Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-11-15
SYSTEM OF FINANCE
Existing Method Declared to
Be Inadequate.
NEW CIRCULATING MEDIUM
One Is Needed That Would Be Capa-
BILE of Expansion.
STATEMENT BY MR.. W. v. cox
Member of Currency Commission Of
the American Bankers Associa-
ton Explains His Views.
STATEMENT BY MR.. w. v. cox

|
| financial markets of this country Is said
| to be likely to give more point to the con-
tention which has been made for several
years past by bankers and Others who
| have given attention to the system OF
finance that, as far at least as the means
of supplying circulating medium to be
used in handling current business is con-
cerned the existing system or method is
entirely inadequate.
What is needed, it is claimed is a cir
culating medium capable of being ex-
banded to supply the wants that may
arise, and when such need no longer ex-
lists that at once corresponding con-
traction should take place.
Owing to the Importance of this subject.
as we'll also to the strong probability that
Congress at it's coming session IS likely to
devote good deal If attention to financial
matters the bankers and others of this
city are taking a deep interest in the cur
rent discussion. Perhaps there is no one
who takes a livel:er interest in the plans
proposed for securing for this country
safe and at the same time elastic currency
system than Mr. w. V. Cox the president
of the Bankers Association of this city.
Mr.. Cox is member of the currency
commission of the American Bankers AS
ISOLATION whose plan for a credit cur
d
few weeks ago in Atlantic City, and which
will be considered by Congress.
Account of the Plan.
In speaking of the subject to represent
alive of The Star Mr.. Cox followed the
same lines as those of his late address be-
for the Association of Bank Clerks in this
city. and gave an account Of the credit
currency plan which he believes is the
| col, - "a
When the Am Ei"-
ton met in this city two years ago. Mr..
| Cox said, "a legislative committee was
appointed. In drafting measure we
began discussing the subject. the papers
exploited it, so that when the st. Louis
convention met it became currency re-
form meeting. No plan could be agreed
on, and a commission was appointed,
which met here about year ago. Every
member had plan in his head, and
sometimes one or two in his pocket.
There was the clearance currency plan
advocated by the legislative committee of
| the association. The Central Bank plan
was presented and strongly Endorsed and
! actively advocated by The Chamber of
! Commerce of New York.
ITO reconcile and use the provision and
plans suggested, many of which had most
commendable features, seemed hopeless.
Matter of Agreement.
mo one believed 1t possible to agree to
any MEASURE however meritorious it
might be. A unanimous agreement, how
ever, was reached Let me tell you how
| it was made possible
We first agreed on certain principles,
and the rest was easy and logical.
| 'First-We affirmed our belief in credit
| currency.
"Second-That bank note is the same
| in principle as a demand bank deposit.
'Third-Creation by tax of guaranty
fund lodged with the government and
ample to redeem all notes of failed banks.
''Fourth-Reserve against a bank note.
| same as against bank deposits.
"Fifth-Active daily redemption at CEN
| trail cities of all notes. practically same
as checks.
Based on these premises which we
| believe to be sound, we recommended:
| ANY national bank having been active
| ly doing business for one year and having
| a surplus fund equal to 90 per cent of its
| capital shall have authority to issue credit
| notes as follows, subject to the rules and
| regulations to be determined by the con-
| troler of the currency:
| "An amount equal to 40 per cent of its
bond-secured circulation, but not to eX
| coed % per cent of it's capital, subject to
| a tax at the rate Of 2la per cent per an
mum upon the average amount outstand
| ng.
"a further amount equal to 1917 per
| cent of it's capital subject to a tax at the
| rate of 8 per cent per annum upon the
| average amount outstanding in excess of
| the amount first mentioned.
The total of credit notes and bondse-
cured notes shall not exceed the capital.
AS to Reserves.
1.-THE same reserves shall be carried
against credit notes as are now required
by law to be carried against deposits.
The taxes provided upon credit notes
shall be paid in gold to the treasurer Of
the United States, and shall constitutes
guaranty fund for the redemption, of notes
of failed banks, and for the payment of
the expenses of printing and the cost of
redemption. In order that the guaranty
| fund may be ample from the beginning
any bank making application to take out
credit notes for issue shall deposit with
the treasurer of the United States in gold
an amount equal to per cent thereof The
unused portion of this initial payment
shall be an asset of the contributing
banks respectively, and shall be refunded
from time to time when this may be done
without reducing the guaranty fund be-
low an amount equal to per cent of the
credit notes taken out
Numerous Redemption Cities.
THE controller of the currency shall
designate numerous redemption cities con-
veniently located in the various parts of
the country. Through the agency of the
| banks in such cities adequate facilities
shall be provided for active daily redemp-
| ion of credit notes.
The provision of existing law limiting
| the retirement of bond-secured notes to
| So, OO0,OO per month sha,. be repealed.
"All public moneys above a reasonable
| working balance, from whatever source
derived, shall be currently deposited from
day to day in national .anks without re-
quiring collateral security or special guar
anty therefor, but in no case shall the
balance carried with any bank exceed %
per cent of the capital.
IAN banks receiving such public moneys
on deposit shall pay into the United
States Treasury interest thereon at the
rate of per cent per annum."
Bestowal Of Gifts.
| meeting Of the Ladies' Aid Society Of
the German Orphan Asylum. in Anacos-