any day, whether to-morrow or a year from now, I could go to the one who had given me such note and receive from him the money due on the note. All these notes of banks are promises to pay on demand. That which will give them currency among the people is whether or not when demand is made the person who issues them, whether it be a corporation or an individual, will meet that demand.

Mr. JOHNSON, of Ohio. You promised to answer a question that I asked you awhile ago, but did not do it.

The CHAIRMAN. As to whether these notes should be receivable for Government dues.

Mr. ECKELS. I would arrange it by percentages, because at present the legal tenders, as I understand, are accepted for dues.

Mr. JOHNSON, of Ohio. So are national-bank notes.

Mr. ECKELS. No, not for customs dues.

Mr. JOHNSON, of Ohio. They are for internal revenue.
Mr. ECKELS. Oh, yes.

Mr. JOHNSON, of Ohio. Would you still do that?

Mr. ECKELS. Yes, and I would have a certain percentage, basing it upon the amount of legal-tender notes issued by the Government, accepted in payment of customs, because they would be equivalent to gold, being based on legal tenders or Treasury issues, which are on demand always redeemed in gold at the Treasury.

Mr. WARNER. I believe that you suggested, Mr. Comptroller, that the 50 per cent deposit of legal tender notes was not, in your opinion, a necessary security to the currency?

Mr. ECKELS. I do not think it is necessary

Mr. WARNER. It is an alternative between raising money by taxation to retire the greenbacks and——

Mr. ECKELS. Yes, and I think that

Mr. WARNER. I have not come to the point yet, quite. Now, is not the requirement of that deposit of 50 per cent just so much of an obstruction to the free development of the currency and to just that extent a tax upon borrowers?

Mr. ECKELS. I hardly think so; but suppose you get dollar for dollar in exchange for it for loaning purposes?

Mr. WARNER. If you tie up just that amount of money as a condition to getting dollar for dollar, is not that just so much of a tax upon the money which you do get?

Mr. ECKELS. Yes; but the idea is with a great many people that these legal tenders ought not to be in circulation at all; that those evidences of debt ought to be gotten out of the way. Under the plan suggested there is no contraction or expansion in the present volume of currency. There is another consideration: I said it was perfectly safe. I have no doubt but that it would be perfectly safe. But as I have suggested, you must teach the people, all classes of people-you have 65,000,000 of people to deal with, scattered all over the country-and he majority of those who are in business have never known anything but a bank-note currency which is dollar for dollar secured. Now, the practical question is whether you can make so much of a change from the existing order of things and yet retain the confidence of the people in your notes. It is not a sentimental question, it is a practical question. Mr. WARNER. Let me put it in another shape Do I understand, then, that the alternative is to put a tax upon wealth to pay off the greenbacks, or a tax upon borrowers in order to carry them?

Mr. ECKELS. I think it would be a tax on borrowers, if your premises are correct. But I do not admit the correctness of the premises you state.

Mr. WARNER. Is that not the fact?

Mr. ECKELS. Possibly it is. I have no doubt that if the people could thoroughly appreciate the expense that is now incident to this system of things, as they will appreciate it if you issue an interest-bearing bond every four months to the extent of $50,000,000, they would see that the expense on that side is a great deal harder burden than whatever additional expense in the way of interest on this side would be. Mr. WARNER. Instead of taxing wealth to pay the greenbacks we are taxing the borrowers to carry them?

Mr. ECKELS. Yes.

Mr. CULBERSON. I do not understand the proposition that way. Mr. WARNER. I am perfectly willing, if I had the time, to explain it, but I do not wish to intrude on the time of the committee to explain it.

Mr. CULBERSON. I do not think the Comptroller has made that assertion.

