The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1894-12-12
A CURRENCY CONFERENCE.

OOof-
mittee on Banking and Currency held
free-and-easy conversation on the subject
of currency on Monday afternoon. Mr..
Cobb of Alabama is reported as asking
Mr.. Carlisle: "Do you hold that the Gov
eminent owes no obligations to depos-
itors ?" To which Mr.. Carlisle replied
'No more than il (the Government is
obliged TO protect private citizens who In
vest their funds in manufacturing con-
Germs and corporations"
This is an amazing reply. The Govern
ment creates banking system, authorizes
1t to circulate lis own notes or money, to
receive and invest deposits, and owes no
more obligation to the people to see that
the bank-circulating notes are redeemed 10
coin and that the money of the people it
has received is returned on demand, sub
ject to conditions attached to its lending,
than the Government owes TO investors in
an industrial enterprise which exercises
no such power as the bank exercisesl
The circulating notes issued by bank
under the Carlisle policy will possess the
quality of legal tender. The Government
them for all dues. TO the masses of the
people accus omed to greenbacks and ma
tional bank notes the Carlisle notes will
be, in effect. a Government issue. Mr..
Carlisle does not propose to make the Gov
eminent responsible for these notes. but
1t will only be after series OF failures, In
volving heavy losses. that the people will
comprehend that the old system under
which their current money was as good as
gold has been done away with.
In respect TO deposits. States find it
necessary 10 make the most rigid condi-
tions as to the investment of moneys so
received. In California a narrow line Of
investment is open to savings banks. A
Board of Examiners is maintained and in
vested with authority to institute the most
minute inquiry as 10 the general policy of
al! banks. When one shows dispo sition
TO go wrong, word from the Examin er
causes it to put up its shutters. The off,
Gals of the bank are Immediately deprived
of the power to play fast and loose with
the money of other people.
bank gains degree of credit in being
in a sense a Governm institution. The
masses of the people do not comprehend
the precise relation the bank holds to the
G vernment but the belief is universal
that the Government would not be even a
silent partner in a swindling institution.
If number of men Of supposed means
should organize themselves into a bank,
issue prettiy engraved notes payable on
demand and make deposits. one small clerk
would do all their work. The people
would not accept their responS biIity.
They would prefer to deposit their money
with a savings institution conducted under
the requirements of law. The private
bank died of its own voracity. 1t wanted
to make money SO fast that it is now una
bic to make any money at all. Mr. Car.
Isle proposes in substance to go back TO
the private banking system. he proposes
to release banks from all obligations to
maintain deposit to secure the redemp-
ton of their circulating notes, and also to
release them from all obligations to keep
a reserve fund 10 meet call for deposits
with. Between the old wildcat banking
system and that now proposed by Mr..
Carlisle there is so little substantial differ
ence that the improved security offered Tor
the redemption of circulating notes and
the payment of deposits rests rather upon
a supposed higher moral consciousness of
bankers than upon be ter legal restraints.