Mineral Point tribune. (Mineral Point, Wis.) 1869-1938, 1894-12-13
SECRETARY CARLISLE AND
COMPTROLLER ECKELs TALK.
THEY SUBMIT ARGUMENTS TO
THE SENATE COMMITTEE.
The Secretary Fayors More Elastic
Currency General Safety
Fund-State Banks and Wild Cat
Issues--The Comptroller Against
Any Great Changes.

Washington, Dec. l1.-Secretary Car
Isle appeared before the house COM
mittee ON banking and currency to
explain his currency plan as PROPOSED
in his annual report and endorsed by
the president in his annual message
He said he was satisfied the present
law requiring deposit of bonds to
secure circulation prevented elasticity
of the currency. The plan proposed
would give ample protection without
the deposit of bonds. TO the sugges-
ton that 1t might be unsafe to place
the entire question of the volume of
currency in the hands Of the banks,
the secretary said 1t would be to ex-
pand and contract as common inter
ests demanded This fiexibility was
very desirable. One difference between
his plan and the Baltimore plan was
that the latter put ultimate liability
on the government, while the secre-
tary's put 1t on the banks themselves
through the proposed guarantee fund.
The secretary was asked If the ulti-
mate liability of the government would
not inspire more confidence In curren.
cy. He replied that 1t undoubtedly
would, but his plan would insure am
pie protection and therefore ample con-
fidence. He explained that in the
case of the failure of bank its thirty
per cent. goes into the general safety
fund. Ii the total safety fund and as
sets Of the bank was not sufficient to
meet all liabilities without carrying
the general safety fund below five
per cent, then all banks would be as
sessed to meet the liabilities. The
banks then have a lien on the assets
of the failed bank. Concerning the
state bank feature of the plan, Seere-
tary Carlisle said
st suggests merely plan by which
state banks should act If they saw
fit. But the government has no direct
concern with the state institutions.
The plan simply gives them the priyil-
ege of acting under certain conditions
il they see fit" The secretary then
took up the proposition that no nation
al bank note be of less denomination
than $40. 1t would encourage the
circulation of silver certificates Of
small denominations. Concerning the
provisions to "repeal all provisions of
law requiring banks to keep a reserve
on account of deposits the secretary
said: 'The present law keeps bank
from using its rserye at the time
when 1t needs 1t most"
Carlisle then took up section II, on
the state bank features of his plan.
He said as to this that he would con-
slider such state bank notes safe-per-
haps perfectly safe would be TOO
strong-but reasonably safe. Mr..
Johnson of Ohio, referred to the old
wild cat days. THAT is thing Of the
past" said the secretary. "You could
no more resume the wild cat system
than you could revive the conditions
which made 1t possible. We have ad
vanced far beyond the possibilities Of
wild cat system" The secretary
said thot the ten per cent. tax pro-
posed on state banks is sufficient to
wipe out their circulation In case that
they do not observe good conditions.
1t Is practically prohibitory tax. At
ter some further explanation recess
was taken.
Comptroller of the Currency Eckels
appeared and made an elaborate
statement Of his views. He contended
that the national banking laws were
not to be lightly dealt with and that
they should not be altered unless 1t Is
absolutely known that the change was
TO be beneficial In this country the note
issuing function was an incident de-
poslt accounts the principal. In 9TH
er countries 1t is different. In France,
Germany, and Russia, the Issuing
functions are paramount. In England,
Ireland, Scotland and Canada the sys-
TEN more nearly approaches ours. The
scheme which he suggested In his re-
port, was intended to disturb as little
as possible the existing order OF
things. In order to make any system
successful a note issued must be I'M
mediately, not ultimately, convertible
into coin. Mr.. Eckels said that while
sNpNTSIdTI 1dIiiSlc anu l0 aEi1Nh aS W
general principles, they differed some
what as to methods.
Replying to Mr.. Johnson Eckels said
he would make bank notes receivable
for public dues to the extent that they
represented in legal tenders 900 per
cent? The government should not
lend Its credit to banks except In so
far as by its regulations II gave peo-
pie confidence that notes and their re-
demption was the subject Of govern
ment supervision; in fact that no bank
could meet its demand obligations II
they were all presented at one time.
Over 90 per cent Of business Is done
on credit, not cash. The question as
to whether the banks should hold a
hard.and.fast line reserve was the line
of argument. Tt Is impossible to judge
the future by the events Of 1903 II
was 4 strange thing to have more fall
ures last year than In any other year,
and he said the comptroller should
have the decision about throwing
haptS into tho hands of receiver.