The times. [volume] (Richmond, Va.) 1890-1903, 1894-10-14
THE BALTIMORE PLAN.

At the Bankers Convention in Balti-
more Mr.. A. L. Hepburn, formerly Comp
troiler of the Currency. gave his approval
TO the plan that was adopted by the
convention, which requires all the banks
that issue notes to pay TO the Treasurer
of the United States a tax of per cent.
on those notes, to be guarantee funh
against circulation. He went further than
the plan went in terms 0hough the plan
would necessarily so that far il put into
operation), and expressly gave his appro-
baton to State banks issuing currency.
He said:
I'm respect to the proposed circulation.
there can be no objection to State bahh
receiving circulation, providing, as Il con-
dition precedent they are required 10
submit to examinations by the Comp
troller Of the Currency, make the hye re-
ports required annually by him of the
national banks, keep the same reserves,
have the double liability OF stockholders.
submit TO all supervisory regulations. and
conform to all requirements, so as 10
place the circulation issued TO State banks
exactly on par, with respect to safe
guards and security, with circulation is
sued to national banks
None of the proposed restrictions on
banking have our appreciation. There is
is the one we operated under before the
war, when the government coined and
issued the standard of value, and had
absolutely nothing else to do with money,
and every person or corporation was al
lowed TO issue It's promissory notes. TO
whomever would take them and in any
quantities that the parties pleased. That
is the true theory of money and banking,
and any restrictions upon it simply de-
prive the public of a part of the inestima-
BILE privilege of using It's credit In the
way that will bring 1t the best returns,
When we operated under that theory the
country grew and developed as II by
magic wealth was diffused broadly among
the people; there were no very wealthy
men, but men who were comfortably on
were the rule. Nevertheless, although we
disapprove OF all restrictions of the Bal
timore plan, and of what Mr.. Hepburn
would require. we should be delighted to
see Congress enact the plan with Mr.
Hepburn's amendment into law. The sub
stance of the case. then, would be that
all banks, State and national, could issue
notes TO the amount of SO per cent of
their paid up capital on paying to the
Treasurer a certain tax on their circuia-
ton. 10 be a guarantee fund against It,,
State banks to submit TO the present re-
auirements OF the national bank law Tor
national banks in relation to inspections,
examinations and reports.
II the law were thus amended we
should make an immense advance In
solving the money problem. 1t would be
far from what the public is entitled to,
but 1t would be a great gain. Our OBJ
Jections TO what Mr.. Hepburn demands
are entlrey theoretical The government
has no business inspecting banks 1t has
nothing TO do with money or currency,
except TO coin the standard Of value.
Nevertheless, its inspections and examina-
tons and reports are all perfunctory
things. that amount TO nothing, and as
practical matter. we have no objection
TO State banks submitting 10 them. They
will make State banks neither better
nor worse. Their importance and useful
ness depends upon the men who manage
them. and not on government inspections.
We have heard OF president OF ma
tional bank who was breeder Of fine
cattle. He sold the United States bank
examiner a fine Jersey on credit. When
ever the bank president thought 1t was
about time for the examiner to make
his rounds he would direct a clerk to
write TO him and ask when he might
expect a payment on account Of that
COW. The examiner always replied that
he would be in that city on q certain
day. when he would make aim a pay
ment. whereupon the bank president at
once nrocAAdAA n nut his bank into L