Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1895-04-12
BOARD OF TRADE
Continued from page g.

arisen and had caused great unrest In tbt
minds OF our people; yet the banks had
accommodated themselves to the situa
ton, and were in fair way to weather the
storm. But when, suddenly, the peonle
lost confidence, when wild fear seized
| upon them, when reason and common
sense abdicated the throne and blind. nm
reasoning fury reigned instead. there
followed the inevitable result of such as
mime stupidity. Bank after bank sus.
pended. Distrust and disappointment
were everywhere present The old story
was repeated; if men could have their
money they didn't want it, bat if they
couldn't have it they wanted it badly
The people failed; failed to be lust failed
10 be reasonable, failed to exercise com
mon sense.
Inc money which was withd rawn from
the banks was withdrawn. also. from
circulation 1t was hid away in old stock
ing legs and between feather beds, because
reason had given place to fear, confidence
10 dlstrust. Now in all this exhibition.
the Dill holder had played no part. Let
come what would, he knew his holding
was absolutely good and the depositor
knew, Also that the bills could not pos
slply operate to reduce the value of his
claim upon the assets of the bank
But am of the opinion that if the
law proposed by the Baltimore plan
should be enacted. the fact that there
existed lien upon the entire assets and
stockholders liability, prior to the de-
posts, to the extent of seventy five per
cent of the capital, would be most
fruitful cause of distrust, and in many
places precipitate a run at the first note
of warning, uttered by some shallow
pated agitator.
The bills would be good, but the deposit
tors would be robbed of security to
which think they are entitled, and which,
for the very banks sake they ought to
have.
Another Objectionable feature of the
plan Is, that in case the assets and stock
holders liability should not be sufficient
to redeem the bills the remaining banks
should be taxed to make them good
Why not enforce all the merchants in
this city to gr ar sntee the indebtedness
of each individual one? Why not apply
the rule broadly, and enact that the dill
gent and honest shall pay the debts of
the slothful and dishonest? l see no
good reason for SO doing. I can see no
equity in holding conser vative, honestly
managed bank, in Maine, liable for the
doings of band of promoters in the
wild and woolly" West, or wide-awake
pushing, yet prudcntly managed bank in
the West liable for the old fogyism and
dry rot of some eastern heirloom.
1t is because of these reasons that l
do not like the Baltimore plan.
The next proposition to which I beg
to call your attention is the Carlisle
PLAN offered by Secretary Carlisle, Cor
one of his plans) / shall take the origi
nal plan, because it may be supposed to
voice his own ideas Although this had
the Endorsement of the President, in the
beginning he subsequently withdrew his
support. This proposes to repel the bond
deposit clause, to allow banks to issue
circulation to the amount of seventy five
per cent of capital, upon deposit of
United States legal tender notes, includ-
ing treasury notes. issued under the act of
1890, to the amount of thirty per cent of
capital, that no bills shall be issued of a
lower denomination than ten dollars, that
the bills be a first lien upon the assets of
issuing bank, and other banks be liable
to a pro rata assessment upon their circu-
lation to make good any deficiency, and
that the treasurer may, in his discre-
ton, out of any money in the treasury,
redeem and retire the legal tenders, up to
seventy per cent. of bank circulation taken
out under this act. 1t also provides that
state banks may be exempt from United
States tax on circulation when it shows
that it has not had outstanding circula-
ton in excess of seventy five per cent. of
paid up capital, that its notes are first
lien upon the assets Cincluding stockhold-
cr's liability to amount of ownership and
that it has deposit with proper state
officer, of thirty per cent. of circulation,
in legal tenders.
You will notice that the "guarantee
fund.- of five per cent. is not exacted of
state banks. You will also bear in mind
that it is a matter of common history that
"paid-up- capital of state banks has often
consisted of corner lots in Boomtown, of
stock in branch houses and in develop
ment companies, in hotels and opera
houses, in town-sites and ranches, in fur
naces and iron mines. of stockholders
notes which for most excellent reasons
were never before found in the list of any
banks loan, and of reddogs and wild
cats of every description and of no con
ceivable value. 1t is needless for me to
recount the difficulties and losses of old
state bank days. Many of you gentle
men learned them in the school of expe-
rience. Remembering all these things,
| cannot understand how men can favor
the issuing of notes based upon such Sc
entities as have mentioned. No reason
has ever appeared to my mind sufficient
To entitle it to moments considerations
l see not one sound argument in its favor
hut a whole train of difficulties and dis
asters attendant upon its enactment.
State bank issues belong to primitive
times. They have been trampled in the
dust meath the wheels of progress. To
revive them would be to refuse to be
guided by the lamp of experience. Happily
no such calamity is likely to befall us at
present. The proposition to prohibit the
| issue of bills of smaller denomination
than ten dollars is sop to the silver in
terests; an attempt to force an undesir-
able kind of money onto the people; to
| fix upon us, in the form of silver the two