The Coconino weekly sun., 1894-12-13
ABOUT THE CURRENCY.
what "A Prominent Senator7 Has to Say
 About Currency Reform.

great attention in and out of congress, and while his plan is favorably com mented on by many prominent mem-. oers of both houses, there are others whose opinions are of value who argue that the plan proposed by Comptroller.
 Eckels, in his annual report, has ,su- perior merit, ani when thoroughly un- derstood will meet with general ap. proval. A prominent senator who is recognized authority on all financial questions explained his views on the two plans. He said:
 MT Carlisle's plan for currency reform, when applied to practice, will produce the fol- lowing results: Taking for the purpose of illustration the example of a bank having sl0O- OO0 capital, such bank would be entitled to issue notes up to the limit of $750O0 (75 per cent. of the capitaD, but before doing so must deposit legal tender" notes to the amount Of $s2 300 (S0 per cent of circulation|.
 This in effect would be equivalent to a net issue of S52,50O in circulation by the bank or S15OOO received in notes from the government
 Upon this Sj2OOO of currency the bank would earn its profit, provided it could keep them in circulation, after deducting costs of redemp-
 tion tax for safety fund" and tax for adminis- traitor Of comptroller's bureau.
 As plan for relieving the general govern
 ment from the burden and charge of redeeming
 United States notes 1t would, according to the secretarys estimate, result in securing the
 temporary deposit of 1925 GOO 900 of these notes
 with the government if all the national and
 state banks now in existence should take out circulation to the full amount proposed, Let us
 see how this result would be arrived at The
 present capital of all national banks now in
 existence is about s66S.OO0,O00. If to this is
 added S3a2, 900 900 as the capital of state banks
 ayailing themselves of the privilege, a total
 capital of Si i,O00 0O0, GOO would be had as the
 basis upon which to issue currency Assuming
 that all the banks possessing this capital is
 sued currency up to the full limit of 75 per
 cent, we will have an issue of bank currency
 to the amount of s75O0oO,OO0 Against this le-
 gal tenders to the amount of 30 per cent of cir
 culation must be deposited, or $225, ,0O000
 What will be the effect of this upon the vol
 tune Of money in circulation? ,.....
 Add bank notes issued, 1000; less na-
 tional bank currency retired, Si72.0 900: legal
 tenders deposited and withdrawn from circu-
 lation, $22S,0OO0O0; total, S397 900 900; net n-
 crease in circulation, $3o3, ,000.0O0
 Assuming that this increase could be
 kGpt in circulation, withdrawal of S225,- 0C0,000 Of United States notes is effected
 temporarily, but as there are S9s, 900 of
 these altogether outstanding, there would
 still remain outstanding the major por- bNOh Ol luG hdSSt UT auOub cSoiVOV'VVVp lo
 harrass the treasury by presentation for
 redemption in gold. If the $750,0 100000 is not
 kept in circulation, the amount of legal tenders
 returned by redemption of circulation would be added to the large sum not refunded. Again, If the legal tenders deposited by the banks are to be used for redemption of those notes on presentation, there would be no difficulty in procuring any amount of them by presenting bank notes.
 So much for the working of tho secre- tarys plan, and now we take a look at the plan proposed by Comptroller Eckels. As he gives few figures on which to base Q compilation, but simply lines the principles of his plans only . hypnotic illustration of It's
 practical working can be attempted. Taking bank with sl00, 900 capital, as in the other case
 the comptroller's plan appears to require that | the bank deposit with the treasury so0, 600 in | United States or legal tenders tor cancella- | tion), in exchange for which it will immediate ly receive 5000 in bank notes, for the current redemption Of which only 1t shall be liable dur | ing its lifetime, the government assuming re- sponsibility for ultimate redemption of the bank | notes of this class only upon the failure or
 liquidation of the banlI. In this feature, there fore, there is neither expansion nor contraction of the currency, simply the exchange of one | kind of currency for another just us good. but | for the purpose and with the effect of entirely | relieving the government of the burden and cost
 of current redemption during the existence of | the bank receiving and issuing the same. Under this branch of the comptroller's plan | with the present capital of national banks (viz. s66s, ,OOO0 0OO s334O0o,OO0 of legal tenders
 would immediately be retired and withdrawn from the possibility of being redeemed in gold | by the general government, while banking capital of sl7,OOO,OOO,OOO would serve as | the basis for retiring the entire issue both | of United States notes and Sherman | h nbOnt
 S9s,OO0OO0. While under the secretary's plan capital of sf ,OO0,O01 would effect withdrawal according to his own estimate of only S225 00O,- | OO0. Should the bank notes issued against "le- gal tenders" be made available for lawful
 money reserve against deposits, as are now the | legal tenders, this would operate to withhold them from redemption by the banks.
 Passing to the other feature of MT. Eckels' recommendation 1t is found that bank with
 SfOO000 capital could also issue as much as sSo,- 900 of safety fund notes, constituting first loan upon It's assets and upon the liability of it's shareholders, and redeemable upon the fail ure of the bank promptly out of safety
 fund" created by a light tax upon all the banks issuing this kind of circulation. It is upon this class of notes that the bank should make profit which would be Q clear one over and aSoye the light expenses for cost of redemption and taxation for the safety fund and for cost of operating the comptrollers bureau.
 It is on this class of currency also that the
 element of elasticity" would be found, for
 each bank could issue either none at all or as much as 50 DOT cent of it's capital. Of the pres-
 ent national bank capital 50 per cent would be
 s33i 900 ,OOO or a sum s162, 100000 greater than the total of present national bank circula-
 tion, viz: Sl72, ,OO00 900, while capital of | S1, 600, ,OOO0CO would provide for s5oO,- 100000 of this safety fund.- circula-
 tion, sum SS2s,OOO,COO greater than the present bank issue. So within the limits of $500 OOO, ,OOJ would be the expansion or contrac-
 tion of this currency, and this limit could easily be extended in future if necessary by reducing
 the percentage of legal tender" currency to be supported by the banks and extending the limit for safety funds" currency beyond 50 per
 cent. of capital
 The legal tender" currency out of the way by MT. Eckels' plan of substitution of bank
 notes, the practical result would be bank notes
 redeemable only in gold or silver coin, for there
 would exist only bank notes, gold certificates and silver certificates
 Homes for Disabled Soldiers. WASHINGTON, Dec. S.-The annual re-
 port of the board of managers of the national home for disabled volunteer