Arizona weekly citizen., 1894-12-15
OUR FINANCES Secretary Carlisle Explains the New Plan to
 the Committee. WORKS AUTOMATICALLY. The Banks Will Expand and Con tract ths Currency as the Common Interest De-
 mands It.

WASHINGTON, Dec. 12. - Secretary Carlisle appeared before the house con- mittee on banking and currency today to present in detail the features of the new currency plan proposed in his an- uusl report and endorsed in the presi- dents message. Besides the full mem
 bership of the committee Senor Romero
 Mexican minister, and many members of congress were present. Carlisle took up each section of his recommends tions.
 First, to repeal all laws requiring or authorizing deposit of United States bonds, securities for circulation and second, to perniit national banks to issue notes to the amount not to exceed 75 per cent of their paid up and unim- paired capital, but requires each bank before receiving notes to deposit a guarantee fund consisting of United States legal tender notes, including treasury notes of 1890 to the amount of 30 per cent upon circulating notes ap- piled for. This percentage of deposits upon circulating notes outstanding to be maintained at all times and when ever bank retires it's circulation, in k be returned to itIn proportion to the amount of notes retired. Carlisle said he was satisfied the present law requir- ing the present deposit of bonds to secure circulation prevented elasticity of the cure cy. The provision out lined" said Carlisle ,,gives ample pro- lection without the deposit of bonds, as required by the present law"
 Carlisle said the practical value Of the reserve fund currency was shown in 1893. There was demand for money aggregating s4O,OOO,OOO. The treasury did it's best to Ineet the stringency, but by the time the notes were ready to distribute the demand had gone by and many packages of notes were returned unopened. he secretary invited criti- cism or this particular section.
 Chalrmsu Springer asked how the secretary's plan differed from the Balti- more plan
 Carlisle explained the technical diff ference. The Baltimore plan proposed to deposit 50 per cent under certain conditions, while the treasury plan proposed a deposit of 40 per cent When oaok fails the treasury plan contem- p's.ss an assessment on all national I.tnk t,ey in turn having lien on the failed psnk.
 Representative Hall, ot Missouri, sug gested there Was prevailing an opinion that 1t Ues unsafe to place the power of expand.rg tEe currency in the hands of and banks.
 ''It will work automatically, said Mir. Carlisle. "The banks will not expand the currency unless the people needs it. I her interest will be to expand and contract ns common interests demand II. These interests will, therefore, con- trol at all times.
 The secretary stated this hexibility was much more durable than the rigid sy stem by which a certain amount of currency was outstanding. At one time the stringency was so great the banks drew out s13, ,0O0, 900 under pressure and If it had no. been for the Canadian banks, who sent currency into thIs cou untry, serious results might have en- sued.
 Mr. Carlisle said that the ultimate liability was on the government by the Baltimore plan, snd on banks by hIs plan.
 Johnson inquired IT the ultimate ha- bility of che government would not in- spire more confidence in the currency. The secretary said It undoubtedly would, but that his plan would insure ample protection and therefore ample He explained in case of the faiiure oS bark it's thirty cents goes into the general safety fund and if the assets of the failed bank were not suffi- cisnt to meet all liabilities without car rying the general safety fund below 50 per cent, then all banks are assessed to meet the liabilities. The banks then have lien on the failed bank.
 Concerning the state bank feature of the plan, Carlisle said: 'It suggests merely plan by which the state banks could act if they saw fit. But the gov ernment has no direct concern in the state institutions, the plan simply gives them the privilege of acting under cer- tain conditions if they see lit"
 The secretary then took up the prop osition that If no national bank note be of less denomination than S10 it would encourage the circulation of silver cer- tificates of small denominations. H