Kansas City daily journal. [volume] (Kansas City, Mo.) 1892-1897, 1895-01-04
HOW TO REFORM THE CURRENCY
Colonel Leighton, of st. Louis, Talks to the
Merchants of Boston About 1t.

Merchants of Boston About 1t.
Boston, Mass. Jan. S.--The annual ban
quet OF the Boston Merchants Association
occurred at the Hotel Vendome tonight
with over 200 guests present At the head
OF the table sat the president OF the asso-
citation. John a. Lane. ON his immediate
| right was Hon. A. r. Hepburn, president
Of the Third National bank. of New York
Thomas G. Catchings, congressman from
Mississippi, and Hon. William Dodsworth,
of New York. AT his left sat George f..
Leighton. president OF the Commercial
Club, OF st. Louis: Hon. Roger Wolcott,
| lieutenant governor of Massachusetts, and
Hon. William Il. Barrett congressman
elect from Massachusetts.
Colonel Leighton said the country Is now
fairly In accord upon certain fundamental
propositions that our currency system.
both in It's coin and paper. Is In the highest
degree faulty; that we have reached the
end OF patching; that the reform must be
| comprehensive: that our banking system
| has, in its present form, in its relation TO
the currency at least, reached the limit of
DEVELOPMENT and hence of extended conf
| mercial usefulness; that the attempt of the
government to carry on n note issue busi-
ness IL u failure; that the fault is not
merely one of administration, but Is funda-
mental to the system itself. that legal ten
der notes ought to be restored; that we
must create a new system of bank currency
founded upon bonds at par or founded upon
capital paid in and secured primarily by a
guarantee fund contributed by all, and sec
ondly by a first lien upon assets. No ade-
quate legislation upon such a complex ques-
ton can be perfected In a hurry. Financial
reform should be placed in tr- nands of a
commission embracing the highest expert
ability of the nation and representative OF
all its varied commercial requirements.
"The small towns must have small banks.
Their risks are small and may be as well
guarded and distributed as in larger banks.
Under the present limitations state banks
are a commercial necessity. Unless the
national system can be extended to meet
the wants OF the smaller or less populous
communities as l believe it can. with per-
feet safety and advantage, the financial
need must of necessity he filled more and
more by the state banks. and their claim
for all equal rights in the issue of currency,
If the state chooses to grant 1t, however
unwise we may consider II, is one which
you cannot answer and sooner or later must
concedc.
ut would be worthy of inquiry by COM
mission. whether the branch bank system
could not be made a permissible feature
of any national system.
THE problem politicians and some bank
ers are trying to solve Is how to recover
from our folly without paying the penalty:
get rid of legal tender notes without pay
ing them get out of our silver speculation
without loss; maintain national credit while
appropriatng a solemnly pledged reserve
tions and individuals have been looking
for just such an escape since the world be-
gan. and have not found it. l don't be-
iieve we shall.
such a commission ought not to evoke.
1t does in this country. the Jealousy of the
legislative body. Its office would be simply
constructive"
Colonel Leighton said with reference to
mooted plans for the reform of the cur
rency:
THE assumption seems to be made that
in any plan to he adopted the currency
must be based upon capital, following the
general lines of the Canadian system. l
am not prepared to say that this may not
be necessary. and even desirable but / do
not think II admits of question that, un-
less the government is prepared to give its
absolute guarantee in the first instance to
such an issue, currency based upon
low interest bearing bond created by the
gradual funding and complete retirement of
the legal tender and the Sherman notes.
thus setting the reserve of Sl00.00O,00O free,
would be preferable and would be currency
of a higher order.
Speaking of state banks in an East
ern atmosphere" said the colonel, ''is like
waving a red rag at bull" Nevertheless,
he proposed to tell Easterners that they
know very little about the state bank of
deposit and discount, the strictly CONNER
cial bank as ii exists in the West and
South. 1t is not the mushroom growth it
is so often styled. 1t Is a perfectly natural
and healthy growth In the Western and
states, in no sense hostile to the
system but supplantinG 1t, and
designed to meet commercial conditions
which the national banking system does
not meet at all under the present limita-
tions as to minimum capital.