The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1894-12-12
CURRENCY REFORM SCHEME.
The Plan Advocated by Carlisle
Causes Comment.


plan of currency reform is naturally at
tracing great attention in and out Of con-
gress. Mr.. Carlisle, it is expected, viii
next Monday appear before the house COM
mittee on banking and currency TO answer
any questions that may be asked in fur
Their explanation of his proposition and
to assist in the preparation Of a bill COW
ering his views on the subject, which will
soon be introduced by Chairman Springer.
While Mr.. Carlisles plan is favorably
| commented on by many prominent mem
bers Of both houses. there are others whose
! opinions are of value who argue that the
plan proposed by Comptroller Ecl1els in his
| annual report has superior merit and when
thoroughly known will meet with general
! approval. A prominent senator who Is recog-
nized authority on all financial questions
| explained to a representative of the As
| ISOLATED Press his views. He said:
"Mr. Carlisle's plans Of currency re-
form, when applied To practice, will pro
duce the following result: Taking for the
purpose Of illustration the example Of
bank having 100000 capital, such a bank
would be entitled to issue notes up to the
limit Of $4,000 C75 per cent. Of capitaD, but
| before doing so must deposit legal tender
notes to the amount of S22,50O GO per
cent. of circulation. This, in effect would
be equivalent TO a net issue Of s52,5OO
| circulation by the bank or $4,000 received
| in notes from the government minus S22-
| 500 in notes deposited with the govern
| ment Upon this $4,000 Of currency, the
bank would earn its profits, provided it
! could keep them in circulation, after de-
/ Quoting costs of redemption, tax for
| ca ferx md f,r 7fraie, rot
Of comproller's bureau.
| LAS a plan for relieving the general gov
| eminent from the burden and charge Of
| redeeming United States notes it would,
! according to the secretary's estimate,
| suit in securing the temporary deposit
! of $225 900 900 Of these notes with the gov
| eminent, If all the national and state
! banks now in existence should take out
! circulation to the full amount proposed.
! Let US see how this result would be
| arrived at. The present capital Of all
/ national banks in existence is about $685.,
| 100000. If to this is added 1892, 100000 as
| the capital Of state banks availing them
| selves of the privilege, total capital of
| 81, 600 would be had as the basis
| upon which to issue currency Assuming
| that all the banks possessing this capital
| issued currency up to the full lint of 70
| per cent, we viii have an issue Of bank
| currency 20 the amount of $750,O0O,0OO.
| Against this legal tenders to the amount
| posted, or $225 100000.
What viii be the effect Of this upon the
/ volume of money in circulation
! add bank notes issued. $3.50 600. less
| national bank currency retired, Sl12O00
| 600; legal tenders deposited and Withdrawn
! from circulation. S225, 100000; total, 1897,
100000; net Increase in circulation, $685.
O0e 600
Assuming that this increase could be
| kept IN circulation, withdrawal Of S225-
100000 Of United States notes IS effected
| temporarily; but as there are $49S 1000 Of
! these altogether outstanding, there would
! still remain outstanding the major portion
| Of the mass. or about $243 900 900; to harass
| the treasury by presentation for redemption
| in gold. IL the $50,000.000 Is not kept in
| circulation. the amount Of legal tenders
| released by redemption Of circulation
| would be added to the large sum not fund
| ed. Again, If the legal tenders deposited
! by the banks is to be used for redemption
/ of these notes on presentation there would
| be no difficulty in procuring any amount
| Of them by presenting bank notes. Comp
| troller Eckels gives but few figures on
| which to base n computation for his plan.
| In this feature therefore there is neither
| expansion nor contraction Of the currency,
simply the exchange Of one kind Of cur
! rency for another, just as good, but for the
! purpose and with the effect Of entirely re-
| leving the government of the burden and
| cost of current redemption during the eX
| istence Of the bank receiving and issuing
| the same.
| Under this branch Of the compuoller's
! plan with the present capital Of National
/ banks Cviz. $66S O0OO 0O) S334 100000 of
| legal tenders would Immediately be retired
| and withdrawn from the possibility Of be-
| ing redeemed in gold by the general gov
| ernment while a banking capital of $1,000
| 600 900 would serve as the basis for re-
| firing the entire issue both Of United States
| notes and Sherman act notes, amounting
! together to about $i9SOOOOOO. While under
| the secretary's plan a capital Of $l,O0O,000
| would effect a withdrawal according to his
| own estimate of only 1925, O00 Should
the bank notes issued against legal tenders
| be made available for lawful money reserve
! against deposits are now the legal tend
| ers. this would operate to withhold them
| from redemption by the banks.
| Passing to the other feature Of Mr..
| T,ckels's recommendation ii is found that
/ A bank with 100000 capital could also IS
! sus as much as $4,000 of slfety fund notes,
! constituting a first lien upon its assets,
| and upon the liability Of its shareholders,
! and redeemable upon the failure Of the
| bank promptly out Of a safety fund.-
| created by a light tax upon all the banks
| issuing this kind Of circulation. 1t IS upon
| this class of notes that the bank would
make a profit, which would be a clear one
! over and above the light expenses for cost
of redemption and taxation for the safety
J fund, cost of operating the comptroller's
| bure7u II Is in this class Of currency
also that the elasticity would be found.
! for each bank could issue either none at
/ all or as much ais 80 per cent Of its cap
| ital."
Program Agreed Upon.
A program for speedy considerations or
the financial plan proposed 10y the president
and Secretary Carlisle was arranged by
the house committee on banking and cur
rency today. Three resolutions were
passed. The first specifies that the fnan-
/ cial plan, as outlined by the president and
the secretary of the treasury, shall be
taken up next Monday. and that Secretary
Carlisle and Comptroller Of the Currency
Fckels be invited before the committee
at 10 a. m. Monday and that the hearings
close on Saturday, Dec. Is. There was
little division Of sentiment as 70 the hear
ings and no vote Of significance was taken.
The sentiment among the democrats was
for proceeding as fast as possible and re-
porting a bill before the holidays. 4
second resolution authorized Chairman
Springer to invite persons before the COM
mittee next week 10 give their views.
This excited some comment. Mr.. Walker
moved indefinite postponement Of the prop
osition on the ground that there had al
ready been too much Tank in the COM
mittee. The resolution was carried, how
ever, although Messrs. Walker and john
son, republicans, opposed Il. A third res
olution was adopted authorizing a call Of
the committee al any time. and making
five a quorum. Tals is to prevent delays