The record-union., 1894-12-11
Special to the RECoRD-UNGox.

Special to the RECoRD-UNIoS.
WASHINGTON, Dec. 1O.-Secretary Car
Isle appeared before the House Commit
tee on Banking and Currency to-day to
present in detail the features of the new
currency plan, proposed in his annual
report and indorsed in The Presidents
message. Beside the full membership of
the committee, Senor Romero, the Mexi-
can Minister, and many mem bers of Con-
gress were present. Carlisle took up
each section of his recommendation !:
First, to repeal all laws requiring or au-
thorizing deposit of United States bonds
as security for circulation; second, to per-
nit national banks to issue notes to an
amount not exceeding IS per cent. of their
paid-up and unimpaired capital, but to
require each bank, before receiving the
notes, to deposit a guarantee fund con-
sisting of United States legal tender notes,
including treasury notes Of 1880, to the
amount of 80 per cent. upon the circulat-
ing notes outstanding to be maintained at
all times, and whenever bank retires its
circulation, in whole or in part, its guar
antee fund 10 be returned TO it i'll propor-
ton to the amount of notes retired.
Carlisle said he was satisfied the pres
ent law requiring the present deposit on
| bonds to secure circulation prevented
elasticity of the currency. "The pro-
vision outlined" said Carlisle, gives
ample protection without the deposit of
bonds, as required by the present law"
He added the practical value OF the re-
serve fund currency WAS shown in 1893.
There was demand for money aggregat-
ing $40, 900, 900. The Treasury did It's best
IN the StrinUanpU bnt nv tho fip,a a
the notes were ready to distribute the de-
mand had gone by and many of the pack
ages OF notes were returned unpaid. The
Secretary invited criticism on this par
ucular section.
Chairman Springer asked how the Sec
retary's plan differed from the Baltimore
plan.
Carlisle explained the technical differ
ence. 1'he Baltimore plan proposed a
deposit of 30 per cent. under certain con-
ditions, while the Treasury plan pro-
posed deposit of 80 per cent. When q
bank fails the Treasury plan contemp-
| lated an assessment on all the national
| banks, they III turn having lien on the
| failed bank.
Representative Hall of Missouri sug-
| gested there was a prevailing opinion
| that 1t was unsafe to place the power OF
| the currency in the hands OF corporations
| and banks.
at will work automatically" said Car
| Isle. This will not Xpand the currency
unless the public needs 1t. Their interes
will be TO expand and contract as the
| common interests demand it. These in
| terestS will, therefore, control at all
| times" The Secretary stated this teXi-
| bility was much more desirable than a
rigid system. by which certain amount
OF currency was the understanding. AT
| one time the Strlng6ucy was SO great that
the banks drew out Sl3, 5000 900 under the
| pressure, and If 1t had not been for the
| Canadian banks, who sent currency into
this country, serious results might have
| ensued."
Carlisle said that the ultimate liability
was on the Government by the Baltimore
! plan and on the banks by his plan.
Johnson asked if the ultimate liability
| of the Government would not inspire
more confidence in the currency. The
| Secretary said it undoubtedly would, but
that his plan would insure ample protec-
| ton and therefore ample confidence
He explained that III case Of the failure
of bank its 80 per cent. goes into a gem
eral safety fund, and if the assets of the
| failed bank are not sufficient to meet all
| the liabilities without carrying the gem
eral safety fund below the per cent.
| then all the banks are assessed to meet
the liabilities. The banks then have a
| lien on the assets OF the failed bank.
] NOnC6EuluR ln6 ~kOldlb Ddnk feature OF
| the plan, the Secretary said: "It suggests
merely a plan by which State banks
could act if they saw fit. But the Cow
ernment has no direct concern with State
| institutions"
| The Secretary then took up the propo-
| sition that no national bank notes be
| issued of less denomination than $40. 1T
would encourage the circulation OF silver
coins of small denominations" he said
| MIR. Sperry asked il silver certificates
were redeemed in gold.
No." said the Secretary; "there are
| two classes of notes redeemed in gold.
viz: the greenbacks and the treasury
notes under the Sherman Act OF 1890"
! Concerning the ninth provision-'.re-
| peal all provisions of the law recurring
| banks to keep reserve account of the de-
posits"-the Secretary said "The pres
! ent law keeps a bank from using its re-
serve at time when it needs it most"
| Cobb OF Alabama asked: 'Do YOU hold
that the Government owes no obligation
to the depositors
mo more," said the Secretary, ''than
it is obliged to protect private citizens
who invest their funds IN manufacturing
concerns, corporations, ETC."
Comptroller of the Currency Eckels ap-
peared before the committee and made an
elaborate statement. He contended that
the national banking laws were not to be
lightly dealt with and should not be al
tered unless it was absolutely known the
change would be beneficial