Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1894-12-13

Washington, Dec. 11.-Secretary Car
Isle appeared before the house COM
mittee on banking and currency to
explain his currency plan as proposel
in his annual report and endorsed by
the president in his annual message.
He said he was satisfied the present
law requiring a deposit of bonds to
secure circulation prevented elasticity
of the currency. The plan proposed
the deposit of bonds To the suggeS
lion that it might be unsafe to place
the entire question of the volume OF
currency in the hands of the banks,
the secretary said it would be to eX-
pand and contract as common inter
ests demanded. This t1eXibility 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 it on the banks themselves
through the proposd 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 it undoubtedly
would, but his plan would insure am
pie protection and therefore ample con-
fldence. He explained that in the
case Of the failure Of q bank its thirty
per cent. goes into the general safety
fund If 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, Secre-
tary Carlisle said:
at suggests merely a 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 privil-
eye of acting under certain conditions
if 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
provisions to repeal all provisions OF
law requiring banks to keep reserve
on account of deposits" the secretary
said: '"rhe present law keeps bank
from using it's rserve at the time
when it needs it most"
Carlisle then took Up section IL, 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 a thing of the
past" said the secretary. "You could
no more resume the wild cat system
than you could revive the conditions
which made it possible. We have ad
yanced 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.
When the committee reconvened
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-
post accounts the principal. In 9TH
er countries it is different. In France,
Germany, and Russia, the issuing
functions are paramount. In England,
Ireland. Scotland and Canada the Sys-
tenn 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
Secretary Carlisle and he agreed as to
general principles, they differed some
what as to methods.
Replying to Mr.. Johnson EckelS said
Nc WOulu udhp Uduk uOltS ItCSlN dplC
for public dues to the extent that they
represented in legal tenders go per
cent? The government should not
lend it's credit to banks except in so
far as by it's regulations it gave peo-
pie confidence that notes and their re-
demption was the subject of govern
ment supervision; in fact that no bank
could meet it's demand obligations If
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
hard-and-faSt line reserve was the line
of argument. 1t is impossible to judge
the future by the events of 1898. 1t
was a strange thing to have more fail
ures last year than in any other year,
and he said the comptroller should
have the decision about throwing
banks into the hands Of a receiver,
when its reserve had fallen below a
fixed limit. The committee then adj
journed until today.
The events of the past two days
leave little room for doubt that the
financial question is to be prominent
topic in the senate during the present
session and there are some facts which
point to a state of affairs which may
render the session one of great inter
est. 1t is understood that the instruc-
tionS of tho dpmOcra tic Spna tOria1 call