The morning call., 1894-12-14
MONEY OF PRICE.
CornwaIl's Plan for a
Currency.
ALL FOR THE BANKERS.
Nothing for the Government in
the Scheme.
HIS SINGULAR VIEW OF RIGHT.
There Should Be No Notes Issued
and Made by Law Legal
Tender.
HIS SINGULAR VIEW OF RIGHT.


tinued its hearing to-day. Letters we're
read from ". II. Dana, editor of the Com
mercial and Financial Chronicle. and r.
b. Ferris, yice-president of the Bank of
&ew York. Ferris said: There seems to
be no good reason why the existing national
banks which have United States bonds on
deposit with tie Comptroller should not
be allowed to continue as they are until
their charters expire or their deposited
bonds are paid off. Section of Carlisle's
bill seems like forcing the banks 10 do
what they have not been consulted about"
Ferris advocated the establishment of GEN.
trail redemption agencies which would, he
thought, enhance the elasticity of circu-
lation based on the deposit of bonds.
Referring to section 10 of Carlisle's bill,
providing for the issue of notes by State
banks, without provision in the sinking
fund, Ferris said: 1T makes the bill
simply an imitation measure. modified by
the deposit OF 80 per cent of legal tender
notes and "A provision to cancel United
States notes to the extent of 20 per cent of
the new circulation issued when the
treasury has means to do it,"
The letter concluded: "As the bin sub
stilutes national bank notes for new issue,
~ VIII NC 1diiutc, as ~ fIcSouio uO H.
ducements to solid banks to become in
surers of the circulation of mushroom
institutions. and stimulant to organize
banks not subject to United States inspec-
ton is questionable.
William q. Cornwall, president of the
City National Bank of Buffalo, and presi-
dent of the New York State Bankers AS
ISOLATION, said MS recommendations were
as follows
1. The greenback and treasury notes should
be redeemed. then cancelled. The real business
of the Government regards money is TO
stamp upon gold and silver their fneness and
weight. government has no right to issue
money with nothing back OF IL ana to make it
legal tender-to create a currency and by an
act OF law force the people to take Its full value
without regard to intrinsic worth. All such
issues upto to-day have ended in trouble. The
greenbaek and treasury note are of this char
acter. They are the Governments note 10 the
extent of S500,00o,0OO. payable on demand
and in gold. They have caused trouble enough
already. They are a constant menace TO the
gold reserve. They should be paid up.
2. The vacancy should be filled with bank
notes. The best currency OF the best nations
to-day is mainly bank notes, which are first
lien upon the assets Of the bank. These assets
are commercial possessions, representing the
product OF the brain and muscle OF millions of
people. They are the wealth of the nation.
What better basis for circulation can be than
thls-the actual wealth of the nation?
To fill the vacancy created by the retirement
of the legal tenders and as fast as they are re-
tired national banks should be allowed to issue
notes to percentage of capital without bond
security, the notes TO be first lien upon the
assets of the banks, including the double la
blity of stockholders, with guarantee fund
made up by all the banks, the Government con-
tnuing 10 guarantee and redeem all notes as
at present. This is practically the Baltimore
plan. II is simple and good as far as It goes,
and 1t goes far enough for the present.
3. To perfect The system further and make
out the complicated and delicate problems at.
tending this, an impartial expert commission
should be appointed.
To recapitulate: (l)-RetIre the legal ten
ders. (2)-Let the national banks take out
notes under the Baltimore plan TO replace them.
(3l-Appoint an impartial expert commission
10 perfect our currency system.
Replying to question DV Warner, Corn
wall said he. thought the green backs and
treasury notes outstanding should be re-
deemed, but he would perform this re-
demption with low-rate bonds. He also
said he did not consider that part of Sec
rotary Carlisle's plan relating to tho re-
finite. Corn wall said thai return to State
bank notes would bring about return of
eounterfeiting. now reduced to a mini
mum.
At the afternoon session Chairman
Springer read letter from a. B. Hep
burn of New York, ex- Com ptroler of the
Currency and one of the advocates of the
Baltimore plan. Mr.. Hepburn wrote "a
follows:
OF course, Mr.. Carlise's provisions reuuir.
ing banks taking out circulation TO deposit
greenbacks and treasury notes is made In the
interest Of relieving the Government and not
for the benefit of currency issue. do not
know that 1 have any objection to this. l
would like TO see any sale course pursued
which would relieve the Government OF its
embarrassments. 1t is by no means an I'M
mixed blessing to Its banks the retirement OF
The Government from the banking business
While 1t would benefit the Government and the
people as a whole, 1t would certainly
put added responsibilities upon the banks.
am strongly opposed TO the pro-
position to do away with the re.
quirements that the banks keep reserves,
aud my understanding Of the law does not
tally with hat Of the Secretary The law when
1t was drafted as l understand it, was based
upon the experience of prudent and we'll
managed banks, and the reserve was fixed at
point where prudent and welmanaged banks
carried their reserve. 1t was sought to fix A
limit so well-manaeed bank would a. often be
over as under the reserve 10 the regular course
OF business. This law is made not for the nine
banks who would observe 1t without any legal
provisions, but for the tenth, that through
either incompetent, speculative or unsafe man.
agement might fail TO keep a proper reserye
and to keep its finances sufficiently strong to
meet the demand That might be made upon il.
The statement which the Secretary makes
that the State banks keep 20 per cent reserve.
whereas the national banks keep only g. l do
not think is well founded.
Hepburn criticized the repeal of the 10
per cent tax on State bank notes while
leaving tax on national bank notes; also
the section forbiddlng of national banks
TO issue notes of less than $40. The safety
fund should be equally compulsory and
State banks should be required to keep
the same reserve. The section of the
Carlisle bill which provides for imposing
the 10 per cent tax in case the bank does
not satisfy the Secretary and Comptroller
thiplya xuould ha of litfla aapnDnt and