The herald., 1894-12-14
Hearings Before the House
Committee.
Numerous Schemes Proposed by the
FinancIers.
The Baltimore Plan Has Many Ardent
Advocates-Ex-C Comptroller Hep
burn Presents His
Views.
6y the Associated Press.

and R. B. Ferris, vice-president OF the
bank OF New York. Ferris said: There
seems to be no good reason why exist
ing national banks which have United
States bonds on deposit with the comp
troler, should not be allowed to con-
tinue as they are until their charters
expire or the deposited bonds are paid
of. Section 7 of Carlisle's bill seems
like forcing the banks to do what they
have not been consulted about"
Ferris advocated the establishment OF
central redem ption agencies. which
would, he thought, enhance the elastic
ity OF the circulation based on the de-
posit of bonds.
Referring 10 section 10 OF CGrlisle's
hill, providing for the issue OF notes
by state banks. withcIt the provision OF
einkiug fund. Ferris said:
s'It makes the bill simply an imitation
measure. modified by the deposit of 80
per cent Of the legal tender notes, and
the provision to cancell United States
notes 10 tie extent OF 70 per cent of the
new circulation issued when .he treas
ury has means to do il"
The lettsr concluded: "As q bill to
substitute nation Al bank notes for new
issue it win be failure, as it presents
no Inducements 10 solid banks 30 become
insurers Of the circulation OF mushroom
institutions, and the stimuiant to or
game banks not subject to United
states inspection is questionable"
William IL. Cornwall, president OF the
Citv National bank of Buffalo and presi.
dent OF the State Bankers association,
said his recommendations were as fol-
lows
First-The greenbnck and treasury
notes shoul1 be redeemed, then can
celed. The real business OF the govern
ment as regards money, is to stamp
upon gold and silver their fneness and
weight. A government bas no right to
issue money with nothing back Of It
ana to make il legal tender-to create a
currency and by an act OF law, force the
people 10 take ita full value without
regard to intrinsic worth. All such
iesnes up TO today have ended in trouble.
The greenbsck and treasury note are OF
this character. They are the govern
mert's note TO the extent OF 5000, 900. 600
payable on demand and in gold. They
have caused trouble enough already.
They are a constant menace to the gold
reserve. They should be paid up.
Second-The vacancy should be filled
with bank notes.-the best currency OF
the beet nations today ia mainly bark
notes which are q first lien upon the
assets OF the BANK. These aesets ar
commercial possessions, representing
the product OF the brain and muscle of
miliions OF people. They are the
wealth OF the nation. What better
basis for circulation con there be than
this-the actual wealth Of the nation?
To fill the vacancy created by the
retirement OF the legsl tenders, and as
fast as they are retired national banks
should be allowed to issue notes to
percentage OF capital, without bond
security, the notes to be a fret lien upon
the assets OF the bank, including the
double liability OF stockholders, with O
guarantee fund made up by all of the
banks, the government continuing to
guarantee snd redeem all notes as at
present. This is practically the Balti-
more plan. 1t is ample and good as far
as it goes, and it goes far enough for the
present.
Third-To perfect the system further
and make out the complicated and del
icate problems attending this, an impair.
tial, expert commission should be ap-
pointed
To recapitulete:
J.. Retire the legal tendera.
2. Let the national banks take out
notes under the Baltimore plan to re.
place them.
). Appoint an impartial, expert COM
mission to perfect our currency system.
Replying to questions, Cornwall
said he thought green backs and treasury
notes outstanding should be redeemed,
bus he would perform this REDEEM ption
with low rats bonds. He alse said he
did not coneider that part of Secretary
Carlisle's plan relating to the retire.
ment of treasury notes sufficiently defn.
ite. Cornwall said that return to state
bank notes would bring about a return
OF counterfeiting, not reduced to the
minimum.
At the afternoon session, Chairman
Springer read a letter from A. B. Hep
burn OF New York, ex-Comptroller OF the
currency, and one of the advocates Of
the Baltimore plan. Mr.. Hepburn wrote
as follows:
cot course Mr.. Carlse's provisions
requiring banks taking out circulation
TO deposit greenbscks and treasury
notes is made in the interest OF relievs
ing the government, and not for the
benefit Of a currency issue. | do not
know that have any objection to this.
| would like TO see any safe course pur-
sued which would relieve the govern
ment OF its embsrraesmenra. 1t is by
no means blessing to the banks. The
retirement OF the government from the
banking business, while is would bene-
fit the government and the people as o
whole, would certainly put added re-
Bponsibility upon the banks. | am
strongly opposed to the proposition to
do away with the requirements that the
banks keep reHerves, and my under
standing OF the law does not tally with
that of the secretary.
''The law when il was drafted, as | un-
derstand it, Was based upon the exper-
ence of prudent and well managed
banks, and the reserve was fixed at
point whore prudent and weli-mesning
banks carried their reserve. 1t was
eought 10 fix limit 80 a we'll managed
bank would as often be over as under
the reserve in the regular course Of bug
iness. This law is made, not for the
nine banks who would observe it with
out any legal provisions, but fer the
teath, that either by incompetent,
speculative or unsafe manal ement
might fail to keep proper reserve and
TO keep it's finances sufficiently strong to
meet the demands that might be made
upon it.
The statement which the secretary
makes that the state banks keep 20 per
cent reGerve, whereas the national banks
keep only Is, / do nos thInk 10 well
iorEded "