Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-12-11
THE CURRENCY HEARING
The House Committee Continues to Hear
Viewa
A Plan Presented by Horace White
Questioned at Length.

a reorganization Of the currency laws was
resumed In the room OF the ways and
means committee, but did not move off
very promptly. Among those present were
Mr.. Horace White of the New York Even
ing Post, Mr. c.. c. Homer of Baltimore,
chairman of the committee of national
bankers to formulate the so-called Balti-
mere plan, and Mr.. A. b. Hepburn of New
York, ex-controller Of the currency. These
three gentlemen represent the currency
ideas embodied in the Baltimore plan and
they were present for the purpose of urg-
ing the merits Of that plan. 1t was ex-
pected that Secretary Carlisle would pre-
sent his currency bill and continue his
statement of yesterday, but the Secre-
tary was late in arriving Mr.. White opened
the hearing. In answer to questions he
stated that he had drafted bill on the
lines of the Baltimore plan and it was
arranged that this should be placed before
the committee. Mr.. Whites statement was
read from manuscript and was a carefully
prepared review of the banking question.
He began with a reference to the Balti-
more plan, calling attention to the fact
that 1T deals with only one part of the
banking business-that OF issuing circulat-
ing notes.
1T is often said," he began, that the
issuing of notes is not necessary func-
ton of a bank. 1t Is true that a bank
may exist without 1t, but banking sys-
of rendering to the community all the SER
vice that it is capable Of"
Discussing the solvency of banks, he
said: "At common law any man may issue
his promissory notes and circulate them
as money If people are willing to take
them. But this is like the right to make
or keep gunpowder or to sell liquor. 1t Is
the paramount right and duty of the state
to provide for the safety of the commu-
nifty. Hence, it may prescribe the regula-
tions under which circulating notes shall be
issued or gunpowder be stored or liquor be
sold 1t is not bound to give equal priv
ileges to all persons to exercise these
functions. 1t may authorize one bank to
issue or one powder mill. and no more"
The first half OF the address was de-
voted largely to a historical review of
banking in this country, and the Suffolk
bank redemption system and the New
York safety fund system of the days prior
to the war were referred to at length.
The baltimore Plan.
The latter part of Mr.. Whites address
was devoted exclusively to the Baltimore
plan. Referring to the fact that it makes
the circulating notes a FIRST lien on the
assets Of the bank, he said: There is an
outcry against this last feature from some
people, who say that the poor depositors
will suffer But what is the condition of
the poor depostors now? Aren't notes a
first lien on the assets? Aren't security
bonds part OF the assets? Can any de-
positor get any part of this fund until the
notes are paid in full?"
Mr.. White said he saw no objection to
the repeal of the 10 per cent tax on state
bank notes, provided the state banks COM
ply with all the requirements of the ma
ticnal banking law, and provided the
means of enforcing these requirements are
lodged with the controller of the currency.
But mere power OF observation without
the power of enforcement he would con-
slider unwise. unsafe and sure to cause
embarrassment and to end in disaster.
Mr.. White announced himself in favor
of the retirement of the legal tender notes.
notwithstanding that retirement is not In
cluded in the Baltimore plan. He would
have them extinguished. not merely tenn
porarily withdrawn. MY reason" he said
in conclusion, for desiring the extinction
of the legal tender notes is that they are
constant menace to business interests
business men are in a chronic state of
alarm lest the government should not be
allie to redeem them In gold, or lest a no.
litical party should come into power on a
platform of not redeeming them at ALL"
Not Mere Tendency.
At the close Of Mr.. Whites statement
he submitted his bill on the lines of tho
Baltimore plan. Mr.. Homer stated that
the committee Of national bankers had not
yet formulated their bill
Mr.. johnson Of Ohio asked Mr.. Whites
opinion on Secretary Carlisle's currency
plan. .....
Mr.. White answered that he did not
think the Secretary's plan would give
the elastic currency 1t sought to secure
1t compelled banks to put up 80 cents every
time they issued 75 cents.
Secretary Carlisle came in at this point
and was an interested listener to Mr..
Whites answers to questions to the
want Of elasticity in Mr.. Carlisle's cur
rency plan.
Secretary Carlisle then resumed his state
ment, begun yesterday. He presented the
bill he had prepared embodying his plan
OF currency revision. and read it to the
committee, commenting On 1t as he pro-
ceeded. When he had concluded reading
the bill Mr.. Carlisle explained it in detail.
He pointed out the various sections of the
present law proposed to be repealed.
The Secretary's Views.
Mr.. Brosius Pa.) asked whether it were
not desirable for the government to as
sumo the risk of redeeming notes rather
than leaving it to the banks. Mr.. Carlisle
answered in the negative. He said he did
not believe in government responsibility
further than in providing the most ample
safeguards. The Secretary presented ta-
bles showing the profits of national banks
under the proposed plan as compared with
their profits under the present law. 1t
showed the additional profits and induce
ments would incline national banks to take
out circulation. In the course of the gen
eral discussion Mr.. Carlisle said he did not
think any immediate retirement of the
United States treasury notes was prac-
ticable. The Secretary spoke of Controller
Eckels currency plan. without wishing
to criticise it, he thought it's fatal defect
was in requiring national banks to take
out two different kinds Of circulating notes.
Mr.. Hall of Missouri asked the Secretary
as to Mr.. Whites statement that the treas
ury plan lacked elasticity. Mr.. Carlisle
said there was no difference between the
plans as to the amount of circulation which
could be taken out.
The shipments of gold was discussed at
much length Mr. Carlisle said the loss of
gold was very heavy after the passage of
the Sherman law. The loss of our gold
had brought on financial distrust, and had
threatened panic But there had been no
real danger. These panics were largely the
result of sentiment dspublic feeling, in
stead of well-based fears
At 1880 the random Questioning of Mr..
Carlisle was concluded and the Secretary
excused. The committee took a recess until
o'clock. when Messrs. Homer and Hep
burn will be heard.
The Bond Issue.
During a general discussion between Mr..
Carlisle and members of the committee the
Secretary referred to, the Issuing of bonds.
He said that as much as he regretted it he
saw no way of prevepting the further issue