The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1894-12-11

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cal conclusion that all tax on state
banks should be repealed" said the
secretary. "but that may not be prac.
tical at present"
Mr.. johnson, Of Ohio. referred to the
old wildcat dayL
THAT is thing Of the past" said the
secretary. "You could no more re.
sumo the wildcat system than you
could revive the conditions which made
it possible. We have advanced far be-
yond the possibilities OF a wildcat sys'
tem."
The secretary said the ten per cent
tax proposed on state banks was sutiici-
ent to wipe out their circulation in case
they did not observe good conditions.
1t was practically prohibitory tax.
Mr.. Brosius, OF Pennsylvania, asked
II a state bank could not issue its notes
for year without observing conditions
or paying the tax US the tax was pay
able annually.
Mr.. Carlisle said this would be the
case until the end OF the year when the
tax became payable; the bank would be
free to issue its notes as 1t saw fit, but
with the nowiedge that it would have to
pay the tax II tho government condi.
tions were violated.
Mr.. Cobb asked II the conditions
were not so stringent that it would make
state provision impossible.
The secretary said that the provisions
were not stringent il the state banks
gave good currency and observed con-
ditions.
Mr.. Carlisle added that in his judg.
ment the tax on state banks was uncon-
stitutional. The courts thought other
wise, however.
At this point Mr.. Carlisle said he
would submit his bill and appear to-
morrow morning if desired TO 60 over
it in detail. 1t was arranged TO have
the bill printed.
A recess was taken until 2 o'clock.
COMPTROLLER EcELEs.
At o'clock, when the committee re.
assembled, Comptroller of the Currency
Eckles appeared and made his state
ment. Nothing. he said, ought to be
done by Congress looking to change Of
the present banking system. unless the
result should be beneficial both to the
banks and the public. The extent OF
the banking interest OF the south rep
resents in capital S6S0.000,00O, in de-
posits s., 400, 100000, and in depositors
about 100000. Such enormous inter-
ests being involved any new system to
be inaugurated must at the outset COM
mand the confidence OF the people. The
national banking system now in vogue
might be said to be national habit
e Al ,-b L. 20
little or nothing Of other systems. He
thought, therefore, that nothing in the
present system should be alter
ed unless 1t could be improved
upon to the promotion of the business
interests OF the people. In this country
the notes issuing function was an incl
dent, the deposit amounts the principal.
In other countries 1t was different. In
France, Germany and Russia, the issu-
ing function was par amount In Eng
land, Ireland, Scotland and Canada the
system more nearly approached ours.
The scheme which he had suggested in
his report, he said, was intended to dis
turb as little as possible the existing
order OF things. In order to make any
system successful the note issued must
be Immediately not ultimately convert.
BILE into coin. This was the frat con-
sideration.
After this came, II the banks could be
given the power to expand the currency
in times OF stringency, the two main
objects OF currency system would be
Obtained. In his system he had pro.
posed a fifty per cent deposit upon
which bank notes should be issued. To
the extent OF the deposit those notes
were absolutely safe. Ike other fifty
per cent would be secured by n safety
fund raised by proper taxation. Frank.
ly, he did not consider such deposit
necessary. The legislation OF that per-
iod had created currency which in and
Of itself, in his opinion, could not have
maintained itself had not the govern
ment endowed it with legal tender
quality. The existence OF these legal
tenders was to-day, he thought, the
greatest danger to the credit OF the
United States at home and abroad.
Compared to 1t the defects OF the bank
ing system were only an Inconvenience.
THE MANLY THING.
Undoubtedly the manly thing to do.
ne said, was to redeem and retire those
notes. The authority to do this had
once been given to Secretary McCul-
lough, but it had been rescinded. 1t
could be done now out OF the surplus
revenues or by means Of funding bond.
To-day. under the national banking act,
sl65. .O0O, 900 OF legal tenders hold for re-
serve fund were taken out OF circula:.
tion. Under the system he proposed
so per cent OF the circulation would be
deposited In legal tender, for which cir
cuiation notes would be issued dollar
for dollar. This would in no wise in
crease the volume Of currency. The
| operation Of this plan would be to i'm
mediately withdraw 100000, 600 OF the
legal tenders from the S4SO,0O0.OO oil
the legal tenders now used to drain the
treasury OF gold.
AS to the question Of elasticity, elias
ticity was governed by two things-the
demand and the immediate converti-
bility Of the notes. 10 the extent OF 90
| per cent OF tho notes the currency would
bo elastic. This plan would relieve the
treasury OF S340, 100000 OF grecnbacks
and furnish an elastic currency for tho
people and profitable CURRENCY for the
bank. He argued the inherent right OF
the government to make issues OF legal
tender, but questioned its expediency.
As to the safety OF the notes, history
would repeat itself.
Tho best assets Of any bank or othor
financial Institution wero redeemable
paper. This was apparent during tho