The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1894-12-11

reasonably safe" He suggested change
In the third provision. so that the lien
would not cover the funds OF the guardians
! and other cestui quo trusts.
! Cox of Tennessee. the author Of the
| State bank bill defeated at the last ses-
| sion, asked how State banks would be
| compelled to observe these conditions.
| The Secretary said the treasury officials
would exert proper efforts to see that the
conditions were observed. The books and
accounts of the State banks would DE in
! Spected, and II access was refused the
Federal officials would determine on tax.
| Carlisle said he did not believe in the
| authority of the Federal Government to
assert such authority over State institu-
tons. His idea was that the Federal
| authority did not go beyond imposing
| tax as means of compelling the State
| Institutions to observe Ger tain conditions.
State bank notes would certainly be far
| different from United States notes in ap-
pearance. They would have the name of
| the State bank in different color.
My position would lead to the logical
| conclusion that all tax on State banks
| should be repealed" said the Secretary.
| "That may not be practical at present,
| but there should be the least exercise of
authority possible. We do not insist that
they should do so and so. but we say if
you do not do it we will tax you. The tax
| will be payable annually. the bank will
naturally amply for an exemption from
| the tax. The treasury will say, you must
| fully satisfy US on your business that it is
according TO the Government condition or
we must decline to exempt you from the
| tax"
johnson of Ohio referred to the old wild
! cat days.
THAT is a thing of the past" said the
Secretary. "You could no more resume
| the wildcat system than you could revive
! the conditions which made it possible. We
have advanced far beyond the possibilities
| of wildcat system"
The Secretary said that the 10 per cent
tax proposed on State banks was sufficient
to wipe out their circulation in case they
did not observe the Governm ent's condi-
tions 1t was practically a prohibitory
| tax.
Brosius of Pennsylvania asked if
State bank could not issue its notes for
year without observing conditions or pay
| ing the tax II the tax was payable annually.
Carlisle said that this would be the case
|
came payable. The bank would be free to
issue its notes as it saw fit, but with the
knowledge that 1t would have to pay the
| tax If the Government conditions were
violated.
Springer asked why the State banks
should not be subject to exactly the same
conditions of reserve, etc. las national banks,
and Carlisle added that in his judgment
bo
tional. The courts thought otherwise,
however. At this point Carlisle said he
would submit his bill and appear to-mor-
row if desired to go over it in detail 1t
was arranged to have the bill printed.
Recess was taken until P. NJ.
When the committee reassemb bled
Eckles appeared aad made his statement
Nothing, he said, ought to be done by
4 Congress looking to change of the pres
ent banking system unless tha resultant t
effect should be beneficial both to the banks
and the public. The extent of the bank
| ing interests of the country represented in
capital S6S0.00O 600, in deposits $780,
100000 aud in depositors 100000. Such
| enormous interests being involved, any
new system To he lnaugurated must at the
outset command the confidence of the
| 1uO udIiOudl Uduk system now
in vogue might be said to be national
habit. Most of those who made use of it
knew little or nothing of the new system.
Therefore nothing in the present system
should be altered until it could be inl-
proved upon to the promotion of business
interests of the people. In this country
the note-issuing function was an incident,
the deposit accounts The principal. In
,hn. -
Germany and Russia the issuing function
was paramount. In England. Ireland,
Scotland and Canada the system more
nearly approached ours. The scheme
which he had suggested in his report was
intended to disturb as little as possible the
existing order of things. In order to make
any system successful the notes issued
must be Immediately, not ultimately, con-
vertible into coin. This was the first
| consideration.
After this came, if the banks could be
| given the power to expand the currency
in times of sringency, the two main OBJ
jects OF currency system would be OBJ
tanned. 10 his system he proposed a so
per cent deposit upon which banknotes
could be issued. To the extent of the
! deposit these notes were absolutely SAFE
The other 30 per cent would be secured by
a safety fund raised by proper taxation:
Frankly, he did not consider such deposit
necessary, but the exigencies of the war
made it necessary. The legislation of that
period had created currency which in
and of itself, in his opinion. could not
have maintained itself had not the Govern
ment endowed it with a legal tender
| quality. The existence of these legal
tenders to-day was the greatest danger to
the credit of the United States at home
and abroad. Compared to it the defects
Of the banking system were only an in
convenience. The legal tenders called for
gold and must by law be re-issued The
drain of gold could be made continuous
aud the confidence of the people must be
shaken both here and abroad. As long as
| trade relations between this and other
countries existed our monetary laws must
be regardful of the systems of other
countries.
The public credit abroad must be main
| tain cd nv tho radnm ntion NJ thosa pator in