The sun. [volume] (New York [N.Y.]) 1833-1916, 1893-09-04
TO REVIVE STATE BANKS.
sA7URDAT's IMPORTANT CONFERENCE
At THE TREASURY DEPARTMENT.

At 2Nf TREASURY DEPARTMENT.
President Cleveland Took Fart In II ana
Laid Before It Letters from Representa-
tives OF National banks In New York,
Boston, aud Chicago Favorinr the Plan
Secretary Carlisle TO Draft Hill Which
Will Provide for the Reorganization OF
National Hanks AS Slate Banks, and
for the Repeal of tho Tea Fer Cent. Tax
So ms to Enable Them to Issue Currency
The Currency TO He BASED ON Securities
Approved by Governments Authoritie.
and the Banks to He Under Government
Supervision - The Notes Issued TO he
Rcdeenabie In Gold by the Unltcd States.
WASHINGTON. Sept 3.-Only two newspapers
In the East and possibly four or FIVE in the
West had the news this morning OF the i'm
portant conference hold yesterday at tho
Treasury Department. Tho fact that such
meeting had been held came as surprise to
the Washington public. for the conference had
been arranged with great secrecy and was
conducted behind closed doors. 1t has been
ascertained to-day that. besides Speaker
Crisp Secretary Carlisle. and the two members
OF the House Committee on Banking and Cur
rencr. Hale OF Missouri and Warner Of New
York, President Cleveland took part in tho
conference 1t was not intended that his pres
ence should become known. but 1t has leaked
out, and no attempt Is made to deny It, In
fact, the conference was called by the Presi-
dent, who desired to talk with tho Secretary OF
the Treasury and the Speaker Of the House
concerning financial legislation. and particu-
larly with regard to the plank OF the Chicago
platform which demanded a repeal OF the ten
per cent. tax on State banks.
Mr. nd hou 70 t.; O.
popularity expressed. and he is opposed even
now to repeal. unless the State bank currency
that would be Issued can be made as sound as
that OF tho national banks. For some time
past he has been In communication with prom
inent bankers and flnanciers In various parts
OF the country on the subject, and he has as
certained the views Of great many mon OF
this sort without regard to politics. Some OF
them are opposed to any change at all Just
now. though nearly all admit that the present
system cannot be continued much longer
under the existing law.
United States bonds. upon which to base the
national bank currency. are becoming scarcer
and harder to get every day. and tho number
OF banks and the demand for bonds and for q
larger volume Of currency are constantly in
creasing. The time must como soon when
large portion OF the outstanding Government
bonds must mature and DO taken up. and the
bankers themselves. it 10 said. realize that
some new legislation must he enacted. Many
OF them favor a new issue OF bonds, and that
plan has already been suggested as the first
step to follow tho repeal Of tho Sherman Silver
Purchasing law. The Western and Southern
Democrats. however. are violently opposed to
bond issue. and they declare with great
unanimity that such action on the part Of
Congress and the Administration would breed
Popuists in overwhelming mum bers and lead
to the defeat Of the Democracy in the next
election. For this reason 1t may be said the
bond-issue plan has been abandoned for the
present, and 1t will not be revived unless all
other means Of affordins relief shall fail.
Mr.. Cleveland. 1t is said. has letters from
Presidents or other authorized representa-.
tives OF oil but two of the national banks In
Chicago. expressing readiness to cooperate
with him in bringing about such a necessary
change in the banking system as will permit
the national banks to organize as State insti.
tutions. provided tho law shall be SO drawn 40
to guarantee q sound currency and continue
Government inspection and supervision.
Similar expressions have been received by the
President from representatives Of all the ma
tional banks in New York except four. and
from fifty-seven national banking institutions
in Massachusetts,. including a majority Of
those in Boston. Tho bankers. it is said.
believe that IN early change Is inevi-
table. and they are willing that it shall
take place under Mr. Cleveland's Administra-
ton. because they know him to be in favor Of
a sound system and honest money. They rec
ognize the wisdom Of changing now instead Of
postponing 1t until an unfriendly Administra-
ton. and perhaps. an unwise Congress. may
come into power. These letters were laid be-
fore the conference yesterday, and the sugges-
tions from some Of the bankers and fnanciers
who had written to the President or the Secre-
tary Of the Treasury were listened to with
deep interest The whole matter was discussed
and as result OF the conference 1t |
was left to Mr. Carlisle to have q bill drafted |
looking to q change in the banking law.
The bill. it is said. will provide for the reor-
Of the national banks rs State in
stitutions. and the repeal Of the 10 per cent |
tax will permit thsm to issue currency tho |
same as national banks now do The currency
will be based upon State. municipal. and other
bonds or private securities OF such character
as to meet the approval OF the Government !
authorities. The present system Of examina-
ton by the United States is to be continued. |
and the Government Is to stand good for |
the REDEEM ption Of the currency In gold. Such |
State banks as now exist will be permitted to |
Issue currency. provided they comply with the |
requirements OF the new law. but against such |
banks as do not reorganize In compliance |
with the law the 10 per cent tax will still |
stand. That feature OF the present law which |
provides that banks may issue currency only |
to the amount Of 90 per cent. OF their bonds |
will probably be retained. as It Is expected |
that the extension OF the privilege to the many |
State institutions which would take advantage |
Of it would sufficiently; increase the volume Of |
currency. 1t would thereafter naturally ex-
pand with the growth Of the new banking |
system.
1t Ia now related that this whole subject was
also gone over at a conference held on Friday
night by President Cleveland. Secretary Car
Isle. and Senator German, and tho question OF
an immediate increase IN the vol
ume OF the currency was also considered 1t |
Is believed that the proposed change In the
banking laws vii take some time for accom-
plish 'nent and in the mean time some further
relief OF the financial strinGency than the
mere unconditional repeal OF the sherman law
Is desired. According to q reliable authority.
the plan suggested n short time ago OF issuing