The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1894-12-11

interest," at the capitol today centered
in the room of the Committee of Ways
and Means, where Secretary Carlisle
end Comptroller Eckels appeared by
invitation before the House Committee
on Banking and Currency to explain
and advocate the new banking plan
prepared by those two officials and
endorsed by the Presidents message.
The room was crowded with members
OF the House. and intense interest was
manifested. Secretary Carlisle was
examined and cross-exarnined by the
members of the committee
He had the rough draft of bin in
dis possession, but after his examina-
ticn it was concluned to revise it be-
Aore submitting it to the committee.
Mr.. Carlisle and Mr.. Eckels differed
somewhat as to the details of the pro-
posed banking scheme, but agreed up
on the principles to govern it. Car
Isle VIII appear again on Wednesday.
Tomorrow Mr.. Hepburn. Horace
White and other New York bankers
viii be heard.
The Technical Difference.
Mr.. Carlisle took each section of his
recommendations, first-the repeal Of
ali laws requiring or authorizing the
deposit of United States bonds as Sc
curities for circulation, and, second
TO permit national banks to issue notes
TO an amount not exceeding 20 per cent
OF their paid up and unimpaired capt.
tai, and to require each bank before is
suing notes, TO deposit guarantee
fund consisting of United States legal
tender notes. including treasury notes
of 1890 to the amount of 80 per cent of
the circulating notes applied for
Mr.. Carlisle explained the technical
difference between his and the Balti-
more plan. The latter proposed de-
post of SO per cent under certain con-
ditions, while the treasury plan pro-
posed a deposit of 80 per cent When
.he bank fails the treasury plan con-
templated an assessment on all nation
al banks, they in turn having a. lien on
the failed bank.
Representative Hall (Mo.l suggested
that there was a prevailing opinion
that It was unsafe to place the power
of currency in the hands of corpora
tions and banks.
1T will work automatically said
MIR. Carlisle. THE banks will not ex-
pand the currency unless the public
needs It. Their interest viii be to ex-
pand and contract as common interest
demands it. These interests will, there
fore. control at all times
Mr.. Carlisle said that the ultimate
liability was on the government by
the Baltimore plan and on the banks
by his plan.
Mr.. johnson asked if the ultimate
liability of the government would not
inspire more confidence in the cur
uency. The secretary said it undoubt-
eddy would, but that his plan would in
sure ample protection and therefore
ample confidence.
EaYrlojY1e7 THAT in of foil
of q bank its 30 per cent. goes into
the general safety fund, and if the
assets of the failed bank are not suf-
ficient to meet all the liabilities with
out carrying the general safety fund
below the per cent, then all the
banks are assessed to meet the iiabili-
ties. The banks then have a lien on
the assets of the failed bank.
State Bank Feature.
Concerning the state bank feature
of the plan Secretary Carlfsls said:
ut suggests merely d plan by which
state banks could act if they saw fit
But the government has no direct cen
Germ with state institutions. The plan
simply gives them the privilege of
acting under certain conditions il they
see fit.
The secretary then took up the pro-
position that no national bank notes
fe issued Of less denomination than
$40. 1t would encourage the circula-
lien Of silver coins of small denomi-
nations. These certificates Were not
crowded in the treasury.
Mr.. Sperry asked if 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 $780,
concerning the ninth provision, re
peal all provisions of the law requir-
ing banks to keep a reserve account
Of the deposits" the secretary said:
The present law keeps a bank from
using its reserve at a time when it
needs it most
Mr.. McCobb, of Alabama, asked :
''Do you mold that the government
owes no obligation to depositors?'
No more said the secretary, than
1t is obliged TO protect private citizens
who invest their funds in manufacture
ing concerns, corporations, etc.
MIR. Carlisle then took up section 3
the state bank feature of his plan.
he said as to this that he would con-
slider such state bank notes safe-per-
97aps perfectly safe would be too strong
but reasonably safe
He suggested change in the third
provision, so the lien would not cover
the funds of guardians and other ces-
tut qUi trusts.
Mr.. Cox Is Curious.
Mr. Cox, of Tennessee, the author of
the state bank bill, defeated last ses-
sion, asked how state banks would be
compelled to observe these conditions
Mr.. Carlisle said the treasury officials
would exert proper efforts to see that
the conditions were observed. The
books and accounts of the state bank
would be inspected and if access was
refused the federal officials would de-
teTmine on q tax.
Mr.. Carlisle said Gle did not believe
in The authority of the federal gov
eminent to assert such authority over
state institutions. His idea was that
the federal authority did not go hey
ond imposing a tax as a means of
compelling the state institutions to OBJ
serve certain conditions.
State bank notes would certainly be
far different from United States notes
in appearance. They would have the
name of the state bank in a different
color.
MY position would lead to the log
ical conclusion that all tax on state
banks should be repealed" said the
secretary. THAT may not be practical
at present, but there should be the
least exercise of authority possible.
We do not insist that they shall do
do il, we will tax you The tax will
be payable annually. The bank will
naturally apply for an exemption from
the tax. The treasury win say, you
must fully satisfy us on your business
that it is according to the government
condition, or we must decline TO ex-
empt you from the tax
Johnson and wildcats.
Mr.. Johnson, of Ohio, referred to the
old wildcat days.
THAT is a thing of the past" said
the secretary. you could no more re-
sumo the wildcat system than you
could revive the conditions which made