The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1897-04-20
FINANCIAL ILLS
NEED A REMEDY
John p. Irish on the
American Monetary
System.
More Equal Distribution of
the Purchasing Medium
Required.
Discussions In the Convention of
the California Bankers
Association.

invitation, from John P Irish, being by
way of report of the work of the COM
mlttee appointed by the Indianapolis
Monetary Conference to urge upon the
President and Congress the necessity of
some action looking toward a better dis
tribut1on of money throughout the coun-
try.
The address was listened to with
marked attention and referred 10 a COM
mittee.
The convention is being held in the as.
sembly hall of the Concordia Club. Presi-
| dent Rideout presided.
Treasurer George w. Kline of the
| Crocker-Woolworth Bank made his report
to-day as did also Secretary r. NJ. Welsh
OF the San Francisco Savings Union.
Papers were read by E. B. Pond of the
San francisco Savings Union on "Inter-
est and Taxes; by Ben c. Wright on
Currency of the Future; by Charles Alt
schul of the London. Paris and American
Bank on Popular Prejudices' by hon.
II. w. Magee, Bank Commissioner. on
1.-THE Bankers Responsibility and Re-
Iationship to the Public; by Frank Fl.
Gibbon of the First National Bank of Los
Angeles on Remedies for Prejudlces
Against Banks; by J. Z. Baker of Ala
media on 1.-The Banker and the People"
Colonel Irish was introduced at the
afternoon session. In part he said:
The banking and currency legislation of this
country since 1852 is the result of emergen-
cies, met by hasty &C ton. These emergencies
have been of various kinds. Some of them
arose in the war and the readjustments which
followed. The most serious errors, however
have their radius in emergencies purely par.i-
san. OF these the compromises of the several
rounding acts are examples.
The net result of haste and compromise is a
system OF financial legislation unbecoming a
modern commercial nation. Our National
banking system has been outgrown as a
means OF distributing the surplus capital OF
the country with fair equality, and is, by law,
compelled to be instrumentality fo- con-
tracing the currency at the very time when it
should be expanded. The vice of the system,
however, by no means closes the eyes OF
thoughtful men to its virtues. Its bill
holders sleep in safety while banks fail and the
record of liQuidatons shows less percentage
of loss to creditors than under any other sys-
tenn we have had. Wisdom dictates that we
discard the vices OF the system and expand it's
virtues into a scheme that will align with
scientific princi pies and give TO great people |
as good banking facilities any in the world |
We are familiar with the empirical PROPOSE
tons in finance which have held public at !
tention and have seemed to attract nearly |
majority of our people. The student of cur !
rent affairs who passes over these propositions |
without profoundly inYestig ating them snubs |
MS Outy. our CounIry1nen never act without |
reason. We are not willful or insncere |
people. We make no complaint without |
cause and if we listen with favor to an map.
plicable remedy, it is because a better has not |
been proposed. The mem Der of Congress from |
Iowa uttered cry pinched out of the people |
by necessity, when he declared that 1--WE need |
a more and fittener currency" That he was |
ignorant and demagogue was evident when |
he proposed to expand the currency by max |
ing any and every mans note of hand legal |
tender and irredeemable That the people |
felt the necessity to which he gave voice was
proved by two elections to Congress in spite
OF the appalling folly of the remedy he sug-
gested.
The popular proposition to warehouse per-
ishable products and receive for them cur
rency certificates, while infirm a remedy is
valuable as a symptom OF the inadequacy of |
our banking system as just distrI Dutor OF |
surplus capital. Rising in the scale toward a |
legitimate system is the proposition to return
to state banks OF issue. These all have COM
mon origin in a necessity felt by the people
The monetary conference held in Indianapo-
lis on the 18th OF last January was a conspicu-
GUS recognition of this necessity. 1t was a
convention of borrowers, not bankers About !
thirty States were there.
With interest at ~ per cent in New York |
City and 10 in Texas 1t IS evident that our |
means OF distribution are faulty The farmer
1s.a business man. 1t is old saying and |
wise, that every good business man can Ditch |
use more m oney than he has. The merchant |
or manufacturer, in close touch with the |
financial centers, has ready access to surplus !
capital and can use his credit cheaply and
conveniently. The greater the congestion of /
capital at the center the cheaper his use of IT, |
But at the time when his opportunities are |
greatest those OF the farmer or planter are the |
least. He, too, must use his credit. The space
between seedt and harvest must have pro-
visions. He must carry floating debt like
me merchant and manufacturer bur he is de- |
priv ed OF the facilities 10 which they have ac-
cess.
Ii is said. with more than a shadow of truth
that farm cannot stand 10 per cent interest
AS matter OF fact they 60 stand much more
Denied the cheap ana ready use OF credit the |
planters OF tobacco. rice and cotton in the
South, the wheat and corn farmers farmers
VINO raise hogs and cattle in the Middle States
and our ranchers in the West by com mission
make wasteful and inconvenient use of their |
credlt Ihey are carried by the country store |
Keeper, whose expert ence warns him to in |
demnify himself by an average advance of 25 |
per cent III prices and interest the running |
account His losses are not small; he is moi |
speedily enriched. but is equally with his |
debtor the victim of an uubuslness like system
winch mas a cause that should be removed.
III leads hnaily TO an accumulated credit that !
must De disposed OF by mortgage which rep
resents 70 per cent more than value received
ana s pears rom twice to four times the interest
that should be paid upon business accom-
notation. In this way unbusiness-like meth
OBS are cultivated amongst the producers and
their complaint that they work for somebody
else is so far justified al to deserve our sym-
pathy and our effort TO remove Under i'm
proved distribution that large class of business
men who are neither merchants manufac-
turers, nor professional men would have ac-
cess TO the use of their credit upon equally
favorable terms. They would be trained in
more exact business methods, would be less
often mised into speculation by the dream of |
reco upment. and. above all, would feel them
selves at least part of the great business COM
munity, equal citizens OF the commonwealth
OF trade and enterprise, and not hewers of |
wood and drawers OF water. And when the
pied piper OF the tune OF the dema gogue an
pesred they would not follow 10 destruction
like the gaping children OF Hameiin.
But these are not the only sufferers from the
torrents Oh our inadequate currency and
hSp fhn
est foreign trade in the world, and carry it on
under conditions of peculiar difficulty. II an
American merchant buys cargo in Yoko-
hama, Hongkong. Singapore, Calcutta, the
lonian Isles, Valparaiso or Rio he settles for
1t in London, and its value is expressed in
English money. That is to say that the iDex-
orable law of trade selects for the Gle airing.
that has the most scientific aud stall Bile system
OF currency and banking. Our merchant in
erect deposits the price of his cargo in Lon
don 10 the credit OF the seller. In its final |
analysis commerce is the exchange. For |
every cargo that leaves q country finally a |
cargo comes back in exchange. The nature of |
trade is that the invoice and bill of exchange
seller III japan, China, the Straits, India or |
Brazil OF whom we bought, having our deposit |
10 his credit in London, uses il, directly or In
directly, TO exchange for the Complementary
cargo which completes the exchange Of COM
IN oddities.
These conditions terminated in England !
wnen Patterson founded the Bank OF England |
smote mixed and unstable currency and |