The Topeka state journal., 1908-06-01

submitted as security. To use conn
merciai paper as basis, the appIica-
tion must come from a currency as
sociatfon.
No bank or association NAV apply for
circulating notes based on commercial
paper to an amount in excess Of 80 per
cent OF Its unimpaired capital and sur
plus.
The term Commercial paper" means
only notes representing actual COM
mercfa1 transactions It shall bear the
names of at least two responsible par
ties and shall not have more than four
months to run.
Circulating Notes.
The second thing upon which popu-
lar attention must center is the new
circulating notes" themselves. The
legal plan for the issuance, form, re-
compton and guaranty of the notes
may pc summed up as follows:
Inc new circulating notes will have
the same form as the national bank
notes They will be issued in denom-
nations Of IS. $40. $50, $50. 800, $1,000
and $4,000.
They will be redeemable in lawful
money upon presentation to the gov
ernment treasury or subtreasuries
They will be backed by the guaranty
of the United States government. by
the individual bank, and also in most
cases by the currency associations
They must be also secured by a re-
demptfon fund amounting to 10 per
cent of their value deposited in the
treasury.
They will be issued only by the gov
ernment and only when the secretary
Of the treasury deems it advisable.
No bank may at any time have out
standing notes in excess Of the amount
or its unimpafred capital and surplus.
The total issue Of the new circulating
notes cannot exceed $500, 900 900.
The banks must pay to the govern
ment tax of per cent on the notes
for the first month of issue and there
after each month an additional tax at
the rate of per cent per annum until
the total reaches 10 per cent.
These taxes shall be used by the
government as reserve fund for the
redemption of United States and other
notes.
AS soon as the need for the new
notes shall have passed the banks may
take them out Of circulation by re-
deeming them as fast as they wish.
There is no redemption limit on the
new notes, although the old limit of
50, ,000. 600 per month is kept up on the
national bank notes.
Currency Commission.
The third main provision Of the bill
| has to do with the currency commits
sion. The makeup and duties of the
commission are outlined as follows:
A commission is created to be known
as the national monetary commission.
1t will be composed of nine members
of the senate appointed by the vice
president, and nine members OF
the house appointed by the speaker.
Its purpose is to inquire into and re-
port to congress at the earliest prac-
ticable date what changes are neces-
sary or desirable in the monetary sys-
tenn of the United States.
The commission viii sit during the
congressional recess.
1t will have legal power to summon
witnesses and investigate banking and
currency systems in all proper ways.
With the idea that the present legls-
lation is but a temporary relief to be
used until the commission shall sug-
gest a permanent currency form the
Aldrich-vreeland bill is made to ex-
pire by limitation on June 30 1914
Washington knows that the rest OF
the country. specially the west,does not
like the omission from the commission
Of the lay members recommended by
President Roosevelt and Representative
yreeIand. But there is every DISPOSE
ton on the part Of the house and SEN
ate leaders to have the commission
Justify it's existence without the aid OF
bankers and financiers who are not
members Of congress.