The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1894-12-12

euue9, or by ns%&ns % t1A@@+se
was now proposed 20 give fne oanss :
valuable franchise. assd x Vas FFoi's1 Islat
they Should make = fair return a q ~
70 secure fhe csrrsnt redemption On moss
legal tender noses. tire banks. Tor TIE pfss-
flexe CT Issuing notes OF usear caps11i
stock against their assets rsoaid pe nszss1a
70 sI1fosgt legal tender rEtn the goFssn-
,sent as a reserve fund To-Day. unaer
ire re riorsaf bankiag act szsS,e." q
legal tenSers hej5 for reserve furs1s were
sake,s OUT Of ct~cRsz1tor. UDssr the system
he uroro~sa. 20 per cent Of the esreAsation
would be aegaeitesl IN legal tenders. foT
r<vsef circulating rotee would be Issued
1oIlar for dollar. This wosld IN 10 wise
decrease the volume of currency. Tne oE,-
r,erasfoa & thss plan would Immediately
usts.srxw saze esavA Of tire legal tenders
from me 1850 ysaso of legal tenders now
used 10 drain the treasury OF goid- tbs
saou,a be dons by every bank for tns
vrsvileee q future issue o. notes against
"a assets. Esos unless tfere wss s1f1i-
Gent rroat ia circulation. banks would
not take Il out IL was a plain business
fssatfsr.
The complaint under the present system
vas that there was no profit Ia ciFeuia-
zion. About saa co.ooo In national bank
circulation Mas outstanding. Certainly.
under the proposed system there would
b. a considerable profit IN the present
circulation ard Ia times OF demand the
profit by taking notes against assets
would materially Increase As TO the
question u elasticity. It was governed BY
two things-fae demand and the ifnuae-
~. "a
extent OF 50 per cent OF the notes. the
currency would be elastic. THIS plan
would relieve the Treasury Of S5f9@"."0
OF greenbacks. and furnish an elastic cur
rency for the people. and = profitable cur
rency for the banks. He maintained the
Inherent right of The government 70 make
issues Of legal tender. bsat questioned its
sxpesiisncy A. 90 the safety OF notes.
history would repeat itself IL was safe
to say that not a noss wUald have suffer
ed loss II government bonds had not been
Deposited In the treasury wants. The act
of 1874 In England pretends to have been
enacted 10 make the notcholsier OF the
Bank OF England sec are. yet. as a matter
of fact 1t VAS an act To limit the circu-
lation. The f15.0oo co. Of uncovered notes
of the bank-that IS. those which had not
= pound OF gold behind thegnr-were just
as secure as those covered BY gold The
act OF 1874. which attempted 10 fix the
amount of uncovered notes had TO be
amended three years later 90 give the
Bank Of England authority to issue above
tbe amount fixed by the pool act. The
notes issued by the Bank OF England urs-
covered have always been a. goo.ie as
the others The assets OF any bank or
any other financial institution were re-
deemabie paper. This was apparent dur
ing tho panic last year when bonds were
hard to dispose OF. while convertible pa
per was acceptable everywhere. The bank
assets and credit behind the uncovered
notes 30 be issued under the proposed sys-
tenn for this country would make them
entirely safe
Mr.. Eeiels said. IN conclusion. that
while Secretary Carlisle and he agreed
~ to TIE general principles they differ
ed somewhat az to me rssods.
Among those present today were Hor-
ace White. OF the New York Evening
Post: G.. q. Homer. OF Baltimore, chair
man of the committee Of the national
bankers to formulate the so-ealled Ealti-
more plan. and A. Il. Hepburn. OF New
York. ex-comptrolier OF the currency.
These gentlemen represent the currency
ideas embodied In tho Baltimore plan.
AIR. White opened the meeting. reading
from manuscript lie began with ref
erence 10 the Baltimore plan, calling at
tention TO the fact that IL Deals with only
one part OF ths banking business that
OF issuing circulating notes. a function
not Indispensable but valuable to the
people. He hsld that IL was the para
mount right and duty OF the state 10
provide for the safety of the community.
Hence &c may prescribe the regulations
under which circulating notes shall be
Issued. or Eunpowder stored. or liquor
be sold 10 In not bound 20 give equal
privileges 10 all persons 10 exercise these
functions. The FIRST half OF the address
was devoted largely 20 n historical re-
view OF banks In this country. and par
ticuiariy the New York safety fund sys-
tenn of the days prior 10 thu war. which
MIR White extoilsd at length. The latter
part OF Mr.. Whites address was devoted
exclusively 20 the Baltimore plan. Re-
ferring TO thu fact that 10 makes circu-
latinw notes a rrss lien on the assets of
the bank. he said:
There II an cutlery against this fec ture
from some people. who say the poor de-
positnr viii suffer. But what IS the con
dition OF the poor deposltors now Arc
not notes irst lien on the assessg Can
any deposition get any part OF this fCrd
until the notes are psi1 IN frns And,
supposinE that the bonds should ever fail
short OF paying the notes. could ,he de-
posltor get any part OF the remaining
assets until the gar value OF the notes
was detuctefY or course not"
Mr.. White said he saw no ob3e. ton 10
the repeal Of the 70 per cat. tax en- state
bank notes. provided the state banks com
ply with ala the requirements q the O.
tional banking law. ana provided the
means OF enforsuE these rcuuiTcGas ats
are lodged vita the comptroller OF tie
currency. Hut a mere power 81 osrServa-
ton. without ths 20 w~r OF enforcement.
he said. he coast Iered unwfse, Unsafe
ana sure % cause eyaaarrs ssment and %
end ia disaster. lie cons tered 10 ceSlr-
able. though not Indispensable. that the
government sn Nj continue. as row. re-
sQcnsihle ~or tie redemption C bank
notes. The tialtimo-e PLAZA siguply takes
the law as Z nnls H. II Makes a change
IN the manner ~ feimbursinx the govern %
ment fer TIE ra3smotl0h - failed notes.
The eniv Guestl3n - whether the sug-
gcsted change rats ne Eoverasatnt a
any grsater ri *. Thts IS a question a
mathematics IL "a 10 be aGsxsrea nv
ths tables 81 eaak mortality in the past
IL ytars
Taking up another branch Of the cues
ton. Mr.. white SAID. ut has BEEN said
there Is no more reason why the govern
rnent should guarantee the notes 90 q
hank than those % a merchant or a farm.
er. This wcuhi Re true x the notes of ths
merchant the manufacturer ana fagTnes
were allowed 10 circalate IS money. bot