Mr. ECKELS. There is one other thing. I hope the committee will pardon me if I make too many suggestions, but there is one thing which I think worthy of consideration in connection with the present system, and that is its uniformity of supervision. I am not saying anything now about the note issues, but simply about the uniformity of supervision. A great many people have a surplus of capital which they can not use to advantage in the communities in the East, and the Middle and the other States where the systems are older than in the Northwestern and in portions of the South. The result of that has been this: That, understanding this uniformity and the general method in banking, there has been invested in banking capital in the West and in the South, by these people who had a superabundance which they could not use profitably at home, a great amount of banking capital. That capital has been so much additional money to these places that needed it for the purpose of developing their natural resources. It has served the same purpose as if that amount of capital had been imported. In addition thereto, the establishment of such banks has educated the people of those communities up to the point of depositing in banks, thereby giving to such communities the benefit of an available capital which, but for the establishment of such banks, would have remained either in the pockets of the people or have been stored elsewhere. So that every dollar, as I stated before, is made to bear a great many transactions instead of but a single one.

I have made several investigations because I thought they would be important to the Committee on Banking and Currency. One was to ascertain the number of depositors in the country having in banks sums of $1,000, under $1,000, and over $1,000, etc., and I found there were almost two million depositors in national banks and four million depositors in savings banks; and adding the number of depositors in State banks would bring it up to about eight millions of depositors. Then I made an investigation also as to the amount of checks, etc., used in retail transactions, and I found that there was about 55 per cent of purchases from grocers, clothing men, and all that sort paid by credit instruments. Then I made an investigation, or looked up a former investigation that had been made, as to the amount of capital which had been invested in the banking interests in the South, the West, and Northwest in national banking. Mr. BLACK. By whom?

Mr. ECKELS. By people in the North and East.

The evidence of the extent of this investment is found in the fact that in 1889 nearly one-third of the capital stock of 520 national banks in

Iowa, Minnesota, Missouri, Kansas, and Nebraska was contributed by Northern and Eastern stockholders, while in Dakota, Idaho, Montana, New Mexico, Utah, Washington, Wyoming, and Arizona more than one-half of the capital stock of 144 national banks was held by nonresi. dent shareholders. In the States of Virginia, West Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Mississippi, Louisiana, Texas, Arkansas, Kentucky, and Tennessee, of the shares of 410 national banks, a little more than one-sixth of the total was held by nonresident shareholders.

Simply to show to what extent capital has been brought into these places in order to develop them, I think this is an important consideration in dealing with the banking question.

The CHAIRMAN. One gentleman invited by the committee to present his views, Mr. Lackland, president of the Boatmen's Bank, of St. Louis, has sent a brief communication stating his views, If there be no objection the Chair will hand it to the reporter to be printed in lieu of reading.

Mr. JOHNSON, of Indiana. Why not have it read to-morrow?

The CHAIRMAN. It will be inserted in the proceedings if there be no objection.

There was no objection, and the letter referred to is as follows:

BOATMEN'S BANK,

St. Louis, December 8, 1894.

MY DEAR SIR: I have yours of 6th instant, and regret very much that I can not appear before your committee in Washington City. I have very decided views on the currency question, and will preface this by saying that I have been in active business since 1837, and have experienced all the ills of State-bank money.

I don't approve of any of Mr. Carlisle's bill for many reasons. The first is that I don't think any bank ought to be allowed to issue paper money. Why should a bank be allowed to put forth their bills payable as money any more than any other corporation or capitalist? In my opinion, it is giving an undue advantage to the banks. Nothing ought to be allowed to pass as money without the broad seal of the Government. It is a function that belongs exclusively to the Government and ought not to be delegated to any other source. They have all the machinery for protecting the people against counterfeiting; besides, are equipped with subtreasuries and strong boxes thief proof, which afford absolute security, besides the promise and ability of the Government to redeem all its pledges.

My idea of a perfect currency is very simple and could be easily accomplished. In the first place, have all the tariff revenue paid in gold; then Congress authorize the Government to issue one thousand millions of legal tender notes, no note under the denomination of five dollars. This issue to be legal-tender and payable in gold at any of the subtreasuries of the United States on demand. With this issue redeem all the outstanding silver certificates, gold certificates, legal tenders and nationalbank notes, as to have but one currency, then have the Government accumulate $250,000,000 of gold, and this, together with the silver now in the subtreasury, to be held for redemption of this new issue. This, in my opinion, would be the very perfection and simplicity of the whole subject.

