St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-10-20
LEA5E.c BANKERS DISCUSS LBPOR-
TANT FINA yCIAL TOPICS
AT THE CONGRESS IN CHICAGO.


when the exchanges Of goods are rapid
and expensive, and less abundant when
the contrary condition exists. AS to
how il is 10 be obtained he said:
I'VE cannot get it from the govern
ment, because the government cannot
know when the demand for money is
increasing or diminishing. l believe it
has never been proposed to gauge the
issuing of currency by the collections
at the customs house, but the method
would be much more philosophical than
the per cap ita method"
Mr. White then gave the history of
money from the early ages to the pres
ent day. and, continuing, said:
But the point l wish to illustrate is
that Il check on bank, or private III
divduai'S acceptance, or a certificate of
depositc in an insurance company. or
any kind Of shinplaster, will perform all
the functions of bank note if the pub
lie have the same confidence in the
issuer. There is no difference between
the check and the bank note as regards
their intrinsic nature and character.
at is easy to see that the cheek syS-
tenn is
AUTOMATIC AND ELASTIC,
and that il accommodates itself to the
volume OF business at one time as we'll
as at another. 1t is not quite so easy to
see that the bank note system may be
automatic and elastic in the same way.
The present national bank currency
is not HOW and never was all elastic cur
rency. The great merit of the national
bank currency is its security. This is
due To the governments guaranty, which
is all sufficient for the notes it issues.
United 5 ateS bonds issue can be dis
pensed with as part OF the security OF
the government"
Mr.. White then read copy of COM
mInication from the comptroller of the
United States showing that the taxes
levied on the national banks of the
United States since the organization Of
the system had Melted the government
the round sum Of $3.50. 100, 900, and con-
tinued:
Iii appears, therefore, that if there
had never been any bonds issued for
national bank notes the government
would have lost less than a million
dollars by redeeming the notes of all
failed banks. IT there had been COM
mon tuud of something like a million
accumulated by taxation of banks
No Loss WOULD HAVE RESULTED
to the government"
Mr.. White then went Oh to say:
"BOnus securities for bank notes is not
cons. stent with elasticity. If you ask
me il | consider elasticity more yaiu-
able feature than security, say, de-
cidedly. no. Our first claims should be
for both security and elasticity. Both
are obtained in tie Scotch system by
unlimited liability of the shareholders
of banks for their note issues. Thus 1t
has happened that thousands of notes of
failed banks in Scotland have always
been received by the other banks at par
md have never deprecated, although
they have neither bonds requisite nor
safety fund behind them.
If bank note system is both elastic
and secure we have every requisite OF
perfect system. The reason that bank
notes are preferable is that they are con-
Stantly balancing each other in trade,
just as checks do In other words, they
carry themselves without the use OF
gold. Gold is used as a tOuchstone all
the time, but its actual transfer is re
quired only to settle balances of inter-
national trade"
Mr.. White eyampled the imperial
banks Of Germany, France and Englan
as a good way to
DISPENSE WITH BOND SECURITY
Tor bank notes. He also said:
There is no reason that | can dis
cover that the national banks should
not be allowed to have branches, as the
Scottish banks and the Canadian banks
do.'
MIR. White then went on to show why
the national banking act must be gotten
rid of. if a flexible currency is secured,
i'll so far as the bond security clause
is concerned, saving:
IF bond security were dispensed with
and its place taken by either a safety
fund, unlimited liability or bank con-
solidatiOn, an elastic currency would
be secured" Eas
In conclusion, Mr.. White read the bill
which was drawn up by him last win
ter and introduced in The house of rep
resentatiVeS by MI. Walker. of MasSa-
ChusettS.
E. o. LEIGH,
eX-director Of the United States mint.
now New York banker, read a paper
on The Silver Question as Related to
the Appreciation of Gold" He said:
He must be blind indeed who fails to
see that the distrust. which was the
main feature Of the recent panic, had
It's birth III the silver policy of this
country. Nothing short of 4 radical re-
NersaI or thlS policy Will restore conf
dence and attract foreign investments.
IN order TO merit the confidence of the
world and maintain our excellent credit
and reputation as q country of the first
class, we must maintain our monetary
system above all question. The only
way TO do this IS to 20 out of the silver
business until such time as other COM
merclal countries may find 1t for their
interests to join with us in restoring sill
yer to It's former use as money"
Mr.. Leech then discussed the claim
that what appears TO be a depreciation
in the value of silver is really an an
probation in the value of gold, occa-
soned by its scarcity aud by the disuse
Of silver as money.
THE PANIC IN AUSTRALIA
and the United States was the subject
discussed by Hon. Joseph c.. Hendrix.
OF New York. He drew vivid picture
OF the rush of British capital to Aus
traia, and the collapse which followed
Inc period OF financial lntoXication."
Regarding the panic of the United
States. he said:
The Bland act, followed by the
Sherman act, with a free coinage party
never idle in congress, drove away the
foreign capital that Australia has since
squandeTed, and this distrust OF Europe
in our ability to keep upon gold basis
came SO wildly home TO US when the
free gold in our treasury fell below the
point Of fixed reserve that our own peo-
pie caught The injection of distrust"
10 the action Of New York bankers
III the direction tlf financial afTairS a,,d