Show FOU FOlt CURRENCY REFORM question al always always al- al and the tho currency We Ve have tho the poor waS ways with us Each year men who pretend to Know all about the ono one unsolved ed of ot government assail tho the rea reading reading- ing- ing public with plans for Tor the reform of the na nations nation's ons on's currency system And It Is now belIeved believed be be- that in the coming days clars of oC congressional activity some soma reform along wong these lines Jines will vill be effected The doctors of at finance are arc agreed on only onh one thing There Is not enough mono money when time timo of of stringency recur And the they are likely to recur at any time In In average times there thero is plenty plent of or when financiers talc role mono mone money in the country counti But I darn Jarm the volume of money In circulation seem 1 to decrease until there is not nearly enough for the uses of or trade I Of or course cOUlSe in times S of normal business activity actual mone money is not an absolute requisite Credi takes its place And so long as a 3 man has an any sor of security ho lie can get along without seeing money even though his operations run into tho millions Indeed he may do a good deal of or business oven even without securities of an any sort Men len borrow when whon the only assurance the lender has is that the tho creditor can not afford to fail faU in keeping his en en- But when panics come nothing but cold cash suffices So that whatever reform is effected it will have to do with the question as applied to times of at money oney stringency Probably the tho suggestion of former Secretary Shaw Sha-cs' permitting national bankers bankers bank bank- ers to Issue notes redeemable In gold and proportioned in volume to their secured capital is th most attractive of the many schemes that have hae been advanced advance Tho The plan is to require bankers issuing these notes to pa pay to the government a tax o a from three three- to five per cent for all this volume So long as the mone money marl market et is not depressed so long longas as there thero is a 3 sufficient volume of cash with which business ca can cai be transacted there will be no Issue athe o a othe otho the tho extra notes But as soon as the tho interest rate for mone money rises to the fictitious heights common InWall in inWall Wall Van street in panicky times it will pa pay the banker to put out his notes He lie ran lan pa pay the governments government's tax and still have havo a margin of profit from the excessive excessive ex ex- cx- cx rates of interest the borrowers are aro willing to pay him Very probably If It there were such a plan 1 I operation panics would be more snore rare Indeed It is believed by practical financiers that there could beno beno be bo bono no no panic no money stringency when borrower could secure all the money the they wanted at twenty per cent And they have been pa paying as much as forty per cent over and over oer again In New York If It the President shall recommend some somo s such uch J plan again as again as ho he has done in the past congress will now most likely adopt the suggestion and enact a 3 law making provision for relief The Tue effect of ot it would bo be felt throughout tho the country It would not create a a. permanent increase k I of the volume of ot mono money because so long as the f bank of ot issue iesue had hial to pay Imy the tho government tax that tha extra volume would be bo contracted as soon as the instant demand for it and tho the excessive sl o Interest rate became things of the tho past So that when Wall street operators became entangled and found it nece necessary ry to pay ay forty per cent for mone money they could get it without robbing the tho rest of ot th the nation And the unnatural condition with all Its bad effects would bo be confined to tho the place where it originated orIginate s Such a n. measure was before beloro congress last year t. t and failed The members pf of the tho committee o on banking In the last house will bo be in the tho coming congress Assuming that Speaker cr Cannon shall j frame that committee much as tho the last one it ma mabe may maybe be fairly expected that legislation will bo be hurrIed hurrle forward more rapidly ly than before and that It will wil bo ho enacted into law They have stated that they d do clo not see ECO why It should not be bo made mado a law b fore congress adjourns for fOl tho the holiday recess Tho They understand the tho proposed legislation is still what wha tho the bankers of tho the country want In view of th the I developments of tho the last Jast few weeks ed 8 the tho report o otho or of ortho tho tIm twelve Republican