Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-11-16
|pLAN OF Commission
Recommendations in Interest of
Elastic Currency.
FOR ACTION OF CONGRESS
Issue Under Government Supervision
of Credit Bank Notes.
DETAILS OF PROPOSED SYSTEM
Changes in National Bank Act to
Meet Suggested Conditions
Provision for Refund.
DETAILS OF PROPOSED SYSTEM

The currency commission concluded its
work last evening and gave out state
ment of its recommendations. which will go
to Congress, favoring a plan for securing
an elastic currency
While there was a wide divergence of
views among the members of the commits
sion as to the details of the plan as
finally adopted it is stated that it has
the unanimous approval of all the mem
bers The commission last evening gave out
statement of what they have accom-
plisted. Their reference to tax indi-
Gates the amount of their contribution to
redemption fund for the payment OF
notes of failed banks and does not indi-
cate tax in the sense of revenue to the
government
The plan agreed upon by the two commit
tees contemplates the issue under govern
ment supervision of credit bank notes by
national banks equal to 40 per cent of their
bond secured circulation, subject to tax
of 2A per cent per annum; an AUTOMATIC
increase of credit notes under certain con-
ditions; further issue of credit notes equal
to 121A per cent of bank 5 capital at a tax
of per cent per annum; the establishment
of guarantee fund for the redemption of
credit notes of failed banks; provision for
active daily redemption of credit notes; re-
pealing existing law limiting the retirement
of bond-secured notes to S3000GO0 per
month, ana the deposit all puDllc moneys
above reasonable working balances in ma
tional banks without collateral security, on
which the banks pay per cent.
Changes Imperatively Required.
In the report addressed to the members of
the American Bankers Association, which
Is signed by the fifteen members who have
been daily attending the meetings the
statement is made that there is unanimty
of opinion that changes in the existing bank
note system are imperatively required, and
that the present volume of bank notes is
wholly unresIonsive to the demands of
commerce. 1t does not, the report says, eX-s
crop moving period-causing stringency--
nor contract when the uses for currency
are less eXtensive-causing redundancy.
Banks are under the necessity of parting
with their reserve money to supply the de-
mapd for currency at certain seasons, al
though that demand would be quite well
satisfied if banks could supply their credit
notes, instead of depicting their reserve
and causing a contraction injurious to
business.
To meet this situation the national bank
ing act, the report says, should be SO al
tered as to permit under ample safeguards
the issue of credit bank notes, which would
automatically adjust the volume to the de-
mands for currency. Such notes can be Is
sued under provisions which will insure alb
solute safety TO the note holder and an
ample supply of currency to the public.
The report/sets out a series of principles
which were agreedeupon by the bankers,
and which they believe underly "a correct
solution of the currency problem SO far
as It relates to the issue of bank note
currency.