New-York tribune., 1906-11-14
BANKNOTE CIRCULATIOy
Mr.. Peabody Urges Repeal Of La
of 1882 to Giue Banks Better Chanc

To the Editor OF The Tribune.
Sir: The action OF the New York Chamber
Commerce at its meeting November : In lcS
ing the entire report OF it's COMMITTEES On @,
nerce seemed somewhat inconsistent. inaznz=
as the committee had recommended two quits $
verse plans.
Their first recommendation toward securing I
flexible and elastic banxnote circulation- wss
create a great central bank OF issue similar
those OF Germany or France.
The alternative propositions were:
First-To allow national banks with bont-secg;s
circulation equal to half their capital Issus
cured notes TO the amount OF So per cent Of tas
capital: these notes to be subject 70 taxation ga
uated from TO per cent per annun. accor>'
to ths volume Issued.
Two-To repeal the law restricting the retrsns
of national bank notes TO 100000 a month.
Three-To make future issues OF Unitsd szz
bonds unavailable as basis for national "a
notes.
Four-To require that ell money IN the genz
fund OF the treasury. anove a reasonaols wo:E=
balance. be deposited IN national banks.
The first motion 10 consider these recommsra
tons separately was strongly opposed by the &C
mittee. which urged that the report be adoptss I
O whole.
Ths chairman OF the committee said that hs r
central bank. but the committee was not wiz
TO advise such action at present
bank was best explained BY the chairman 0: y
Chamber OF Commerce COMMITTEES fnancs. s-l
declared his belief IN the central bank Tor ISL
emergency currency. and for gradually Working y
country out OF the present system OF issuing 93s
notes, as well as for securing system IA ~
fornity with and good those OF E-sx.
France and Germany
A prominent member took exception 10 The y,
ton OF ths alternate plan that future issrs
United States bonds should not be available .
OF the COMMITTEES replied that the eornn1z
deemed Il unwise TO increase tbs infexios vo--,
but wished TO provide that the flexible amount
oanknotes might be Increased IN the fall an'
retired IN the spring.
After adopting the entirs report. including 5]
plan OF the central bank and the alternative y
posals the Chamber OF CoDmercs voted 70 ~
ttnue It's committee with authority 20 CONFER "
Congress such modification OF existing laws as =
conference might seem advisable" a.
My own strong cOnvtcaton which expressc-
the meeting Is that the most important Tecr.1.s
daticn IS THAT for the repeal OF the law a
" hich has prevented elasticity by RESTRICTING
retirement OF national bank notes and wor.1
no less hindrance TO withdrawal OF any new =
OF emergency currency.
Were the banks as prior TO 1851 unreStncus.
the retirement Of their notes they would does. -
upon occasion borrow or procure United -
bonds for the ISSUE Of additional notes, wnica
could return when the demand should csAss
Ought We not TO give the national oanAs y. - !
chance. by restoring 10 them the prtvlesss r
Such simple legislation should readily be srss
by Congress, while mora radical changes ~~
fall OF enactment 4
This would at least be a safe experinen.~
anord temporary relief. giving time 1oI r.S-a
consideration and development of mors r~
'' ''''' Henry W PEAso0' !
Boston. Nov. l2 1906