The herald., 1894-12-14
C4RLISLE'S CURRENCY PLAN

w. G. Cornwell, president OF the City
Bank of Buffalo, in recent interview
with the representative of the New York
Evening Post on Secretary Carlsle's
plan for currency reform, bestows praise
upon the secretsry's work in broad
and general way, while diSagreeing as to
some of the details. and especially as to
the state bank note feature, which be
rejects for good and sufficient reasons.
"rhe s?cretRry's message" said Mr. Cornwell,
"indicates a careful study of our own tinanc al
situation and oi tas currency question in gen.
eral. He has arrived at rock bottom on several
points, and on these his rec Imm eudatioAs are
admirable Tle abolition Of th bond security
is one OF these. Making otes a first lien upon
ali the a sets OF a bauS, including the double
liability OF stock olders is another This is one
OF the great eatures OF Il frst-class aux curren.
cy, and one of the encouraging signs of the
times is its advocacy mt natioual headquarters
Putting upon banss the necessity OF redeem
Ing their own notes daily REDEEM ption) is still
aGolher This is abso. utsiy neces ary to sci
entfc elasticity.
Both Mr. Carlisle and Mr.. Eckels take ad-
vanced positiOnS in this matter, remedying the
vital defect in the Baltimore pan, namely, the
] say defect 1t not vita tn intention of crit
icism. The trainers OF the Baltimore plan were
we'll aware of this defect, but the idea was to
introduce but one reform st time, and tn "
took the most important, nam sly, The abolition
OF the bond security. Swapping changes
not be gotten Though an American congress,
a for tnat reason the Baltimore plan is a wise
one"
Mr. Co-nwell agrees with the secre-
tary, however, in another essential fea-
ture wherein the latter disagrses with
the Baltimore plan. The secretary ad-
This, Mr.. Cornweil believes, is a step
towards general" security, and is in
the right direction. 1t ls hampered,
however, in the secretsry's plan by the
deposit of legal tender to the extent of
80 per cent OF the issue. This is a par.
tial retention OF the old special security
feature. and is wrong as far as it goes.
The greenback 10 put under bushel
temporarily, out OF sight but not out OF
existence.
Continuing, Mr.. Cornwell says:
"Ihe secretary proposes the repeal of thelaw
the interest OF gool blnking. The reserve re-
qui;emenr is the lockjlw of panic times. He
proposes to Taise the blockade which now
makes it i'm DO sib.e to increase or retire ma
tio l1l bank notes speedily. The notes for each
bank II 10 b. kept printed ami ready for i'm
medinte delivery. This is as it should be,
he provision OF safety fuod of per
CEN, -ontrlblted by all the nation al banks, is
in accordance with the best thought on the
Ftsbi i.at l,1t ft,na
credit Of the indiv dual bank releasable upon
retlrem mt of circula ion not subj .ct to con.
Rres,i Al c cJndscltion, q might happen under
P1pndst control, AS to the provision tnat no
national note shall be of less demon nation
than $40 this would b. we'll enough if state
bank issues, under the later provision in the
plan were likewise restricted out they are not
"Ihe tax fJr expenses, one-half OF per cent
Is Il. minor detail ana do IS not apply to state
banks The discreet onary retirement of legal
tenders do IS not, In my opinion, meet the re.
quirem 4uts. The thing to advocate is all alb
soIute withdrawal aud cancellation of legal
tenders, to be accomplished gradually by an
automatic arrangement, decreasing legal tend
ers as bank notes increase. This is the right
thing to do and there is DO use of lodging it."
Mr.. Cornwell thinks that the plan for
admitting state bank issues is imper-
reasona. There is provision in New
ork arranging for state banks to use
thG government safety paper in their
Il 0tes, but tbs notes must be distinctly
in design, etc.
Another kind of currency is thus in |
troduced into our already complicated |
syetem. We want uniformity and we
u ant absolute safety for note holders.
We get it under this plan so far as the
rational bank note is concerned. but the
tate note has fuctuating value, de-
bending upon the honesty and success
Vi the bank managers, and is not COW
red by the per cent REDEEM ption fund.
No such note should be offered to the
innocent note taker. The state bank
tote under semi~government approval
night be heavily overissued and readily