The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1894-11-25
SEATTLE. SUNDAY. goy. a5.
A FLEXIBLE CURRENCY.

The aBaitimore plan" as it In called, 10
becoming a subject OF much interest to
bankers, as well as TO the public generally.
who are interested in the formation OF
new national currency for this country.
The plan was originated at q mesting OF
the American Bankers Association held
in Baltimore last October. and Is particu-
larry interesting now that II il rumored
that President Cleveland Is TO inaugursts
its essential features in his forthcoming
message to congress, or ut least to make
favorable mention of them.
The main object of the proposed law is
to produce currency that will combine
the qualities of safety. which the present
system has. with greater degree Of dexi-
blIity. aud at the sans time DO national in
its character. Many OF the features of
the Canadian banking Law are adopted IN
the proposed plan. and IL Il practically
based on the experience Of the past thirty
two years OF national banking. taking into
consideration the losses incident 20 the
failure of banks during that time.
The plan proposes that banks shall be
empowered TO issus national currency up
10 50 per cent. OF their unimpaircd capital.
This issue TO be taxed ut the rate Of one
half Of per cent per annum. In case OF
an emergency, like tho late panic, for In
stAncc, banks shall be allowed to issue In
currency an additional % per cent OF
their nnimpaired capital. to be known ss
an emergency circulation and 10 be used
in times when the banks. from natural
causes or otherwise. would be subjected
TO an unusually heavy drain. This addi-
tional issue would also be taxed one-half
OF per cent. per annum, and would be
rats OF which IL not named in the pre-
posed plan.
The entire income from the tax on the
emergency circulation would DO put into
Whist Is called the guarantee fund, which
fund Is 20 Be started by an initial TAX of per
cent. on the average circulation outstAnd-
ing during the frst year of all the hanks.
Both classes Of circulation are to be made
srss lien upon the assets of the issuing
banks. Ia the event Of the assets Of any
bank not being sufficient by reason Of
insolvency. 10 pay any part OF It's eircu-
latlon. the government steps In and pays
off any deficiency. charging It to the gen.
ersi guarantee fund. The payment Of this
tax Is 10 be continued until there is fund
In she hands OF the United States comp
troller, ar treasurer equal to 5 per cent.
of the entire outstanding average cireals-
ton. When this point is reached, the
further collection OF the tax may 70 sns-
PENDED. at the discretion Of the com pirol-
ier. 10 be reimrossd hy him when this
fund falls below the required ) per cent OF
circulation.
tits claimed that the currency would
under this arrangement be made entirely
national IN character. absolutely safe. and
would possess the greatest possible elastic
lty consistent with absolute safety. While
ms old system Is national in character and
absolutely safe. the objection i made that
IL Is absolutely without tie quality Of
elasticity. Witch IS the one quality most
needed in eoantrF Ike this, wheru. a.
certain seasons Of tae year the moving Il
the cotton crop OF the South requires
millions Of meaey for oniY ccsnpsrs-
lively abort time, and 90 other sea-
IONS the greas wheat regions q the
Northwest reqatFs an extraordinary
amount % cnrrsacy Ter shs movement ef
the crop. IL has always been matter os
great difficulty under tbs present system
Il gei enough money together at rartiea-
lar sgEns % ths year % handle these dlner.
eat erops ia different parts Of the country.
Usaer the proposed plan tbs digacaliy
waaa lie entirely shvIasea. Is the cur
rensy could be Increased snd decreased a.
shs aseas Of the time ghs demand
TIE hanks Of shfs cssy ct The prussns
sine havs "a outstanding elrsulasion Of
$50 eoe. which 10 practically absolutely
sikia and pneAsaseahle. /. vas tat
amount pgiex - tie psnia and IL wss The
sasae amount during shs panic. - thsye
vas no gar - watch tie hanks
could lawfully iac-sss. il Under
TIE proposed plan he hanks q
sAts city eouli hare ksa an cat
standing circulation AZ any tine
equal % seN.oo pries 10 tao psaie.
aad coul3 hare increased that elrea.
tassea daring she panic 30 tns sxtens q
sDa.eo0 nere ~ sss9lag what hAs aeore
beer dsssrIse& as 80 emergency circulation.
A lzrse rropossion Of this s~cond issns
could have hssa loansa 20 merchants ard
individuals whs we're in need Of -
IAs rsaa la. maSA - commend ia -