New-York tribune., 1906-11-16
From The Tribune Rursan

From The Tribune BureauI
washington, Nov. 15.-Unanimous agreement
was reached by the currency commission of the
American Bankers Association to-day on a plan
Tor emergency banknote issues to be recon-
mended to Congress in December as a basis for
legislation to meet the demand for an elastic
currency Some of the features of the plan of
the New York Chamber of Commerce for an
issue Of an emergency circulation were adopted
notably the system of credit notes issues and the
deposit OF public money above a reasonable
working balance in national banks In other re-
Spects the proposed bill is original and the
whole represents the combined thought and
study of nearly u score of leading bankers act
ing ofhc1alIy for about eight thousand financial
institutions in all parts of the country.
The unanimity with which the agreement was
reached augurs we'll for the enactment Of the
plan recommended at the approaching session of
congress- and the members OF the commission
after adjournment to-day expressed the conf
dent hope that Congress VIII give the desired re-
lief which, they say. is much in the interest
of the public it is TO insure the business Of
banking against stringency due TO an ineIastic
currency.
Secretary Shaw and Controller Ridgely who
have been present at meetings of the commits
sion, were informed this afternoon of the basis
or agreement reached, and the principal feat
ures of the plan adopted seem to meet the ap-
proval OF the, fiscal officers Of the government
who have more than once urged reform in the
currency laws to meet modern conditions
ISSUE OF CREDIT BANK MOTHS.
The plan agreed upon contemplates the issue
under government supervision of credit bank
notes by national banks equal to 40 per cent of
their bond secured circulation, subject to a tax
Of DIa +{o II,
crease of credit notes under certain conditions:
further issue of credit notes equal to 12Ia per
cent of banks capital, at a tax of per cent
per annum: the establishment OF a guarantee
fund for the redemption Of credit notes OF failed
banks; provision for active daily redemption OF
credit notes; repeating existing law limiting the
retirement of bond secured notes to SSO0OOOO
a month: and the deposit of all public moneys
above reasonable working balances in national
banks without collateral security. on which the
banks are to pay per cent
In the report TO the members OF the American
Bankers Association, which is signed by the
fifteen members who have been attending the
meetings. the statement is made that there is
unanimity of opinion that changes in the ex-
listing banknote system are imperatively re-
uuired, and that the present volume OF bank
notes is wholly unresponsive to the demands OF
commerce. II does not, tne report says SApdAIl
with the need for currency in the crop moving
period-causing stringency-nor contract when
the usese for currency are less extensive. caus-
ing redundancy. Banks are under 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 sat
isAed 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 Banking
act the report says. should be so altered as 10
hermit under ample safeguards the issue or
credit banknotes which would automatically ad-
lust the volume 10 the demands for currency
Sucb notes can be issued under provisions which
will insure absolute safety 70 the noteholder
and an ample supply of currency to the pubic.
THE COMMITTEES REPORT.
The report gives series of principles which
we're agreed on by the bankers. and which. they
baIieve underie "a correct solution of the cur
rencv problem so far as it relates 10 the issue
Of a banknote currency. The report says:
We therefore unanimously recommend the en-
octrrant jnto Law of the following, having the
firm conviction that thereby VIII De proNloeu d
banLnote currency safe beyond peradventure
and automatically varying IN volume as neeuS
of commerce vary. - ...,
I CREDIT BANKNOTES.-Any nationaI
hank having been actively doing business TOT
one year and having a surplus 1und equaI W
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