The record-union. [volume] (Sacramento, Calif.) 1891-1903, 1894-12-14
TIE CURRENCY QUESTION.

WASHIN GT0N, Dec. l3.-1ne House
Banking and Currency Committee con-
tinued it's hearing to-day. Letters were
read from w. Ii. Dana, editor of the
Commercial and Financial Chronicle, and
u. b. Ferris, Vice President of the Bank
of New orl. Ferris said; There seems
to be DO good reason why the existing
national banks who have United States
bonds on deposit with the Comptroller
Should not be allowed to continue as
they are until their charters expire or
their deposited bonds are paid of. Sec
ton of Carisle's bill seems like forcing
the banks to do what they have not been
consulted about" Ferris advocated the
establishment of central redemption
agencies, which would. he thought, en-
nance the elasticity OF u circulation based
on tie deposit OF bonds.
Referring to Section 10 of Carlisle's
bill, providing for the issue of bonds by
state banks, without provision in the
sinking fund, Ferris said; st makes the
bill simply All imitation measure, modl-
fled by the deposit OF 30 per cent. of legal
tender notes and provision to cancel
United States notes to the extent OF 10
per cent. of the new circulation issued
when the Treasury has means to do 1t"
The letter concluded: LAS the bill SUBJ
SLlDILSS udLlOudl DdIlh uOI6S lOI d ne"
issue il will be failure, as it presents no
inducements TO solid banks 10 become in
surers OF the circulation of mushroom in
situations and a stimulant to organize
banks not subject to United States in
spection is questionable"
William G. Cornwall, president of the
New York Banking Association. read
carefully prepared paper advocating SUBJ
stantially the Baltimore plan. His
recommendations were as follows:
First-Ihe greenback and treasury notes
should be redeemed, then cancelled. The
real business of the Government, as re-
CARDS money, is to stamp upon gold and
silver their tineness and weight. The
Government has no right to issue cur
rency with nothing back of it and to
make it legal tender-to create a cur
rency and by an act of law force the peo-
pie to take its full value without regard
to the intrinsic worth. All such issues
up to to-day have ended in trouble. The
green back and treasury notes are of this
character. They are the Governments
note TO the extent of 100000, O0O, payable
on demand aud in gold. They have
caused trouble enough already. They are
constant menace to the gold reserve.
They should be paid up.
Second-The vacancy should be filled
with bank notes. The best currency of
the best nations to-day is mainly bank
SETS of the bank. These assets are COM
mercial possessions, representing the
product OF the brain and muscle OF mill
ions of people. They are the wealth of
the Nation What better basis for circu-
lation can be than this the actual wealth
OF the NationY TO ill the vacancy Gre
ated by the retirement of the legal ten
ders. and as fast as they are retired Ma
tional banks should be allowed to issue
notes TO a percentage OF capital, without
bond security, the notes to be first lion
upon tile assets of the bank. including
the double liability OF stockholders, with
a guarantee fund made up by all the
banks. tie Government continuing to
guarantee and redeem all notes as at
present. This is practically the Balti-
more plan. 1t is simple and good as far
as it goes, and it goes far enough for the
present.
Third--To perfect the system further
and make out the complicated and deli
cate problems attending this, an Impair
tall expert commission should be ap-
pointed.
To recapitulate: ~. Retire the legal
tenders. ca Let the national banks TAX e
out notes under the Baltimore plan to re-
place them. 90 Appoint an impartial,
expert commission to perfect our cur
rency system.
Replying to a question by Warner,
corn wall Sdlu he thought GDe SFe6uDdchS
and treasury notes outstanding should be
redeemed, but he would perform this re-
delnption with low-rate bonds. He also
said ne did not consider that part OF Sec.
rotary CarliSle'S plan, relating to the re-
tirement of treasury notes, sufficiently
definite. Cornwall said that return to
State bank notes would bring about re-
turn of counterteitlng, now reduced to a
minimum.
At the afternoon session Chairman
| Springer read a letter from A. 3. Hep
! burn of New York, eX-Comptroller of
| the Currency, and one of the advocates OF
the Baltimore plan. MIR. Hepburn wrote
as follows:
"Of course Mr. Carlsle's provisions re-
| curing banks taking out circulation to
deposit green backs and treasury notes is
| made in the interest OF relieving the Gov
ernment, and not for the benefit of cur
rency issue. l do not know that l have
any objection TO this. | would like to see
any sale course pursued which would re-
! lieye the Government of its embarrass-
ments. 1t is by no means an unmiX ed
| blessing to it's banks. the retirement OF
the Government from the banking BUSH
| ness While 1t would benefit the Gov
eminent and the people as a whole, it
would certainly put added responsible
| tiles upon the banks.
II am strongly opposed to the PROPOSE
that the banks keep reserves, and my
understanding of the law does not tall y
with that OF the Secretary, The law
when it was drafted, as l understand it,
was based upon the experience OF prudent
and weIl-managed banks. and the reserve
was fixed al point where prudent and
! well-meaning banks carried their re-
serve. 1t was sought to fix a limit 80 a
/ well-managed bank would as often be
over as under the 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 tenth, that either incompetent, specu-
lative or unsafe management might fail
to keep proper reserve 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. re-
serve, whereas the national banks keen
only IS, l do not think is we'll founded"
Hepburn also criticised the repeal OF
the ten per cent. tax on State bank notes,
while leaving tax on national bank
notes; aiao the forbiddiDg of national
banks 10 issue notes Of less than $40. The
safety fund should also be equally com
pulsory, and State banks should be re-
ouired TO keep the same reserve.
He closed by saying: 1.-The Secretary's
discussion Of the financial question IL
general L most cordially approve, and the
conclusions he reaches ! believe are wise
and sound, but the details of the bill he
has submitted. in my judgment. are
| open 10 serious criticism"
The committee then adjourned till to-
| morrow.
His Wishes Carried Out.
OAKLAND, Dec. I2-Dr. George Fran
els died In Alameda on the third instant
and was cremated few days later, with