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


inspires absolute confidence. But my
idea is that the proposed plan will in.
sure ample protection, and therefore
ample confidence. "
HYPorHETrcAI CASE
Mr.. Walker put the hypothetical case
Of failed bank, and asked the course
to be pursued under the proposed sys.
tenn. First" said the secretary. "the
banks 80 per cent goes into the general
safety fund. The notes OF the bank are
then paid Immediately. II the total OF
the safety fund aud the assets OF the
failed bank are insufficient to meet all
the Liabilities without carrying the gen.
eral safety fund below the per cent,
then all the banks are assessed to meet
the liabilities. The banks then have a
lien on the assets OF the failed bank. "
Mr.. Walker asked what would hap
pen il failed bank had no assets, so
that there would be no lien for the
other banks to fall back on. The secre.
tary said this was an extreme pre-
sumption. It had occurred only ak
times that a national bank had been ab.
solutely without assets.
II understand" said Mr. johnson, Of
Ohio, "that you hope to secure an elias
tic currency by this plan. Now, what
incentive would there be for bank to
reduce its circulation?" "The bank
may not at once reduce" said the sec
rotary. "but II the public does not want
money, the bank will withdraw circula-
ton, as there would be q anall tax on
it."
"The bank will 20 to the limit OF its
circulation at the outset, will it not !"
queried Mr.. johnson. "ProbabIy, yes,
at the start" said Mr.. Carlisle, 'but if
there is no demand for what is issued
the notes will be slowly but surely re-
tanned. The tax on the notes is not
much, but it is enough to keep the issue
beyond what the public needs."
Mr.. Johnson said he could not see the
elasticity claimed. Some banks might
reduce, others might not. The plan
showed great inducement for issuing
currency, but it did not show the same
inducement for contracting currency.
STATE BANK FEATURE.
Mr.. johnson, OF Indiana, asked as to
the state bank feature Of the secretary's
plan. at suggests merely plan by
which state banks could act If they saw
fit," said Mr.. Carlisle. "But the gov
ernment has no direct concern with
state institutions. The plan simply
gives them the privilege OF acting un-
der certain conditions il they see fit"
Mr.. Walker asked If Mr.. Carlisle had
yet drawn o bill relating to his plan.
The secretary replied that he had
drawn a rough draft this morning and
he would submit it to the committee.
It was a tentative measure and he
would change it in some details.
Mr.. Carlisle then took up the fifth
proposition OF his plan, namely, "No
National bank note to be OF less denom-
inetion than $40, aud all notes OF the
same denomination to be uniform In de-
sign; but banks desiring to redeem
their notes in gold may have them
made payable in that coin, the secretary
of the treasury to have authority to pre-
pare and keep on hand ready 10 issue
upon application reserve OF blank ma
tional bank notes tor each banking as
sociation having circulation"
The secretary said this would encour-
age the circulation Of the silver certif-
Gates OF small denominations. The ma
tional bank notes being above $40
would give clear field to the silver GER
tificates under $40. These certificates
we're now crowded into the treasury. II
they were to be kept as part OF our
money, they should be forced into use,
and this would accom- mplish that end.
Representative Hall asks as to the
gold provision in the secretary's plan.
Mr.. Carlisle said this should be put in
because OF the gold banks" on the
Pacific coast, mainly at San Francisco,
which had little paper and much gold.
1t was not intended to apply to the
country at large.
TWO CLASSES OF NOTES.
Mr.. sperry asked il silver certificates
were redeemed in gold. mo" said the
secretary; "there is popular impress
sion to that effect, but it is not correct.
There are only two classes Of notes re-.
deemed in gold, namely: The green
backs and the treasury notes under the
Sherman act OF 1890"
Mr.. Sperry asked If the gold circula.
ton should disappear would the gov
ernment meet its obligations in silver.
The secretary replied that silver was
oulv one.fitth OF the circulation. There
was need OF small notes to supplement
the coin. e.,
Mr.. Walker asked as to the subsidiary
silver coin, which led Mr.. Carlisle to
sneak OF the bad condition OF the cnr-
rency laws on this point. 1t accumu-
lated in the treasury at times when
there was dearth OF small change at
many points. "It might be cured"
said the secretary, ''by making sub
sidiarv coin legal tender"
The secretary then took up tho ninth
provision Of his plan. namely: Repeal
all provisions OF the law requiring banks
to keep a reservoir account Of depos'
it's" He explained that this keeps a
bank from using its reserve at time
when it needs 1t most"
Mr.. Warner, of New York, asked il
the allowance OF natiooal banks to do
away with q reserve would not be dis.
crimination against state banks in
states requiring reserves. The secre.
tary said it might be open to that objec-
MIR. Cobb asked: "Do you hold that
the government owes no obligation to
dopontors2" "No more" said the Soc
retary, "tnnn it is obligated to protect
private citizens who invest their funds
in manufacturing concerns, corPo ra-
tions, ETC."
SECTION TwQ.
a., C-I,.i~ ,ho,, took lin anrLion .