The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1894-05-30
Substitution Of the Old Wildcat Scheme
for the Present Safe National Bank
System Vigorously Opposed.
SEVERAL CHANGESPROPOSED
Which He Believes Would Cure
Defects and Remove Objections.
Repeal Of the 10 Per Cent. Tax Adyo-
Gated by Mr.. Cox-yest's Substitute
for Turpie's Hawaiian Resolution.
Special to the indianapolis Journal.

~R(N-aA ~ NHE
WASHINGTON, May 9.-Representative
Johnson spoke to-day on the proposition
pending in the House to repeal the present
prohibitory State bank tax law. He was
heard with the closest attention, and when
his time expired Mr.. Springer, who is in
charge Of the bill, himself asked that Mr..
Johnson's time be extended. Mr.. Johnson's
discourse showed the most exhaustive study
of the STANDARD literature on banking and
economics and the most careful research
into the statistics on the subject. He spoke
nearly two hours, and when he concluded
he was warmly congratulated. Mr.. Conn,
of the Elkhart district, has determined that
he. too. will discuss the subject, and is
now at work on a speech. This will be Mr..
Conn's effort. He will treat the mat
ter rather from a business standpoint than
from that Of an expert economist. He ex-
poets to speak on Friday.
Mr.. Johnson opened his speech to-day
with the declaration that a bill to repeal
the ten-per-cent. tax on State bank circula-
ton had been overwhelmingly defeated in
the committee on banking and currency.
and that this committee utterly repudiated
the pending amendment. which involved the
same proposition, and that the advocates
Of repeal were obliged in this extremity
TO tack their measure on to the Brawley
bill as an amendment in order to get ii
before the House for consideration at all.
He then declared that the real bone of
contention was not the Brawley bill, but
the question as to whether the old system
of State banks OF issue was to be revived
IN the country. AS to the direct issue of
inconvertible paper money by the govern
ment, he declared that Ii was a scheme at
war with the soundest principles of finance,
and had ara n0ofnaf a tho host n~nnrf
ence in the worlds history. Government
paper might be issued and maintained at
par in limited quantities. but not to such
currency. The credit of the government
was good. but not good enough for this;
besides, that credit had been created by
actual and not simply by ca
pacity to pay. The difficulties of getting
such money into circulation and its lack
OF elasticity was also dwelt upon, and de-
probation and consequent loss predicted in
case the experiment was ever attempted.
THE WILDCAT SYSTEM.
Mr.. Johnson next took up the State bank
system Of issue. and strenuously antago-
nized 1t. going at length into the history
OF that system as it existed before the war,
and dwelling upon the disasters and losses
which IL occasioned, and insisting that bro
ken banks. a worthless currency. counter
feiting, money brokage and high notes of
exchange were among it's progenies. The
speaker conceded that the system, if adopt
ed now. would be shorn of many of it's
former crudities. but utterly denied that.
IL would yet be a safe OF satisfactory one,
contending that the difference would sim
ply be one OF degree and the approach to a
good system by no means near enough 10
justify the experiment of its revival, and
that the plan would still be wrong in prin-
ciple, and hence necessarily evil in its
effects. He opposed the substitution Of a
weak and diffused system for a strong sys-
tenn or central control. which had insured q
sound and uniform currency, and said that
no one would contend for such a change ex-
cept the man who ignored all experience,
and insisted that forty-four opportunities
for error were less likely TO result in dis
aster than one opportunity. Recent sta
tisttcs were quoted TO demonstrate the SUI
periority of national banks TO existing
State banks. and the for and
against the State bank scheme were exam
Mr.. johnson then devoted himself to an
examination OF the national banking sys-
for banks Of discount and deposit. and
commencing 1t for the soundness and uni
tions urged to il were discussed. and the
speaker advocated its amendment and re-
t%ention. admitting that it had some defects
which ought to be cured. He declared him.
self opposed to issuing government bonds
simply as a basis for national banking, on
bonds would impose upon the people. The
use Of approved State and municipal bonds
to secure circulating notes, the notes to be
Issued 10 the par value OF such bonds, and
the reduction of the present tax on circu-
lation. were suggested as superior to any
system OF State bank issue that could be
devised. The speaker. however, stated his
belief that the substitution of a safety
fund. in the. place OF bonds. as security for
the notes OF national banks would. in con-
nection with other minor amendments to
the law. secure a sound. uniform and elias
tic currency. Statistics were quoted in
support of this position. and the safety
fund was elaborated with care, the argu-
ments relating to 1t being gone over. Can
ada. and the States of New York and Ohio
were cited as fields In which the system has
been in successful operation. MI. johnson
contended that the plan. II adopted. would
remove all the well-founded objections that
are urged 20 the national banking system,
do away with the demand for the issue of
fGasq She Tsaivd RTS q t Ry e oId gtste baaR s and
tenn, and give 10 the people a currency well
adapted TO all their needs.
MR.. cox ADVOCATES REPEAL.
Representative Cox. of Tennessee, who
spoke before Mr.. Johnson. advocated repeal
of the State bank tax. After reviewing the
history of State banks of issue he said:
The idea that the national banks could and
would furnish a sufficiency of paper cur
rency has been found almost a total fail
ure. There is no money to be made in TAX
ing out the circulation. Some OF our very
largest national banks deposit the requisite
amount Of bonds, and content themselves
with the interest on the bonds, because
there is nothing TO be made with the cir
c~ulation. There is left to the people but
one way TO increase either their currency
or money. and that Is with gold. The pres
ent system has resulted In the concentration
OF money and currency of the country In
certain localities and left other great sec
lions utterly destitute of money or of cur
rency unil the business becomes almost
dead and discomfort and uneasiness pre-
walls. There is not a State that has a debt
that does not maintain 1t with absolute
fidelity. Why not permit these States that
owe debts to draw their obligations within
their own borders. and. instead of suffering
a continual ORA ina ua On their nIIrranNEy in
pac ilg interest. pay their interest to their
own citizens. and develop at the same time
a medium or exchange that can and will
advance the prosperity OF their people. We