The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1894-12-14
BANKING AND CURRENCY.
Further Plans Unfolded Before the
Committee Yesterday


ing and currency committee continued
the hearing to-day. Letters were read
from w. NJ. Dana, editor of the CONNER
Gal and Financial Chronicle. and r. b:
Ferris. vice-president OF the Bank OF
New York. Ferris said:
There seems 10 be no good reason
why the existing national banks who
nave United States bonds on deposit with
THE comptroller should not be allowed to
continue as dlney are until the charters
off. Section of Car1isle's bill seems like
forcing the banks to do what they have
not been consulted about
William g. Cornwall, president of the
New York Banking association read a
carefully prepared paper advocating sub
Stantialiy the Baltimore plan. He said
his recommendation were as follows:
Fir5t-The greenback and treasury
notes should be redeemed then cancelled.
The real business of the government as
regards money is to stamp upon gold
and silver their fineneSs and weight. A
government has no right to issue with
nothing back of 1T, and to make it legal
tender; to create a currency and by the
act of law, force the people to take its
full value without regard to the inltrln-
ended in trouble. The greenback and
treasury note are of this character. They
are the governments note to the extent
gold. They have caused trouble. enough
already. They are a constant menace to
the gold reserve. They should be paid
up.
Second-The vacancy should be filled
with bank notes.-the best currency of
the best nations today is mainly bank
notes. which are a first lien upon the
assets of the bank. These assets are
commercial possessions, representing the
product of the brain and muscle of mil
hons of people. They are the wealth of
the nation. What better basis for circu-
lation can be than this-the actual wealth
of rfhe nation?
To fill the vacancy created by the retire
ment of the legal tenders and as. fast
be allowed to issue notes to percentage
of capital, without bond security, the
notes to be a first lien upon the assets
Of Of t stoe sdn1 WITH s aq fund
made up by all the banks. the government
continuing to guarantee and redeem All All
notes as at present. ms Is pra 1d exong
as far as it goes, and 1t goes Tar enough
for the present.
Third-To perfect the system further
cate problems attending this, an Impartial,
expert commission should be appointed.
To recapituate:
Second-Let the national banks take
out notes under the Baltimore plan TO
replace them
commission to perfect our currency sys-
TEN.
Mr. Hepburn's Idea.
At the afternoon session. Chairman
Springer read a letter from A. B. Hep
burn, of New York, ex-comptreller of
the currency and one of the advocates
of the Baltimore plan. Mr.. Hepburn
wrote as follows:
"Of course, Mr.. Carlisle's provisions
requiring banks taking out circulation
to deposit greenbacks and treasury
notes is made in, the interest Of relieving
the government, and not for the benefit
of a currency issue. 1 do not know
that I have any objection to this. !
would like to see any safe course pur-
sued which would relieve the govern
ment of its embarrassments. 1t is by no
means an unmixed blessing to its banks
the retirement of the government from
the banking business. While it would
/ benefit the government and the people
as whole, it would certainly put added
responsibilities upon the banks. am
strongly opposed 10 the proposition to
do away with the requirements that the
banks keep reserves and my under
standing of the law does not tally with
that of the secretary. The law, when it
was drafted, as 1 understand it, was
based upon the experience of prudent
and we'll managed banks, and the re-
serve was fixed at point where pru-
/ dent and we'll meaning banks carried
/ their reserve. 1t was sought to fix q
limit so a well managed bank would as
often be over as under the reserve II
the regular course of business. This
law is made not for the nine banks
who would observe it without any lega
provisions, but for the tenth, that either
/ incompetent, speculative or unsafe
management might fail to keep a propal
reserve and to keep its finances suf
! ficiently strong TO meet the demand tina
might be made upon it.
The statement which the secretary
makes that the state banks keep q
| per cent reserve, whereas the nationa
banks keep only Is, I do not think is
! well founded"
MIR. Hepburn also criticized the repea
of the 10 per cent tax on state banl
notes while leaving a tax on nationa
bank notes; also the forbidding Of
national banks to issue notes OF less
than SO; the safety fund should also
be equally compulsory, state banks
should be required TO keep the same re-
serve. The section Of the Carlisle bill
which provides for imposing the 10 pei
cent tax in case the bank does no.
satisfy the secretary and comptroller
he thinks. would be of little account
the imposition of the tax, after a banf
had failed would only aggravate and
complicate matters. He thinks state
banks designed to take out circulation
should become national banks in fact.
He closes by saying:
The secrerary's discussion Of tht
financial question in general, l mos
cordially approve and the conclusions
he reaches, I believe are wise anC
sound, but the details Of the bill he ha!
submitted, in my judgment are open tt
serious criticism"
/ The committee then adjourned unit
; tomorrow.