The Montgomery advertiser., 1906-11-16
REFORM PLAN
 MADE PUBLIC Bankers Complete De-
 Alterations. SUGGEST SIX PRINCIPLES Believe They Will Solve the Cur
 rency Question.
Conclusions Reached by FiBaneiera UHanImOusIy Endorsed as a Curative for Present Hils--
 Final Adjournment.

washington, Nov 15.-The plan of currency reform agreed upon bv the | committees of the American Bankers | Association and the New York Cham Der of Commerce. upon which they have been at work for four days was made l public today.
 The committee was made up of rep- resentative financial men from all over the United States, with President A. B. 1 Hepburn of the Chase National Bank, of New York. as chairman.
 The Chamber of Commerce. comuis- | sion was composed of Frank A. Van- derlip. of the National City Bank of New York. and Charles A. Conant of the Morton Trust Company. 1 The conclusions reached were unan- ,imous and will be submitted in the l form of q report to the members of I the American Bankers Association Be- l fore adjourning today, q committee was appointed, consisting of MT. Hepburn 1 James B. Pagan of Chicago. and John L. Hamilton of HoOpston. Ills, to whom was intrusted the drafting of bin for presentation to Congress which will embody the Ideas of the Bankcrsi Committee.
 The plan agreed upon contemplatsI ! the issue under Government super | vision, of credit bank notes by nations al banks equal to 70 per cent. of their bond secured circulation. subject to q
 
 automatic increase of credit notes an. der certain conditions; a further issue | of credit notes equal to 12 1-3 per cent. | of banks capital at tax of per | cent. per annum; tho establishment oi | guarantee fund for the redemption oi credit notes of failed banks; provisios for active daily redemption Of credil notes; repeating the existing law lin! | lting the retirement of bond secured | notes to s3,0O0,0O0 per month; and the | deposit of all public moneys above reasonable working balances in nation al banks without collateral security on which the banks are to pay 2 per | cent.
 opinion is Unanlmous. l En the report, the statement Is made that thero tA 1itiantmttvs ss eptakSn h&f l changes in the existing hank note sys. tenn are imperatiyeiy required and tint | the present volume Of bank notes K wholly unresponsive to the demana8 ] of commerce It does not. the report ] says. expand with the need for eur- rency In the crop moving period. cans- 1 Ing stringency, nor contract when tho uses Tor currency are less extensive, causing redundancy. Banks are un- der the necessity of parting with their | reserve money to supply the demand, for currency at certain seasons, al. though that demand would be quite as we'll satisfied if banks could supply
 
 their reserve and causing a contrae. tion injurious to business
 To meet this situation the national banking act, the report says, should he so altered as to permit, under ample safeguards, the issue of credit bank notes which would automatically ad- just the volume to the demands Tor currency.
 The report sets out a series or prin- ciples which are believed to underlia correct solution of the currency aues- ton and says:
 We therefore unanimously recou- mend the enactment Into law of the following:
 Six Recommendations.
 First, credit bank nutes.--Any na- tiOnal bank having been actively doing business for one year. and having surplus fund equal to twenty per cent of its capital, shall have authority to Issue credit notes as follows subject to the rules and regulations to be de- termined by tho comptroller of the cur rency: "An amount equal to forty per cent of its bond secured circulation, subject to tax rate Tne rate of two and one-half per cent per annum upon the average amount outstanding; pro- vided, that if at any tim0 in the futuro the present proportion of the total eap- itaiization of all national banks shall diminish, then the nutnorized issue or credit notes shall be increased to a correspondngly greater per centage of it's bond secured notes A further amount equal to twelve and one-half per cent of its capital subject to a tax of at the rate of tive per cent per annum upon the average amount out standing, in excess of the amount first mentioned. The total or credit notes and bond secured notes shall not ex- ceed the capital
 
 serves shall be carried against credit notes as are now required by law to be carried against deposits.
 Third, guaranty fund.--The taxes provided upon credit notes shall be paid in gold to the Treasurer Of the United States and shall constitute a guaranty fund for tho redemption of notes of failed banks and for the pay ment of the expenses of printing and tho cost of redemption. In order that the guaranty fund may be ample. any bank making application to take out credit notes for issue shall deposit at the treasury in gold an amount equnI to five per cent thereon. The unused portion shall be an Asset of the con tributing banks respectively, and shall be refunded from time to time when this may be done without reducing tie guaranty fund below an amount equal to five per cent of the credit notes talk. en out.
 Cities for Redemption.
 Fourth-Redemption: The cohptrol- Ter shall designate numerous redemp- tion cities conveniently located in the various parts of tho country
 Fifth--The provision of existing law limiting the retirement of bond secured notes to S3,0OO,oO0 per month shall be repealed.
 sixth-All public moneys above a reasonable balance shall ba currently deposited from day to day iu national banks without requiring collateral ss- curlty or special guaranty therefor, but In no case shall the balance carried with any bank exceed 90 per cent of the capital thereof. All banks receiving such public moneys on deposit shall pay into the United states Treasury interest thereon at the rate of per cent per annum,