The times. [volume] (Richmond, Va.) 1890-1903, 1895-01-01
A NEW AND A VALUABLE IpEi

ana SnaH 10 on TcpthtiH6, that iHis
| country will never have any real pros
| perty again Unat prosperity which is
| equally diYused amongst all the people,
and not the false prosperity OF enormous
! beggars scattered over the land, until
| the Government OF the United States
| Is cut loose. stock. lock ana barrel, from
| any connection whatever with the money
| and currency OF the country. except the
| coming OF the precious metals. When
| every man is permitted TO ENJOY again his
natural right to put out his promissory
notes 10 pay coin as he pea5es, and when
the States are again permitted 10 enjoy
the right reserved 10 them by the Consti-
tuition to charter their banks OF issue as
they please. we shall have general pros
perlty again. But we shall never have
il until then. We despair, however, Of
seeing this blessed condition of constitu-
tionai liberty for long time. and mean
while we feel bound to contribute what
ever we can towards the amelioTation and
TEN now on us of the United States Gov
eminent undertaking TO run The private
financial affairs of the people. TO this
end we present our readers this morning
with a PLAZA for q new currency system,
presented by Mr.. l. NJ. Ashley, Jr., OF
Ohio, and laid before its readers, with
qualified approval, by the financial
Chronicle, of New York, in its last issue.
The plan consists OF two parts the first
part containing nothing new, but the sec
ond part is entirely new and original. so
far az we know
The first part of his plan proposes that
tho Government shall authorize the
issue of 400 millions of = IL per cent. gold
bonds. TO sell them to the national banks
for gold or legal tenders. and to allow the
banks to issue notes on them up to par
OF the bonds, the bonds to be deposited
with the Government, as now.
The Financial Chronicle thus summarizes
the objections to this part OF the Plan,
considered as standing by itself: a. A
special issue of Government bonds for
use as security for bank-notes would be
wrong in principle. would be in OPP
position to public opinion. and II is hardly
possible Congress could ever be induced
10 give its sanction 10 il; ~ even IL done.
IL would be but a temporary provision,
and could not be the basis of permanent
system, for an increasing demand for
banks, and hence for the bonds, would
enhance the market price until it be-
came Improbable TO retain the circula-
ton, and the notes would he given up
and the bonds Soda process of which
We have had an illustration during re-
cent years: 60 bank-notes so secured can
not be elastic. or the volume aAoat be
made in any degree to conform to the
volume of commercial transactions, ,anG
consequently would not relieve our res
ent embarrassment in the least; % a
currency with a Government bond back
of it calls for the locking up of an equal
or larger amount of capital to secure It,
so that the operation is of no advantage.
but disadyantaf to the public.
But Mr.. Ashley's scheme must be con-
sidered as a whole, and while these OBJ
jections are sufficiently potent when adj
dressed to a proposition to issue bonds
as basis of currency standing by it,
self. they may disappear when applied
to his whole plan. We VIII state the
second part of his plan. with the Finan-
cial Chronicles suggestions of amend
ment without dirfercntiating the two.
In addition to the 400 million dollars Of
currency covered by the bonds, Mr.. Ash
ley proposes that the Comptroller of the
Currency be authorized TO divide the
country into suitable and convenient dis
tricts, and that the national banks in
each of those districts form themselves
into clearinghouse. After this has
been done, il is then provided further
that these district clearinghouse shall
organize a national clearing house the
representation in the national body be-
ing based in each case on the combined
banking capital of the district. There
upon this central or national organiza-
ton is TO possess the power 10 issue notes
10 each of these district clearing houses
TO the amount of 80 per cent. of the CAP
ita represented in such district. on the
deposit of sufficient collateral as security
for payment. together with % per cent. of
gold or United States notes The notes
are then to be distributed among the
individual banks by the district clearing
houses. The individual banks are TO lie
primarily responsible for the redemption
of the notes, but both the district ana
the national organizations shall be liable,
in the order named. for their redemption,
in gold or silver at the option of the
holder. The district clearing houses are
to have the right to examine and inspect
the affairs of each bank in the district
association as 1t pleases.
1t is obvious that this makes "a founda-
ton currency In place Of the legal ten
ders. which would be taken IN and de-
stroyed, of 40 million dollars. and au-
thorizes an emergency currency OF 50,
per cent. of the paid-up capital OF the
banks for periods when the currency de-
mands an expansion. Ii also authorizes
the banks themselves to become examin-
ers Of each other. which secures real ex-
aminations instead Of the perfunctory
ones now made by Government officers.
IL a. Government currency ia N no ad