Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-05-27
CURRENCY REFORM
AIM OF INQUIRY
Senate Committee Approves
List of Questions to Be Sent
Bankers and FinanCierS.
QUERIES THOROUGHLY
PROBE THE SUBJECT
Senator Nelson Introduces Bill Pro.
posing Asset-Secured System
National Banks.


! The investigate by the Senate bank
causes which have made necessary
reform of the country's currency system
was formally begun yesterday afternoon
when the committee approved a list OF
questions to be sent to bankers and
financial experts. These questions viii
be sent out Immediately. They are thir-
ty-two in number and go thoroughly into
the subject Of currency reform.
! The committee will send a letter with
these questions stating that the questions
are not to be understood as intimating
what point Of view will be taken by the
| committee.
| A summary Of the questions is as fol-
lows:
| What are the essential defects of our
banking and currency system? Enume-
! rate its advantages and disadvantages
and what purposes are to be attained by
| an improved. system.
Should national banks continue to have
a bond-secured currency. and should
present reserve requirements for such
banks be changed?
Elastic Currency Plan.
Should elastic currency be authorized.
and, IL SO. should it be limited and to what
| amount; should it be in notes Of in
dividual banks. a. central reserve associa-
| ton. a number of regional associations or
| the Treasury?
If such notes are from the Treasury
| should they be on pledge Of security, and
of what kind. and should they be first
| lien of the government on the concern to
| which issued?
| Should all currency have gold basis,
| and how should 1t be issued and what per
cent of reserve should be required
What should be the limit if notes are
issued to or by an association and should
it be based on capital stock and surplus
What device should be used to retire
such currency when demand subsidies
Should a tax be laid on this currency,
graduated to increase with the volume
| issued by the reserve association or with
the length Of time outstanding?
/ Question of Central Control.
i Should there be a central reserve as
ISOLATION with branches, or reserve as
sociations with or without a central con-
troll; and if a number under such con-
troll should it be wholly with representa-
tives of the associations. wholly by the
government. or by both? Should such
association have a geographical territory
and exercise it's reserve functions there
exclusively or should member banks be
permitted to choose which near associa-
ton they should join, disregartling fixed
territory?
Should state banks or trust companies
be stockholders in such associations anG
under what conditions? How many re
gional reserve associations should there
be; what should be the minimum capita
stock and what amount to each bank
how should directors of such association
be elected and in what numbers. power.
and terms of office?
What should be the general nature Of
business of such association; should il
accept deposits other than those Of banks
pay interest on deposits, discount double
name commercial paper for member bank:
on equal terms to all and should it's dis
count rate be public, subject to weekly
changes?
II Loans to Member Banks.
Should it loan directly to membe,
banks with or without collateral security
with interest equal for all public and
subject to weekly change, and should re.
serve associations be permitted to dea
with each other in purchase and sale OF
paper. exchange, securities and gold?
Should government deposits be with
drawn from banks and placed with such
associations: how should they be appOr-
toned at what interest, if any, and how
soon could this be done?
Should a national bank be required to
Keep reserve with the association to
Il which it belongs except that in its vaults
or should it be allowed to use other as
soications and. il so, how much? Should
a reserve association be required to main
tain reserve against it's deposits: what
amount: In gold only. or lawful money?
Should liability of each member bank be
limited to its stock subscription, and II
not what should be its liability?
Should reserve associations do business
with banks other than members and of
what character? Should national banks
be permitted. upon payment Of a COM
mission. to loan their credit by accepting
bills arising out Of the ordinary courses
of commerce. and should reserve asso-
Citations be permitted to deal in these &C
ceptances in transactions with banks or
other associations? Should there be a
limit to such acceptances, and what
limit?
Dividend Payments.
permitted to pay their banks. and should
any share of the profits Of an association
be distributed to member banks in pro-
portion to the average deposits during the
year?
What is your opinion of the plan of the
national monetary commission, and what
notifications would you suggest, if any:
Senator Nelson. republican member OF
the Senate committee on banking and
| currency. has introduced a bill proposing
a system OF "asset-secured currency fol
national banks. under which the banks OF
the country could. IL necessary, issue
emergency currency to the total amount
Of $295.OO0,OO0 The bill would give banks
authority to issue the new notes to an
amount not greater than the difference
between their present bond-secured cur
rency and their total paid-in capital. The
new notes would constitute a first ano
preferred lien upon all of the assets OF
the bank by which they We're issued