Custer weekly chronicle. [volume] (Custer City, S.D.) 1890-1931, 1897-01-09
PREPARE A CURRENCY BILL
The House Committee on Banking
Will Go to Work.
Reed Suggests Action--Walker Talks
of the Remedies He Advocates
and His Plan for Cor.
recting Errors.

Washington, Jan. Representative
Walker OF Massachusetts,, chairman Of
the house committee on banking and
currency, will make a determined effort
to perfect some legislation OF the cur
cency during the present session, nc so
much with a hope that 1t will become a
law as with the intent of having it
ready for action by the house during
the extra session, while the tariff bill Is
in the nate January 6 Mr.. Walkers
committee will a series Of
meetings and begin the preparation Of
a bill. This action will be taken at the
suggestion Of Speaker Reed.
What are the prospects Of legisla-
ton in this congress and the next to
correct the alleged existing evils in the
banking and currency systems?" was
asked.
1T will depend upon the leaders Of
the dominant party. The banking and
currency committee during my eight
years service on 1t has practically had
the opposition of the leaders Of the
dominant party under both democratic
and republican administrations of the
house. Beginning with h days of
sam hdiludll, Tie ISBlSldllOh VI LAG
house has been concentrated more and
more in the hands OF a few men. While
he form is preserved of appointing
ifty-eight committees who prepare leg
lslation, and who work l~aboriously,
very few committees get any OF their
measures before the house. Unless the
few leaders are earnestly in favor of
legislation 1t cannot be had. A common
remark in the house is that a large pro-
portion OF the house might as we'll go
home as to be here"
What are the most vital defects in
the governments present currency sys-
tenn"
THE most vital defect is that there Is
a government system. Banking is Of
such a nature that a government, as
such, can take no part in 1t other than
tina of supervision unless the govern
ment is a banker, with all the service to
the public and risks of a banker. The
fact is that the bankers of this country
now have TO carry every dollar of the
existing currency, as compared with
banks in England, France and GerN
many, without a cents profit to the
bankers, while in other countries where
| the currency uSSu ny NlN PVpl'iN - PNN'
In circulation by the bank, the bankers
that issue 1t make a profit upon 1t of
whatever their rate OF interest on loans
and discounts is. II every dollar of ex-
lsting currency was put in circulation
by the banks of this country the banks
would receive about $50, 900, 900 income
on it. That would mean that they could
reduce the rates of interest they charge
by nearly one-third and pay their stock
holders the same rates as now
What would you recommend to rem
edy these defects?"
THE people nave become so accustomed
TO the currency being Issued by the gem
eral government, and the constitution of
many states forbidding state banks to is
sue 1t, 1t IL not practicable to depart from
that custom. But as 1t is impossible for
any agency other than banks to put cur
rency in circulation among the people and
make it's current redemption safe and
practically free from expense, congress
shiu.d put the current redemption of our
g~reenbacks upon the banks pro rata to
their capital and compensate the banks
for this service. which, by the way, would
really cost nothing as compared with pres
ent conditions, by allowing the banks to
issue an amount of currency equal to the
sum of g~reenbacks of which they assume
the current redemption. This would make
a profit TO the banks Oh the total cur
rency issued of more than three times,
taking the country over, what they can
make by issuing 1t with the use of bonds,
as required under the present law"
But how would you make the currency
as safe as our present currency, which is
guaranteed by bonds?'
,.Tha vary small tax NJ . mills on a doll
lar annually, retaining the same provision
as now-that the assets of the banks in
case of insolvency should be used first to
pay its currency notes-would make a
safety fund In the United States treasury
OF an amount many times more than the
losses could be, as shown by thirty years
experience, l would have the government
guarantee the payment of every dollar OF
currency issued, which would be equiva-
lent to its being secured by bonds"
What vital changes would you recon-
mend in the laws regulating the national
banking SYSTEM"
First, l would release the banks from
an obligation to secure their currency by
the use of United States bonds That re-
quires the bank to put in the hands of the
government for the safety of their cur
rency Ill per cent of their capital to each
dollar of currency issued when they begin
business. What l suggest is hat the gov.
eminent take 100 per cent of their assets
to pay each 100 per cent of their currency
notes when thdey go out Of business
With the 2 mills tax for a safety fund, the
latter is as secure as the former. Further.
more, the use of bonds violates every prin.
ciple of banking as it is understood In ev.
cry other country than this. 1t was adopt.
ed as a forced loan upon the banks. Had
IL been abandoned Immediately after the
civil war, and had the government aban,
Sonea main,a.nnnS d soio reserve 10 re-
the banks, where 1t belongs and where ii
is in every other country, we never would
ton, nor the free Coinage of silver dues.
ton, and the like questions, which will
come to vex the country until the govern
ment goes out of the banking business"