Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-11-15
CONCLUDES IT'S PLAN
CURRENCY COMMISSION MEETS
DEMAND FOR ELASTIC CURRENCY

The currency commission today concluded
It's work of framing plan for the issuance
of an emergency circulation to meet the
long-taIked-of demand for an elastic cur
rency.
The commission after practically conclud-
ing its work during its morning session
today authorized a committee to draw up
a statement of the purposes that are
sought in the proposed legislation and the
plan that has been decided upon. This
plan was outlined in The Star yesterday
afternoon. At that time the commission
had decided that the emergency currency
should be guaranteed by the credit of the
banks, together with special guaranty
fund to be accumulated from the tax to
be paid for the issuance of such currency.
When the commission adjourned yesterday
practically the only question that remained
open related to a method for providing an
Immediate fund for the payment of notes
Of failed banks before the system shall be
In operation long enough to provide FUND
from the tax" receipts. This problem was
disposed of this morning by providing for
an additional assessment of per cent upon
the amount of emergency circulation. to be
held in the redemption fund until 1t has
grown large enough from the graduated tax
to be placed upon the emergency circula-
ton.
When the fund from this regular and
permanent source shall grow large enough
to care for the notes of failed banks the
additional assessment of per cent Is to
be paid back to the banks that contributed
It.
Regarded as Safeguards.
The bankers think they have provided
safeguards against the issuance of too
much emergency currency. or the keeping
of such currency in circulation too long, by
providing a progressive tax from about
to per cent. They claim that such a grad
uated tax will discourage the taking out of
a large circulation by any bank, as the
more they take out the greater percentage
will have to be paid.
While the bankers call the assessment to
be made by the government upon the emer-
gency circulation they take out a tax" 1t
does not produce any revenue for the gov
eminent, but merely forms a fund for the
purposes of the banks in guaranteeing the
validity of their circulation. and this guar
enty fund will at all times belong to t
= banks themselves, although it would be
held by the government, for the purposes
for which 1t is provided. practically in per-
petuity.
banks for the issuance of emergency cur
rency does not provide any revenue for the
government, and the banks do not have to
put up any security for such issues as they
have to do in the issuance of national bank
notes. They cannot Issue bank notes in
excess of the par value of the securities
deposited in the treasury by them. but
they will be able to issue emergency cur
rency without putting up security of any
kind.
Plan Of the New Workers..
The plan agreed upon is practically
that which has been advocated by the
chamber of commerce of New York. 1t
provides an automatic. plan for the issuance
of such circulation.
The plan of the legislative committee of
the American Bankers Association con-
templated a supervision of such issues by
government commission which would be
the judge of the condition of stringency
that would warrant the issuance of emer-
gency circulation. But under the plan
adopted by the bankers. the banks them
solves will be the judges of such necessity
The members OF the commission again
met at 2:30 this afternoon to finally go
over the report of the committee that has
drawn up statement of their plan for an
emergency currency, and upon adjourning
their afternoon session they will make this
statement public.