Evening star., 1894-12-21
A Substitute to Be Offered for Car
isles Currency Bill.
OBJECTIONS MADE This NECESSARY
The National Banking System
viii Be Allowed to Continue.
OF II Err NEW FE EATU RES

A caucus of the banking and currency
committee democrats was held at the
committee room last night, the following
members being present. Springer, Cox,
Culberson, Sperry Warner, Cobb (Ala.)
and Ellis The absentees were Cobb MO-,
Hall pIo) and Johnson (Ohio). 1t was
reported that Secretary Carlisle was pres
ent, but this proved Incorrect. The dis
cussion took a wide range and the senti-
ment was general that the bill would have
to be materially changed in order to meet
objections and command a support which
would secure it's passage. The needed
amendments were formulated, and when
the caucus adjournede4t was not contem-
plated that the Carlisle bill should be
more than amended. 1t was arranged that
Mr. Springer should see Secretary Carlisle
today and submit the contemplated
changes.
A New Measure Agreed Upon.
When the Secretary and Mr.. Springer
met today IL was determined that the bet
ter plan would be to frame new measure
I'm the nature of substitute instead of
mutilating the original bill with many
amendments which went to its vital prin-
ciples. Accordingly the substitute was
agreed on in full. and as soon as 1t can be
copied and put in proper bill form 1t Will
be presented to the House, and thence
forth be the bill on which the currency
debate is to proceed. Two very important
features make their appearance for the
first time in the substitute.
Important to National Banks.
The main one will have the effect of al
lowing the national banking system to run
along, without an arbitrary provision that
banks must organize under the new sys-
tenn. The original Carlisle bill contem-
platad that al ma tiOpal hanks must reOr-
ganize under the new plan. This would
have required them to surrender the gov
errment bonds which now constitute the
basis of their circulation. But the substi-
tute does away with this imperative
change. If national banks wish to continue
to hold their United States bonds and issue
circulation thereon they may do so. 1t is
felt that they will soon discover the advant-
ages of the new system and Will, therefore,
adopt il voluntarily. But the option will be
given to them to judge for themselves, and
II they wish to they may continue as ma
tional banks.
Unknown Liability Feature Cut Out.
The other important feature of the substi-
tute is that 1t does away with the unknown
liability of banks to guarantee the notes
of all other banks. This feature of the
original bill has been much criticised.
1t contemplated that If national bank
failed its notes would be paid out of it's
assets and the general safety fund.- made
up by all the banks. But if the assets and
safety fund were insufficient to pay the
notes of the failed bank, then the con-
troller of the currency was to make a
pro rata assessment on all the banks of
the country. The banks said this prospec-
tive assessment shouldered them with an
unknown risk. In effect it made them sup
ply insurance on all the notes of banks
In which they had no concern.
Assessment Plan Also Dropped.
Tn ,,iav, of tbesa criticisms the substitute
will do away with the assessment plan.
The safety fund" will be the limit of the
Joint liability of all the banks for the fall
ure of individual banks. They will, how
ever. be compelled to keep up this safety
fund by more rigid provisions than appear
ed In the original bill. Besides these two
main changes, there are many lesser ones
which were summarized as amendments
yesterday. but which will now be incorpor-
ated as q part of the substitute.