The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-11-15
CIear-Cut Answers to the InterrOga-
tories Sent Out by the National
Monetary Commission.
WANTS GREENBACKS RETIRED
DECLARES SILVER DOLLARS SHOULD
BE REDEEMED IN GOLD,
And FavOrs the Adoption of an Elias
tic Banking Currency Based
ON Business Assets.

WASHINGTON, Nov. 14-Mr. Horace
White whose book on Money and Bank
ing has attracted so much attention, has
submitted some clear-cut answers to the in
terrogatories of the monetary commission
regarding improvements in the currency
system of the United States. Mr.. White is
an outspoken advocate of the retirement of
the greenbacks and the adoption of an elias
tic banking currency based on business as
sets. He declares that the silver dollars
should be redeemed in gold and that in
financial sense there is no difference be-
tween the several forms of government
fduciary circulation of which silver dollars
are part. 1.-The latter" he declared, ''are
metallic gleenbacks." He does not believe
that the amount of circulation presented for
redemption would be any greater than at
present if silver were redeemable in gold. In
answer to the questions regarding the main
tenance of the gold standard Mr.. White
says: II would recommend the redemption,
retirement and cancellation of all legal
tender notes first step. Probably the
silver certificates and silver dollars would
thereafter remain at par with gold, like the
outstanding thalers of Germany, and would
not be presented for redemption in any con-
siderable amount, beng needed like the
smaller silver coins, for circulation in retail
trade. After the retirement of the legal
tender notes we should be able to see better
what to do next"
To the question: For the purpose of facil-
itating the use of existing silver currency,
what do you recommend the smallest
denomination of United States notes and
bank notes which should be put in circula-
tion?" Mr.. White answers: Ten dollars at
first; but this should be made a matter of
experiment the object being to determine
the dimensions of the field of circulation
which will absorb the silver currency, leav-
ing the rest to bank notes..
In regard to the legal-tender notes, Mr..
Whites responses are as follows
Question-On what ground, if any, would
you favor the gradual but entire withdrawal
of the treasury notes of 1890 and of the
United States notes?
UNCERTAINTY DRAWBACK.
Answer-On the ground that there is no
certainty, and can be no certainty, that the
government will always redeem them in
gold. Redemption nonredempton is
political issue to be fought in elections,
and must remain so long this kind of
paper is outstanding. Mere uncertainty is
always a drawback to business prosperity.
Failure of redemption would be bankruptcy
public and private.
Off it shall be decided to retire the
United States notes, how can it be done
without adding to our bonded debt?
A.-By canceling all that are received at
the treasury for taxes or presented for
demption, all so received over and above
the governments necessary disbursements.
Q.-How in that case can provision be
made for maintaining an adequate amount
of currency available for purposes of bust
ness?
A.-Provision will be made automatic
cally in various ways, namely: % Retain
ing the gold produced by our own mines
CD BY importing gold from abroad. 60
By the issue of national bank notes. Prior
to the civil war the government gave itself
no concern about providing currency for
purposes of business, yet the supply was
never deficient.
Off it be thought inexpedient to fund
the United States notes, how can they be
redeemed with an assurance that the bank
currency will take their place?
A.-The assurance is found in the fact
that in every case where a currency
vacuum has existed it has been filled by
bank notes. This was the case in the panic
of 1895. The process of taking out notes
might be made more expeditions. That is
matter of machinery and of legal regula-
is a profit In issuing bank circulation, it will
be issued. If there is no profit in it, we
must conclude either that the law needs
amendment, or that the demand Tor cur
rency is slight.
Mr.. White believes that in process of
| time it will not be possible to rely upon
| issues. because of the extinction of the pub
| lie debt. In reply to the questions whether
| any safe and practicable plan can be de-
| vsed for using other securities, he. says that
| he thinks not, adding: Il should not like
| to be charged with the responsibility of Sc
| lecting the securities or choosing between
! the different kinds offered He believes
| that 80 per cent. of the paid-up and unim-
| paired capital of the bank should be limit
| of the note issues and that cash reserve
| should be held for the redemption of notes,
| 1.-The same now provided by law for de-
J ofr
| cities and Is per cent elsewhere, with the
| right to keep three-ffths of said Is per cent.
IN the reserve cities There IS no dlfterenGe
| ties, so far as the bank itself is concerned,
| and no reason why the reserve should be
| greater or less for the one than for the
| other. The reserve should consist of gold,
and should be in the vaults of the bank or
( in a clearing house depository"
A BANKING CURRENCY.
Other questions regarding the best plan
for establishing and regulating banking
| currency are answered by Mr.. White as
| follows:
In general approve of the plan adopted
| by the American Bankers Association, at
| Baltimore in October, 1894, commonly called
| the Baltimore PLAN Ali bank notes should
| be redeemable at the commercial center of
| the country and also at their own coun-
| tiers. Perhaps an exception should be made
| of the Pacific coast, on account of distance.
| The requirement of redemption at the
| banks counter was found to work no hard
| shin under the SUFFOLK bank system, since
| as much specie was customarily deposited
| in the country banks as was called for by
depositors or note holders"
Q.-What if anything. beyond provision
| for Immediate redemption is needed for Sc
| curing the elasticity of note issues in pc
| RODS of normal business?
A-Ability to issue notes promptly is as
| needful as prompt redemption.
ON times OF panic or sudden Str1ngen-
| cy how would you provide for additional
| issues by the banks, to enable them to con-
| tinue discounts and prevent commercial
| distress?
Al would allow an extra issue equal to
| 25 per cent of the banks capital, condi-
| toned on the payment of tax, at the rate
| of per cent, per annum, to the government
as long as the excess of notes remains out
| standing.
OF what should the banks reserves
| consist?
A.-Gold.
Q.-Shoud any national bank be per-
| mitted TO pay interest on the current de-
| posts of other banks?
Al see no objection thereto. The ques-
| ton is eminently one to be answered by the
experience of the past thirty years, during
which time the practice has existed
Q.-Should deposits of country banks in
reserve cities be authorized to be counted
as a part of the required reserve?
Ayes, to the extent of three-fifths as
the law provides. This proposition is
the result of experience, / believe, and
ought. therefore, to be accepted as settled.
hot he he min al