The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1894-12-11
Little Difference Between the Two
OF Carrying Them Ont.
THE STATE BANK FEATURE
WOULD NOT REVIVE "wILD-CATS,, !,
THE SECRETARY CLAIMS.
Ten Per Cent. Tax, He Says, Is I'm
constitutional - Controllers View
Of the Elastic Currency System.

the room or the committee on ways ana
means, where Secretary Carlisle and Con-
troller Eckels appeared by invitation. be-
fore the House committee on banking and
currency TO explain and advocate the new
banking plan prepared by these two off,
cials and indorsed by the Presidents mes
sage. The room was crowded with men,
bers OF the House and intense interest was
manifested. Secretary Carlisle was exam
ined and cross-examined by the members
Of the committee. He had the rough draft
of bill in his possession, but after his
examination 1T was concluded to revise it
before submitting it to the committee. Mr..
Carlisle and Mr.. Eckels differed somewhat
as to the details of the proposed banking
scheme, but agreed on the principles to
govern it, Mr.. Carlisle will appear again
en- Wed 1eslay Tomorrow Mr.. Hepburn,
Horace White and Other New York bank
ers will be heard.
Mr.. Carlisle adopted an easy, conversa-
tional style OF address in his talk to the
committee to-day. He said he was ready
to answer questions from the commit
tee as well as elaborate his own views.
He took up each section of his recent rec
concentrations. First, repeal all the laws
requiring or authorizing the deposition of
United States bonds as securities for cir
culation, and, second. permit national
banks to issue notes to any amount not ex-
ceeding rs per cent. of their paid-up and un-
impaired capital, but require each bank
before receiving notes, to deposit a guar
antee fund consisting OF United States legal
tender notes.. including treasury notes of
1890, to the amount of 80 per cent. upon the
circulating notes applied for. this percent
Of he 81 LAT faS
outstanding to be maintained at all times.
and whenever bank retires its circulation
in whole or in part, its guarantee fund to
be returned to Ii in proportion to the
amount of notes retired"
Mr. Carlisle said he was satisfied that
the present law requiring the deposit of
bonds to secure circulation prevented the
elasticity of the currency. 1.-THE provision
outlined said Mr.. Carlisle. gives ample
protection without the deposit of bonds, as
required by the present law" Mr.. Carlisle
said the practical value of a reserve fund
of currency was shown in 1893. There was
a demand for money aggr sssating $4,000 600.
The treasury did its best to meet the
stringency, but by the time the notes were
ready to distribute the demand had gone
by and many of the packages of notes were
returned unopened. The Secretary invited
criticism of this particular section.
DIFFERS FROM THE BALTIMORE Plan
Chairman Springer asked how the Secre-
tarys plan differed from the Baltimore
plan.
Mr.. Carlisle explained the technical
difference. The Baltimore plan proposed a
deposit of so per cent. under certain con-
ditions, while the treasury plan proposed
a deposit of 80 per cent. When a bank
fails the treasury plan contemplated an as
sessment on all national banks they, in
turn. having a lien on the failed bank.
Representative Hall, Of Missouri, suggested
that there was prevailing opinion that it
was unsafe to place the entire question of
expanding the currency in the hands of
corporations and banks.
1T will work automatically" said Mr..
Carlisle. Banks will not expand the cur
rency unless the public needs 1t. Their
the common interests demand. These inter-
ests WILL therefore, control at all times"
The Secretary stated that this flexibility
was much more desirable than a rigid sys-
tenn by which a fixed amount of currency
was always outstanding. At one time the
stringency was SO great that the banks
had not been for the Canadian banks. who
sent currency into this country, serious re-
suits might have ensued.
Mr.. Johnson. of Indiana, asked IL the Bal
timore plan did not contemplate govern
ment liabilities?
Mr.. Carlisle said that ultimate liability
plan, and on the banks by his plan.
Mr.. Johns on asked If the ultimate liability
of the government would not inspire more
confidence In our currency?
The Secretary said it undoubtedly would
but that his plan would insure ample pro-
tection. and, therefore. ample confidence
He explained that in case of the failure OF
a bank its 80 per cent. goes into the gen
eral safety fund. If the total of the safety
fund and assets of the failed banks are not
sufficient to. meet all the liabilities without
carrying the general safety fund below
per cent, then all the banks are assessed
to meet the liabilities. The banks then
have lien on the assets of the failed bank
plan, Secretary Carlisle said ut suggests
merely plan by which State banks could
tions. The plan simply gives them the priv.
ilege of acting under certain conditions. ii
they fit
The Secretary then took up the PROPOSE.
ton that no national bank note of less de-
nomination than $40 be Issued. 1t would
encourage the circulation of silver certifi
Gates of small denominations, he said
These certificates were now crowded into
the treasury.
: Mr.. sperry asked If silver certificates were
NO." said the Secretary: there are only
two classes of notes redeemed in gold
namely. the greenbacks and the treasury
Concerning the ninth proposition, "repea
all provisions of the law requiring banks
to keep a reserve on account Of deposits >
the Secretary said the present law keeps a
bank from using its reserve at time wher
Ii needs it the most
Mr.. McCobb. of Alabama, asked ''De
you no. that the government owes no OBJ
legation to depositors"
mo more" said the Secretary. than Il
is obliged to protect private citizens whe
invest their funds in manufacturing con
Germs, corporations, etc.
STATE BANK FEATURE
Mr.. Carlisle then took up Section IL
"the State bank feature of the plan. Hs
said as to this he would consider such State
bank notes safe-perhaps perfectly saf.
would be too strong-but reasonably safe
He suggested change in the third pro
vision. so that the lien would not cover
the funds of guardians and other cestu
Qui trusts.
Mr.. Cox. of Tennessee, author of tn,
State bank bill defeated last session, asked
how State banks would be compelled Il
observe these conditions?
Mr.. Carlisle said that the treasury Off
cials would exert proper efforts to see tha
the conditions were observed. The books
and accounts OF the State bank would b,
inspected. and IL access was refused tn.
federal officials would determine on a tax
Mr.. Carlisle said he did not believe in tn,
authority OF the federal government to ex
ert much authority over State institutions