Show IA tAW VIOLATED ROOSEVELT BY Chairman Fowler of the House Banking and Currency Com Corn Committee Committee Assails President BAD MATTER MADE WORSE NO POSSIBLE EXCUSE FOR BOND ISSUE New York YOlk Nov No Representative 28 e Charles harles N Fowler chairman of the he house committee on banking and cur currency currency rency reny today gave out the following statement regarding the issue of Pan Panama Panama Panama ama canal bonds and treasury certificates cates Personally said Mr Fowler and from a party patty standpoint it is unpleasant ant for me to disapprove the action of the Republican administration but my study of the questions involved and my duty to the public compel me to toot set ot forth the tte reasons why the action of the administration is surprising ex ox extraordinary extraordinary unwarranted and most un unfortunate Unfortunate fortunate Butted In After Crisis Had Passed On JOn Friday November 15 the crisis of 01 the present currency panic had been reached and successfully passed through the th splendid achievements of the American bankers in bringing gold goldI I to this country to the extent of about at a very great cost to them nos for it was purchased generally at it a premium of 01 about 2 per pel cent and also by responding to the business ne no necessities of the various localities in is issuing issuing Issuing suing clearing lea ring house houfe certificates and cashiers ashier checks in denominations of Si 1 2 5 and 10 as well ivell as the larger de denominations nominations At this juncture when I the financial and currency situation was already alread well in hand the administration tion intervened against ag the opinion of ot the best Judges of the situation There Therefore Therefore Therefore fore primarily tho the effect of at the gov governments governments action must be a most dis die disturbing disturbing factor although the bankers of at the country may prevent any serious consequence from the movement Did Not Need the Money In the second place the government did not need the money as it has to its credit which is taken from the people through taxation There Therefore Therefore Therefore fore the debt of the government should not have been Increased in increased Increased creased especially when such sueh increase of debt is clearly in vio violation violation lation lution of the intent and purpose of law Jaw and in the third place because the action atlon of the treasury is ia a most violent of economic law Jaw for which h the people must yet pay the penalty First let us ii deal enl eal with the cf of 2 per cent of Panama bonds which are to be used as the basis of additional bank note circulation The government has as stated in Its treas treasury treasury treasury ury or to Its credit and therefore it did not need the proceeds to pay for the thc construction of at the Panama canal or orto orto orto to meet the current expenditures of the government And even if it it did It could not take any part of or the pro proc c eeds of these thee sales for the present as the banks could co d not afford to exchange their reserve money for bank notes Bad Matter Made Worse And further because instead of there being a margin of at gain there must necessarily necessarily be an actual loss of 01 capital in the transaction Again by this hy hypodermic hypodermic hypodermic injection of another of fixed Immobile currency into our sodden fOdden mass of bank note c circulation which never responds to the varying conditions of at commerce be because because because cause not directly related to the busi busl business ess ness of the country we have made abad a abad ahad bad had condition worse Think of pushing further a principle of currency expansion expansion sion although our business was constantly expanding from 1882 to 1891 fell from fram In 1882 to in 1891 Why Simply because it was as unprofitable to hold the bonds for that purpose Aye a principle which has haa proved its utter lack of to our needs since 1891 by showing an actual contraction c during the fall of many of the intervening years ears and an actual expansion during the spring months of many others I Reaction Sure to Come I Again we shall find when the reaction reaction tion comes and the changed condition Is reflected d in our reserves beginning about th the he of January if not earlier and increasing rapidly during the I spring months until the reserves in our banks will ivill probably exceed those tho of any I preceding year since 1900 that this very if unfortunately the in increased I creased debt shall be converted into bank notes that these bank notes will I not disappear and he automatically re ro retired retired tired but that they will find a place in the tho reserves of at the state banks in inthe inthe inthe I the reserves of af the trust companies and to some extent though they have no I right Tight there therein in the reserves of the na national n banks Will Drive Out Gold VOR mark this That every bank banknote banknote note nate held as a reserve will displace just that amount of gold and drive it out of the country That Is just what our silver r purchases did from 1870 to 1894 The money always has and in Invariably invariably variably will drive out the better There will be upwards of one ane per cent profit on the circulation taken out on these bonds and und so the banks anks will force them out persistently ad aid the counter counterpart counterpart counterpart part will be that noiselessly Imper Imperceptibly imperceptibly n but with absolute certainty the gold will give place to the Continued on Page 2 LAW VIOLATED BY ROOSEVELT Continued from Page age 1 cured to extent that that it finds Its way Into the th reserves of the var various ious ions lioUS financial fina of o the tM coun try ry Striking Contrast During the next few months you will note this striking contrast between these notes and the credit currency expressed in clearinghouse certificates and cashiers checks that while notes will remain to perplex and curse us in the future by not lot contracting to the extent of a aI I single dollar from January to July ov ev every overy ery cry single dollar of or credit currency in inthe Inthe inthe the form torm of clearing house certificates and cashiers checks ch which have hac come into existence naturally n with a great urgent need will disappear ar when they are required no longer Certificates Unlawful Today we have in the banks and therefore by any fair fall in inference inference ference or construction of the statute the sale of ot these those certificates is unlawful unlawful unlawful ful Again I am not aware of any stat statute statute statute ute by which they can be construed to be a lawful basis for bank note cir circulation circulation circulation However this may be the most unfortunate incident to my mind is the fact that they are to be printed in the size of our present bank bills and coin certificates evidently with the In Intent Intent intent tent and purpose that they would cir circulate circulate circulate as currency Under the circumstances I assert that tho the action of the administration was certainly surprising to any anyone one who was at all familiar with v the bank bankIng banking banking Ing situation on Friday Nov No 15 con considering considering considering the fact that the government had in cash on hand and would not have any more to speak of Immediately after the bonds were sold It was certainly extraordinary It was unwarranted In increasing the national debt and It was most unfortunate from every ever point of ot view especially economically Effect Will Be Disastrous I believe that the effect Is bound to tobe tobe tobe be disturbing to the banking conditions because the transaction is a forced one and has no direct relation to the com corn commerce commerce merce merco of the country as did the im imports imports imports ports of gold on the part of the banks as this operation was related to our coming exports and a strictly business transaction transact ion ionI I am confident that the effect upon the situation will be most disastrous economically For the honor of the government but more particularly and especially for the welfare of ot the whole country I sincerely hope that not a single 3 per vel percent percent cent certificate will be issued and that the administration will have the cour courage courage courage age and patriotism to withdraw the of offer offer fer for of the 3 per cent certificates certificates certificates Immediately thereby relieving relievIng ing lug the present situation and protecting the people against the future conse consequences consequences consequences of ot a most grave and serious mistake |