The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1916-01-22
Reserve Banks Board Of Governors Considers
Plan to Retire Third of Billion Creenbacks

WASHINGTON. Jan. 2i-Committees OF
the American Bankers Association sub
mitted TO the conference OF governors
OF the federal reserve banks a plan TO
retire and cancel the S34s. 200. 900 OF
treasury notes commonly known as
greenbacks. The plan was approved by
the governors and committee appoint
ed TO study IL In detail with view
TO drafting bill for submission to
congress.
The proposal was put forward by the
bankers a. means Of remedying the
present inflated condition OF the cur
rency and OF warding off the financial
Ills which some authorities have pre-
dicted Will result from the maintenance
predictions. IL became known today. al
ready have been voiced TO the federal
reserve board
Proponents OF the plan for canceling
the Ereenbacks expressed the opinion
that the twelve federal reserve banks
could absorb the issue OF S2OO. 0OO 900
OF bonds which would be necessary for
the cancellation. II il claimed that no
depletion OF the amount Of currency
would be involved. as the $3.50. 900 OF
gold which is now held as a reserve
back OF the greenbacks would be releas-
ed Against this gold. in the event OF
a business demand FOR such additional
currency. IL was pointed out. $4,000. -
O0O OF federal reserve notes could be
issued. {.
Representatives OF the American
Bankers Association said that they had
two purposes in proposing the cancella-
ton plan. The first is 70 provide a
ready means OF currency elasticity. II
was pointed out that the demands Of the
country FOR currency are variable with
the seasons and the condition OF busl-
ness. In the present situation the
amount OF currency Is so large as TO
meet all needs and the way is open for
further expansion II necessary. but no
the currency save through withdrawal
OF national bank notes at the rate OF
S25.0O0.0O0 n year. as provided by the
federal reserve act
Gold formerly was tho only elastic
element in our currency. IL was said by
banking authority today. and this
has lost its elasticity as a result Of the
great increase In our gold supply
brought on by war business. Under
present conditions. Il was claimed. tho
country has little demand FOR federal
reserve notes. because the OUTSTANDING
volume OF irreducible currency Is more
than sufficient for the countrys needs.
one OF the advocates Of the green
backs cancellation scheme said today;
1t was further pointed out that the
greenbacks have been a tremendous eN-
pense TO the country. Instead OF be-
ink a loan without interest their con-
tiuued existence has caused many bond
issues through which funds were Sc
cured 10 redeem them. They were prom
iscs OF the government 20 pay on de-
uecmablc they deprcciate. and the credit
OF the government depends almost en-
trcly on its ability 20 redeem acCording
TO the contract.
since 1879 II has cost the United
states government more than billion
dollars % maintain the status Of the
greenbacks as rtdesmahle currency
From 1890 90 1898 bond issues totallinE
S374. O0U. 900 were made 90 secure gold
with which 20 redeem treasury notes,
In 1895 more than S172.O0O 900 gold
was paid out by the treasury FOR re-
demption OF greenbacks and in 1894 and
1895 more than $500. uOu 600 We're re-
deemed In gold. Yet at the end Of the
latter year they We're all In existence
as a result of the law permitting them
TO be reissued.
In january. 1895 President CIeve-
land. tu special message 10 congress.
urged a per cent bond issue. the pro-
G eds To ratirc and cancel treasury
notes. In that message he said that
the time had come when the treasury
process Of issuing bonds To- procure gold
20 b. imm ediately drawn for purposes
not related 20 the benefit OF the gov
eminent OF our people
Congress took no action az that time
and 10 has taken none since. The prob
able reasons why congress did not act
In 1895. the bankers said. was that the
retirement OF treasury notes would
have depleted the currency. Now they
say the situation is reversed. There is
too much currency and too many kinds
of IL. These fixed elements in the
currency prevent the operation Of the
federal reserve act In respect 20 elastic
They say that the act IL bound "a
fam far shodt Of the measure OF COM
diately made for contraction OF the
CurreuCy."