Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-11-14
MAY ADJOURN TO-DAY
Satisfactory Progress Made by
Currency Commission.
THE ESSENTIAL PRINCIPLES
Kind of Security to Be Accepted by
Treasury.
THE EMERGENCY CIRCULATION
One Plan Agreed Upon and Another
Yet to Be Determined
Credit Of Banks.
HE EMERGENCY CIRCULATION

The currency commission was in session
for three hours today, and made such
progress that many of the members hope
that before the day Is over they will be able
to adjourn.
There are two essential principles in con-
nection with the work of issuing so-called
elastic currency. one of which has been
agreed upon by the commission, and the
other Is yet to be determined. The first
that has been settled relates to the kind Of
security to be accepted by the treasury as
a guarantee for the redemption of the
emergency circulation.
The commission decided at Its meeting
late yesterday afternoon that 1t would req
ommend that the credit Of the bank shall
be accepted as such security instead Of
having approved securities put up with
designated repositories for that purpose
The legislative committee of the American
Bankers Association when In session
recently in st. Louis decided in favor Of
q plan gy which securities were to be put
up for the emergency circulation. That
plan was not favored by the members of
the commission representing the chamber
Of commerce of New York. nor by other
members representing the American Bank
ers Association.
Report Caused Discussion.
There was a great deal of discussion over
that feature Of the report, and during the
earlier session yesterday it seemed that 1t
would not be possible for the members to
get together on any recommendation. Dur
ing the afternoon. however, there was some
plain talk in the meeting and several mem
bers expressed their view that It would be
impossible for them to make any prog
ress unless concessions were made. Later
debate resulted in vote on q resolution
providing that the credit of the banks shall
be the basis of security for the emergency
notes to be issued.
When the commission met this morn
ing the chief business before It was to
agree upon the tax that should be charged
by the government against the issuance Of
emergency circulation. The American
Bankers Association had favored a uni
form tax OF 3 per cent, and the chamber
of commerce a graduated tax of from to
. per cent the amount to be increased
as the emergency circulation Of a bank
should be enlarged. By that method it
was argued there would be an incentive
on the part of banks to keep the amount
OF such circulation at as low point as
possible. and would prevent anything Of
the nature of imitation
subcommittee consisting of Mr.. Frank
A. Vanderlip. Mr.. Sol Wexler and Mr..
James B. Forgan was appointed to con-
entire matter of the disposition to be made
of the tax fund to be accumulated in the
Treasury Department. During the meeting
this morning the subcommittee made re-
port. but it was not acceptable to, the com
mission. and the subcommittee was in
structed to make modification of. Its
plan. The subcommittee had not reported
when the commission adjourned at 1:30
o'clock for luncheon. but It Is believed that
before the day is over it will be able to
report and that its report will be adopted
in some form.
A Graduated Tax.
The amount Of the tax, in the Judgment
Of several Of the commission. will be grad
uated according to the amount Of circula-
ton asked for by bank and will range
somewhere from 2 to 8 per cent. There
was talk earlier in the day of having it
from 2 to 8 per cent, increasing the tax q
quarter Of 1 per cent for increa sing
amounts Of circulation, so that the mini
mum circulation would be taxed per cent
and each additional amount would be one
quarter Of per cent higher until the maxi
mum Of 3 per cent should be reached.
There has also been a practical agreement
that the tax shall be kept in a separate
fund in the treasury as a guarantee for the
payment of the notes Of any banks that
may become bankrupt. The question that
was disturbing the subcommittee when 1t
adjourned for luncheon today Is what fund
COulO De CS1licu upon lOE ING FeuempllOn OF
the notes Of bank that might fail before
the plan has been in operation long enough
to permit the accumulation of fund from
the tax receipts. 80
There is far from feeling OF confidence
on the part of all the members Of the COM
mission that the plan Will be approved by
Congress without very considerable discus
sion. Almost to a man the members believe
that their general plan will commend itself
to Congress and they have the backing of
Secretary Shaw and Of Mr.. Ridgley, con-
troller Of the currency. Both the Secretary
and the controller have been in session with
the commission much Of the time they have
been in this city. Chairman Fowler Of the
House committee on banking and currency
was also with the commission for a time.
Bankers Plan Abandoned.
The commission has abandoned the plan
of the legislative committee of the Ameri-
can Bankers Association for the appoint
ment of q commission by the PRECEDENT, to
decide upon the necessity for the issuance
of emergency currency by any bank. The
chamber of commerce representatives were
opposed to that plan. as were some of the
representatives Of the American Bankers
Association They favored a plan by
which the issuance OF emergency currency
should be upon some automatic plan. al
lowing the banks themselves to decide upon
the necessity for the issuance Of the cur
rency; and that, in a general way, is the
plan that has been decided upon.
The chamber of commerce formerly. ap-
proved a plan for the establishment of q
central bank to take care Of this emergency
circulation, but that, too, has been ahan-