The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-10-16
VIEWS OF BANKERS
NEW CURRENCY SCHEME PROPOSED
BY EX-GOVERNOR MERRIAM.
How a Western Man Would Reform
the Present system-Address by
John p. O'DcIl.

the Grand opera House this morning at
10 o'clock, with an unusually large at
tendance of delegates and a liberal sprink-
ling of visitors and onlookers- The associa-
ton was welcomed to the city by Mayor
Porter King. and to the State by Hon.
G. Gunby Jordan. president Of the State
Banker Association, in brief addresses.
To these words OF welcome President John
j. p. O'Dell responded In behalf Of the Wis
iting bankers and delivered his annual adj
dress. In concluding. he said: "A year
ago. at your convention i'm Baltimore, a
plan for the reformation of our national
currency system was adopted. and while
the recommendations of the association did
not meet with universal approval. the ac-
ton of the convention gave rise to most ex-
tensive agitation Of the currency question.
both in and out of Congress. and a great
deal of valuable discussion followed. The
effort of the association to deal with this
subject has not been fruitless. ard 1t is to
be hoped that the agitation thus initiated
will continue until the government shall
abandon the issuance of notes, and a more
perfect currency system shall be adopted.
The evils of our present system were never
more apparent than to-day. During the
period since We last met together our
country has passed through an experience
that will not soon be forgotten. Following
a season of universal liquidation and dis
tress. the country was confronted by a
national treasury forced almost to the very
verge of bankruptcy and was saved from
this only by the heroic and patriotic action
Of a wise and courageous President. For
weeks uncertainty and confusion prevailed.
and were not allayed until by the sale OF
a large amount of bonds the government
recovered it's gold reserve. That this ex-
pedient offered but temporary relief We
have had ample evidence, and the signs
are not wanting to indicate that we
A.xro xor .Dth1A IN f0r nm
less we shall depart entirely from
the present make-shift and pernicious
system of governmental note issues. With
a scientific monetary system, based upon
the standard which has received the in
dorSement of the most civilized nations, we
may feel assured that the intelligent and
energetic people of the United States will
develop and utilize to an extent beyond
the dreams of the widest visionary the
marvellous resources which nature has
bestowed upon us, until at last we
tions of the earth, the foremost in material
prosperity and moral worth, which will be
manifested In the advancement of our arts
and sciences and in the daily life of our
people To-day, were it not for our un-
certain currency system, We might we'll
congratulate ourselves upon the condition
OF affairs. Abundant crops have rewarded
the labors of the -husbandman. the wheels
OF industry are moving more smoothly and
rapidly confidence is taking the place OF
together, the prospect, but for one single
cloud, is full Of encouragement. With the
increasing prosperity of the people we may
hope TO prosper even as We suffer with
them i'm their misfortunes. To us, as bank
ers. is committed the duty of maintaining
the credit OF our people. This We can do
financial morality, the truth OF which
time and experience have demon
s s,rated; ur0n large us resn aS AN to ass cen-
bat error, to contend for the truth, TO
assist in raising. the standard of CONNER
ctal and national honor, to extend the SEN
timent OF brotherly fellowship-this Is our
mission. Are we capable OF discharging
the trust? L think we are"
The report of the executive council was
then read by Mr.. Z. Fl. Pu.len, chairman.
The treasurer's report was then read and
accepted.
Ex-Governor Merriam. OF Minnesota. read
Twentieth Century" in which he outlined
a currency scheme. His suggestion was.
thar. say 40 per cent. of the capital of a
notes and circulation be issued against
the same. the bills remaining in the hands
OF the treasury, and currency TO an amount
equal TO the remaining GO per cent. of the
capital stock to be delivered to the bank
for issuance when desired. Before the un-
secured currency is forwarded. however.
sum equal TO 5 per cent. of its capital stock
as a bank circulation safety fund on
which money the government should allow
interest at the rate OF 3 per cent. per an
mum. The government, in the case of assets
of insolvent banks be insufficient to reim-
burse it for the circulating notes of default
ing Institutions, may assess each bank in
the system pro rata to an amount suficient
to fully indemnify it for any losses incurred,
but in any one year no institution shall be
age circulation for the previous year. IN
asmuch as there are likely to be at least
four thousand banks organized under any
national law, the Treasurer might act as
redeeming agent for all Of the banks, and
each bank should at all times keep with
the treasurer 5 per cent. of its capital stock
as a redemption fund, which fund should
be in gold coin. and held in trust for the
specific purpose intended. AS fast as notes
are redeemed. the bank should at once re-
init a sum that would repair any deficiency
made by redemption and new notes be for
warded.
"Inasmuch as the bank would make a
profit out of the circulation not secured by
United States notes or Sherman notes. il is
right that all of the banks should pay a
tax upon the unsecured notes to the gov
eminent for the privilege accorded them.
This tax should be made sufficiently large
TO pay all the Expenses OF the Office of the
Controller. including the printing of bank
notes. engraving. ETC., to pay the United
States for the charters granted a handsome
revenue. which should aid in defraying gen.
eral expense and to make the currency
elastic. Every bank desiring to become ma
tional should pay a tax of 2 per cent. per
annum on the amount of it's average cir
c%ulation.
1T can at once be seen that whenever
and wherever the demands for money are
sufficiently active TO enable banks to lend
their funds at prices that will net them
over 2 per cent. there will be an incentive
to put out the currency. but when Ii is
worth less than that amount. as ii has been
in New York and Boston for some months.
the unsigned bills would remain in vaults.
The government would receive several mil
lions of dollars per annum into its Golfers
to aid in paying its bills as a return for
the privileges granted the banks. In addi-
tion the interest on one hundred millions of
gold now maintained in idleness would be
saved. and the gold put into active use in
stead of being out of the channels of trade,
there being no further use for a gold re-
serve as the bulk of greenbacks and Sher-
man notes would be absorbed as a basis for
currency or as a reserve against deposits
in banks. That all parts of the country
might have the advantage of the national
system. banks should be permitted to or
ganize with a capital Of S25.0 NO or even less.
thus encourag ins State banks to abandon
their present characters. Banks desiring
to organize under this plan should be ex-
amined by an agent of the Controller and
be permitted to begin business only upon
a certificate of the examiner. duly certify
ing that the capital stock had been paid in
actual cash."