Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1894-12-11

u
Sufficient to meet all the liabilities without
/ carrying the general safety fund below tne
5 per cent, then all the banks are assessed
% meet the liabilities. The banks tnen
have a lien on the assets Of the Ialieu
bank"
Mr.. Walker asked what would happen
If a failed bank had no assets, so tnat
there would be no lien for the other banks
to fall back on. The Secretary said tnls
was
AN EXTREME PRESUMPTION.
tt had occurred only six times that a ma
tional bank had been absolutely without
/ assets.
~ understand" said Mr.. Johnson, OF
Ohio, ''that you hope 70 secure an elastic
currency by this plan. Now, what lnceh-
tive would there be for bank 70 reduce
its circulation" /" "The bank may not az
once reduce, said the Secretary. "out II
the public does not want money, the banks
will withdraw circulation, as there would
be a small tax on it.n
The bank viii go to the limit OF us CIR
culation at the outset, will it nolP querled
Mr. Johnson "PrObably, yes, at the
start - said MT. Carlisle. "but if there is
no demand for wnat is issued the notes
will be slowly but surely retained. Inc
tax on the notes is not much, mt IL Is
enongh TO keep the issue beyond what ne
public needs
Mir. johnson said be could not see the
elasticity claimed. Some banks might re-
duCe, others might not The plan showed
s great indUcement for issuing currency,
but it did not show the same inducemens
for contracting currency.
Mr.. johnson, Of Indiana, asked as 70 the
State bank feature of the secretary's
plan. at suggests merely plan ~ which
State banks could act If they saw tit," said
Mr.. Carlisle. "But the government has
no direct concern with State institutions.
Tue plan simply gives them the privilege
of acting under certain conditions II they
see tit.n
Mr.. Walker asked if Mr.. Carlisle had
vet drawn a bill relating TO his plan. The
secretary replied that he had drawn
rough draft this morning and be would
submit il to the committee. IL was a ten
tative measure and he would change 1t in
some details.
Mr.. Carlisle then took up the fifth propo-
sition OF his plan, namely, "NO national
bank note % bs Of less denomination than
$40, and all notes Of the same denomiua-
tion TO be uniform in design; but banks
desiring tOlredeem their notes in gold may
have them made
PAYABLE N COIN,
the secretary Of the treasury 70 have au-
thOrity 70 prepare and keep on hand ready
20 issue upon application a reserve OF blank
national bank notes for each banking asso-
citation having circulation"
The secretary said this would encourage
the circulation Of the silver certificates of
small denominations. The national bank
notes being above $40 would give a clear
field TO the silver certihcares under $40.
These certificates were now crowded into
the treasury. If they were to be kept as
part Of our money, they should be forced
into use, and this would accomplish that
end
MIR. SDerry asked if the gold circulation
should disappear would the government
meet its obligations in silver. The Secre-
tary replied that silver was only One-tfth
OF the circulation. There was need OF
small bills TO supplement the coin.
Mr.. Walker asked as TO the subsidiary
silver coin. which led Mr.. Carlisle to
speak of the bad condition of the currency
laws on this point 1t accumulated 10 the
treasury at times when there was dearth
of small change at many points. 1T
might be cured, - said the Secretary, "by
making subsidiary coin a legal tender"
Representative Hall asl ed as to the gold
provision in the SeCretary's plan. Mr..
Carlisle said this should be put in because
Of the ''gOll banks" OR the Pacific Coast,
mainly in San Francisco, which had little
paper and much gold. IL was not intended
% apply 10 the country az large
Mr.. Sperry asked II silver certificates
were redeemed in gold. mo" said the
Secretary; there is a popular impression
20 that effect out 10 is not correct. There
are only two classes Of notes redeemed in
gold, namely: The green backs and the
Treasury notes under the Sherman act OF
1890"
The secretary then took up the ninth
provision Of his plan, namely: "Repeal
all provisions Of the law requiring banks
20 keep a reserve on account OF deposits"
He explained that this "6eeps a bank from
using its reserve at time when IL need it
most"
MIR. Warner, Of New York, asked if the
allowance of national banks to do away
with a reserve would not be a discrimina-
ton
AGAINST STATE BANKS
In States recurring reserves. The secre-
retary said il might be open to that Obiec-
ton.
Mr.. Cobb asked: ''DO you hold that the
government owes no obligation to deposi-
tors" "No more" said the secretary,
'than it is obligated to protect private citi-
zens who invest their funds in manufacture
ing concerns, corporations, etc
Mr. Carlisle then took up section IL,
the Estate Bank feature OF his plan. He
said as % this that ne would consider sucn
State bank notes safe-perhaps perfectly
safe would DO too strong, but
reasonably safe. He suggested
change in the third provision,
so that the lien would not cover the funds
of guardians and other cestui Qui trusts.
Mr.. Cox Of Tennessee. the auther Of
the State bank bill, defeated last session,
asked how State banks would be CON-
PEELED 20 observe these conditions
Mr.. Carlisle said that tle treasury OIL
ciaIs would exert proper efforts 10 see that
the conditions were observed. The books
and aCrOuntf Of the State bank would be
inspected and if access was refused the
Federal officials would determine on tax.
Mr.. Carlisle said he did not believe in
the authority of the Federal government
to exert much authority over State insti-
tutions His idea was that the Federal
authority did not go beyond imposing
tax, as a means OF compelling the State in
stituCOu 10 observe
CERTAIN FEDERAL CONDITIONS.
''NIy position would lead 10 the logical
conclusion that all tax on State banks
should be repealed said the secretary,
"but that may not be practical at present
Mr. Johnson, Of Ohio, referred 70 the
old wildcat days.
"That is a thing Of the past,n said the
Secretary. "YOu could no more resume
the wildcat system than You could revive
the conditions which made il possible. We
have advanced far beyond the possibilities
of a wildcat system
The Secretary said the 10 per cent tax
proposed on State banks was sufficient 70
wipe our their circulation in case they did
not observe good conditions. II was prac-
tically prohioitOry tax.
Mr. Brosius, of Pennsylvania, asked If a
State bank could not issue notes for year
vvfth,ut n s-y-irr ~ conditions or Daviurt m .