People's party paper. [volume] (Atlanta, Ga.) 1891-1898, 1893-01-27

JatlVe IN congress from the nIJeentn
Ohio district, spoke on "American
banking and the money supply of the
future" The system of banking
established by the New York State
legislature, which provided for Sc
curing notes by stock collateral de-
posted with State authority, mr..
Harter said, was the greatest single
advance IN banking science since the
world began, and in 1914 England
adopted the idea with but trifing
changes, and under it the Bank of
England has since been conducted,
and upon it hinge the finances of
Great Britain, and therefore of the
world.
The national banking system had
no features of Importance not already
in use and fully understood in the
various States and it for nearly thirty
years has proven, in the main, wise,
prudent, efficient, and valuable sys-
TEN, and with but few amendments,
but for the decreasing supply of
United States bonds, would continue
the permanent system of the coun-
try.
The high prices for United States
bonds, their growing scarcity, and
the small return in interest they
bring, the fact that 1907 will, it is
believed, see them all paid, distinctly
points to the opening Of a new epoch
or period in American banking, and
in connection with which Mr.. Harter
said it was easy to forecast the money
supply of the future.
The speaker laid down these con-
ditions the adoption of which were,
in his opinion, essential to success
full financial future for the United
States:
First Gold must continue to be, as it
is now, the sole standard OF value IN the
| United States, and that bimetall1sm must
and can only be maintained by limiting
the coinage of the other metal (sllver) as
is done now. The silly waste, loss, and
general insanity which marked the Gov
eminent purchase of pig silver must
never be repeated.
| Second. The Government must stop
the issue of legal-tender paper, retire IN
! the best manner and at as early date as
| it can properly be done, all the paper it
| has out. and thereafter cOnfine itself to
| collecting taxes, dlsburSing the proceeds,
and keep it's hands off the money market.
| With the Government simply coming
| freely all gold and restricting the coin
age of the baser metals, like silver, nickel
and copper, every other form Of money
would be promptly redeemable or con-
vertible into gold, and the volume under
any good banking system would always
be what the business of the nation need
| ed.
Mr.. Harter here presented the bill
introduced in the House Of Represen-
tatives, No. 9770. In detail Mr..
Harter's plan provides that the Unit
ed States shall no longer guarantee
the payment of circulating notes is
sued by any bank, that the circula-
ton of any bank shall not exceed so
per cent of the par value of the
bonds deposited by that bank; that
the State bank circulation shall be
repealed; that bank circulation shall
be secured by approved bonds, de-
posted either in the United States
Treasury or in the State treasures ;
that a tax of one-ffth of one per
cent shall be levied on all bank circu-
lation, the receipts from which tax
shall be turned into reserve fund
to secure the circulating notes, and
that no bank notes shall be legal
tender.
A paper was submitted by the
Hon. A. S. Hepburn, Comptroller Of
the Currency, on the subject of State
and national bank circulation. He
said:
The Constitution prohibits the States
from coming money or making anything
except gold and silver legal tender State
bank bills could not become legal tender,
neither are national bank bills. In times
of prosperity, State bank bills would cir
culate freely, but in times OF stringency
they would return to the banks for re-
demption and they would have to be re-
deemed in legal tender money provided
by Congress. The Constitution provides
that Congress must provide all the money
that possesses full debt-paying power.
By every consideration of sound business
principles it should provide all the money
the country requires. AS in the past, so
in the future, every period OF financial
depression would result in more or less
general suspension of specie payments
by the banks. If State bank notes are
allowed to circulate their acceptance De-
comes a necessity. While the wealthy
might provide themselves with means
| of discriminating against the notes Of
weak banks, TO the average laboring
man bank note deJector would be as
inexplicable as the binomial theorem.
| State bank circulation loses its money
mower in a crisis instead of paying
debts it comes forward itself to be paid
and so adds TO the danger.
There is no mere fallacious idea than
that we can have good local currency.
While note might pass at par in Kan
sas and at discount in Pennsylvania,
it's purchasing power would be equal in
both places. The discount in Pennsylva-
MIA would lie equaled by a corresponding
increase Of cost price in Kansas. This is
an inevitable law attendant upon depre'
ciated currency.
Circulation should be secured. When
the United States bonds cease to exist,
other suitable securities will exist. The
function of the Government is not mere
| " to protect the note holder, but as far
as possible to protect all creditors. In
| recent wears banks have become large
owners of securities. Since this is the