members of ot tho the committee committe on the tho proposed legislation made mado just prior to th the he adjournment of or the last session of ot congress beV beof bo be V comes of special interest at this time The TIme pur purpose purpose purpose pose of ot tho the bill tJ tim tho o committee sai said Is to give tho the people of or the United States in som degree at least the benefit and advantage of or currency which Is now the currency in uso use i j l' l pra every evory civilized country In tho the world The Time effect of or tho the bill as explained in tho the of or tho the committee Is this First Any First Any national bank may issue an amoun amount of or credit currency equal to 40 per cent of or its outstanding outstanding outstanding out out- standing secured bond currency whatever that ma mabe may be but this amount of ot credit currency can cap not ex cx exceed ex exceed 25 per cent of Its capital The Tho bank banI must pa pay an annual tax of at 3 per cent upon tho the amount o a this Issue of cre credit it currency in circulation Second Second The The bank may take out an a amount of or credit currency equal to 12 per cen 1 of ot its capital but must pa pay upon tho the amount of thi l issue uc of ot credit currency in iii circulation a a. tax of at 5 per pel cent Third Time Third The present capital of or our national bank banle Is The possible Issue therefore o 0 25 5 per cent subject to a tax of or 3 per cent Is 21 H anti ana tho the possible issue of l 12 per cent I f j i I f subject to a ta tax ta of G 5 per cent Is making a total possible Issue Isue of Fourth Fourth Time The total circulation of or a bank banle IncludIng including Ing inS its cre credit it currency that It now carries again s its Us deposits deposits 25 25 per cent In reserve cities an and 1 per cent in other cities Tho committee recognize no difference between this credit currency and dc do deposits posits subject to check Sixth The Sixth The profit upon this cre credit lt currency wIlho wll wn bo ho precisely the tho same ame as upon a corresponding amount of ot deposits upon which the bank Is payin either eIthel 3 per pOl cent or C 5 per cent as the tho ca case e ma may be beIn beIn beIn In summing up tho the committee recalled then thes facts First That FIrst That owing to our constantly Increasing population and ancl constantly l expanding ing business pro provIsion provision provision vision must be ma made mado o for a largo large annual increase Second That Second That That this tImis Increase can not be silver sll 11 in any ammy form for we shall not purchase another of bullion and that It would be unnecessarily expensive cx ex pensive even eyen if It we could rel rely upon an supply of or gold Third Third That That That our present secured bond currency while safe safo is just as expensive as gold old and bears no relation whatever to business needs being a 3 speculation bond-speculation scheme pure puro and simple Fourth That Fourth That tho time true truo credit currency pro protected protected as provided In this measure being boIng as goo as gold itself 3 adapts apts Itself always alwa's and ancl under all clr dr to the tho ever varying varying- needs of or the tho peo pee pic plc and Is as ns economical as a sound credit can b bIn bin bin in any form torm A single lo conclusion alone is left as tho the result o a searching and exhaustive examination of presen con conditions condition and running back for more moro than tw hun hundred re years ears and that is that we need and mus and will have sooner or later credit currency pro protected protected protected b by a proper reserve and re redeemable on demaud do de domand domand mand maud in gold coin That time the proposed currency is safe safo be beyond ond an pera peradventure venture your our committee feels confident Th report of the controller shows sho that all the cre creditor of tho thu national banks s that have havo failed falle have ha receive 78 per cent of the tho amount due duo them thorn only quarter one of tho the amount duo an any not hol holder er who is a general cre creditor of ot tho the bank woul have to be Dc paid out of th time tho guaranty fun fund But th records of or the time controllers controller's office show that a n. tax tm o 0 one fifth of 1 I per cent upon all tho the notes of or th national banks s would have paid tho tIme notes of th failed banks In full Therefore tho the C G per con cen guaranty fun fund which would bo be called upon to pa only one fourth of this amount would last Jast Just 10 years Such a condition as that now prevailing surely can be bo p prevented c it Is to bo be hoped that the time lesson of or 1907 will not bo ho wasted |