The Washington herald., 1908-01-09

Representative Fowler, chairman of the
Committee on Banking and Currency, |
yesterday introduced his financial bill /
The measure is Mr.. Fowler's substitute
for the Aldrlch currency bill. and en-
bodies his own ideas upon the subject
When the subcommittee met Tuesday. Mr.. /
Fowler was authorized TO introduce the
bill in the House. after he had read 1t
over TO Mr.. Prince and Mr.. Gillespie, and
u viii be used when referred to the Com
mittee on Banking and Currency as a
basis for that committee to work upon in
the consideration of financial legislation
The action of the subcommittee in di-
recting Mr. Fowler TO introduce his bill
does not necessarily mean that the MEM
bers of the committee give their unquali-
fed approval to the measure. but they de-
sire TO have it as a concrete proposition.
Retires All Bond Currency.
The bin provides for the complete re-
tirement Of all present outstanding ma
tional bank bond-secured currency. IT
authorizes a currency in lieu thereof
based upon the general assets Of the
effect that the Comptroller of the Cur
rency shall designate throughout the
country certain redemption cities, SO that
redemption city shall be within at most
twenty-four hours reach of every ma
uonal bank. Following this, it is pro-
vided that the national banks shall indi-
cate 10 the Comptroller Of the Currency
10 which redemption city they wish to be
Joined.
Then the Comptroller of the Currency Is
to select a time and place within that
redemption district for the organization
of the district in a manner which the
bin indicates as follows: That each bank,
regardless of its capital stock, within a
district, is entitled to one vote, and a
representative of each bank is authorized
10 cast that vote.
Banks Organize Districts.
These various representatives will
meet at q time and place selected by
the Comptroller of the Currency for
the organization Of the district: these
representatives are to elect "a board
OF managers. consisting Of seven per-
sons the board to select its own chair
man. Under the provisions of the bill,
such chairman is tC become a sort of
deputy comptroller of the currency
within that district, except as to GER
tain matters pertaining TO criminal
statutes and other specified provisions
over which the Comptroller has juris-
diction This is supposed to complete
the organization scheme
Following this, national banks are
authorized 90 present TO the Secretary
of the Treasury national bank notes
and lawful money in lieu of outstand-
ing notes of the banks bcnd-secured
currency. If the application of the
bank is approved by the board of man
ayers of the district to which the bank
belongs, the bank is entitled to get
guaranteed credit notes to the amount
OF its capital stock
Has Guarantee Provision.
a tax Of > per cent per annum is i'm
posed, and each bank is required To de-
posit as "a guarantees fund with the Treas
Urer of tine United States per cent of its
average deposits for six months, and in
addition an amount equal to per cent Of
the national bank guaranteed credit notes
IL purposes 10 take out for issue and cir
culation. This is supposed TO create a
guarantee fund, which, It Is estimated
viii amount TO something like $500.000 goo.
Both deposits and notes outstanding
against any bank viii be guaranteed by
this fund. Eighty per cent of the fund is
to be invested I'm United States bonds
0raWing interest The remaining 20 per
cent is to be deposited in the banks of
various redemption cities for the purpose
of Fedeeming the guaranteed credit notes
of the banks within that redemption dis
trict.
Bonds tO he Returned
When this guarantee fund reaches $25.-
O00,OO0, which il would do practically at
once. or as soon as the measure should
become effective, the government is au-
thorized to return TO the banks the United
States bonds which it now holds as Sc
curity for deposits, the object being for
the banks to get control Of the bonds so
that the government can invest "a part of
this 50 per cent guarantee fund in per
cent bonds.
There is also a provision in the bill
which stipulates that in buying up these
bonds the bank holding them shall be
paid the price each bank paid for the
purchased before January I, 1908, and that
the banks shall be able to show that
they did pay q certain price for them
It is provided that the guarantee-credit
notes shall be printed upon green back
ground Mr. FOWieT's idea being that
the gold certificates shall be yellow, the
silver certificates white, and the new
guaranteed-credit notes green.
The bill viii 20 to the fun committee
which will Immediately begin its consid-
Grafton. and il is Mr.. Fowlers intention
that the committee shall hold hearings
which those interested in the subject
shall be invited 70 attend.
Fowler Explains Bill.
Representative Fowler yesterday made
the following statement concerning his
currency bin:
I've are to-day. with regard to our
financial ana currency practices, exactly
where We were In 1896 with regard to our
standard of value and to decide now to
make all kinds Of bonds the basis of
currency would be just as serious and
fatal a mistake as 10 have adopted silver
then as our standard OF value
The time is opportune. the circum-
stances are auspicious. and careful in
VestgatiOn of all the facts and conditions
justiies the conclusion that Congress can
and should so legislate as to bring about
these results. Ny bill proposes:
'First-A uniform banking system.
'SecOnd-UnifOrm bank reserves, con
sisting Of gold coin OF its equivalent.
"Third-A simple and scientific none
tary system, consisting of only three
forms Of currency-gold for our bank re-
serves, bank credit notes redeemable in
gold for the larger bills and silver for
the smaller bills, and subsidiary coins
Thinks IL Ideal System.