Asheville daily citizen. [volume] (Asheville, N.C.) 1890-1900, 1894-12-10
CARLISLE EXPLAINS HIS PLAN
TIE GOVERNMENT DIVORCED
FROM BANKING.

Difference Between This And the Bal.
timOre Plan The Ultimate Liabil.
ity Placed on the Banks, Not OH the
Government-Elast of the Cur
rency.
WASHINGTON, Dec. Outstanding at
the foot of the long table in the ways
and means committee room Of the House
this morning Secretary Carlisle explained
in detail to the banking and currency
committee the plan recommended by him
for new banking law. All Of the sew
enteen members of the committee except
four were in their seats as early as 10
O'Clock.
The hearing attracted large number
of representatives in addition to the
members OF the committee. Among
those present were Wilson, West Vir-
ginia; Hooker. New York; Snod: ;ass,
Kentucky; Turner. Georgia. J, X. Cow.
en-, ofBaltlmore. member-elect of the next
Congress, and Senor Romeo. Mexican
minister, we're also in attendance.
When the committee was called to
order Secretary Carlisle was asked by
Chairman Springer to explain what
would be the practical workings of his
currency plan. In answer Carlisle said
he had come to answer questions of the
committee and to make statement OF
his plan, but not to indulge in general
argument, as that had been done already
in his annual report. Proceeding to take
up his argument seriatim as they ap-
pratcd in his report. Carlisle read the
first two, as follows:
/. Repeal all laws requiring or author
iziug the deposit of United States bonds
as security for circulation.
., Permit national banks to Issue
notes to an amount not exceeding IS
per cent. OF their paid up and unimpaired
capital, but require each bank before re-
ceiving notes to deposit guarantee
iund, consisting of United States legal
tender notes, including treasury notes
OF 1890, to the amount Of 80 per cent.
upon the circulation notes applied for.
This percentage of deposits upon circu-
latine notes outstanding to be main
tained at all times, and whenev yer bank
retirts its circulation, in whole or in
part, its guarantee fund is to be returned
to it in proportion to the amount Of
notes retired.
In explanation Carlisle said it had
come to be almost generally believed
that that provision OF the law requiring
deposit of United States bonds as Sc
Curity for circulation was failure. He
believed it prevented elasticity of the cur
rencv.
Passing, without further comment. to
the second suggestion, Carlisle said he
believed that this proposition was per-
icctly safe i'll guaranteeing surety of de-
posi,ory. The treasury reserve, he
thought, should not exceed more than
onc-halt of the outstanding circulation
OF the national banks.
Springer asked Carlisle to explain the
difference between his plan for retiring
circulation and that OF the Baltimore
bankers, and the Secretary gave briel
sketch of each. The Baltimore plan. he
said, provided for circulation up to 80
per cent. o. the capital stock of the
banks without any deposit whatever,
but subject to a tax, the fund raised
from which was to used in relieving the
funds of failed national banks. Ii this
did not become large enough, the gov
erpment is to relieve the fund, looking to
the banks tor repayment. The govern.
mcnt plan was that separate fund oil
80 per cent, of circulation should be held
for each bank, and in addition there
should be safety fund, raised like that
of the Baltimore plan. But if this fund
should not prove large enough the treas.
ury department might assess the nation.
al banks pro rata on circulation. The
government, through this means, could
lose nothing.
In furtter explanation Carlisle said
that the banks by his plan are called
upon to keep safety fund intact; In the
Baltimore plan. the government was re.
quired to do this. my PLAN said the
Secretary, requires the National bank
ing system to support itself entirely, ant
relieves the government OF all connection
with the system except to furnish the
notes and hold the safety fund"
Carlisle said his plan did away with
the present system of redemption OF Ma
tional bank notes. At present the Ma
tional banks could send their mutilated
notes to the treasury and receive in re
turn new notes. BY the new plan tn,
government was divorced entirely from
the redemption OF those National banl
notes; the government was relieved of al
responsibility in the matter.
In answer to Johnson of Indiana. Car
Isle said that the idea of the plan wa.
that the stronger banks should carr,
weaker. II a bank failed SO badly thai
it could not pay its notes, the ultimate
liability was placed. by the Baltimore
plan, on the government; bv the plaI
proposed by himself, the ultimate liability
was placed on the banks.
Johnson wanted to know il Carlisle
thought the banks would agree to this
and the Secretary answered that tn
banks must speak for themselves; h
was looking out for the interests Of til
government.