The times. [volume] (Richmond, Va.) 1890-1903, 1894-12-11
CARLISLE EXPLAINS HIS PLAN
The Idea is That The Stronger Banks
Shall Garry The Weaker.
IT DIFFERS FROM The BALTIMORE PLAN
The Government. Under tho New Plan. Will
Not Redeem Mutila'ed Notes as IL
Now the Custom.

MAYS and Means Committee room OF the
House this morning. Secretary Carlisle cx-
plained in detail TO tho Banking and Cur
rency Committee the plan recommended
by him for the new banking law. All
of the seventeen members OF the commit
tee. except four-Messrs. Black, Illinois;
Broslus. Pennsylvania; Haughen, Wiscon-
sin: Ellis. Kentucky. we've In their seats
ns early as 10 o'clock, the hour at which
the hearing was called. Mr.. Culberson.
OF Texas. who had been detained at home
by reason Of lines in his family, hurried
10 Washington TO attend tO-aay's meet
ing. The hearing attracted a large num-
Der OF representatives In addition to the
members Of the committee. Among those
present were Messrs. Wilson. West Vir-
ginis; Hooker. New York; Snodgrass, Ten
nessee Turner Georgia. j. X. Cowen,
OF Baltimore. member-elect Of the next
Congress and Senor Romero. the MeXi-
can minister, were also ia attendance
When the committee had been called TO
order, Secretary Carlisle was asked by
Chairman Springer TO explain what would
be the practical workings of his currency
plan. In answer. Mr.. Carlisle said he had
come TO answer questions Of the commit
tee. and 10 make statement OF his plan,
but not 10 indulge in a general argument
rs that had been done already In his
annual report.
Mr.. cARLisLE's EXPLANATION.
Proceeding 10 take up his suggestions
seriatim. as they appeared In his report,
Mr.. Carlisle read the first two, as fol-
lows:
Repeal all laws requiring or author
izing the deposit of United States bonds
as security for circulation.
2.-Fermit national banks to issue notes
10 an amount not exceeding 20 per cent,
Of their paid-up and unimpaired capital
and require each bank before receiving
notes TO deposit a guarantee fund, con-
sisting OF United States legal tender
notes. including Treasury notes of 1880,
10 the amount OF 30 per cent upon cir
culating notes applied for: this percent
age of deposits upon circulating notes
outstanding to he maintained at all times,
and whenever the bank retires its circula-
ton in whole or in part, It's guarantee
fund 20 be returned TO IT, in proportion
90 the amount Of notes retired.
In explanation, Mr.. Carlisle said IT had
come to be almost generally believed that
that provision Of the law requiring
deposit OF United States bonds as securi-
" for circulation was a failure. He
believed it prevented elasticity of Curren-
cy Passing without further comment TO
the second suggestion, Mr.. Carlisle said
he believed that this provision was per
fectly safe in guaranteeing surety to de-
pOsitors. The Treasury reserve, ne
thought, should not exceed more than
one-half of the outstanding circulation OF
national banks.
DIFFERS FROM THE BALTIMORE PLAN.
MIR. Springer asked Mr.. Carlisle to eX-
plain the difference between his plan
for retiring circulation and that of the
Baltimore bankers, and the Secretary
gave a brief sketch of each. The Baiu-
more plan, he said provided FOR ctrcula-
tion up TO 90 per cent. OF the capital stock
OF the banks without any deposit what
ever. but subject TO tax, the fund raised
from which was to be used in relieving
the funds OF failed national banks. If
this does not become large enough the
Government is 10 relieve the fund looking
20 the banks for repayment. The Govern
ment plan was that separate fund OF
- per cent of the circulation should be
held for each bank. and, IN addition,
there should be "a safety fund, raised like
that of the Baltimore plan, but if this
fund should not prove large enough the
Treasury Department might assess the
national banks pro rata on circulation.
The Government through this means
could lose nothing.
In further explanation, Mr.. Carlisle said
20 keep the safety fund intact In the
Baltimore plan, the Government was not
required 10 do this. My plan" said the
Secretary, requires the national banking
system TO support itself entirely and re-
lieves the Government of all connection
with the system except to furnish notes
and hold a safety fund"
STRONG BANKS TO GARRY WEAK ONES.
Mr.. Carlisle said his plan did away
tom nf pa1a Ian
OF national bank notes At present the
national banks could send their mutllated
notes TO the Treasury and receive in re-
turn new notes. BY the new plan, the
Government was divorced entirely from
the redemption of these national bank
notes. the Government was relieved OF
all responsibility In the matter.
In answer TO Mr. Johnson, of Indiana,
Mr.. Carlisle said that the idea of the
plan was that the stronger banks should
carry the weaker If Il bank failed so
badly that II could not pay its notes
the ultimate liability was placed. by the
Baltimore plan, on the Government; by
the plan proposed by himself the ultimate
liability was placed on the banks.
Mr.. Johnson wanted to know II Mr..
Carlisle thought the banks would agree
90 this, and the Secretary answered that
The banks must speak for themselves
He was looking out for the interests Of
70 Government.
In answer To Mr.. Johnson (Dem.. o.,
Mr.. Carlisle said that one great advan-
taEe Of his plan was that IL would fur
nish an elastic currency. The entire ra-
tlonal bank deposit would not be filled up
% the limit OF the plan unless the bust
ness Of the country required It. Under
the present system. If a national bank de-
sired TO retire its circulation IL must
send TO the Treasury lawful money of the
United States OF a requisite amount. but
A. was not allowed TO withdraw this
amount for circulation under six months.
Under the new plan bank might retire
its circulation to-day and Increase 1t to-
morrow.
TIE STATE BANK FEATURE.
Mr.. Carlisle then took up section IL, the
"State Bark" feature OF his plan-yiz.:
"Circulatlng notes issued by banking
corporation. duly organized under the
laws Of any State, and when transacts
no other than banking business, shaI
be exempt from taxation under the laws
OF the United States, when IL IL SHOWN
20 the satisfaction OF the secretary or the
Treasury and the Controller oil the Cur
rency-
First. That such bank has at no time
had outstanding its circulating notes IN
excess OF IS per cent. of It's palu-up anu
nnimpaired capital.
Second. That It's stockholders are IN
uividually liable for the redemption OF I's
circulating notes TO the fun extent or
their ownership OF stock
Third That the circulating notes con-
stAut4 by law a first lien upon all the as