Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1908-01-09
Measure Framed in House
Committee Makes Radical
Changes in Present System
of National Bank Control
WILL PROVIDE DESIRED
ELASTICITY, Is BELIEF
ContenpIates Complete Re-
tirement of Bond Secured
Circulation and SubStitu-
ton of Asset Secured Notes,

IBy Morning Journal Special Leased Wire'l
Washington, Jan. S.-The sub-com-
mittee of the house committee on
banking and currency to which was
entrusted the framing of bill to in
crease the elasticity of the currency
reached a conclusion today and viii
report favorably to the full committee
a. bill drawn in the main by Chairman
Fowler of the committee.
The bill provides for the complete
retirement of all present outstanding
national bank bond-secured currency
and authorizes in lieu thereof a cur
rency based on general assets of the
banks to be worked out in this way;
The comptroller of the currency
will designate throughout the country
certain redemption cities, so that there
shall be redemption city within al
least twenty-fours' reach of each ma
tional bank The 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 man
ner:
Each national bank in that district,
regardless of its capital stock, Will be
entitled TO one vote representatives
of the banks will meet at time and
place designated and elect board OF
managers to consist of seven mem
bers.
The seven will elect a chairman
who will become deputy comptroller
of the currency and assume control oL
his redemption district, except that
he shall not have charge of the en-
forcement of the criminal statutes.
Each national bank is authorized to
present to the secretary of the treas
ury national bank notes and lawful
moneys in lieu of other national bank
bands secured outstanding notes,
Then If the banks applications there
for is endorsed by the board of man
ayers of the redemption district to
which it belongs, the bank will re-
ceive credit notes to the amount of It's
capital stock. These notes will be sub
ect to tax of per cent per annum.
Each bank viii be required to deposit
as a guarantee funds with the treas
urer of the United states equalling .
per cent of its average deposits pre-
ccdfng twelve months, and 5 per cent
of the credit notes which it takes oIt.
The revenue thus obtained is 10
create and support a national guar
anty of $500, 100000 for the guaranty
of both the deposits and outstanding
bank notes of every national bank,
Eighty per cent Of this fund is to be
invested in United States bonds draw
ing per cent interest. while the re-
naming 20 per cent is TO be deposited
in banks of the various redemption
cities for the purpose Of redeeming
the guaranteed credit notes of the
banks of the various redemption dis
tricts
When the national guaranty fund
reaches $25,000,000, which would be
almost 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
ment now holds security for federal
deposits, the object being to enable
the banks to set control of the bonds
so that the government can invest the
80 per cent Of the guaranty fund in
per cent bonds and regain control
In buying these bonds the banks
holding them shall be paid their orig
inal purchase price, providing then
exact purchase price can be proved.
1t Is Mr. Fowlers idea as embodied
in the bill, to have the new credit
notes printed on green background
in differentiation from the yellow
background of the gold notes and
white background of the silver certif-
Gates
Mr.. Fowler, chairman of the com
mttee on banking and currency, to-
day made the following statement re-
garding the financial situation:
We are today with regard to ou
financial and currency practices where
we were in 1896 with regard to the
standard of values and to decide now
to make all kinds of bonds the basis
of currency would be just as serious
and fatal mistake as to have
adopted silver then as our standard
of view.
'The time is ripe, the circumstance
are auspicious and careful investiga
ton of all the facts and conditions
justifies the conclusion that congres.
can and should legislate so as to bring
about these results
"First-A uniform banking situa.
ton.
Seeond-Uniform bank reserves