Evening star. [volume] (Washington, D.C.) 1854-1972, 1893-11-25


ing substitute for it and for the present
system of national bank notes, which have
been decreasing in volume from year to
year. Mr. Springer, the chairman of the
banking and currency committee, which is
10 nave charge of this question in the
House, has given his views and has out
lined the bill which will be reported by that
committee. 1t is substantially a bill to
permit the issue of national bank notes on
the bonds of states and counties and mu-
inequalities, just as they now issued on
government securities, with such safe
guards as to the acceptance of bonds as
may seem necessary. MIR. Springer has laid
this plan before Mr.. Voorhees,, the chair
man of the Senate committee on finance,
and he has consulted with the officials of
the Treasury Department about il. 1t is a
safe inference TO make that the plan does
not meet with unqualified approval at the
Treasury Department, IL the views Of the
controller of the currency on another plan
10 Increase the circulation are considered.
Mr.. Eckels is nearly through the prepara-
ton Of his annual report to Congress; and
though no part of it has been made public
II is altogether likely that it contains a
warm commentator of what is known as
the "safety-fund' plan for the issue of ma
tional bank notes guaranteed by the gov
eminent And the approval of this plan Is
a negative disapproval of the plan of Mr..
Springer, for the two are entirely unlike.
The Controllers Report.
Mr.. Eckels has been at work on his re-
port for about a week. 1t is about ready
for the printer. and II will probably be
given out for publication December i. 1t
will be sent to Congress on the day when
Congress meets-December 1. 1t is COM
paratvely a brief report-possibly one-half
the length o. the reports made by Mr. Eek
els Pre1ecess0rs- IL is not at all likely that
Mr. E<eAeis will say any thing in it in dis
paragenent of Mr. Springer's plan. He has
refused consistently To discuss that plan
with anyone but Mr.. Springer, and the
statement that he does not approve il en-
ureiy Is purely inferential.
L called Mr. EckelS at his home ON
Rhode Island avenue a few evenings ago to
ask him 10 tell ME how the circulation of
the country could De increased with safety.
IN answer to a question he spoke first of
the present system of national bank notes,
based on government bonds The diff
Guilty with a circulation based on bonds"
said MIR Eckels. lis that II Is not suff1-
Gently elastic. Ii does not increase when
there is an increased demand for currency
and diminish when that demand ceases.
Inc national bank circulation under the
present system diminiSheS the price of
bones goes up. There has been an enor-
nous shrinkage in the amount of national
bank circulation because of the nigh price
Of bonds.
Now. Il is down to nearly saOo Ooo OOo
The eificulty with any circulation based
on bonds is that when you make a de-
mand Tor the bonds the price of them goes
up and when the price goes up they are
culation.''
Would not that same objection hold
good IN the extension of the present sys-
TEN proposed by Mr. Springer
cannot discuss Mr.. Sprinsers propo-
fr1ft for a
Springer is at the head of the banking and
currency committee of the House. Besides
he has talked wiki me about his plan and
could not be quoted saying anything
either in favor OF or against 1t.
There Is very serious problem before
the country" continued Mr. Eckels Con
gress must determine whether we shall
have banking system which shall be I'M
der the control Of the government, as tn
present system of national banks Isl wheth-
er there shall be currency issued by these
banks under government supervision and
on what security IL shall be based, and
whether the government shall be RESPONSE
bic for the redemption of this currency.
There is Ona proposition which has re-
ceiVe1 a great deal Of consideration at the
hands of Mr.. Horace White and many
eminent men To which 7 have been giving
much serious thought lately. u is known
- 'He s~f"tv fund system. and IN one form IL
was used by the state of New York for many
years AMI used successfully. It was adopt-
e'. I believe. in 1S29 ard was in use some
twenty years. Under this system the ma
tiOnal hankS throughout the country would
be permitted to Issue notes up to q certain
per cent % their capital to be guaranteed
Nv the government. end there would be in
+Ha treasury re@emDtion fund deposited
nv TIE banks and alSO safety FIND made
~ 90 a taV 81 circulation which would
." the prGte"tion of the government in
use - thc fa'lu~e Of any Of the banks
~ its 'nah;l'tv u redeem it's circula ton.
Insurance omDanias. pc Won know can
c7'C'''7ta very cIC~eI- what the percentage
Of risk is and what premium thew must
. L. 60
loseeS and still wake n 1-oft In the same
~-0y tho gnvnr-'-nNDt could tell nv figuring
On ~ h'''' f"t',~"~ since the Inauguration
Of to oa'ioraI h1rk'rp system inst what
rs-On~+~o-n 81 'Ne v-hcln circulation would
boz haan rr@1n S-0O1 by the onvernmept
II tHa earotv fund evSter1 had boon in oper-
zion throughout that pariN1 II hos been
F~rIra4 OF and II is something Ike one
CO-+~ra ut Io7st''
''r--'o- -ris ~-Nno~e1 svstar, the banks
-0'l1 s''rl be under the control Of the gov
-~---~~nr1+S--
''Or. voc k-d --o'- ro+a bolaars ---o,,,5
,-'r~rr--- v---f'- 80 ~Na-aNoI6a-s ,,-o,,,s
~, rasr4r~tl,ra pc tEe,- VOW are 10 +ba ~
S+o~'- \ r,.,.oNoII~- q. 800 1a1 o~ ~
-~,oe- ir-ora-. 90 the crn1ito-s % a ban,
1e0o~'t"r r"e -he ""''"n - ~o'n~ 70 one
b~-'- or ~rO*ra-- SHnraHnI1Gr hoe tbn
rE~h+ 70 I--0-,- III ~r~--- tLa CONDITION %
howl r'rr+ .tn - --~Lc11or arcents his note
- 80 -ec-'-r~- c~'r~-o Of husi~oSs a1a he
STOW ~-ho.I-- 10 III t~ryo ~ or not The
-,r,f+4I 600 ~r TO -1tfnn1r hankS is nov.
',s,,,+ s,,rq PrN N0N - .No,- ---o-a aII0va1 N
49,. - th~+ ar'oItnt N 7otae
,ln ~~r,--~->--'ent oI,r tioooI
r--r,l- csr,,--ra tfrr vy--rI1 10 0N~-lv h,,r-
r~-St - hr-p mil
r~-~ y. Ms - --~To---~~t'O - coin a,5
g --~r-'r 49,, .',n guarantee Of the govern
went he'li~1 81 -
--r--r. synonym Of GOiu
"Wonld e not be Dcssible that the gov
eminent would be embarrassed bv the de-
rnand for Z large quantity Of coin. If there
was such an enormous amount of paper
money in circulation not based on coin IL
the treasury
Theoretically il is possible" said Mr.
EckelS. but it il not at all likely. If peo-
pie knew that they could get coin for theil
notes AT any time they would not want it
You have now one thousand millions OF
Sreenbacks secured by only one hundred
millions OF gold. Yet no one wants the
gold because he knows that he can get Il
whenever he does want it
The notes of any failed bank would be
reieernable from this safety fund as q
whole and not from the proportion which
tlat Eank mad contributed to the fund.-
The whole fund would be pledged to the
redemption Of any notes which any of the
banks could not redeem and the pledge a
L-r