The Mt. Sterling advocate., 1894-12-18

The report Of tho Secretary of The
Treasury gives the details OF his cur
rcncy plan. IT is substantially the
Baltimore plan with an important
modification which is an improve
ment.
Mr.. Carlisle recommends a prac-
tical way tor the dissolution OF the
partnership between the Government
and the banks. He urges that circu-
lation, or currency, shall be based on
the assessment of the banks, and not
limited by the decreasing debt of the
country. He also recommends the
gradual withdrawal and cancellation
OF Government paper.
The basis proposed for the national
bank circulation is the capital of the
banks, the notes that may be issued
to be in the aggregate rs per cent. of
the paid-up capital. This will give
an abundance of money, much more
than is needed or than can profitably
be absorbed by the banks on the
country's present volume of business
But the experiences of the country in
1898 proved that there is need Of
elasticity. If such system as that
which Mr.. Carlisle recommends had
then been in operation business men
would moi have been obliged to pur-
chase currency for their weekly needs
The banks under such system would
issue notes as long as discounts were
demanded by merchants in good
standing. The notes would not be
taken if the banks fixed the rate too
high, and the notes would return to
the banks when they were no longer
needed in bushes. This is the simple
philosophy underlying the new plan.
The safeguards provided for the
security of the note-holders are ample.
In addition to the capital of the bank
the Secretary suggests that 30 per cent
of the circulation in legal tender notes
or in Treasury notes of 1890 shall be
deposited by the bank in the Treasury.
This fund will increase the security
beyond that provided by the Balti-
more plan, and besides will with
draw from circulation Government
paper to an amount ranging from S62,-
100000 to $225,OO0,0O0. This is a
substantial improvement on the Bal
timore plan.
The provisions for "helping silver
by making $40 notes the smallest that
my be issued, and for repeating the
tax on State bank circulation, may
well wait upon the scheme for reform
ing the national bank system. With
the present number OF banks, having
capital of $1,000000000 sufficient
currency would be supplied Tor long
time to come under the proposed plan.
AT present there are $500,000,000 OF
gold demand notes and $207, ,00O,0 ,0O0
of national bank noIes. The last
would be retired. If the full amount
of currency possible under the pro-
II posed issue should be issued, $22S,-
100000 of the $5OO,OOO,000 would be
, deposited by the banks as guarantee
fund. Against this $435,5OO,oOO OF
: Government and bank paper retired
would be issued $750,000,000 of new
, bank notes. The balance of the
, present circulation of the gold notes
{ available for the guarantee fund, re-
naming after the retirement of the
national bank notes and the establish.
f ment of the guarantee fund, would
be $271, 100000.
I Hence the circulation provided fol
D by Mr.. Carlisle's National Bank
scheme, exclusive of gold and silver
q circulation, would be $l,02l, 100000
less Government redemptions, whicl
amount to little, in the place of S7O7,
r 100000 ($5OO,OOO,OOO Government
8 paper and $2O7 100000 National banl
0 notes), an increase of 1914, 100000. u
t This would afford ample elasticit.
Y for years to come and would remedy
the more aggravated currency evils
r But this multiplication OF schemes II
J. the Secretary's report suggests ono
s more that the whole subject should b
: referred to a monetary commission
If Mr.. Carlisle can invent such nun
ber how many more can several hun
dred Congressman Invent, to the con
fusion of mind and the prevention o