The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1891-10-13
SEATTLE. TUESDAY, OCT. IS.
A PERMANENT BANK SYSTEM.

uu1uDtE Vi Tile IUfuW hohOS % pA~@ AOA -
Permanent Bank System" which Is re-
garded by many able bankers and men of
finance as the best solution yet offered of
our most important financial problem.
Mr.. Harter is already known to the public
as the author of a trenchant denunciation of
free silver coinage which has had wide cir
culation, and he was the leader of the anti
free silver coinage men in the Democratic
Ohio State Convention. Mr.. Harter does
not believe in the printing of legal tender
notes limited by nothing but the will of
the average congressman who is often
plastic as wax in the hands of a constitu-
ency bowling for "cheap money and plenty
oft" He recalls the French assignat which
finally reached $72 for every man, woman
and child, while the value declined
until it required $500 to buy pair of
boots and $3.50 to pay for pound of butter.
and he cites the disastrous experiment of
the Argentine Republic, whose explosion
produced financial earthquake which
threatened Great Britain with bankruptcy
and caused a multitude of wrecks in our
own financial life.
paper money controlled solely by the will
of a legislature, issued under the lash of
fiuctuating public opinion, he deems free
silver coinage open to even worse objec-
ton. The history of bl-metallism proves
that two metals of varying intrinsic value
can be kept in free circulation side by side
only by limiting the coinage of the cheaper.
Nor is he satisfied with the plan of increas-
ing the currency and of replacing the
national bank note circulation (which the
payment of government bonds must soon
render extinct) by having the government
issue treasury notes to the banks on the
deposit of bullion; he thinks it lacks the
element of profit and self-interest for the
banks that could alone make it successful
The value of banks to the great stream of
trade and commerce Is like that of the
feeders to o great river, and that of the
springs to the small feeders. Banks gather
in the small and scattered sums of idle
money, made up of savings and earnings,
make them available in loans and thus
keep the business of q district gong and
the wheels of industry moving. Mr..
Harter sees that what great country like
our own lacks is not increased volume of
currency half so much as the multiplica-
ton and increase of our banking facilities,
especially through the region west of the
Mississippi. There is CURRENCY enough;
what is wanted is to plant more thickly
the distributive agencies for the rapid
diffusion of currency where it is needed.
The desirable thing, in his judgment, is to
supply currency that will not only be
safe and stable IN value, but will be ample
in quantity, and whose adoption will re-
move from the arena of discussion and
the halls of congress the question of cur
rency supply.
The national banking system was but an
adaptation by Secretary Chase of the state
banking systems of Indiana, Ohio and New
York. Mr.. Harter, who is neither stock
holder or officer in any national bank,
proposes plan which starts with the ma
tional banking act as it exists, but includes
anumber of important changes. The list of
bonds acceptable as security for circulate
ing notes should be enlarged so as to in
clude state, county, city and railroad
bonds. All these bonds must be regis
tered, and the principal and interest must
be payable in gold of the present standard
of weight and tineness. All such bonds
must have been listed for at least five years
prior to their deposit as security for circu-
lation upon at least one stock exchange
located in some city of the United States
having population of $4,000 or more.
No bond that has ever been in default for
non-payment of interest, or has sold on any
stock exchange below par within tive
years, or at less than a premium of S per
cent. above par within three years of its
proposed deposit for circulation shall be
accepted. No state bond representing a
per capita debt of over 81 for each of its
citizens, no county bond representing a
per capita debt of over 81, and no city
bond representing a per capita debt of
over IS. shall be accepted as security for
bank notes. All railroad bonds must be
secured by mortgages; no bank shall have
more than 20 per cent of its bonds on de-
post of the issue OF any one state, county.
city or railroad. Whenever anv bond
shall sell upon any stock exchange where
Il is listed for period of thirty DAYS Mt an
average price of less than los, the comp
troller of the currency shall require it to
be replaced by a bond fully meeting The
requirements of the law. Whenever any
railroad ceases TO pay regular dividends
the comptroller of the currency shall re-
ouire the bank 70 substitute other bonds
of the character required by this law
The security here proposed is of the
same character, but more carefully
guarded, as that on which Massachusetts
authorizes her savings banks to invest the
savings of the poor. Unlike the security
now given for national bank notes it
would always be obtainable, and the sys-
Tam perpetual instead of having banking
.vstem constantly threatened with ex-
tinction by the payment of the national
debt. The remaining provisions Of this
plan are as follows:
In liam Of all other United states taxes. each
bank shall pay in che usual manner . ssIni-