New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1894-12-26
DANGERS IN THE CURRENCY SCHEME.
IT WILL TEND TO CREATE PANIcs INsrEAp OF
TO Ai.LAy THEM.

IT WILL TEND TO CREATE PANIcs INsTEAp OF
TO AILAy THEM.
To the Editor Of The Tribune
Sir: one OF the principal arguments advanced IN
favor Of the new currency plans-the baltimore
plan the Carlisle bill ctc.-is that We need more
elastic currency The bank panic OF ~" - clt'n
as one Of the times when this elastic currency
would have helped us out doubt It. unless the
elastic currency had been secured hy Government
bonds or by an absolute guarantee by IN" "oV-
eminent II it s. based on the general assets, or
the capital OF the bank think that IT would in
crease the severity of a panic
The new plans are to make the issuing 81 cur
rcncy profitable and T. it IS profitable Nh" banks
are going TO issue al they reasonably can OF j.
panics are usually preceded hy q good money
market and siiT rates. tho temptation 10 reap the
harvest Will gradually clil ont the fun issue 81
cclt in a few cases. We must remember thai "
Will not hc the wise nnanccrs of Now WORK only
who arc to acnd tnc bills. Th"v may for"se"
the storm 1t is the five to ten thousand banks
scattered throueh tho South. North. East AMI
West that will furnish the bulk Of the n-ics.
The panic OF 1893 was dlstrust ~ the folv'ncy
Of the banks so ono was asking them 10 redeem
their currency It was to pay their deposits sap
pose in addition TO paying their dcposiprs' tH'S
had another line II customers wanting the h.lls
redeemed; The deposits were IN i's3 first lion
on the assets but that dii not r'assurc panic
stricken depostors Would the same depohitor
feel any better over bank blu secured by hrst
lien on the assets than over a certificate OF DC
posit secured the same way And then. II am a
d,posItor In time OF panic shall Try harder IN tho
future 10 get 10 the head Of the Inc to draw out
the deposit that "A second lien on the assets man
| d.d In 1893. when IT was a first lien. No. this
new plan OF currency Will tend TO make panics In
stead OF allayng them. unless the bills are secured
by the Government. directly or Indirectly. There
Will be two things instead OF one for the worry
cows to fret over.
Then the safety fund guarantee. The ncccs-
sary size OF this fund being based on tn" losses
bv failures o, the National banks. This Is mis-
leading For many years there has been scarcely
any prob, In the currency feature of Nau"nni
banking No matter " there was. there has been
no way that the rascal or the fpeculator could ~
any chance cheat any one by issuing u. II" had
to nut M n Government bond worth more than "A
dollar FOR every dollar he Issued % IT. NOW "" are
TO make the currency feature profitable, IN" rascal
against his currency-he can now put up spuriou,
assets The spcculators' visionary schemes couId
not make o Government bonf-t can make
bank asset These scAr"crows thhi put up 30 lo1
condemn tho new currency idea. but think th'y
do show that the safety fund figures coinpllci from
our National bank statistics cannot be applied 10
arnonZ the food az country Spectators. with
cunning and some credit. IL VIII be tho new way
scheme and issue currency on H. II am rascal
or sueculator the farmer and the merchant VIII
keep shy OF giving me their property N me snare
NJ deuoslts but give engraved bank hilI
and | viii get his property with ~.
The only statistics hay" TO base this cur
rency on are our own old state bank ISSUES IN"
mo hanks that isauc bills can be counted on your
fingers TO be sure these banks have n great mum
Der OF branches. but the branches DO no, Issue
Troy y Y Dec r. 1894