that they VIII recon-
mend themselves to the public at large,
TO Congress and TO bankers. II is be