New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-09-25
THE QUESTION OF THE CURRENCY.
ALLEGED DANGERS OF THE PRESENT SYSTEM
THE DIMINISHING BANK REsERyEA

THE QUESTION OF THE CURRENCY.
ALLEGED DANGERS OF THE PRESENT SYSTEM
THE DIMINISHING BANK REsERvEs y,
To the Editor Of The Tribune.
Sir: 1t is we'll to take our instruction on tho CUT.
rency question as go along Actual experience
from season to season and from year to year IN
the best teacher, for It deals with facts and not
with theories. The last summer and present fall
furnish fruitful lesson. We have seen sound
money victory won. a confdence-inspirng tariff
enacted. bountiful harvests gathered and an adj
vancng market secured as the result Of trade
conditions at homo and abroad. We have seen an
easy money market, whose seductive zephyrs have
blown softly that have almost thought We
Of reaching tho desired haven before
another winters storms.
There u.s. however. cloud on the horizon. II II
the diminishing bank reserves. The demand FOR
money to move the crops which is the most nat.
ura, heathfuI aud legitimate to which cur
rency can be put. Is met by what? Why. by send.
ing out into the country broadcast the most val
liable part Of the assets of the banks-their re-
serves Every week is looked forward to with
apprehension by the banks. for the simplest calcu-
lation shows that few more weeks drain like
the last will bring US face to face with sharp
spasm in the money market The call from the
country is for any currency that Is absolutely good
and receivable everywhere at par Nothing less
good is wanted and the banks have nothing to
send but their precious reserves
But they congratulate themselves that they are
preparing for the future by stopping discounts to
business houses and putting the money into call
loans TO have their funds near at hand
What does this but, first, restriction OF busi-
ness and. second. the prospect Of great liauida.
ton OF securities to supply the banks with tho
currency they need?
This is our system Of banking as 1t stands at
present. Actual experience has shown us again
only be safe when 1t Is SO dull that no one Is
making any money; and that active legitimate
tect the reserves Of our banks.
bank currency our country has ever produced said
In mis- speech before the Senate on February ..
would be placing us below the general level OF the
Intelligence OF civilized States. to admit that wa
bank circulation and OF avoiding at the same time
It's dangers.
addition to It's present admirable provisions. SO
that when banks throughout the country are called
on for currency 10 move the crops they may be
able provide il without impairing their reserves.
TO foster business. currency must be provided; to
maintain stability. bank reserves must be kept un:
dmnsned hnsn nese w ywI be- answered
II the prominent clearing houses throughout the
country were Incorporated under act of Con-
eress for the purpose they could act as trustees
for the public, and hold bank assets pledged for
currency issued thereon and thus cearins.houss
would be absolutely safe. At the same time. this
facility for procuring currency would protect the
monetary panics from whose storm areas we have
not even yet emerged. Such a proposal has q like
in some respects 10 the plan for an excheQuer
The value OF a perfect currency system, which
can only be attained by some adequate provision
OF Government" is so great that Webster did not
overstate 1t when ne said that II such system
could be enacted and given fair trial, 1T Will be
admitted by the whole American people to 5s tha
in this country. the Constitution only exGepted;
Som,