Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-12-10
CARLISLE'S PLAN
Interest in the Secretary's Appear
ance Before the House Committee.
4 FAVORABLE DISPOSITION DISPLAYED
The Replies Elected by the Ques-
tions of the Committee.
GOLD SUPPLY AND BANKS

GOLD SUPPLY AND BANKS
Secretary Carlisle appeared before the
House committee on banking and cur
rency today to present in detail the fea-
lures of the new currency plan proposed
in the annual report and indorsed in the
Presidents message. There was much in
terest in the hearing, as it was felt that
Mr.. Carlisle would lend a more popular
interest to the subject than had appear
ed in the formal report. The crowd in
attendance made it necessary to use the
large room of the committee ON ways and
means. Besides the full membership of
the committee present Senior Romero, the
Mexican minister, and many members Of
Congress were i'll attendance.
In general the character of the Ques-
tions showed favorable disposition to-
ward the plan and many OF the members
of the committee expressly declared, in
asking questions which seemed to imply
antagonism, that they agreed with the
Secretary and were favorahly disposed to-
ward the proposition. But two members -
Messrs. johnson OF Indiana and Sperry of
Connecticut-appeared disposed to combat
the suggestions made by Mr. Carlisle.
The points In the general proposition con-
corning which members of the committee
appear to entertain most doubt were those
making a distinction between state and
national bank systems and the pro-
visions for the redemption of the
bank notes in lawful money" which
appeared to excite the apprehension
that the adoption of the system might put
the country upon u silver basis. num-
Der OF questions were asked on this lat
ter point, indicating fear on the part of
members of the committee that this might
result.
On the Secretary stating that banks
might, if they saw fit, redeem their notes
in silver dollars, he was asked If he be-
lieved it would be possible to maintain a
parity of these notes with gold If the
banks should redeem them in silver Mr..
Carlisle expressed himself as firmly of the
conviction that there was no danger of
the notes falling below parity, though he
admitted that 1T would largely lie with the
banks to determine this.
Banks and Gold.
He thought that the banks would, as a
matter of policy, be compelled, just as the
government is, to maintain their credit by
gold payment where gold was demanded.
Moreover. he said that the large use of
silver which would result from the retire.
ment of all notes below the denomination
of ten dollars, except silver certificates,
would leave an abundance of gold in the
hands of the banks. AS far as the govern
be change in the present condition,
since no discrimination would be made
by the government between gold and silver
in either receiving or paying out money.
This question, however, seemed to fix an
apprehension in the minds of several men,
bers of the committee, who laid special
emphasis upon the fact that the proposed
plan would not leave the option with the
holder of the note to demand either gold,
silver greenbacks in redemption, but
left it entirely to the banks to redeem in
any character of lawful money. This
question of how silver would be affected
by putting into operation Mr.. Carlisle $
plan seemed to be regarded by members
of the committee as one of the most i'm
portant, and several members expressed
the opinion that currency or this
character, which might be redeemed entire
ly in silver, would put the country on a
silver basis.
Claims of National Banks.
Carlisle disclosed to the committee the in
formation that under decision of the
Attorney General the government is now
liable to claims from national banks for
over taxation, -unning back over a period
of thirty years. He recommended that for
the purposes of taxation of one-half per
cent on the bank circulation it should be
expressly provided that banks should not
be relieved from the payment of this tax
on such Of their own notes as might hap
pen to be in their own possession in the
ordinary course OF business, not presented
or held for redemption. BY a decision of
the Attorney General, he said, it appeared
that the present law was defective in this
respect, and the government was subject
to claim for the return of all taxes col
lected on the currency of a bank while in
Its own possession.
Mr.. Carlisle adopted an easy, conversa-
tional style OIL address. He said he was
ready to answer questions from the COM
mittee, as we'll as elaborate his own views.
He took up each section of his recent rec
concentrations.
First repeal all laws requiring or au-
thorizing the deposit of the United States
bonds as security for circulation, and, sec
ond, permit national banks to issue notes
to an amount not exceeding 15 per cent of
their paio up and unmpaired capital but
require each bank before receiving notes to
deposit a guarantee fund, consisting of
United States legal tender notes, including
treasury notes of 1890, to the amount of
80 per cent upon the circulating notes ap-
piled for. This percentage of deposits
upon the circulating notes outstanding to
be maintained at all times, and whenever
a bank retires it's tion, in whole or
in part, it's guarantee fund to be returned
to it in proportion to the amount of notes
retired"
Mr. Carlisle said he was satisfied that the
present law requiring the deposit of bonds
TO secure circulation prevented the elias
ticty of the currency. THE provision out
lined" said Mr.. Carlisle, gives ample pro-
lection without the deposit of bonds, as
required by the present law"
Mr.. Carlisle said the practical value of a
reserve fund of currency was shown in '93
There was a demand for money aggregat-
ing S40,0O,GGO. The treasury did it's best to
meet the stringency, but by the time the
notes were ready to distribute the demand
had gone by, and many of the packages of
notes We're returned unopened.
Criticism Invited.
The Secretary invited criticism of this
particular section. Chairman Springer asked
how the Secretary's plan differed from the
Baltimore plan. Mr.. Carlisle explained the
technical difference. The Baltimore plan
proposed a deposit of 30 per cent, under GER
tain conditions, while the treasury plan pro-
posed deposit of 80 per cent. When a
bank fails the treasury plan contemplated
an assessment on all national banks, they
in turn having a lien on the failed bank.
Representative Hall of Missouri suggested
that there was a prevailing opinion that it
was unsafe to place the entire question of
expanding the currency in the hands of
corporate and banks.
Carlisle Banks will not expand the cur
rency unless the public need 1T. Their inter-
est will be to expand and contract as the
common interests demand. These interests
WILL therefore, control at all times