Waterbury evening Democrat., 1894-12-11
CARLISLE AND ECKELS.
Both Appear Before the House Ways and Means Committee.
FINANCIAL REMEDIES EXPLAINED.

| The Secretary and the Gomptrolicr Agree
 That a New Ranking Plan Is Necessary.
 but Disagree In Their Views as to the
 Methods-sr. Carlisle Cross Examined. wAsHINGToN, Dec. 1.-The principal interest at the capitol today centers in the | sessions of the committee on ways and means Secretary Carlisle and Comptrol- Ter Eckels appeared by invitation before l the house committee on banking and cur rency to explain and advocate the new banking plan prepared by those two off cials and indorscd in the presidents mes sage The room wns crowded with mcm- bers of the house, and intense interest was manifested.
 Secretary Carlisle was examined and cross examined by the members of the committee. He had q draft of n bill in his possession, but after his examination con- cludcd to revise it in certain particulars before submitting il to the committee Mir. Carlisle and Mir. Eckels differed somewhat as to the details of the proposed banking scheme, but agreed upon the prin- cipleS to govern il. Mir. Carlisle will ap- pear again on Wednesday. Today Mir | Hepburn, Mir. Horace White and other New York bankers will be heard. MT. Carlisle Answers Questions. MT. Johnson asked if the ultimate lia- blllty ot the government would not inspire l more confidence in the currency. Undoubtedly" said the sccrctary, "if the United States government stands be hind a national bank note, 1t inspires ahso- lutc confidence. But my idea Is that the proposed plan will insure ample protection | and therefore ample confidence. ''
 Mir. Walker (AlnsS.) put the hypothetical ease of q failed hank and asked the course | to be pursued under the proposed system.
 
 80 per cent goes into the general safety funds The notes of the hank arc then paid immediately. If the total of the safety fund and the assets of the failed hank arc insufficient to meet all liabilities without carrying the general safety fund below tho per cent, then all tho hanks arc assessed to meet the liabilities Tho hanks then have lien on the assets of the failed hanks
 Mir. Walker asked what would happen if a failed hank had no assets. so that thcrc would he To lien for the other hanks to fall hack on The sCcrCtary said this was m extensive presumption IL had occurred only six times that q national hank had bCcp absolutely without assets,
 ''I understand. ' said Mir. Johnson CO). that you hope to secure an elastic cur rcncy by this plan Now. what incentive would thCrc b,' for hank tn reduce its cir culation:"
 The hank may not at once reduce, said tho secretary. but if the public does not want money the hank will withdraw circulation. as there will bc a small tax on it
 ''Thc Iv:nk will go the limit of its cir culation at the outset, will it not" qucrictl Mir Johnson.
 Probably yes, at thc start" said Mir Carlisle. but if thCrc is no demand for what is issued the notes will he slowly but surely retired The tax on the notes is not much, but il is enough to keep the iS- sue beyond what the public needs
 Mir. Johnson said he could not sec the elasticity claimed some hanks might rc- duCc: others might not. The plan showed n great induccmcnt for issuing currency, but it did not show the same induccmcnt for contracting currency.
 Mir. Johnson tlnd.) asked aS to the state hank feature of the sccrCtary's plan.
 It suggests merely n plan by which state hanks could net if they saw fit But the government has no dircct concern with state institutions. The plan simply gives them the privilege of acting under certain conditions if they fiji.
 MT. Walker asked if Mir Carlisle had vet drawn bill cmhodying his plan. The secretary replied that he had dictated n rough draft, and he would submit it to the committee. IL was tentative meas urc, and he would change it in some de- tails.
 Compt roller EckcI's statement.
 Comptroller of the Currency Eckcls then appeared and made his statement. Moth ing. h, said. ought to hC done by congress looking to a change "f the present banking system unless the resultant should be ben cflcial both to the hanks and the public The extent of the Ianking interest of the frx in al in deposits S3. 4O0. O0O OOO. and in deposit ors about ,, OOO. .OO0. Such enormous in tCrCStS being involved, any new system to bc inauEurnt~l must at the outset com mand tho confidence of the people
 The national banking system now in vogue might be said to be national habit. Most of those who made use of it knew little or nothing of other systems. He thought, thcrcforc that nothing in tho present system should bc altered unless it could bc improved upon to the promotion of the business interests of the people In this country the note issuing function was an incident and the deposit accounts the principal. In other countries it was | different. In France, Germany and Rus sia the issuing function was paramount In England. Ireland, Scotland and Can | ada the system more nearly approached | ours. The scheme which he had suggested
 
 | turb little possible the existing or der of things In order to make any sys- | tenn successful the note issued must be i'm | mediatcly, not ultimately, convertible into l coin. This was the first consideration After this came, if the banks could be given the power to expand the currency in times of stringcncy, the two main objects Of n currency system would bc obtained. The safety Fund Feature.
 In his system he had proposed 90 Der l cent deposit, upon which bank notes should be issued To the extent of the deposit | those notes were absolutely safe. The oth. CT 30 per cent would be secured by a safety fund raised by proper taxation. Frankly he did not consider such deposit ncces sary | The legislation of that period had created currency which in and of itself, in his opinion, could not have maintained itself | had not the government endowed 1t with ! n legal tender quality
 Mir. Eckcls described at length the lcgis- | lation which created the legal tenders, and | he gave it as his opinion that the legal | tenders ultimately but not immediately | convertible, made the war much moro ex- | pensiye than 1t otherwise would have been. The existence of those legal tenders today was, he thought, the greatest danger to the credit of tho United States at home | and abroad.
 compared To II the defects Of the bank Ing system were only an inconvenience The legal tenders called for gold and must Il by law he rciS~ucd Tho drain of gold | could bc made continuous. and tho conf | dcnCc of the ps,nplc must be shaken both | hero and abroad As long as trade rcla- | tiOns between this and other countries cx- | istcd our monetary laws must bc rcgard- | full of the system of other countries. The public credit abroad must bc maintained