The Anaconda standard. [volume] (Anaconda, Mont.) 1889-1970, 1893-01-13
BANKING and CURRENCY
IeetnS Of Noted American Pilalclsn
In Philadelphia
OUR CIRCULATING MEDIUM
Methods OF Issuing Notes Securod
by the Oovernment-The9 state =
and National Banking
System.

PHILADELPHIA. Pa, Jan. l2.-The sev.
entcenih scientific session Of the Amsri.
can Academy OF Political and Social
Science convened hero this morning In the
Drexel institute. President Prof. Edmund
j. James Of the Wharton school Of finance
and economy in tho chair. Represeutsr
tive bankers of Philadelphia, New York
and Baltimore occupied seats on the
stage. Tho topic Of the evening IVES
National versus state banks Of issue"
Papers were submitted by Hon. Horace
White, editor Of the New York Erssing
Post, by Hon. w. L. Trenholm of Ohio,
and A. S. Hepburn, the present comptrol.
Ter OF currency. Tho discussion had Gig.
nificance far beyond mere academic Do.
bate. as tho first threc gentlemen have
grown to be intimate advisers OF Prssi-
dcnt-elect Cleveland IN financial matters,
while Hepburn represents Harrison's ad-
ministration. White, In tho leading paper
of the evening, gave Q sketch Of The good
and bad systems OF banking that existed
before the var. In the former category
the governing principle Was that hank A.
sets should redeem the circulating notes.
This. in tho speakers opinion, was the
true theory Of banking. The bad systems
wcrc FREQ banks, moro especially Of the
northwestern states, which copied after
tho New York system Of issuing notes OF
securities lodged with . public ofhcer.
The free bank system Was . step back.
ward in the evolution OF banking, because
Il absorbed the hanks capital before Ito
| doors were opened for business.
White thought the system OF banking
ON bond security is destined to perish
soon, because all securities ilt to be used
for the purpose are fast disappearine.
| The national hank note system could b
preserved and improved, however, By .
very slight change In the present Law, Wis:
| Out Of the present tax on bank notes con.
stitute safety fund to bs lodged In the
treasury, the amount Of IL 10 be computed
by the actuaries taking the national hank
mortality Of the past 25 years - . basis.
Let tho government continue TO b -.
sponsible for the notes and hold the 6rst
lien ON tho assets and personal liability Of
shareholders for its own protection, all
other parts OF the national hank
law to stand az now. Whensvsr
tho safety fund has rsaehsd an
ascertained amount. lst parttcipa1ing
hanks withdraw their bonds and ell thsm
IL they choose. This plan would dispense
| with the craving for silver currency b.
cause Il would furnish all tho circulating
notes needed, and Il would dispenss With
| tho need of state bank notes because every
facility for sound banking that . state
could possibly grant would be granted b.
tho national government.
Hon. N. ID. Hartsr of Ohio laid down
the conditions to be adopted. which, In his
opinion, were essential to the suceessful
financial future Of the United States.
Gold must continue tho sole standard of
value and bi-metailism must and can ooly
be maintained by limiting the coinage Of
silver as We do nov. Tho government
must stop the issue OF legal tender paper,
retire in the best manner and at - early
date rs can properly be done all pspsF
II has out and thereafter connns
itself to collecting taxes, disburs-
of the money market. With tho govern
ment simply coming freely all gold and
restricting the coinage OF bAser metals,
every other form Of money would Be
promptly retieernable or convertibls into
gold and tho volume under any good bank
ing system would always be what the busl.
ness Of the nation needed.
Harter then presented bill introduced
In congress and pictured the business Al
the United States free from congressional
control which would follow the adoption
of this plan, and said while Il providsd
for state banking, tho banking Of ths
future, would. under the bill. b vesy
largely done by national banks and b
hanks and bankers not Issuing notes.
Comptroller Hcpburn's paper was ou
state and national bank circulation. II
said In part THE constitution provides
that congress must provide all money that
possesses full debt-paying power. By
every consideration OF sound business
principles It should provide all the usouey
the country required. Al In the past, %
In future, every period Of financial d.
precision would result in more OF les gen-
eral suspension Of specie paymsuts b.
banks. II state banks are allowed 70 cir
culatate their acceptance becomes . busi
moss necessity. State bank circulAtios
loses it's money power in . csisis
instead Of paying debts Il comes forward
TO be paid and so adds to the danger. II
the states arc to share with tho United
States in issuing papsr money, ws will
have chain OF soversignties, each With
varying laws aud systems- The proat ol
q banks circulation depends upon thu
length Of time IL is outstanding. In osdsI
TO get their notes into general use and
keep them outstanding. state banks vould
seek to arrange with city correspondent
for their redemption. AZ result Of ths
intense competition for banks accounts
all Of our cities would b drawn into IN
mesles. aud tho weak and bad notss
would not be confined 10 the place ol
issue. Circulation should be secured.
When the United States bonds cease Il
exist, other suitable securities will exist
The injunction Of the government b MOI
merely TO protect the note holder, but q
far as possible to protect all crsditors. Ia
recent years banks have become las.l
owners Of securities; since this is The eass
Il would not be an onerous provistou ID
require them to own proper securities - {
basis for circulating notes."
A. the Montana.