Mr. Trenholm regarded the greenbacks, or United States notes, as the frailest element in our heterogeneous currency sys-tem, and in classifying the money of the country in the order of its value, placed the gold coin and gold certificates first, the national bank circulation second, silver coin and silver certificates next, and the greenbacks last, and suggested that it would be of great benefit to the whole mass of our currency if the greenbacks could be eliminated and national bank notes substituted in their place.
He then recommended the retirement of the $346,000,000 of greenbacks by funding the debt into bonds, or so much of it as should be presented at the Treasury within a limited period. Such bonds were to be issued to national banks only in exchange for greenbacks, and were to bear a low rate of interest, not exceeding two and one-half per cent. These bonds were to mature only upon the failure or liquidation of the banks owning them, and be available only as security for national bank circulation. The banks were to be required to retain on deposit with the Treasurer of the United States other bonds to the minimum amount provided by existing laws, and to use the new bonds only for procuring additional circulation, or in substitution for other bonds on deposit in excess of the minimum, but the new bonds were to be available for all purposes by banks organized after the passage of the Act.
He recommended the transfer of the National Bank Redemption Agency from Washington to New York City, and the creation of a sub-agency at each central reserve city, the notes of all the banks wherever located to be redeemed at whichever agency they should be presented. He then expressed his views at length in support of these suggestions and the belief that the retirement of the greenbacks would restore the national banking system to healthy activity and stimulate it to fresh growth in sections of the country where national banks were most needed.