Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-05-12
NEW CURRENCY BILL
Measure Agreed Upon by
House Republicans.
ADOPTED BY 1873 TO is
Emergency Circulation to Be Issued
on Commercial Paper.
TO AVOID CAUSE OF PANIC
Proposed Formation of Clearing
House Associations, Who May
Appeal to Treasury for Money.

Republican of the House. in conference
las; night. agreed upon currency DILL
| to be submitted to the House for adop-
ton. under a special rule to be reported
| from the committee on rules. The vote
upon the bill in last nights conference
| was 1873 to Ii.
The conference met at o'clock, KEEP
| resentative Sherman of New York pre-
siding as chairman. Representative Nree-
| land of New York. chairman or TIE
| conference currency committee, present
| ed the bill which the committee hdu
perfected late in the afternoon. The chlei
points of the bill are set forth in the
following synopsis and statement. maze
by Mr. Vreeland before the conference
met:
Chief Points in the Bill.
"Following the instructions of the CON
| ference the committee used the previously
introduced Vreeland bill as a working
basis for the new act Section l OF that
bill provides that banks. not less than
ten in number with an aggregate capital
and surplus of at least 0G0o. may
| form voluntary assoc atoms to be known
as clearing house associations that II
the needs of the country for currehc!
| are SO pressing lndI III Tie
| the Secretary of the Treasury an addi-
| tional issue of bank note circulation is
necessary. the banks belonging TO
| clearing house association may CepoSll Sc
curities. including commercial paper IN
| quality and amount acceptable 10 the
association. The association may there-
upon appeal to the Secretary of the Treas.
! ury and he may issue an amount or
additional currency not to exceed ID per
cent of the securities SO deposited. The
changes made in that section in construct
ing the conference bill are that the clear
| ing house associations: must be formed In
contiguous territory: that not more tnan
one shall exist in any one city. and that
| no bank can belong to two associations.
The conference committee further pro-
vided that the capital and surplus or each
! bank belonging to an ASSOCIATION snail De
| Jointly and saverally liable to the govern
| ment for any deficiency in the amount
necessary to pay the circulating notes
after the sale of securities so deposited IN
case the notes are not redeemed.
"A further change is that i national
bank need have but 10 per cent OF its cap
ital in bond secured circulation. instead OF
50 per cent. as condition precedent 10
i taking out additional circulation through
| an association. An additional provision
was added that banks must keep re-
serve in gold or lawful money against
such additional circulating notes. as Is
| now provided by law against deposits.
| THE committee reduced from $I5O,OOO,-
| 600 to $500 900 900 the limit of additional
circulation which may be taken out for
emergency uses.
Canvass of the House.
Discussing the construction of the con-
ference BILL Mr.. Vreeland said:
| Seventy five members of the House re-
piled to the questions submitted by the
committee in a letter of inquiry sent last
week. To the question, Would you favor
| $3.50 900 600 as the authorized limit of
| emergency circulaIion?' aobut three-hfths
of the answers favored limit Of 100000
600. To the question. Would you favor
| the requirement that banks obtaining
membership in clearing house associa-
ton should be located in contiguous terri
| tory? the answers were practically unan-
| imously in the affirmative. and they also
| favored the proposal 10 allow only one as
| sociaticn in any one city. At least four
| fiiths of the answers favored compulsory
joint and individual liability of constitu-
| ent banks for all notes issued by constitu-
| ent members of an association.
Chairman Fowler Criticised.
Commenting upon the action of Chair
man Fowler of the banking and currency
committee, who is the leader of the re-
| publican insurgency on the currency ques-
ton. in sending a copy of his own most
recent currency bill and a letter in rela-
ton thereto and to the new Vreeland bill
| y,
| Mr.. Vreeland said:
Many members Of the banking and cur
rency committee are not pleased with the
action of Chairman Fowler in using letter
| heads on which are printed the names of
| the members of the committee to convey
| his personal opinions upon currency mat
| tiers to the bankers of the United States
| Mr.. Fower's letter was dated May 9. At
| that time the republican conference of TIE
| house mad acted in appointing a commit
| tee to prepare and bring before an ad-
| journed meeting of the conference a new
currency bill. Therefore Mr.. Fowler
| urged objections against the passage of a
| bill the provisions of which he knew moth
| ing about and could know nothing about
| a. the committee had not then made its
report.
| which he appraised the currency bill
| which he has introduced are right and
| proper. l have no objection to make to
that. Some slaring and important mis-
in relation to the effects OF the new Vree-
land currency bill. Mr.. Fowler stated
that under that bill it is proposed to have
the United States government indorse
and guarantee 81 800, GO0.0OO of bank notes
and he stated that this is a new de-
parture which has never before been
known in the history of the country
| This statement is not only entirely UNI
| true but is absurd for a member of the
| banking and currency committee to make.
| The notes of banks have been guaranteed
| hy the United states at leaSt since the
| act of June .. 1874. The United States
| has guaranteed these notes upon deposit
| of ample security. During tina. time 1t
| has never lost dollar thereby. but on
! the contrary has made a net profit from
| the national banking system of nearly
| SEQ 100000. The law since 1874 has di-
| rected the Treasury Of the United States
| to nay these notes when presented there
| The law also requires national banks to
keen money on deposit in the Treasury
| AZ the United States in advance. for the
purpose of paying these notes. Under the
Vreeland bill. II there should be a cur |
rency famine such as We had last Octo- |
Der, or a great panic. either existing or
| threatened such. as we had last October, |
national banks, with the consent of the |
Secretary of the Treasury. may issue ad-
ditional bank notes TO amount not ex-
ceeding S.0J. GOO coo. The present amount
of hank notes outstanding is 1854 .Ot1UED |
This 500. 900. 900 of note issue covers the |
United States and there is only remote
possibility that more than half or at the
outside two-thirds. of this circulation
| would ever be needed
Security Of Proposed Issue.
| For the security of these notes the
United States will require actual cash
| assets amounting to six OF seven times
| the amount of the notes outstanding |
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