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

The Secretary and the Comptroller Agree
That New Banking Plan Is Necessary,
but Disagree In Their Views as TO tho
AIethods-BIr. 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
the house committee on banking and cur
rency to explain and advocate the new
banking plan prepared by those two Off
cials and indorsed in the presidents mes
sage. The room was crowded with mem
bers Of the house, and intense interest was
manifested.
Secretary Carlisle was examined and
cross examined by the members Of the
committee He had draft Of q bill in his
possession, but after his examination con-
cludod to revise it in certain particulars
before submitting it to the committee.
Mr.. Carlisle and Mr.. Eckels differed
somewhat as to the details Of the proposed
banking scheme, but agreed upon the prin-
ciples to govern it. Mr.. Carlisle will ap,
pear again on Wednesday. Today Mr.
Hepburn, Mr.. Horace White and other
New York bankers will be heard.
Mr.. Carlisle Answers Questions.
Mr. johnson asked If the ultimate liza
bility of the government would not inspire
more confidence in the currency.
Undoubtedly, y said the secretary, III
the United States government stands be-
hind national bank note it tinspires abso-
lutte confidence. But my idea is that the
proposed plan win insure ample protection
and therefore ample confidence.
Mr.. Walker Mass put the hypothetical
case of failed bank and asked the course
to be pursued under the proposed system.
First, . said the secretary, . the banks
80 per cent goes into the general safety
funds. The notes of the bank are then paid
Immediately. If the total of the safety
fund and the assets Of the failed bank arr
insufficient to meet all liabilities without
carrying the general safety fund below th'
8 per cent, then all the banks are assessed
to meet the liabilities. The banks ther
have a lien on the assets of the failet
banks. y
Mr.. Walker asked what would happen /
failed bank had no assets, SO that thor
would be no lien for the other banks t
fall back on. The secretary said this wa
an extensive presumption. 1t had occurre,
only six times that a national bank hat
been absolutely without assets.
"I understand, . said Mr.. johnson 20 }
'that you hope to secure an elastic cur
rency by this plan Now, what incentiv
would there be for bank to reduce its ciI
culationg'
"The bank may not at once reduce,
said the secretary, Hbut if the public doe
not want money the bank will Withdraw
circulation, as there win be a small tax o
it.
tiu-t.. 4...Y- lin -, 49,, a;,,,i4 - sc a,
culation at the outset, will it tnot?' querie
Mr.. johnson.
Probably yes, at the START said NJ
Carlisle, "but if there is no demand fl
what is issued the notes viii be slowly bT
surely retired. The tax on the notes
hot much, but 1t Is enough to keep the /
sue beyond what the public needs. +"
Mr.. johnson said he could not see Il
elasticity claimed. Some banks might +
duce; others might not. The plan Shove
q great inducement for issuing currenc
but it did not show the same inducemel
for contracting currency.
Mr. johnson Qnd.) asked as to the sta
bank feature Of the secretary's plan.
1T suggests merely plan by whi'
state banks could act If they saw fit. b
the government has no direct concern wi
state institutions. The plan simply Civ
them the privilege Of acting under certa
conditions if they see fit.
Mr.. Walker asked If Mr. Carlisle had y
drawn a bill embodying his plan. IL
secretary replied that he had dictated
rough draft, and he would submit it
the committee 1t was tentative mef
ure, and he would change it in some
tails.
Comptroller Eckel's Statement.
Comptroller of the Currency Eckels th
appeared and made his statement. Not
ing, hs said, ought to be done by congr'
looking to change of the present banki
system unless the resultant should be be
efcial both to the banks and the publ
The extent of the banking interest Of
country represents in capital $3.50, 600, 0(
in deposits. SO. 400 000 900, and in depos
ors about 2, 900, 600. Such enormous
terests being involved, any new syst
to be inaugurated must at the outset co
mand the confidence Of the people,
The national banking system now
vogue might be said to bet national hal
Most Of those who made use Of it kn
little or nothing Of other systems
thought, therefore, that nothing in
present system should be altered unless
could be improved upon to the promote
of the business interests Of the people.
In this country the nOUe issuing IuucL
was an incident ana the deposit accoui
the principal. In other countries it y
different. In France, Germany and Il
sia the issuing function was paramou
In England, Ireland, Scotland and q
ada the system more nearly approach
ours. The scheme which he had sugges
in his report, he said, was intended to {
turb as little as possible the existing
der Of things. In order TO make any !
tenn successful the note issued must be
mediately, not ultimately, convertible