The times. [volume] (Richmond, Va.) 1890-1903, 1894-12-08
BAN > ING AND CURRENCY
THE HON j. H. WALKER. or MASH.
ON HIS NEW SYSTEM
wouIa Trsn.f,r the "1urrept Redemption"
to Banks and Relieve IN"
of G,,k and Responsibility.
.rrna cola ro.erve in the United States

",rbe cold reserve in the United States
Treasury il practically maintained at
great EXPENSE 70 the people of the coun-
try for the benefit OF anyDVuy' any "HeIe
In the world whose interest IL Is 10 nave
a large deposit of gold KEEP a. an2 I'm I'm
at the expense OF the AeubIa' ~, a.
which that somebody may uIdH a.
any time. at no expense 10 himself. -
j. II. Walker. ,...~, 90 IT,
"The present financial system OF the
United States is as aslllin,di,inns as any
ing circumstances and conolllohs, as any
which a rich and powerful people Gp.t,.. ever
undertook to maintain, Sd dIaC V p' -
man J. II. Walker, Ot Massae "uSe''9'
TO a Post reporter last nl5 ,,itt ,,,o,,-,,
In fact" he added. our WhoIe ~ sl sem
would 90 to pieces in twenty-four hours
should a crisis OF any hashiitu4e d I
in this country. II has praclcdHy uone
so several times within the last twenty
Congressman Walker is the originator
of the financial system p. enlDo '.l'Id III
Banking BIZ, II. r.. III, III sAplaha
ton and advocacy Of when ne audresseu
the committee on bahhhs di't ~ ~. =.
and a deputatiOn OF Dank IeSIueuts
His method Is warmly commended by
financial experts throughout the country,
in fact, it Is said thai seNetal i.e,lOf In
of the national adminlsr ration are Ia
Clined 10 approve the Scht.i,V. ,to,, r.,,t,
On this point and in connection Win
the second paragraph. as ABOVE MI
Walker says q, Tho oo,,,-
FRY who will disDute this proposition, ana
vet neither the findnciers' lhe pdIlh9 W.
tho Government have tne Cou' as -
face the issue and ADOPT any ~ "a
half a dozen systems thal are apsyl4tte
ly sound. now in operation IN other
countries CT the method proposed py me-
which is practically the pesl IeatuIeS
OF the English. German anu ! Ithtm Sys-
TENS adapted TO our pecun og ,b oT Tyaas
arising from the existence OF me ittas-
nrv note and greenback and our silver
embrOglio."
THE COUNTRY WILL HAVE TO ADOPT 1T.
Notwithstanding which, Mr.. Walker is
confident that his scheme or slihildr
one. will be adopted by the United states
Tast evening CONGRESSMAN Walker cor
daily received the Post man and con
scented 10 treat Of MS Dill IN an inter-
view. <tt
The reporter first submitted the follow
@Haye YOU noticed IN the papers that
President Cleveland is expected 70 ue-
velop some measures Tor me CorItIIloh
Of present existing fnanclai eNlIS vi
Their, what are the evils Whlch heed CUT
recting|
TIE BASAL ERROR.
"The fundamental error in our banking
system" saIG Mr.. Walker S we ndi
ING the Government in any way respOnsi-
HE for hanks or for the redemption OF
paper money. The banks should 9e com
pletely and thoroughly INDEPENDENT Vi
the Government, excepting IN ttc'l 5u
nervisIon by Government officials, IN Ofdef
that their patrons, or the people VINO
have no means Of knowing whether pahk
bills are good or not. may be protected
from loss. .... .,
redeem any coin-paper money, Tor the
Government Is a consumer OF Weal'h ana
consumes every day all wealth. Whlch
comes into its hands from taxation
which in fact. is the only way IN Wnlch
1t comes into possession Of any wealth.
BANKS coNsEEvERs OF WEALTH.
"a bank. on the other hand. is a con
server and increaser OF wealth. a bank'
In the first place Is me owner Oh any
wealth in its own right. and, further, is
the custodian of anywhere from as much
again as IL owns In behalf OF It's deposit
therefore. when n bank issues its
demand notes. or what is called paper
money. every dollar OF this paper money
is a title to actual wealth in the posses
sion Of the bank. There Is not a uoll3r
Of It credit money az il is enormously
called. but the paper IS an absolute tiue
10 wealth I'm the bank secOndarily ana
primarily in the possession oil me man
who borrows on demand notes or the
bank until the obligation on Whlch ne
bOrrows natures. and then he surrenders
TO the bank the wealth I'm his possession
agreed upOn-Which really redeems the
paper money which he took from the
bank.
ION the other hand. when the Govern
ment issues paper money 10 has abso-
lutely nothing with which 10 redeem
dollar Of It in the normal action or the
Government: for the normal action Of the
4 s.tra -FnY ont 30 -rfF
salaries, constructing public buildings.
ships. fortfcations, river and harbor
improvements. and the ten thousand
things that a Government spends its
money for; and II has nothing with
which to redeem the obligations that
II issues.
IF it maintains any coin in reserve for
the purpose Of refecmtDg the demand
notes or paper money that II issues. II
is an abnormal proceeding and while
the paper money II issues IS made safe
II gets no advantage from the issue, for
coin being bona tido wealth. the Govern
ment loses the interest on every dollar
Of coin that IL carries. as II can in the
nature Of the case perform only one
function. viz. The redeeming OF notes
which il issues.
BAEKs' COIN HAS THREE FUNCTIONS.
1.-THE coin that a bank carries does
three things: First 10 is kept as reserve
with which TO pay every demand which
is made upon il: secondly. II currency
notes are issued 10 the amount OF coin
il holds IL is earning as much income
as amy other portion Of rs assets; third
ly. Il is a measure OF value for every
transaction of the bank, in that the
'fial balance between banks and banks
and individuals having paid In coin. IL
is the equivalent Of paying every obh
cation upon the bank in coin, as every
douar Cf coin drawn from the bank
must, in order 20 be made valuable to the
man who draws H. be deposited imme-
diately in some other bank. therefore
the banks. as a rule. never lose any OF
their coin. on the other hand. the
Government, after a dollar of coin Is
paid out absolutely loses the coin paid.
either I'm the redemption OF its notes
or In the payment OF Its obligations
Now, the thing TO DO with our present
financial system Is 90 discover the Gov
eminent wholly and completely from the
banking business and from the money of
the country. and 10 make IL precisely the
same with reference to the banking and
currency Of the country as is any busl-
ness organization Of equal magnitude.
FOREIGN COUNTRIES SYSTEMS.
"The Governments Of England, France
and Germany have only nominal con-
troll of thc banks Of those countries. The