The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1894-12-20
RANKING COMMITTEE.

A. Il
from X. b. Ferris, vice president Oh lh'
Bank of New York.
Mr. Ferris advocated the establishment
of central redemption agencies, WhicH
would, he thought, enhance the elasticity
of circulation based upon II deposit OF
hands Referring to section 10 of the
Carlisle bill, providing for the issue OF
notes by state banks, without the pro
vision of n sinking fund, Mr. Ferris sad
at makes the bill simply an imitation
measure, modified by the deposit OF ~
Der cent in legal tender notes and the pro
vision to cancel United States notes TO the
extent of 20 per cent of new circulation
issue when the treasury has the means
10 do it," He closes his letter by saying:
Gas n bill to substitute national BANK
notes for United States issue, it Will be II
failure as it presents no inducements 10
solid banks to become insurers OF the CIR
.culatiOn of mushroom institutions ana Iie
stimulant to organize state banks not SUD
iect to United States inspection is ques-
tionable."
After q sharp passage at arms between
Representatives Walker and Warner as
TO the order in which witnesses should be
examined, in which Mr.. Walker com
planned of criticism by Mr.. Warner, Mr.
William G. COrnwell, president of the New
York Banking association was introduced
and read a carefully prepared paper on
the currency plan.
After the conclusion of his paper, Mr.
COrnWell in reply to the questions by MI
Warner said he thought the greenbacks
and the treasury notes outstanding should
be redeemed, that he would perform tins
redemption with low rate bonds. lie also
said that he did not consider the part OF
Secretary Carise's plan relating to the
retirement of treasury notes sufficiently
definite Mr.. COrnwell was questioned at
much length; among other things he said
that a return to state bank notes would
bring about n revival of cOuntcrfeitlng,
now reduced to minimum.
Mr. Johnson asked as to the effect OF
rcdcemng greenbacks in silver.
The witness replied that silver would
at once go to Il premium.
Mr. William DOdSwOrthy, editor OF the
New York Journal Of Commerce adj
dressed the committee, after which re
cess was taken.
AT the afternoon session Mr.. Springer
read letter from A. b. Hepburn of New
York, cX-comptrolIer of the currency,
and one of the advocates OF the Balll-
more plan ,,..
Mr. Hepburn wrote as follows: "Ot
course Mr.. CarlSlc's provisions requiring
banks taking out circulation to deposit
greenbacks or treasury notes is made III,
the interest of relieving the government,
and not for the benefit of the currency
issue do not know that ! have any OBJ
icctiOns to that. | should like to see any
safe course pursued which would relieve
even temporarily the government from
its present embarrassment. 1t is by no
means an unmiXed blessing TO its banks,
the retirement of the government from
the banking business. While it would ben
eft the government and the people as
whole. il would certainly put added re-
SpOnsibilitiCs upon the banks. | am
sirnnUlV nnnnSnD In tnp nrppnSltlDn To do
away with the requirements that the
banks keep reserves, and my under
standing Of the law cannot tally with
that of the secretary. The law, when it
was drafted, as | understand, was based
upon the experience of prudent and well
managed banks, and the reserve was
fixed at Il point where prudent and well
meaning banks carried their reserve. 1t
was sought to fix limit for the reason
that well managed bank would as often
he over as under its reserve in the regular
course of business. This law is made, not
for the nine banks who would observe it
without any legal provisions, but for the
10th one, that, either through incompe-
tent speculative or unsafe management,
might fail to keep proper reserve, and
10 keep itself in II sufficiently strong po-
SiiOn to meet the demands that might be
made upon it. The statement which the
secretary makes that the state banks
keep 20 per cent reserves, whereas the
national banks keep only'lS, don't think
is well founded"
Mr.. Hepburn also certified to the re-
peal of the 10 per cent on state banks.
While levying Il tax on national bank
notes of less than $40, the safety fund
should also be equally compulsory 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 bill does not sat
sfy the secretary and comptroller he
thinks would be of little account, the inn
position of the tax after Il bank had failed
would only complcate matters. He
thinks state banks designed to take out
circulation should become national banks
in fact.
He closes by saying: ",rhe secretary S
discussion of the financial question in
general | most cordially approve, and the
conclusions he reaches, l believe, are
wise and sound but the details of the bill
he has submitted, in my Judgment are
open to serious criticism
Prof George Gunton of New York
president of the school of economies, ad.
dressed the committee from an economic
rather than n bank standpoint. He did
not approve of the Baltimore plan or Sec
rotary Carlsle's plan as they took the
government in to the banking business
Mr.. Rohwell of New York. editor of the
Engineering and Mining Journal spoke
of the dangers of the Carlisle and Balti
more plans in making large initiation
possible. The Carlisle plan would compel
another bond issue.
The committee then adjourned until to-
morrow.
FOREIGN AFFAIRS COMMITTEE
Washington, Dec. 13.-The house com.
mttee on foreign affairs today entered
upon an inquiry as to the necessity un,
der the law of continuing the bureau OF
American republics. Messrs. Gray
Tucker and Storer were appointed to in
vestigate and report on the subject. The
committee passed the resolution of Rep
resentative Black, of North Carolina
calling on the president for information
in regard to medating in the war be
tween China and Japan. Assistant Sec
rotary of State Uhl was at the commit
tee room before the meeting and Il gen
eral understanding was reached that full
information would he furnished during
Che coming month. Representative
Blair's resolution will not be reported tC
the house for week, as it is fcarCC
that it might have tendency to delay
the treaty now pending between thu
TINTED States and Japan. The com
Zee agreed unanimously to report the re