A good deal has been said in regard to the elasticity of currency. In my opinion this is a delusion. The object of this is when the cotton or other crops come to market that this expansion takes place to move the crops. Now the theory of this is when the crops are marketed that this currency will be returned to the banks and there lay idle six months until the crops are ready again for market. Now anybody conversant with banking business knows very well that a banker is never so unhappy as when he has a surplus of money on hand, consequently that money will be used, and when the crops come along they will be suffered to take care of themselves. My experience is that when the crops come forward the money will be found to move them. Another point in the elasticity of currency is made that it can be available in panics. No legislation can prevent panics. They come. I may say, as a necessity, to purify the commercial atmosphere, and are the accumulation of years of prosperity, and are one of the financial laws for the settlement and readjustment of things, and will occur, in the very nature of things, in spite of any proposed relief.

I have hurridly set forth my views, without any elaboration, and you can take them for what they are worth; but in my opinion they are worth consideration, for

I regard this as one of the most important subjects now agitating the public mind. To adopt Mr. Carlisle's theory of banking would be a step backward, and I would regard it as one of the greatest calamities that could befall this country.

Very truly, yours,

Mr. S. W. COBB, M. C.,

Washington, D. C.

R. I. LACKLAND.

Mr. Parsons is out of the city, and I can not find any other banking gentleman that can spare the time to go to Washington City.

The CHAIRMAN. There being no other business before the committee this evening, the committee will now adjourn, to meet at 10 o'clock to-morrow morning, for the purpose of continuing this hearing. Thereupon, at 4.12 o'clock p. m., the committee adjourned.

WASHINGTON, D. C., Tuesday, December 11, 1894.

The committee met at 10 a. m.

Present-The chairman (Mr. SPRINGER), Cobb of Missouri, Ellis, Cobb of Alabama, Warner, Johnson of Ohio, Black, Hall, Walker, Brosius, Henderson, Russell, Haugen, and Johnson of Indiana.

The CHAIRMAN: Gentlemen of the committee, we had expected that the Secretary of the Treasury would be here at this time, but as it is a little late and time is passing rapidly, I suggest that we shall proceed. I have asked Mr. Horace White, of New York, to address the committee. In pursuance of authority conferred on the Chair, I addressed a letter to Mr. White, and he has kindly accepted the invitation, and is now here. After he has concluded his remarks Mr. Hepburn and Mr. Horner will address the committee.

Mr. HALL. Will the same plan be followed to-day as was followed yesterday with reference to Mr. Eckels?

The CHAIRMAN. The Chair was going to suggest that we follow the same plan as we did yesterday, allowing gentlemen who address the committee to proceed in their own way without interruption. After they are through, any member of the committee can submit questions. The Baltimore convention, at which a plan was adopted last October, has had its proceedings printed; and, if there be no objection, it will be printed in the record of these proceedings..

The Baltimore plan and the plan outlined in Secretary Carlisle's report are here printed in parallel columns:

THE BALTIMORE PLAN.

SECTION 1. The provision of the national banking act requiring the deposit of bonds to secure circulating notes hereafter issued shall be repealed.

SEC. 2. Allow the banks to issue circulating notes to the amount of 50 per centum of their paid-up, unimpaired capital, subject to a tax of one-half of 1 per centum per annum upon the average amount of circulation outstanding for the year, and an additional circulation of 25 per centum of their paid-up, unimpaired capital, subject both to the tax of one-half of 1 per centum per annum and to an additional heavy tax per annum upon the average amount of such circulation outstanding for the year; said additional 25 per centum to be known as "emergency circulation."

SECRETARY CARLISLE'S PLAN.

I.

Repeal all laws requiring, or authorizing, the deposit of United States bonds as security for circulation.

II.

Permit national banks to issue notes to an amount not exceeding seventy-five per centum of their paid-up and unimpaired capital, but require each bank before receiving notes to deposit a guarantee fund, consisting of United States legaltender notes, including Treasury notes of 1890, to the amount of thirty per centum upon the circulating notes applied for. This percentage of deposits upon the circulating notes outstanding to be

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