The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1897-11-15
HORACE WHITES SCHEME.
HE HAS FULL PLAN FOR RE-
FORM OF THE CURRENCY.
ment Of Greenbaeks, and nm In
crease of Bank Circulation
Based on Cash Reserves Held.
WASHINGTON. Nov. H-Mr. Hor.ve

ton OF an elastic banking currency. based
upon business assets. He declares that
the silver dollars should be redeemed in
gold. and that In a financial sense there
is no difference between the several forms
OF subsidiary circulation. of which silver
dollars are part. The latter. he declares.
are metallic greenbacks. He does not be-
iieve that the amount OF circulation pre-
scented for redemption would be any great
er than at present. II silver were redeem
able il gold. In answer 10 the questions
regarding the maintenance OF the gold
standard, Mr.. White says:
II would recommend the redemption.
retirement and cancellation of all legal
tender notes as a first step. Probably the
silver certificates and silver dollars would
thereafter remain al par with gold, like the
outstanding thaIers Of Germany. and
would not be presented for redemption in
any considerable amount, being needed,
like the smaller silver ccins, for circula-
ton in retail trade. After the retirement
OF the legal tender notes we should be able
10 see better what TO do next"
Question-For the purpose Of facilitating
the use OF existing silver currency. what
do you recommend as the smallest de-
nomination Of United States notes and
bank notes which should be put into circu-
iatIon?
Answer-Ten dollars at first, and that this
be made a matter OF experiment, the OBJ
ject being TO determine the dimensions of
circulation which will absorb the cur
rency leaving the rest to bank notes.
In regard to the legal tender notes Mr..
Whites views are as follows:
Question-On what grounds. IL any,
would you favor the gradual but entire
withdrawal OF the treasury notes of 1850
and Of the United States notes?
Answer--On the ground that there is no
certainty and can be no certainty that the
government will always redeem them in
gold Redemption or non-redemption Is
a political issue. 10 be fought over in
elections and must remain so as long as
this kind Of paper is outstanding. Mere
uncertainty is always a drawback to busi-
ness prosperity. Failure Of redemption
would be bankruptcy. public and private.
Off it shall be decided to retire the
United States notes, how can II be done
without adding 10 our bonded debt?
A.-By cancelling all that are received at
the treasury for taxes or presented for
redemption, or also received over and
above the governments necessary dis
bursements.
Q.-How in that case can provision be
made for maintaining an adequate amount
of currency for purposes of business?
A-Provision will be made automatical-
iy in various ways, viz:
by retaining the goiu pfOuuceu ny
our own mines.
2.-By importing gold from abroad.
s.-By the issue of national bank notes.
Prior to the civil war the government
gave itself no concern about providing cur
rency for purposes of business, yet the
supply was never deficient.
Of II be thought inexpedient to fund
the United States notes, how can they DE
redeemed, with an assurance that 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 1855. The process of taking out notes
might be more expedient. That is a mat
ter of machinery and OF legal regulation.
II is perfectly certain that IL there is a
profit In issuing bank circulation it will
be issued II there is no profit in 1t, we
must conclude either that the law needs
amendment, or that the demand for cur
rency is slight.
Mr.. White believes that in process of
time II will not be possible to rely upon
national bonds as security for bank note
issues. because Of the extinction of the pub
lie debt. In reply 10 the questions
whether any safe and practicable plan can
be devised for using other securities he
says he thinks not II should not like 10
be charged with the responsibility of Sc
lecting the securities or choosing between
he different kinds offered"
He believes that 50 per cent. of the paid
up and unimpaired capital Of the bank has
been tae limit of the note issues and that
a cash reserve should be held for the re-
dempt!on OF the others the same as now
provided for deposits. viz: Twenty-Five
per GENT. in reserve cities and L. per cent.
-i@ewhere, with the right 10 keen three
af'hs Of the said = per cent in the reserve
cities. There Is no difference between de-
post Liabilities ana note liabilities so far
as the banking of il Is concerned, sand no
ason why the reserve should be greater
or less for the one than for the other The
reserve should consist Of gold and should
nc in the vaults OF the bank, or In a clear
ng house depository
other questions regarding the hest MAN
iof eSt1oiisb!ng and regulating banking
currency are answered as follows.
In general, ! approve Of the plan adont-
II ny the American Banking Associatjo,,
4 baltimore IL 1894. commonly known as
ne baltimore plan. All bank notes shouJa
re Tedeemabic AZ the commercial center -
soe country and also ~ their own eonnters
Ger hSps. an exception should h. ma,
~ me Pacific coast on account Of the ate-
thrf- The requirement. of redemnflon A.
3e athNs counter was found TO work no
't'-ti ths SUFFOLK bank system
Si"ee rs much specie was clISto,y4xr{l,. 40.
posted in the country banks as was cs,,as
~ aenositorS or note holders
Q-Nhat II anything bevond ,ro,.t-s,,,,
i'F immediate redemption. * needed for
etu'ing me elasticity Of notes ISSUED "a
periods Of normal buslnesse
"'Nl> ~ ISSUE notes promptly Is as
needfUl as prompt redemption
@-ln times IF panic or sudden e.r,r-
n
ional issnes by the banks "a e.,abgs 49,,
q" continue discounts and prevent err
merciai fistress9 NV'''-
Al would allow an extra iseue - "
ser cent. Of the banks capital. ronstsior<d
upon the payment of tax AZ the. rata -
per cant Per annum 10 the government
outstanding
or what should the banks. reserve
A~Gold
Q--Shor.d any National bank - nar-
alfted 70 pay interest on the current DE-
posts of othar hanks?
Al see 80 objection thereto The amos.
ton rs eminently one to be- answered nv
she experience q the has; thirty wears
during which time the practice has ex-
is1ed
Q.-should The deposits ~ country hanks
IN reserve cities he authorized TO be- count
FL as par; Of the res@rvee
A.-Nes, 70 the extent - three-3fths as
The Law TOW provides. This IS the result
of experience. l believe. and ought there
fore. IN be accepted as settled
Q-What should BE- the minimum CAM
'al for National banksF
Al am inclined 10 favor the present
limit 4 So assa
Q.-Shou3d the existing "a par cent. tax
1n state bank notes be repealed?
A-NA