The Helena independent., 1894-12-11
CARLISLE EXPLAINS.
The Secretary Of the Treasury Given a
Hearing on His Currency Reform
Scheme.
HIS OWN AND THE BALTIMORE PLAN.
he Explains the Points In Which They Differ
Government Owes Nothing to
0epositors.
HIS OWN AND THE BALTIMORE PLAN.

llsle appeared before the house commit.
tee on banking and currency to-day to
present In detail the features OF the now
currency plan, proposed In his annual
report and endorsed In the presidents
message. Besides the fun membership
| Of the committee Senior Romeu. the
Mexican minister, and many members
OF congress were present, Carlisle took
up each section Of his reccommenda.
lions: First, the repeal OF all laws re-
quirlng or authorizing deposit of
! United States bonds as security for cir
culation, and second. to permit national
banks to issue notes to AN amount not
exceeding 70 per cent OF their paid up
ana unimpaired capital. but 10 require
each bank, before receiving the notes.
To deposit guarantee fund consisting
OF United States legal tender notes, In
Guiding treasury notes OF 1890 10 the
| amount OF 80 per cent upon the circulat-
ing notes applied for; this percentage
OF deposits upon circulating notes out
standing To be maintained at all times,
and whenever the bank retires It's circu-
laton, In whole or In part. its guaran-
tee fund Is 10 be returned 10 IL in pro-
portion To the amount OF notes retired
| 1al nilu ilt WIS tdilHutu Int DTtN-
ent law, requiring "A deposit of bonds
to secure the circulation, prevented elas-
ucity OF the currency. THE provision
outlined" said Carlisle. gives ample
protection without the deposit of bonds
as required by law" He said the prnc-
tical value OF a reserve fund in currency
was shown In 1893. There was a de-
mand for money aggregatlng $40. 000,-
600. The treasury did It's best TO meet
the stringency, but by the time the
notes were ready to distribute. the de-
mand had gone by. and many of the
packages OF notes were returned un-
opened.
The SECRETARY invited criticism on
this particular section. Chairman
| Springer asked how the secretary's
plan differed from the Baltimore plan
Carlisle explained the technical differ
ence. The Baltimore plan proposed
deposit OF 30 per cent, under certain
| conditions. while the treasury plan pro-
posed deposit of 30 per cent. When
bank falls the treasury plan contem-
plated an assessment on all national
banks. they In turn having lien on the
failed bank
Representative Hall, of Missouri, sug-
Rested that there was prevailing opin-
ion that IL was unsafe to place the
power of the currency in the hands OF
corporations and banks.
IT Will work automatically" said
Carlisle. THE banks will not expand
the currency unless the public needs
H. Their interest will be to expand and
contract as the common interests de-
mand. These interests will. therefore,
control at all times" The secretary
stated that this fiexibllity was much
more desirable than the rigid system by
which certain amount of currency
was outstanding. AT one time the
stringency was so great that the banks
drew out sl3.000,000 under the pressure,
and III II had not been for the Canadian
banks, who sent currency into this
country, serious results might have en-.
sued.
Carlisle said that ultimate liability
was on the government by the Balti-
more plan. and on the banks by his
plan. johnson asked If the ultimate
liability of the government would not
inspire more confidence In currency
The secretary said II undoubtedly
would, but that his plan would inspire
ample protection, and therefore ample
confidence. He explained that in case
Of failure OF a bank its 80 per cent.
goes into the general safety fund, and
II the assets OF the failed bank are not
| sufficient to meet all liabilities with
JUL lilk AHt ktutldl NdltiN Iutlu Uf-
low g per cent, then all the banks are
assessed to meet the liabilities. The
banks then have a lien on the assets OF
the failed bank.
Concerning the state bank feature OF
the plan, Secretary Carlisle said "It
suggests merely "A plan by which state
banks could act II they saw fit. But
the government has 10 direct concern
with state institutions. The plan sim
al
under certain conditions. II they see fit."
The secretary then took up the propo-
sitlon that no national bank notes be
issued of less denomination than $40
IL would encourage the circulation of
silver coins OF small denominations
These certificates were now crowded In
the treasury. Sperry asked II silver
certificates We're redeemed in gold
NO" said the secretary. There are
two classes of notes redeemed I'm gold
greenbacks, and treasury notes issued
under the Sherman act of 1890"
Concerning the ninth provision: RE
peal OF all provisions OF the law requlr-
ing banks To keep a reserve account
OF the deposits" the secretary said, "the
present law keeps n bank from using
It's reserve at "A time when II needs II
most"
cobb, OF Alabama, asked; do you
hold that the government owes no OBJ
legation To- deposltOrs2''
NO more" said the secretary, than
II is obliged to protect private citizens
who invest funds In manufacturing
concerns, corporations. etc"
Secretary Carlisle was examined and
cross-examinpd by members of the com
mttee. He had rough draft Of bill
In his possession, hut after his eXamlna-
tion IL was concluded 90 revise Il before
submitting it Ia the committee, car
Hale and Eckcls differed somewhat as
10 details OF the proposed banking
scheme, but agreed upon the principles
10 govern H. Carlisle will appear again
on Wednesday
Tomorrow Comptroller Hepburn
Horace White and other New York
bankers Will he heard.