The Newberry herald and news. (Newberry, S.C.) 1884-1903, 1894-11-28
The Coming Banking Plan.
THE State. |

The Washington correspondent of
the Springfield Republican sends his
paper additional information regarding
the plan of currency reform now being
worked out by Secretary Carlisle for
recommendation to Congress by Presi-
dent Cleveland. It is interesting and
is probably accurate. Says the CORES
pondent:
THE new plan will follow that
adopted by the banks at Baltimore in
the essential features Of providing for
note issues against the general assets of
the banks, but will differ from it In
provision for redemption and other de-
tails"
This basic idea of issuing notes
against bank assets is the only correct
one, and its recognition marks great
enlal cement Of official information in
the matter Of banking principles. 1t
permits the expansion of the currency
according to the demand for money
At present, national banking is fitted
to the procrusteau bed of the national
debt, and its issues cannot be increased
without an increase in the country's
Indebtedness.
The plan for the redemption of the
notes proposed at Baltimore is not sat-
isfactory to the treasury officials be-
cause it contemplates the continuance
of the existing redemption agency at
Washington without any additional
provisions for prompt redemption. The
advocates of a scientific banking cur
rency maintain that redemption is slow
and inconvenient under this system,
and that it would not give the elasticity
or the new currency which should be
one of its most essential advantages
over the existing system. Redemption
in coin on demand at the counters of
the banks is the policy which vii! be
urged by the advocates of the banking
currency and will probably be adopted
by the treasury officials in their recon-
mendations to Congress.
This means that notes must flow
back to the banks of issue for redemp-
ton, thus securing degree OF the elias
ticity sought by the advocates of
State bank system. 1t also means that
to get gold for export the spectators
can be compelled to present currency
notes to the banks issuing them. They
cannot raid the Federal Treasury as at
present:
Zone of the plans suggested to secure
prompt redemptions is the establish
ment of branch redemption agencies,
under the control of either the asso-
ciated banks or the treasury. in the
leading commercial cities Of the coun-
try. This would enable the banks of
the surrounding country to send their
notes to the agency for prompt redemp-
ton and would enable the redemption
agent to transmit the notes issued by
the banks outside bis district to the
other central agencies. The theory of
banking currency, which has been
bGrne out by experience in many coun-
ties, is that q bank will make every
effort to create vacuum for its own
notes by transmitting those of other
banks received over lis counters to the
redemption agency for withdrawal
from circulation. This theory would
not be borne out if the expense and in
convenie. ce of such transmissions were
too great.
Redemption would be somewhat
more rapid, probably; than under the
existing system, which offers little mo-
tive except for the substitution of clean
notes, butit is a significant fact that
the redemptions of all classes of paper
money during the last fiscal year under
the existing system were Ouly
about $3.50, 100000, or less than
one-fourth Of the amount of pa
per outstanding. The amount of re-
demptions, when notes are being con-
stantly reissued, is absolutely INSULT
cient to keep the volume of notes adjust
ed to the demands of business, and
prompter redemption, with a view to
greater elasticity, will be insisted upon
in any legislation which meets the sp-
proval of the President"
There should be many such redemption
agencies, covering all the States and
territories, or none at all. The lead
ing commercial cities" must have no
monopoly of them.
"One of the important objects sought
by Secretary Carlisle is the termination
of the existing system of banking by
the government. he desires to see the
pressure for gold for export shifting
from the treasury to the banks, and
prompt redemption of notes in coin at
the counters of the banks he considers
! important to accomplish this result"