The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1894-12-13

flrst- To the large volume of United
states currency of various kinds kept
constantly outstanding, making the con-
.ractlon or expansion of the comparative
~ small national bank circulation less
effective than it would otherwise have
been.
Secondly-The difficulty and delay in
procuring and to some extent in retiring
circulation.
Ihlrdly and manly, the provision of
the law which requires the deposit of
United States bonds to secure circu-
latlon and restrict the issue of notes to
w per cent of the par value of the bonds.
With 90O,000,000 in United States
notes, treasury notes of 1890, silver GER
titicates and gold certificates, besides
about 1925, 100000 in gold and silver
coins constantly outstanding, none of
which can be lawfully retired by the
government without the substitution of
other currency in its place, the national
bank notes, which amount to only $780,
10000, or about II per cent of the
whole, cannot exert a very eff
fective influence upon the
volume of outstanding currency at any
time and especially at times when the
large contractions or expansions are most
needed. But the greatest difficulties are
encountered and the national banking
system as now organized is least effective
when the business of the country de-
mands quick expansions of the currency
to meet sudden emergencies. In addi-
ton to existing distractions to the prompt
increase and decrease of circulation, the
ninth section of the act of July u, 1882,
which provides for the extension of the
corporate existence of national banks,
expressly prohibits them from retiring
their notes to greater amount than
$3,OOO,OOO in the aggregate per month,
and advocates that no bank which made
deposit of lawful money in order to
withdraw its circulation shall be per-
mitted to make any increase in its circu-
lation for a period of six months there
after. These provisions are so manifest
ly in conflict with the dictates of sound
policy that they require no comments.
In view of the foregoing considerations
and many others that might be mentioned
in favor of reorganization and reforma-
ton of our paper currency system,,l have
prepared the outlines of plan which, in
my opinion, will relieve the government
to an extent from the burdens now inn
posed upon it, secure within a reasonable
time safe and elastic national and state
bank currency, and result ultimately in
the permanent retirement of United
States legal tender notes of both classes,
as it is in brief as follows:
CARLISLE'S CURRENCY PLAN.
First-Repeal all laws requiring or au-
thorizing the deposit of United States
bonds as security for circulation.
Second-Permit national banks to issue
notes to an amount not exceeding 20 per
cent of their paid up and unimpaired CAPT
tai, but require each bank before receiv-
ing notes to deposit guarantee fund,
consisting of United States legal tender
notes, including treasury notes of 1880, to
the amount of 80 per centum upon the
notes outstanding, to be main
tanned at all times, and whenever a bank
retires it's circulation in whole or in part,
its guarantee fund to be returned to it in
amounts in proportion to the amount of
notes retired.
Third-Retain the position of the law
making stock holders individually liable
and provide that the circulation notes
shall constitute first lien upon all assets
of the bank.
Fourth-Impose a tax of one-half Of l
per centum per annum, payable semi
annually, upon the average amount OF
notes in circulation to defray the expenses
Of printing notes, official supervision, can
collation., ect.
Fifth-No national bank note to be of
less denomination than $40 and all notes
of the same denomination to be uniform
in design, 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 prepare
and keep upon hand ready for issue upon
application a reserve of blank national
bank notes for each banking association
having circulation.
SiXth-Reuuire each national banking
association to redeem its notes at its own
office or at its own official agencies to be
designated by it.
Seyenth-To provide safety fund for
the immediate redemption of the circula-
ing notes of failed banks, impose a tax
If q per centum per annum upon the
average circulation of each bank until
the fund amounts to D per cent OF the
total circulation outstanding. Require
each new bank and each bank taking out
additional circulation to deposit its proper
of this fund before receiving
notes. When bank fails and its guaran-
zee fund held on deposit to be paid into
the safety fund and used in the redemp-
lion of notes of the failed national banks
md the immediate available cash assets
IF such banks are insufficient to re-estab-
ish the fund, it shall at once be made
good by pro rata assessment upon tne
1ther banks, according to their outstand,
ng calculations, but there shall be a hrst
len upon all the assets of failed banks to
reimburse the contributing banks. The
safety fund may be invested in outstand-
ny United States bonds having the long,
,st time to run, the bonds and the inter
est upon them to be held as part of the
,und and sold when necessary to redeem
notes of failed banks.
Eighth-Repeal the provisions of the re-
and extension act of July l.,
1882, imposing limitations upon the re-
duction and increase of national bank cir
Ninth-Repeal all provisions of the law
recurring banks to keep reserve on ac-
count of deposits.
Tenth-The secretary of the treasury
may, in his discretion, use any surplus OF
revenue in the Ln,"i 80 - =. me r.
lemption and retirement OF UII
ted States legal notes, but
such redemptions shall not
in the aggregate exceed an amount
equal to 20 per cent of the additional cir
culation taken out by national and state
banks under the system herein proposed.
Eleventh-Circulatin notes issued by a
banking corporation, duly organized under
the laws of any STATE AMI " hich transacts
no 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 the comptroller of currency,
first that such bank has at no time had
notes of 20 per cent in excess
Of it's paid up capital; second, that its
are individually responsible