The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1892-01-15
A PERMANENT BANK SYSTEM.

Horace White in the December Forum
presents plan for permanent bank sys-
TEN. Under the present law the govern
ment assumes all responsibility for the
outstanding bank notes and redeems them
on presentation whether the banks are
solvent or insolvent. II the banks are
solvent the government looks to 1.-The five
per cent redemption fund" for means to
pay them; if they are insolvent, il looks to
the deposited bonds, which it can sell in
open market if necessary. The govern
ment's responsibility has become indis-
pensable TO national bank notes. Mr..
White holds that If we are 10 have notes at
all they must be so good that no holder
OF them will ever ask question or enter
tain doubt about them, or even look to
zee what particular bank it is whose notes
he holds.
Mr.. White approves in most respects
the plan of Democratic Congressman Har-
ter, Of Ohio, for the continuation OF the
national banking system by allowing
standard stock exchange securities, pat in
pledge to protect the government, 10 take
the place OF its own bonds after It's own
bonds are no longer available From these
securities Mr.. White would exclude state
bonds because the state cannot be sued in
case OF default, but he sees no objection to
county bonds representing debt of not over
81, and city bonds representing debt of
not over s. per inhabitant; all bonds to b
listed on some stock exchange, and not to
have ever been in default. and not to have
sold below par during five years. Mr.
White would approve also mortgage bonds
of dividend paying railroads other than
street railroads with the same require
ments as 10 listing enforced against city
and county bonds; but he wou!d give the
comptroller of the currency, with the APP
prevail of the secretary of the treasury,
power TO reject any securities. and to
throw out any, for any reason satisfactory
60 himself.
Real estate mortgages. Mr.. White agrees
with Mr.. Hsrter, are not proper securities
and he thinks with these notifications
Mr.. Harter's plan good one, since il
would give the government four strings 10
its bow. l. The bonds deposited as secur-
ity. ?. The banks capital. S. A common
safety fund tif desired) accumulated from
the tax on bank notes. L. The share
holders personal liability. Mr.. White
does not believe in state bank notes. The
national banks enjoy no exclusive and
special privilege; anybody who is willing
90 conform 10 the law can start national
bank There Is no need OF state banks.
the guaranty of the United States is higher
than that Of any one state and the exam
PIES Of Republication on the part of Mime.
sofa and Mississippi in the past are proof
that the guaranty OF the state may become
worthless.
On the other hand. Banker Henry ".
Cannon, formerly comptroller of the cur
Tency, names as an insurmountable Oh
lection 10 Mr.. Harter's plan that no pro-
vision is made 10 restrict the aggregate
amount Of notes issued, and without re-
ssrietlon the volume of bank note currency
would soon be SO inflated that redemption
would be impossible. Mr.. Cannon Believes
that national banks will continue 10 exist
as banks of deposit and discount whether
or not they issue circulation. National
bank notes. being secured by deposit Of
government bonds, are guaranteed by the