The Corvallis gazette. [volume] (Corvallis, Or.) 1862-1899, 1894-12-14
The heSecretary's Idea Of
Currency.
An Interesting Monetary
Scheme.
The Nicaragua Canal Is q Theme OF
Discussion in COngress-Other
Legal Matters.

WASHINGTON, Dec. 1O.-Secretary
Carlisle appeared before the house
committee Oh banking and currency
today to present in detail the features
Of the new currency plan proposed
in his annual report and indOrSed in
the presidents message. Besides the
full membership of the committee
Senor Romero, the Mexican minister,
and many members of congress were
present. Carlisle took up each section
of his recommendations.
First-To repeal all laws requiring
or authorizing the deposit of United
States bonds as security for circula-
tion, and second, to permit national
banks to issue notes to an amount
not exceeding rs per cent of their
paid-up and unimpaired capital, but
to require each bank before receiving
notes to deposit a guarantee fund con-
sisting of United States legal tender
notes, including treasury notes Of 1890
to the amount of 80 per cent upon
the circulating notes applied for.
This percentage depends upon the
circulating notes outstanding to be
ever the bank retires it's circulation
in whole or in part, its guarantee
fund is to be returned to it in proper
ton to the amount of notes retired.
Carlisle said he was satisfied the
present law requiring the present de-
posit Of a bond to secure circulation
prevented an elasticity of currency.
He said:
''The provision outlined gives ample
protection without the deposit Of bonds
as required by the present law"
Carlisle said the practical value of
the reserve fund currency was shown
in 1898. There was demand for
money aggregating $4O,OO0,OOO. The
treasury did it's best to meet the
stringency, but by the time the notes
were ready to distribute the demand
had gone by, and many of the pack
ages of notes were returned unpaid.
The secretary invited criticism on
this particular section.
Chairman Springer asked how the
sedretary's plan differed from the
Baltimore plan.
Carlisle explained the technical diff
ference. The Baltimore plan proposed
deposit of so per cent under certain
conditions, while the treasury plan
proposed a deposit of 30 per cent.
When a bank fails the treasury plan
contemplates an assessment on all ma
tional banks, they in turn having
lien on the failed bank.
Representative Hall of Missouri s1lg-
gested there was prevailing opinion
it was unsafe to place the power of
tions and banks.
'It will work automatically" said
Carlisle. 1.-THE banks will not expand
,11,1o fIn n 6C
it. Their interest will be to expand
and contract as common interests de-
mand it. These interests will, there
fore. control at all times"
The secretary further said: ''This
f1exibility was much more desirable
than rigid system, by which GER
tain amount of currency was out
standing. At one time the stringency
was so great the banks drew out $13,-
100000, under pressure, and If it had
not been for the Canadian banks,
who sent currency into this country,
serious results might have ensued.' -
Controller of Currency Eckels ap-
peared before the committee aud
; made an elaborate statement. He
contended the national banking laws
were not to be lightly dealt with and
should not be altered unless it was
absolutely known the change would
| be beneficial.
Carlisle said that the ultimate liza.
bility was in the government by the
Baltimore plan and on the banks by
! his plan. Johnson asked If the ulti
mate liability of the government woul6
| not inspire more confidence in the cur
rency. The secretary said it undoubt
edly would but that his plan would in
sure ample protection and therefore
ample confidence. He explained tina
in case of failure of the bank its thirt!
per cent goes into the general safet!
fund and if the assets of the failet
bank are not sufficient to meet all Ii
abilities without carrying the genera
safety fund below five per cent, thel
all the banks are assessed to NEE
the liabilities. The banks then hav
Lien ON the assets of the failed bank
Concerning the state bank feature
the secretary said: 'It suggests mere
ly plan by which state banks coul
act if they saw fit. But the govern
ment has no direct concern with stat
institutions"
The secretary then took up the proI
osition that no national bank notes b
issued of less denomination than $1t
1t would encourage the circulation c
silver coins of small denomination!
Sperry asked if silver certificates wer
redeemed in gold. NO" said tn
secretary, "there are two classes {
notes redeemable in gold, viz: Greer
backs and treasury notes under th
. Sherman act of $780,"
Concerning the ninth provision, ''tt
repeal of all provisions of law r
quiring banks to keep an account .
deposits" the secretary said; '"Tl
present law keeps bank from usir
its reserve at time when it meek
: it most"
, Cobb of Alabama asked: sDo "
hold that the government owes !
obligation to depositors?"
"No more" said the secretary, 9Th.
It is obliged to protect a private eli
zen who invests funds in manufs
turing concerns, corporations, etc."
Mr.. Carlisle then took up section !
the ''state bank feature Of his plan
II He said as to this that he wor
l. consider such state bank notes SAT.
perhaps perfectly safe would be