Omaha daily bee., 1907-11-25

NEW LAWS PROF. I'd
T.
Many Suggestions Are Ma, Z. :
Changes in Financial syste S,$s.
PLEA FOR BIG CENTRAL b. ~
Mr.. Hansbrough Has Bill for Institu-
ton Like Bank of France.
RIDGELEY FAvoRs SUCH MOVE
Claim that Chance to Rediscount
Paper Will Prevent Flurries.
R1DGEIEY FAvoRs SUCH MOVE
PLANS FOR ASSET CURRENCY
Proposition of National Bankers
Association WIN Come to Front
Mr.. Fowler Has Credit Cur
rency Bill.

rencY Bill.
WARRINGTON. Nov. 24-Details Of many
new projects for improving the currency
are being submitted to the president and
Secretary Cortelyou, and are receiving such
attention as the other exgencies Of the
financial situation permit Secretary Cor
telyou Is good listener and usually di-
gests quickly essential points Of the vari-
Gus plans which are submitted to him.
Measures relating directly to the currency
which are being discussed among bankers
and incoming members Of congress may be
roughly grouped under four heads-a cen
tral bank Of issue, a central organization
OF the existing national banks, the issue
OF additional ccrculation against various
classes OF bonds other than United States
bonds, and the issue of circulation upon
general assets with the security of guar
anty fund The project of a central bank,
based upon the general outlines OF the
Bank OF France or the Imperial Bank Of
Germany. has apparently been attracting
more attention of late than at any previous
time in recent years. Senator Hansbrough
of North Dakota, who is member Of the
finance committee. has announced that he
will Introduce a bill for such an institu-
tion. Mr. Wexler, vice president of the
whitney Central National bank Of New Or
leans. Is openly in favor OF central bank
and says that the New Orleans press,
taught by the strain Of the cotton situation,
Is generally with him.
Plea for Central Bank.
Those who favor a central bank point to
the recent crisis as the best evidence of
the aid which It could have afforded had
It been In operation. Their view is that
the national banks would have been able
TO redlsoount their paper at such an insti-
tuition and obtain It's notes to any amount
necessary TO relieve the strain. It is con-
sidsred somewhat significant in some quar-
ters that Mr.. Ridgeley, the comptroller Of
the currency, has Just declared for a CEN
trail bank OF issue after previous reports
recommended only general credit cur
rency for the existing banks. The utter
ances Of Mr. Ridgeley are not however
considered TO commit the administration
since Treasurer Treat has a different plan
which he is advocating whenever he is in
vited to deliver public address on the
subject
difference OF Opinion.
1t is so long since central bank existed
or was even seriously discussed In the
Sa'ANNN NNHNNn NAAaN Nitti6 Is ulutn ulHoT-
ence Of opinions as to the details OF the
organization. Those who advocate It gem
orally insist, however. that the secretary
OF the treasury and the comptroller of the
currency should be ex-oficio members OF
the Board of Directors and that the presi-
dent should appoint or approve the selec-
tion OF the head Of the bank The pro-
vision OF the German bank charter in re-
gard to circulation finds a good deal OF
favor-that after a certain fixed limit OF
circulation additional issues. which are not
covered dollar for dollar by gold, should
be taxed at the rate OF five per cent
Others however, perfer the greater free
dom OF the French system, where the
volume Of note issues is practically under
the control OF the bank. and where the
accumulation OF large reserve permits
the bank TO serenely maintain a rate OF
discount much lower than that of the
Bank OF England or the Bank OF Germany
while other countries are in the throes OF
financial convulsion.
The project of combination among the
national banks through their clearing house
committees or otherwise to guarantee q
special circulation IN case OF emergency is
embodied in several plans which have beer
submitted to the secretary OF the treasury
While these plans are declared by ex-
perts 20 have some degree Of merit, It Is
feared that they are too complicated to re-
ceive serious attention I'm congress SO far
as they compel action by law. 1t Is felt by
some that such policy would be drastic
n not unconstitutional in compelling tho
banks 20 make a use OF their assets which
they might not desire TO make.
Fowler Credit Plan.
Most OF the plans presented at previou.
sessions OF congress have dealt with tho
question Of increasing the elasticity OF tht
circulation issued by national banks by
permitting issues on other security thar
United States bonds. There Is a radica
difference OF opinion. however. between
two schools OF thought as to the natur,
OF these additional issues. The plan pro
posed by Representative Fowler chair
man OF the house committee on banking
provides for issue upon the general credi
OF the bank. which provision for a guaraht!
fund raised by taxation upon circulation
This guaranty fund Is TO be employed
when recesvarv 10 redeem the notes o
failed y % '' e the contention OF Mr.
Fowl - who favor this plai
that eu; one-tweifth Of 1 pc
cent ''.' the circulation woul,
mo- nut in order TO insur
ata"' hey propose that the tal
sim" uch larger than this
harmony with two other measures whicl
attracted considerable attention a yea
ago, the bin OF the special COMMITTEES O
the New York Chamber OF Commerce
which was endorsed unanimously by IN
chamber In November 1905. and the plai
Of the special committee OF the American
Bankers association. which was endorse,
almost unanimously al the annual eonven
tion OF the association at Atlantic City II
September last.
The plan OF the Chamber OF commerc,
committee proposes issues on the genera
credit Of the banks TO the amount OF pc
cent Of capital under each Of the rate
OF taxation. 2 5 and 4 per cent. and Z,
the amount Of 10 per cent OF capital a
each of the rates OF s and per cent. Tht
permitted total issues 20 the amount o
8 per cent OF capital. or about $50 900 zoo
but Il was oontsnded that no more thai
half Of this. taxed up to the rate OF pc
CONTINUED on, Second PAss)