Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-12-13
CARLISLE'S PLAN CRITICISED
Financial Experts Do Not Believe 1t to
Be Feasible.
The House banking and Currency
Committee Listens to the Pending
Financial Discussion.

Inc House banking ana currency COM
mittee continued its hearings today in the
ways and means committee room. There
was bare majority of the committee
present. Mr.. William c. Cornwall of Buff
falo, president OF the New York State
Banking Association, was the first witness
of the day. but before he was introduced
letters wers read from w. b. Dana, editor
of the Commercial and Financial Chroni-
Gle, and from r. B. Ferris, vice president
of the Bank of New York. Mr.. Ferris
said: There seems to be no good reason
why existing national banks who have
United States bonds on deposit with the
controller should not be allowed to con-
tinue as they are, either until their char
ters expire, or the deposited bonds are
paid OFF. Section of Mr.. Carlisle's bill
seems like forcing the banks to do what
they have not been consulted about"
Calls 1t am Imitation Measure.
Mr.. Ferris advocated the establishment
of central redemption agencies, which
would, he thought, enhance the elasticity
OF circulation based on a deposit of bonds.
Referring to section 10 of the Carlisle bill
providing for the issue of notes by state
banks without the provision of a sinking
1und, Mr.. Ferris said: 1T makes the bill
sAihPAy dh iIlldllOn measure modified by
the deposit or ~ per cent in LEGAL tender
Eotes and the provision to cancel United
states notes to the extent of 20 per cent
OF new circulation issued when the treas
ury mas the means" He closed his letter
by saying: las bill to substitute national
bank notes for United States issues A. n,iIi
De q Iallure, as 1t presents no intucements
10 soma banks to become insurers of the
circulation OF mushroom institutions. and
the stlmulant to organize state banks NOT
cd
questionable" 40
after sharp passage at arms between
Walker and Warner as to
.ne order In which witnesses should be
Of criticism by Mr.. Warner. Mr. Carnw.n
was introduced and read a carefully RE
pared paper on the currency problem -ba
reSuit OF It's conclusion being that he he
tion would be reached-frst, by retiring tbs
iegai tenders; second by letting the ma
tionai banks take out notes under the Bal
.linore plan to replace them, and, third.
~ appolnt an impartial expert commission
10 perfect our currency system
would Use Bonds for Redemption,
Mr.. Cornwall, in reply to questions bv
Mr. warner, said he thought the graan
backs and treasury notes outstanding
should be redeemed, but that he would per-
form this redemption with low rate bonds.
he also said he did not consider that part
Oh Secretary Carlisle's plan relating to the
retirement or treasury notes sufficiently
definite.
Mr.. Cornwall was questioned at mu,h
enSth. Among other things he said that
return 10 state bank notes would bring
tDout a revival OF coGnterfeiting, now re-
iuced TO minimum. He was at the head
u a state bank, yet he thought uniformity !
n the currency and in banking could best |
'e secured by national system. He did |
or the bank notes. The banks themselves |
mould be alone responsible. In his iudg-
nent the Baltimore plan did not make the |
government liable, as it was to be re-
ouped for any redemptions it might be |
aIed upon to make. The plan of Mr.
carlisle might bring about undue imitation |
u the currency, as 1t permitted new notes |
o be issued in excess of those redeemed
In Mr.. CornwalPs opinion the issue of |
'ank notes should keep pace, with the ex-
inction of greenbacks, but should not get |
mead OF IT, In reply to a question from
Johnson, the witness said
he effect of redeeming greenbacks in silver
would send gold to premium.
Editor DOdswOrth Talks ut Length,
Mr.. William Dodsworth, editor of the New
.ork Journal OF Commerce, next addressed
he committee. He regarded the Carlisle
i'll as unfavorably as Mr. Cornwall, and
'ent at length into an exhaustive presenta-
ION OF the methods of banking in this
ountry and found that the present finan-
al conditions were due among other things
D the fact that the bond form of guaran-
ee has been found incompatible with the
lasucity OF issue; that owing to obstruct-
re restraints the volume of national bank
otes cannot be readily augmented to meet
ublic emergencies, and that for these and
ther reasons the national bank circulation
ad shrunk to one-half it's former volume
nile the public requirements for money
ave been increasing. He suggested the
doption of measures to relieve the bank
IL system of such evils.
AT the afternoon session OF the commit
'e, Chairman Springer read a letter from
B. Hepburn of New York, ex-controller
the currency and one of the chief adyo-
ties of the Baltimore plan. 1t was q
sreful consideration of the various cur
,ncy plans now before the committee.