The times. [volume] (Richmond, Va.) 1890-1903, 1894-12-15
1uE CURRENCY PLANS BEFORE THE
COMMITTEE

1uE CURRENCY PLANS BEFORE THE
COMMITTEE.
The probabilities seem 10 point now to
the Committee on Banking and currency
adopting Secretary Carlisle's plan for
currency BILL and reporting that 10 the
House. We have already said that we
should be glad to see this or any otheI
plan that would change our present cur
rency system adopted, but between Mr..
Carlsle's plan and the Baltimore plan
we do not see how reasonable ana wen
informed men can hesitate. The Bau-
more plan. If the limit of currency to be
Issued is only raised from fifty per cent.
of paid I'D capital to seventy-five per
cent, is so far preferable to Mr. car
isles plan that the two ought not TO De
considered together for moment. MT
Carlisle's plan contemplates locking up
twenty-five and half per cent. OF
banks capital in the Treasury Of the
United States ats dead, non interest-bear-
ing United States Treasury notes, which
is an outrageous abridgment of bank S
use of its capital. 1t is idle to say that
the plan contemplates allowing the bank
an addition to It's loanable fund through
the notes that il permits them TO issue.
The easier the state Of the bank is MADE
the more liberal II can be to the borrow
Ing public. II ough: to have the benefit
Of all the notes 1t can prudently issue
and Of this twenty-five and a half per
cent. OF its capital also The want OF
that twenty-five and half per cent. CT
its capital may be the very thing IN
disastrous times. to carry banks down
hat would tide over the difficulty IL they
only had all Of their resources at their
command when the eXigency Is on them
Mr.. Carlisle hopes, of course by this pro-
vision TO lock up great part of the CIR
culating demand notes of the Government
and cause thereby an end to these drafts
upon the Treasury for gold, But that Is
not the way 10 accomplish his end. Let
us have no mixing OF a sound currency
system with schemes for relieving the
Government from embarrassments that
IL has hung around its neck. Let us Sc
cure a sound currency system ana then
take up the difficulty that these notes
bring upon us They ought to be taken up
and retired, of course. The spectacle
which the last ten months have presented
in this country would be a disgrace TO the
financial system CT a nation of Nahoos'
What would be said of Iahoos selling
their interest bearing bonds 10 put gold
- MI gllOWe0
TO be at once drawn out by their non IN
terest-bearing demand notes? II we we're
not doing exactly that thing ourselves We
We should say that the folly of the pro-
ceeding was worthy OF Iahoos. we repeat
that these notes should be all taken up
and cancelled. but II should be by the
Government issuing its bonds and taking
them up. Chicago banker who mas
achieved very considerable reputation
az a flnancier. MIR. Lyman j. Gage, has
written letter TO the banking and cur
rency Committee. in which he advises
that the Government issue a two and
half per cent. bond to take these notes
up, and that the national banks be al
lowed 60 issue currency on these bonds
up to their face value. without paying
any taxes on their currency. 1t Is very
plain 10 us that scheme Of this sort
would end these notes. and would result
in the national banks issuing all the cur
rency the people needed up TO the amount
of those bonds-say $4,000 900. The bonds
would sell. We have no doubt, AT some
banks TO start with two and a half per
cent. FOR certain on their capital, and
they would have. in addition, all they |
could make from lending out all Of their
capital, for as their circulating notes
would be secured by d deposit with the
Government Of its bonds. they would be
under no necessity TO keep any specie re-
serve on hand 10 redeem their notes with.
Their only reserve would be 20 meet the |
demands OF depositors. and that would
be kept out OF deposltors' money. The |
plan would obviously be profitable one
for the banks. and they would conse-
quently furnish the country an abundance
Of currency. so long as 10000 900 was as
much as the country wanted.
Tempting az this is. however. We great
~ prefer the Baltimore plan, IL II is only
amended so as to allow the banks to |
issue seyenty-Gve instead Of nifty per |
cent OF their capital Mr.. Cages plan |
keeps the Government as the foundation |
Of the banking system. whereas the BAL |
.imore plan makes the credit OF the |
oanks themselves it's foundation. You may
say the objection is theoretical. SO be II.
The difference between success ana fall