New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1894-12-05


AN INELASTIC CURRENCY
referring to the volume of the currency Secre-
tary Carlisle that the issue of Government
notes was intended be. and is in fact unchange-
able The only part of the currency possessing in
any degree elasticity is the National bank notes,
the m is respect at least it has failed to meet
NOS crtlca! periods. This failure he attributes
First the large volume of United States cur
IehSy OF various kinds kept constantly outstanding
paratIge, ,e DoraSt9n or expansion Of the com
enee,ctive than it would otherwise have been:
some extent in retiring circulation: thirdly. and
mainly. the provisions of law which require the
ton and restrict the issue Of notes to 80 per cent
OF the par value OF the bonds"
THE PLAN FOR CURRENCY REFORM.
The Secretary then presents the outlines Of
pian which, in his opinion. will relieve the Gov
eminent to great extent from the burdens now
'i'hPcseu upon IL, secure within a reasonable time a
safe and elastic National and State bank currency
gnu result ultimately in the retirement of United
Ss eea tender notes of both classes 1t is. in
dop;s kepeal all laws requiring authorizing the
lation. " ' Ava ~
% Permit National banks to issue notes to an
up capital and unmpalred capital. but require each
nank' before receiving notes, to deposit guarantee
Including Treasury of 1890 to the amount OF
80 per centum upon the circulating applied for.
ms percentage OF deposits upon the clrcuiat ting
notes outstanding TO be maintained at all times and
Whenever bank retires its circulation. in whole
IN part Its guarantee fund TO be returned It in
proportion TO the amount of notes retired.
81 Retain the provision Of the law making stock
holders individually Liable. and provide that the
circulating notes shall constitute first lien upon
all the assets of the bank.
u Impose tax Of one-half OF / per centum
per annum: PAYABLE semi-annualy. upon the aver
age amount OF notes in circulation, to defray the
penses Of printing notes. official supervision. can
rs No National bank note to be of less denomna-
nomination TO be uniform in design: but banks de-
string to redeem their in gold may have
them made payable in gold. The Secretary OF the
treasury to have authority to prepare and 10 have
serve of blank National bank notes for eacn bank
ing association having circulation
90 Require each National banking association 10
redeem its notes at its office. at Its
offices and at agencies to be designated by 1t.
A SAFETY FUND PROVISION
~ To provide safety fund for the immediate
redemption OF the circulating of failed banks.
impose tax OF per centum per
mum upon the average circulation Of each
centum of the total circulation outstanding.
Require each new bank. and each bank taking out
additional cT S to deposit its proper PTopor
bank fails. its guarantee fund held on deposit to
dempuon OF It's notes. and II this funi sna be I'M
paired by the redemption OF the notes OF failed Ma
assets of such banks are insufficient to re-esablsh
the fund. II shall Al once be made good by pro rata
assessments
shall be first lien upon all the assets OF the failed
The safety fund may be invested in outstanding
United States bonds having the longest tpe to run;
the bonds and the interest upon them TO be held
part OF the fund and sold when necessary TO re-
deem notes OF failed banks.
and Extension act of July Y. 1852. imposing limta.
tions on the reduction and increase OF National
80; Repeal all provisions OF the law requiring
he Treasury
discretion. any surplus revenue OF the nited
States in the redemption and retirement Of United
States legal tender notes. but such redemp,ions
shall not In the aggregate exceed an amount equai
to 70 per cent Of the additional circulation taken
out by National and State banks under the system
herein proposed
EXEMPTION FROM TAXATION.
III. Circulating notes issued by a banking cor
poration duly organized under the laws OF any
State. which transacts other than banking
business shall be exempt from taxation under the
laws OF the United States when It is shown to the
satisfaction OF the Secretary OF the Treasury and
G @e Of had the ID
excess OF Is per cent OF s psidup ana
liable FOR the redemption OF It's circulating notes
to the full extent of their ownership OF stock; %!
lien upon all the assets OF the bank; ca that the
Pahx s States legal tender notes including Treas
ury notes OF $780, equal TO 80 per cent OF ts OUT
promptly redeemed its notes on demand at It's
principal office. at one or more or It's branch
I
70 The Sec: etary OF the Treasury may in proper
rules and regulations to be established by MN, IN
preparation of their notes the distinctive paper
used in printing Cmea S.ases ts notes o
similitude OF United States note or certificate or
National bank note
GRADUAL RETIREMENT OF LEGALTENDERs.
Whatever may be the objection to the Issue and
circulation OF United States lega-tender paper upon
either constitutional financial grounds. 1t has
become SO Incorporated into currency system
and constitutes large part OF our active crcula-
ton that Il could be suddenly Withdrawn with
out producing in present state OF our laws con-
siderable disturbance in the fiscal operations OF the
Government, as well the business Of the peope.
and therefore, the plan now suggested proVldes LOT
its gradual retirement by me use OF sufp,ns ro
enues hereafter received, process Whch WIZ prop
ably require several years FOR its ,or a"
currency to an equal amount have taken their place.
there viii be neither forced CONTRACTION nor ex-
pansion of the circulation on account OF the change.
In the mean while for the double purpose OF pro-
tectlng the Treasury as lar az S lpcntons OF notes
for redemption In gold. and estabiisnng saie OASIS
the the former are 10 be required to Keep always on
deposit and the latter TO keep constantly on hand
30 per cent upon their outstanding circulation
II ali the National and State banks now IN ex
istence should take out circulation 10 the iul
proposed to be ~ tse
I nohes "a and the National bank safety fund. when
raised its full amount OF per cen, upon our,
$4,000 more
THE GOVERNMENT WITHOUT LIABILITY.
As the plan suggested proposes to exempt the
Government OF the United states from all LIABILITY
for the redemption OF National bank notes. ana
places the sole responsibility upon the banks them
selves guarantee fund of not less than ~ per cent
upon the outstanding circulation Is regarded as
a very proper and necessary feature OF the system
4 safety fund consisting OF oniy per cent upon
The circulation together with Governmental iiapinV
Tor redemption in the fund should at any tiine
be insufficient proposed In one or the plans re-
v,,lic
note-hoder but IL would pledge the faith ana circuit
~ the United States In a business In whlch hhey
bave no pecuniary interest whatever. ana Tor mat
reason alone, If there no others, such sys-
tenn would be quite Objectionable and IN my op'h-
uinxh