The Helena independent. [volume] (Helena, Mont.) 1875-1943, 1894-12-05
CARLISLE'S SYSTEM.
The Secretary Of the Treasury Outlines His
Plan for Providing More Elastic
Currency.
POINTING OUT EXISTING DEFECTS.


Washington. Dec. 1.-The annual re-
port OF the secretary OF the treasury
was sent to congress to-day, IL Is a
volumlnous document The report
deala largely In statistics and the reccHt
bond issue, and makes recommends
tions which, In the opinion Of the Sec
retary, will improve the financial sys-
tenn OF the government, He calls at
tentlon 20 the inability OF the secretary,
under existing laws. TO make adequate
provision for the support Of the public
credit. He says the well-known de-
fects In the financial system and the
serious evils threatened have done more
than all other things TO check the indus
trial and commercial progress OF the
country. The secretary says:
"The only part OF the currency pos
sessing In any degree the quality OF
elasticity is that Issued by the national
banking associations, and II is now
generally conceded that IL has failed TO
meet the requirements Of the situation
at some OF the most critical periods In
the business affairs OF the country. Its
failure is credible, In my opinion. TO
three principal causes; first. TO the
large volume OF United States currency
of various kinds kept constantly out
standing, making contraction or expan-
sion OF the comparatively small ma
tional bank circulation less effective
than 1t would otherwise have been; sec
ond. the difficulty and delay in produc-
ing and 10 some extent i'm retiring cir
culation; thirdly and mainly, the pro-
visions Of the law which requires de-
posit OF United States bonds to secure
circulation and restricts the issue in
notes 10 80 per cent of the par value Of
the bonds
in addition to the existing obstruc-
tons TO the prompt increase and de-
crease OF circulation. the ninth section
OF the act Of July. 1882. which provides
Tor the extension of the corporate ex-
lstence of natlenal banks, expressly
prohibits them from retiring their notes
TO a greater amount than $4,000. 600 in
the aggregate per month, and provides
that no bank which deposits lawful
money In order TO withdraw its circula-
tion shall be permitted to make
any increase In it's circulation
for period of six months there
after. These provisions are 10 mani
testify In conflict with the dictates of
sound policy that they require no COM
ment.
"In view of the foregoing consdeIa-
tlons and many others that might be
urged i'm favor of the reorganiza tion
and reformation OF Its paper currency
system, j have prepared outlines OF the
plan which, in my opinion, will relieve
the government to great extent from
the burdens now imposed upon IL. sc-
cure within a reasonable time a safe
and elastic national and state bank cur
rency and result ultimately In the per-
manent retirement of United States
legal tender notes of both classes"
Among the recommendation made
by the secretary are the following: Re
peal all laws requiring or authorizing
the deposit of United States bonds as
security for circulation. Permit ma
tional banks to issue notes To an
amount not exceeding 75 per cent Of
their paid up and unimpaired capital.
but require each bank before receiving
notes to deposit guarantee fund, con-
slsting of United States legal tender
notes, including treasury notes OF 1890
to the amount of 80 per cent upon their
circulating notes outstanding, to be
the bank retires its circulation in whole
or IN part, its guarantee funds to be
returned to 1t In proportion to the
amount of the notes retired. Provide
that circulating notes ehall constitute
a first lien upon all assets of the bank.
Impose tax of one-half of one per
cent per annum. payable seml-annually,
upon the average amount OF notes In
circulation, 10 defray the expenses OF
printing notes, official supervision. can
collation., etc. No national bank note
10 be of less denomination than ten dol
lars and all notes of the same denom-
ination 10 be uniform i'm design; but
banks desiring 10 redeem their notes In
gold may have them made payable In
that coin.
The secretary OF the treasury is 10
have authority 20 prepare and keep on
hand ready for issue upon application
a reserve ~ blank national bank notes.
notes for zach banking association hav-
ing circulation. To provide q safety
fund for the Immediate redemption OF
the circulating notes Of failed notes, he
proposes 10 impose a tax upon the ave-
rage circulation Of each bank until the
fund amounts to s per cent OF the total
circulation outstanding. He would re-
quire each new bank and each bank taxi
Ing out additional circulation To deposit
It's proper proportion OF this fund before
receiving notes. When the bank falls.
its guarantee fund IA to be held on de-
posit to be paid into the safety fund
and used In the redemption OF Its notes.
lie suHgcats the repeal OF the provisions
Imposing limitations upon the reduc-
tinn and increase ~ national bank cur
rencv. and the repeal ~ MI provisions
OF the law requiring hanks TO keep a
reserve on account OF deposits.
The secretary further says; 80 long
ms there are In circulation under nu-
th0rity Of the government two coins
unequal I'm value. hut equal In legal
tender qualities, every consideration OF
good faith aud sound policy requires
prompt redemption OF the notes on pre-
sontatlun I'm the kind Of coin demanded
by the holder and the constant observ-
ancc Of such administrative methods
MS may be- necessary TO preserve the
power OF the less valuable
metal This Is essential to continued
of our standard silver dol
lars and their paper representatives nt
par. and 10 abandon this policy without
n better one would not
only fail 10 cure any OF the evils now
but would entail additional
and greater ones,
This situation Is the direct result OF
the features of our currency legislation
and II cannot be permanently avoided,
or even temporarily Improved without
material changes iu our laws relating
10 that subject These features are.
rlrat. the circulation OF United states
notes ns currency and their current
redemption In coin on demand. second,
4 ba r,uuuuigDrN rstugue of such notes