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PROPOSED CHANGES IN THE CURRENCY SYSTEM

OF THE UNITED STATES.

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COMMITTEE ON BANKING AND CURRENCY.

FIFTY-FIFTH CONGRESS.

JOSEPH H. WALKER, Mass., Chairman.
MARRIOTT BROSIUS, Pennsylvania. GEORGE W. PRINCE, Illinois.
HENRY U. JOHNSOx, Indiana.

JOHN MURRAY MITCHELL, New York, HENRY C. VAN VOORHIS, Ohio.

ADIN B. CAPRON, Rhoilo Island. JAMES T. McCLEARY, Minnesota. NICHOLAS N. Cox, Tennessee. CHARLES N. FOWLER, New Jersey, FRANCIS G. NEWLANDS, Nevada. GEORGE SPALDING, Michigan.

JESSE F. STALLINGS, Alabama. EBENEZER J. Hill, Connecticut. DANIEL ERMENTROUT, Pennsylvania. GEORGE N. SOUTHWICK, New York. John W. Maddox, Georgia.

FRANK ROE BATCHELDER, Clerk. 2

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SUGGESTIONS SUBMITTED TO THE COMMITTEE BY THE CHAIRMAN AT

A REGULAR MEETING ON DECEMBER 15, 1897.

GENTLEMEN OF THE COMMITTEE: We can not hope to secure favorable action in Congress upon needed amendments to the national-bank act, whatever their substance, that are not presented in such form as to meet the approbation of the 70,000,000 people whose servants we are. * therefore wish to call your attention to a few obvious facts.

It is generally conceded that the banking and currency laws need amendment. What changes would do most to induce an equitable distribution of banking capital and currency notes over the whole country, according to the needs of each section, there does not seem to be any agreement of opinion upon. That under the law as it stands the agricultural and higher-interest sections of the country suffer very great and unnecessary hardship and loss in exorbitant interest charges forced upon lenders of capital by tbe bank law and present methods of issuing currency, is asserted by the experts in finance of this and other countries.

The only safe and efficient remedy for this seems to be in allowing the people to have a currency issued on those sound banking principles upon which it is issued in all other countries. That the system of relieving bankers of all the responsibility, risk, and expense of maintaining specie payments upon all the currency notes in circulation, and devolving this redemption in specie on the Government Treasury, contrary to the practice and condemned by the experience of every coun. try, has cost our people immense sums in direct loss and manifold more in indirect loss and suffering in intensifying monetary panics and industrial depressions, is believed by the great body of our people.

The seed from which sprang the recent financial crisis and industrial depression was undoubtedly an insufficient revenue, but the soil that received it had been fully prepared to give it its fruitage of incalculable disaster to our people, by a financial system at variance with and condemned by all experience.

. Wbatever remedies are needed we should diligently seek and immediately and fearlessly apply. We can not justify ourselves to the people if we wait for a repetition of the unhappy experience of the past. We are in duty bound to come to an early decision upon some form of amendments to the banking law that will preserve what is valuable, allow currency to be issued upon sound banking principles, and be a thorough and equitable solution of the whole problem. I will only add:

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First. That I am thoroughly convinced the people do not desire the retirement of the whole body of United States legal-tender notes. Second. That they do desire that their Government shall continue to control and issue all the currency notes used by the people. Third. That the banks only shall put the notes so furnished into circulation and be responsible for their redemption in specie. Fourth. That banks shall be required to keep each and every form of coin and paper money at a par with every other. Fifth. That the Government guarantee the final payment of every dollar issued. Sixth. To justify this guaranty and save the Government from loss it should collect a tax upon all currency notes supplied by it sufficient to guarantee the United States Treasury against loss, because of its guaranty of their final redemption. If we are to come to any valuable result of our labors in framing a bill, we must agree upon what our procedure shall be. To reach a proper recommendation to the committee I have consulted with the chairmen of the subcommittees and the honorable gentleman (Mr. Cox, of Tennessee) of the minority. In order that the committee may not seem to insist on a measure suggested or proposed by itself, we recommend— First. To consider a bill including the three items upon which action is recommended at once by the President. Second. To take the sense of the committee as to whether it shall proceed immediately to frame or consider any bill making any considerable amendments to the national banking law. Third. If affirmative action is had on item No. 2, to adopt the following resolutions: Resolved, That the following bills shall be first considered as in committee of the whole: The bill of the Secretary of the Treasury shall be before the committee, and that the Secretary be given a hearing thereon, such hearing to be confined strictly to questions concerning the operation of the bill in practical banking and in its effects upon the United States Treasury, and that only interrogatories concerning matters over which the com. mittee has jurisdiction when referred to it shall be in order. Second item to be considered, the bill to be prepared by the Monetary Commission, which shall be proceeded with in the same manner and under the same conditions, and that a representative of the Commission be given a hearing. Third bill to be considered, that presented by the chairman of the committee, and that shall be proceeded with in the same manner as the two bills first mentioned. That the meetings of the committee be called for 10.30 a.m., and that after 11 a.m. no business shall be in order excepting the consideration of the bills mentioned until their consideration is completed. Then further action to be agreed upon.

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