The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1894-12-12
Further Explained TO the House
Committee on Banking.
sckEls NOT QUITE IN ACCORD.
Horace White, the New York Editor,
Submits Bill and Argument.
Carfsie's Btii fntrsd ucsd In the House
and Referred-Its Provisions Out
lined In the Repors-Ihs House
Passes che Pooling Bill.

Washington City. Dec. ii.--At ire hear
| ing before the house committee on bank
/ ing and currency yesterday. Secretary Of
the Treasury Carlisle took up section II.
/ the state bank feature OF his plan. lie
| said as 20 this that he would consider
/ such state bank notes safe. perhaps per-
fectly safe would be too strong. but rea-
| sonahly safe He suggested change in
the third provision. 50 that the lien would
not cover the funds OF guardians and
other eestu que trusts.
Mr. Cox. OF Tennessee. the author OF the
| state hank bln defeated last session. ask
ed how state hanks would b. compelled
TO observe these conditions. The secretary
/ said the treasury officials would exert
/ proper efforts TO see that the conditions
were observed. The books and accounts
| OF the state banks would he inspected
/ and II access was refused the federal off,
/ ciais would determine on a tax.
MIR. Carlisle said he did not believe in
| the authority OF the federal government
/ 10 assert supervision over state institu-
/ tions. His idea was that the federal
| authority did not so beyond imposing =
| tax as 4 means OF compelling the state
| Institutions to observe certain conditions.
| State bank notes would certainly be far
different from United States notes in ap-
| pearance. They would have the name of
| the state bank in a different color. My
position would lead TO the logical con-
elusion that all taxes on state banks
should he repealed" said the secretary.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 so and so. but We say II
YOU do not do IL we will tax you. Tha
tax will be payable annually. The bank
Will naturally apply for an exemption
from the tax. The treasury will say. You
must fully satisfy US on your business
that II is according TO the government
condition. or we must decline To exempt
you from the tax"
Tom johnson. OF Ohio, referred to tha
old wildcat days. That Is a thing OF tho
past" said the secretary. You could
no more resume the wildcat scheme than
YOU could revive the conditions which
made It possible. We have advanced far
beyond the possibility OF a wildcat
scheme"
The secretary said the 10 per cent tax
proposed on state banks was sufficient TO
wipe out their circulation IN case they did
not observe the governments conditions.
It was practically prohibitory tax.
Mr.. Broslus OF Pennsylvania. asked III
state bank could not issue It's notes for
year without observing the conditions or
paylng the tax. if the tax was payable an
nually. Mr. Carlisle said this would be
the case until the end OF the year when
the tax became payable. The bank would
be free 10 issue its notes as IL saw nt.
but with the knowledge that II would
have to pay the tax II the government
conditions were violated.
Mr. Springer asked why the state banks
should not be subject to exactly the same
conditions OF reserve. etc, as national
hanks. Mr.. Carlisle said that in his judg-
ment the tax on state banks Was uncon-
stitutional. The courts thought other
wise. however.
Mr.. Eckels appeared and made his state
ment. Nothing. he said. ought To be dons
by congress looking TO n change OF the
present banking system unless the result
ant effect should be beneficial both 10 tbs
banks and 10 the public. The extent OF
the banking interests Of the country rep
resented In capital s6so. 900, IN deposits
|. g. 100 Oo0. 900. and Ia depostors about 2.oo,-
o0a. such enormous interests being involv-
ed. any new system 70 be inauguratei
must at the outset command the conf
aence OF the people The national bank
system now IN vogue might be said to be
n national habit Most OF those who made
use OF Il knew little or nothing of the
new system. therefore nothing IN the pre-
sent system should bo altered until it
could b. improved upon. to tho promotion
Of the business interests Of the people. In
this country. the note issuing function
v,as an Incident. the deposit accounts the
principal In other countries IL was differ
ent. In France, Germany and Russia
tha issuing function was paramount. In
England. Ireland. Scotland and Canada
the system more nearly approached ours.
The scheme which he had suggested In
hls report was INTENDED 20 disturb as lit
tie as possible the existing order OF things.
In order 20 make any system successful
rhe notes issued must be Immediately.
not ultimately. convertible into coin. This
was the flrat consideration After thih.
II the banks could be given the power To
expand the currency in times % gtrin-
gency, the two main objects OF a currency
system would be obtained.
In his system he proposed a 20 per cent
der,osft. upon which bank notes could os
issued. To the extent Of the deposit these
notes were absolutely safe. The other %
per cent. would Re secured by a safety
fupf. raised By proper taxation. Frankly.
- df6 rot consider such deposit neces-
sary. but the exigencies os the war fnaas
il necessary. IRE legislation ~ that per-
iesr Raj created currency which. In and
of itself. ln his opinion. could not have
maintained itsef had not the government
endowed g with a legal tender quality.
Tte existence 81 these legal tenders today
was the greatest danger - the credit ~
the United States AZ housc and abroad.
Compared 70 81. fhe aefecfs % tho bank
Ing Essten Were only an fnconvenience.
Tn. legal TENDERS called for gold, and
must by law D. ro-iss1s,f. The drain -
gold could be made continuous. and ths
confidence q the people must be shaken.
both az home and abroad. As long as
trade relations between this and Other
countries existed our monetary laws must
r.. rsear3fai of fFie Systems Of Other cour-
tries The public credit abroad must be
sssgfed- To the extent ~ the 5eroast these
maintained ~ the redemption or these
notes ia gold Undoubtedly. the manly
thgng ~ 10. ne said. was 80 redeefn ard
then retire tiae nofes Tire authority 20
d. this had ence beer given Secretary
NcCulioch. but 4 had been reacinde1. IL
could be done now cut os tie surplus rev.