Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1894-12-08
CURRENCY REFORM.
Two Different Plans Now Attract
Much Attention,
SEC. cARLIsLE's PROPOSITION.
Comptroller OF Currency EccleSs
Scheme aud Its Practical
Workings.

attracting great attention In and out Of
Congress. When applied to practice
it will produce the following result;
Taking for the purpoao OF illustration
the example Of bank having 100000
capital, such bank would be entitled
to issue notes up to the limit Of $4,000
(75 per cent Of capital), but before doing
30 must deposit legal tender notes to
the amount Of so, 500 CSC per cont Of
elroulation). This, In effect, would be
equivalent to net issue Of $4,000 In
circulation by the bank, or $4,000 re-
coived In notes from the government,
minus SO, 900 In notes deposited with
the government.
Upon this So, 500 OF currency, the
bank would earn It's profit provided II
could keep them In circulation, alter
deductiug costs for redemption tsN Tor
'aafoty fund.- aud taI for adminiAtta-
tion OF comptrollet's bureau.
"AaR plan tor relieving the general
government from the burden and
charge q rcdeeming United States
notes, II would, according 10 tho eecfc-
taty's eatimatu, result In securing the
temporary deposit Of s22,0OO0O OF
these notes with the government u tho
national anu state banks now In exist
ence should take out circulation to this
full amount proposed.
"Let us rec how this result could be
arrived at At present capital Of all
national banks In existence " about
SB6s, OOO,OO IL to this ~ added $780,.
100000 hs the capital Of state banks
nvailing themselves Of the privilege,
total capital Of 81, 200, 100000 would
DO had rs the basis upon which to
issue currency. Assuming that all the
banks possessing this capital Issued
currency up 10 the full liuiit OF 20 per
cent, we will have an Issue o. nank
currency 10 tho amount OF t75O,0JO,-
600. Against this, legal tendvra 10 tue
amount Of 30 per cent OF circulation
must be deposited, or s2.5, 100000"
"Whnt will be tne effect " this upon
the volume OF money In circulation"
add bank notes Issued f75O,0OO,COJ
less national bank currency retired
Sl72,OOO,OlO; legal tenders Deposited
d Withdrawn rom circulation S2.5,-
900, 900; total, s3D7, 100000.
"Net increase Ia circulation $685.
100000.
"Assuming that this increase could
bs kept Ia circulation, n withdrawal OF
S2.6, OOO,O 600 OF United states notes "
effected temporarily, but ~ there are
$3.50, 900, 900 Of these altogether out
standing, there would still remain out
Atanding msJor portion Of the mass,
to hafass the treasury by presentation
for redemption In GOLD. II the $780,
100000 is not kept IN circulation, the
amount Of legal tender secured by re.
demptlOn Of circulation would DO
added 10 the large sum not funded.
again, ifthe legal tenders deposited
by the banks IL TO be used for redamp'
ton Of these notes on presentation,
there would DO no difficulty In prt-
curing any amount OF them by present.
Ing bank nOtos.
$50 much for tho practical working
OF the secreiAry's plan, and We now
take look nj tho plan proposed by
Comptroller Eoklep.
"Taking bank with 100000
capital, ms In the other case, the
cOmptfollet's plan appears 20 require
that the bank dsuosit with tho treasury
$500 DIN Uuittd states or legal tender
TOR cauCcllAuuu), Ia exchange iOi
which IL will Immediately receive s5b,
OlO In bank notes for the current 10.
dempllon Of the bank notes VI thii
class, upon failure Of liquidation Of the
bank.
"rhis feature, therefore, " neither
expansion or contraction tOi the cur.
Tsncy, simply the exchange oione kinl
Of currency for another, just Al
good, but for tho purpose and
with the effect OF entirely Ic
Lowing tho government Of burden
and cost OF current redemption dur
ing tho existence OF the bank re-
ceivlng aud issuing the same. Undel
this branch Of the Comptrollel's plan
with the present capital NJ ustlonA
banks (yiz. $685., O00,U O0l, 1874, 100000
OF legal IendeIs would immediately
bs retired anu Withdrawn from thI
possibility OF being redeemed In gol'
by the general government, while
banking capital OF 81, 600, 10000 woul,
serve as the basis for retiring the entlf,
Issue both OF United states notes ant
Sherman act notes, amounting tygeth
or to about fD3, 100000. While undt
the secretaty's plan a capital OF 200,
600 would effect Withdrawal accOtd
Ing 10 his own estimate OF only 1920,
600, should not the bank notes ISSUE
against legal tenders be made avail
able for lawful money reserve hgaina
deposits a. are now legal tendcTs, mi
would operate to withhold them from
redemption by the banks.
"Patsing TO the other feature OF Nj
Eckels'a plan, II IN found that = ban
with 500, 600 capital could also Issue a
much aH $50, 900 OF safety fund notes
constituting fret lien upon its asset
and upon its liability OF It's sharehold
ore, and redeemAblo upon the failure q
the bank promptly out OF "safet
fund" created by light tax upon a
the banks Issuing this Kind OF oircull
ton, II iBupOn this class OF notes tbs
the banks should make PROF
which should bo clear ono over an
above ths light expenses for cost OF I,
demption ana taxation for the taiet
tunu and for cost VI operating a.
comptroiler's bureau.
"It IL on this class Of currency ali
that the element Of elasticity wouI
be found for which bank could issu
either none At nil or IN much as 90 y,
cent Of ila capital.
"rhe illegal tender currency out
the way by Mr.. Eckleu's plan OF tu
stitution OF bank notes, the prnctio
result would bo that all tho paper GU
reuoy would be TedeUmablo only
gold or silver coin, for there would e.
ist only bank notes, gold cVrtiiioat
and silver certificates"
Hattie wan DrankATds
GuTItutp o. II ner. T-TWn killel