New-York tribune., 1907-09-07
roR FINANCIAL RELIEF.
EMERGENCY BANKNOTES'
n.oosurcr Treat Submits Plan to
peunsgLUania Bankers.

,- Sent 6-Betore the Pennsylvania
-, association here to-day. Charles H
pam rreas,,rer of the United States. submitted
e- the issue of an emergency bank cur
birI, he said embraced an amendment
~. ,,reseut national bank act. permitting
,stioral bank that has not less lhan ~
,+ of its capital invested in United states
ID to take out emergency banknote cur
- ,o an extent not exceeding 10 per cent OF
- oroount invested in United States bonos'
r.. these emergency notes be similar IN 10TH
= design to the present national bank notes.
81 the form which now reads this NOTE Is
o3 hv United States bonds deposited with
.Lo Treasurer Of the United States snail pe
x-ad 10 this note is secured by bonds ana
,ranteed by the United States; that 'he
iss,e shall be made on five six and nine months
ss+ing from August 1 or September l. OF any
o+ber date according to the needs OF the crop
-.o,5nr reriod: that the collateral or security
Cor these emergency banknote issues shall be'
,f desired in other than United States bonds
which means that the issue shall be secured by
s,a.e or municipal bonds. according TO the
standard Of the states of New York and Massa-
csusetts for savings bank investments These
sec,,rties TO be accepted at 40 per cent of their
market value and the United States govern
,nent 10 guarantee the payment and redemption
of all notes so issued at a charge of / per cent
The price at which state and municipal oonds
are TO be received. 40 per cent Of their market
value which is about the percentage OF credlI
given by bank clearing house associations. ana
at the same time will safeguard the market
price of United States bonds the investment IN
which must always be kent sacredly In VieW' 10
protect the large investment now in use for
banking and also for their future supremacy
in the security market. The acceptance Of other
than United States bonds makes them more
easily attainable for banking purposes. They
can be easily secured from private individuals
ing ] per cent
The matter of working out the details is OF
little moment # the principle is recognized.
..rbe national government now has a monop-
DIV of our currency. Therefore. it should not
withhold from the people this inestimable ser
vice, when good collateral approved by bankers
can be given for the currency furnished
Dr. Edwin f Meade, director of the evening
school of accounts and finances Of the CniVer-
sity Of Pennsylvania. made attack on New
York banks and banking this evening Depart
ing from a subject TO which he had been as
signed. DR.. Meade devoted two hours 10 speak
ing on "The Place Of New York City in Cur
rency Reform" In part, DR.. Meade said:
The New York banks, although they know
that they will be called upon to furnish cash for
crop moving purposes. making no adequate effort
TO prepare for this special demand In spite of
the feet that the deposits of the country banks
IN New York usually approximate the reserve
Of the New York banks. these funds are loaned
out TO the limit and the surplus reserve over
the 25 per cent requirement is reduced to the
narrowest> because the most profitable margin
When. therefore, the demand for currency comes,
IL finds insufficient funds available for its salts
faction, and loans must be called and interest
rates advanced until serious financial disaster
often threatens"
In closing, DR.. Meade said: Asset currency is
plan of note issue SO radically defective that
II stands little chance of adoption a great
central bank, while desirable, does not readily
accommodate itself TO the American system Of
Independent banks, and would be also opposed
by that numerous army of citizens who are
nlassed under the army of radicalism. The
policy Of making the Secretary Of the Treasury
the guardian agency OF the New York money
market is cumbersome and liable TO serious
blunder and even grave suspicion of improper
Influence