The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1894-12-29
1HE CURRENCY EEFoEM.
Springer Tells Why the Carlssie Bin IL
Superior to the Baltimore Plan.

Washington City, Dec. os-.'I do not be-
iieee.s said Mr.. Springer. of Illinois. the
chairman Of the house committee on
banking and currency, this morning.
that the people OF the country generally
understand the r1odifca tons in the pres
enG banking system. which viii be ac-
complished by the passage OF the Car
isle bill. as now proposed to be Amended.
In the first place. the Carlisle bill pro-
poses a radical change in the manner
OF securing bank note circulation. The
present law requires depcs:; of United
States bonds and permits the issue of
notes to the amount Of 30 per cent. of the
par value OF the bonds. The rapid pay
nlent Of the public debt. the limited num-
her OF such bonds now outstanding, ana
the further fact that many of them are
held in trust capacities in this country,
and as permanent investments by per-
sons residing abroad, have rendered this
kind Of security impraeticable, and some
othar must be devised or the national
bank circulation will soon be retired.
The Carlisle bill proposes, for the seeur-
ity of the circulating notes of national
banks, instc1i Of United States bonds. a
guarantee fund consisting OF legal tender
notes or currency certificates to the
amount of 80 per cent. OF the circulation
applied for: also safety fund TO be
raised by tax OF i-e of ! per cent. per
annum upon the circulating notes until
it reaches per cent. of the whole circH-
lation, and as further security, a first
Iisn upon all the assets OF the bank and
upon the amount which may be realized
hv Hah faa IF he
national banking Law. 1t must be OBJ
served here that the. guarantee fund OF
60 per cent, the assets of the bank and
the personal liability Of the stockholders
can only so TO the payment Of the cir
culating notes of the bank which Issues
them, but the 5 per cent. guarantee fund
raised by tax upon all the circulation
of the country, is a common fund, cut of
which the notes OF any failed bank may
be paid. If the guarantee fund. the as
sets and personal liabilities of the stock
holders are not sufficient. Thus, on a
circulation of o00oo,o0o the present ma
tiGnal bank circulation, the safety fund
would amount 10 S1o000,0co, and this
whole fund could be drawn upon to pay
the notes of amy bank that failed. This
security. together with the others men
toned, is deemed by the safest fininciers
and bankers OF the. country TO be amply
sufficient TO secure the billholders under
any circumstances. even In a time CT
panic and universal financial Disaster
Replying to a question as to in what
respect this bill differed from the Baitl-
more plam Mr.. Springer added: What
is known as the Baltimore plan was
adopted by "A convention of the national
bankers OF the United States. held In
Baltimore In October last. The Baltimore
plan recommended by this convention
provides az security for the circulating
notes of national banks only safety
fund of per cent on all outstanding cir
culation, a first lien upon the assets of the
bank and upon the personal liability of
the stockholders. IL these sums are not
sufficient. the government of the United
States Is 10 pay any deficiency by
promptly redeeming the noes, but the
government is TO tie reimbursed out of
the per cent. safety fund as soon as 1t
Is replenished by Il taxation of IL of /
per cant. per annum upon the circulation
Of all banks. In short. the absolute Sc
carity OF rhe Carlisle plan is 30 per cent
greater than that provided by the Ralti-
more plan, and as the bin is now amend
ed the banks under both plans will be
liable for all losses which may occur
10 billholders which are to be paid out Of
the safety fund when replenished. The
Carlisle plan, has, however. his addi-
tionai security to the biliholders. that
the notes Of the failed banks which can
not be paid out Of the funds provided in
the bin are to draw par cent interest
until paid This viii advance such notes
TO premium. and Is in lieu of the pro-
vision in the Baltimore plan requiring
the government to advance the deficiency
In the first instance by paying the notes
OF any failsd bank. II the safety and
other funds arc not sufficient
An oasis In the desert OF household