New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-09-03
NEU CURRENCY Plan.
Banker Suggests Putting ont Notes
on Commercial Securities.

In article on Currency Reform in this
months American Banker J. L. RrOwnow
cashier ~ the Farmers and Merchants National
Bank ~ Columbia, Tenn. advocates the establish
rneut n federal depa rtrnent of banking and cur
rency which should have supervision Of furnishing
and maintaining circulation n the requisite elias
ticitv. National hanks would come under the
jurisdiction ~ This department. and the currency
would DO drawn by them ON notes presented 70 the
department. with this scheme in operation Mr.
BronoW believes that an difficulties experienced az
present would be done away with. and the Eugges-
lions made by President Roosevelt IN his message
20 Congress IN 1902 carried out. The details Of
Mr. B-oNnoN plan so forth in his article fol-
low
BY act ~ Congress establish a department Of
the national BANKS. should undertake TO furnish
and maintain circulation adequate 10 supply the
needs or our diversified industries. possessing the
element ~ elasticity"
The act should provide that TITS department he
AUTHORIZED 10 receive notes - national banking as
sociations for sums not exceeding their capital
cured by rleGee OF solvent customer notes for an
amount > pr cent in excess ~ amount of such
note, the soNeucy OF the collateral 10 he certified
20 by ~ least tlnee directors ~ such banking as
sociauon-other u IN oilcers " no may h. directors
period than SIX months. and bearing Interest ~ The
renew on me slbs5itutian OF other solvent notes
as collateral hut Al per cent per annum; that
national banking association he authorized Issue
ISSUED against Tinted states bonds The depart
ment should be charged with The expense n issue.
circulation Pay The expense - maintaining the de
uartufent- The currency should be Identical in
form with that based upon a deposit - bonds. sub
shutting these words. Secured by satisfactory
notes and co,la'erals deposited with the Banking
Department OF The United States
This shOgll also provide for a more fhoTOuE 4
Of the Curreucy's department should he combined
with this. and ing- should he made through
this department n each community 10 the sol
NenCy OF col,srers! notes offered. and. I'm II
iEsoyencles. she right 10 call for other coateTals
The redemption II the notes should he the same
IN notes secured ny BOMBS. The hank would
VI the note aud collateral a. its maturity nv
payment, ard he department would redeem the
circulating NOES.
Ills p,Sn : simple and safe u puts the burden
faclify Coz supplying The demands ~ business.
through and b. which financial system would
receive the clement of elastict,
Tie Interest Ta-e would be egualized and the
supply would Dc always available FOR active sea
There could be 10 financial stringencies under
cal Institutions Banking would be conducted as
usual interior ia ulzs borrowing or redisc0untng
pith financial oentros when money IS plentiful. and
as r,le local demand Increases and rates are marked
I'D IN those centres. with collateral would be
placed with the Banking Department IN sums 10
The per cent charge made by the department.
would be ga tho nature - TAX on circulation and
which would he held 10 cover the expenses u The
Banking Department. together with loss sus-
tanned on ins0lvencies of banks and colaterals.
Under ills plan. It's author believes, money would
De distribu'ed where and when il wanted.
STATE banks ana trust companies would be con-
VerteG INTO EafoLal banks. that the currency
could be Increased readily by six months loans
for the fsi! and water. The derived from the
notes. he estimates would amount 20 about SIS
o0o. 900, which. he believes would meet the running
expenses U! re new department.