The Portland daily press., 1884-01-11
NATIONAL BANKS.
Propositions Before the Finance Com
miltee.

WASHINGTON, Jan. 10.-The finance COM
mittee of the two houses have entered upon
the consideration of important subjects re-
ferred to them. Last winter, when the bill
extending the national bank charters was
passed, it was the general opinion that the
question of the existence of the national banks
vas settled for at leasta twenty years, but un-
der existing conditions the time can be easily
calculated when the basis of the national bank
ing system will have reached its vanishing
point. Two conflicting propositions are now
before the finance committees. The one looks
to giving to the national banks more stable
basis. The object Of the other is to ultimately
supplant the present system By Treasury
notes. The Senate finance committee has IN
der discussion the bill of Sherman, which, in
brief, proposes to allow national banks TO issue
ejaculation to the amount within ten per ceat.
of the market value of the bonds Provision is
made that, in the event of shrinkage, the Sec
retary of the Treasury shall have the power to
call upon the banks to make good their mar.
gins. The meetings of the COMMITTEES have not
been attended by all the members, Messrs. AL
llson aud Aldrich (Representatisesl havi-g
both been absent. Enough has been said how
ever. to show that the Democrats will oppose
the Sherman plan. while the Republicans are
not all prepared to support 1t. The Democrats
are not disposed to 60 further than 10 agree
that the banks may issue circulation to an
amount equal to the par OF the bonds. This is
ao increase of ten per cent. over the existing
law They may also vote for some reduction
OF the tax on circulation. The Republicans of
the committee are not all agreed to the plan OF
the Sherman bill Aidrich OF Rhode Island,
for ins.ancs. Will soon introduce bill which
Will proceed upon aa entirely different
theory. IL will seek to provide a
permanent basis for bank circola ion,
while ct the best the Sherman
plan is but q temporary expedient.
Aldrich would authorize the issue OF a new
low rate bond at turee per ceut., and the pur-
chase with it of the outstanding fours at the
lowest market price. He is oi,fident that the
p-oIle, by simple computa tioD, would see
that there would be saving OF interest this
plan, while at the same time II would afford a
more assured basis for banking. The defects
OF the plans which proceed upon the theory
OF utilizing the existing bonds, Mr.. Aldrich
thinks, are these: The 4 IL aud the per
cent bonds will soon reach their maximum
pr1 e; there will be necessarily
constantly diminishing circulation based upon
them. Second, the bonds would not furnish
stable basis for banking; tho constant huctua-
tioDs OF the bonds would render the circua-
tion unstable The basis of circulation woulI
change every year, and might fuctuate much
more than that Third, there would not prob
ably be any occasion for the Secretary OF the
Treasury to Call upon the banks TO increase
their deposits on account of any violent shrink
age ia their bouds, except l.. The case of great
panic, and at such time IL would be most DIFF
icu for the BANKS to comply with the la ".
The effort to do 80 would only tend to intensi-
IL the eanie.
The theory of Mr.. Aldrlch's bill, which il
substantially the plan favored by the Comp-
truler of the Currency, is this: The nronosi-
tlon IS that Inducements be offered TO the hold
ere OF Gus aud IL per Is aarrs,zz-
der them TO the government, Receiving in pay
me NJ therefor 3 per cent bonds having the
Same dates of maturity as the bonds which are
TO be surrendered. The new per cent bouds
issued would themselves bear . small prani-
um, and it is believed that the holders OF per
cents would consent to such an exchange if sc-
companied by an offer of MT more than 15 per
cent Premium.
The benefits of this plan, both to the holder
and to the government, are apparent The
holders would receive, in tho shape OF Is per
Cent premiums upon the bonds, portion of
ther interest in adyadce, which would be
available for loans at rates greatly exceeding
the borrowing power of the government, which
is Il )W less than three per cent. The govern
ment would be enabled by this use OF It's sur
plus to save portion of the int3rest, which
nthersise it would be- compelled to pay here
after.
Representative Dingley OF Maine, member
OF the House committee on banking aud cur
rency, Says that no expression of opinion has
been made upon the question OF national
banks by toe committee as such the iadivid-
ual OK EXPRESSIONS of several members lead him
to believe that majority of the committee is
disposed to treat the banks with fairaess, and
be does not believe that any bill will be report
ed from the committee which is designed to
inJurs the national banking system. The
Backner bill for the substitution of Treasury
notes for national bank bills, he thinks, will
not be favorably reported.