The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-01-09
ASSET CURRENCY BILL.
Elasticity Plan to Be Offered by tho
House Committee

Washington, Jan. 9.-The bill for re-
form of the currency prepared by Mr..
Fowler and referred to his committee,
where it will form the working basis for
the framing of bill of possibly the
same scope and tenor, provides for the
complete retirement of all present out
standing national bank bond secured
currency and authorizes in lieu thereof
currency based upon general assets
of the banks to be worked out in this
way:
The comptroller of the currency will
designate throughout the country GER
tain redemption cities so that there
shall be a redemption city within at
least "a hours reach of each national
bank. The national banks will indicate
to the comptroller of the currency to
what redemption city they wish to be
Joined. The comptroller will then Sc
lect time and place within each re-
demption district for the organizing of
that district in the following manner:
Each national bank In. that district,
regardless of its e1pftal stock, will be
entitled to one vote. Representatives
of the banks will meet at a, time and
place designated and elect a board Of
managers to consist of seven member.
The seven will elect a chairman who
will become deputy comptroller of the
currency and assume control of his re-
demption district, except that he shall
not have charge of the enforcement Of
the criminal statutes. Each national
bank is authorized to present to the
secretary Of the treasury national bank
notes and lawful moneys in lieu of 9TH
er national bank bonds, secured out
standing notes. Then if the banks ap
p1ication therefore is endorsed by the
board of managers of the redemption
district to which It belongs, the bank
will receive guaranteed credit notes to
the amount of its capital stock. These
notes will be subjected to a tax of two
per cent per annum. Each bank will be
required to deposit as a guaranty fund
with the treasurer of the United States
five per cent of its average deposits for
the preceding IL months and five per
cent of the credit notes which it takes
out. The revenue thus obtained is to
create and support national guaranty
fund of $500,000,000 for the guaranty Of
both the deposits and the outstanding
bank notes of every national bank.
invested in United States bonds draw
ing two per cent interest, while the re-
meinng 90 per cent is to he deposited In
the banks of the various redemption
cities for the purpose of redeeming the
guaranteed credit yotcS of the banks IN
the various redemption districts.
When the national guaranty fund
reaches S25, ,000, 900 which would be al
most simultaneous with the birth of
the new law, the government is re-
quired to return to the banks the
United States bonds which the govern
,nent now holds security for federal
deposits, the object being to enable the
banks to get control of the bonds so
that the government can invest the 80
per cent of the guaranty in two per cent
and regain control In buying these
bonds the banks holding them shall be
paid their original purchase price pro-
viding their exact purchase price can
be proved.
It is Mr. Fowler's idea as embodied in
the bill to have the new credit notes
printed On a green back ground, in diff
ferentation from the yellow back
ground of the gold notes and white back
ground of the silver certificates.