The Saint Paul globe., 1898-09-16
IDEAL BANK SYSTEM
CONGRESSMAN M,CLEARY TELLS
WHAT HE THINKS 1T
SHOULD BE
EXPLAINS HIS CURRENCY BILL

the National Currency Confer
ence, In Session at Omaha
OMAHA, Sept. 15.-The third and last
uay or the national currency conven
ton began with a paper in support of
an al unlimited issue of irredeema BILE cur.
Lelcy py the government, by Gen. \.
L warner, president of the American
Bimetallic union.
Congressman Charles II. Hartman ~
Montana, presided
President Wills, Of the Kansas Aeri
cultural college, led off this afternoon.
arguing for public control of money.
L. H. Weller, Of Iowa, followed. say
ing ne was proud of his position as q
fiatist
A paper by William c. Cornwall, of
BuHalo, N. Y, on deposit currency was
read by E. v. Smalley, of st. Paul, sec
Iretary of the National Sound Money
league, showing that deposit currency
consisting of bank notes has Increased
from 81, 100, 100000 in 1875, to $3 400 OOO 900.
Ihls evening A. Wright OF Chicago.
elaborated upon plan for free bank
ing system without government super
vision.
Time was allowed Congressman Nc
Cleary to give his reasons for ideal
banking system. Mr.. McCleary said:
I'VE are told, and told truly. that the
il has now. We are told and told truly, that
that every dollar Of that money is today as
good as gold. Why, then, should there be
any talk of currency reform?
1T is true that nation we have a
thousand blessings to be, thankful for. a
thousand achievements to be proud of. But
progress is the law Of life Every one be-
Heyes In progress, but the question recurs:
What is the necessity Of any special effort in
form?
Two great facts stand out impressively.
First is the fact that in 1896 more than six
million American citizens voted for change
IN our monetary system. To those of US who
have faith in and respect for American citi-
zenship this fact Is in itself suggestive.
After the monetary battle had been fought
out and the verdict Of the ballot had been
rendered. a notable convention Of business
men from all sections of the country, assem-
bled at Indianapolis to devise ways and
means for the reform Of our currency. In
that convention were representatives of about
two hundred boards Of trade. The men COM
posing the convention were, almost without
exception, opposed to the change voted for by
the six million above referred to. Thus We
see that not only among those who oppose,
but also among those who defend, the gold
standard is recognized the necessity for a
reform OF our currency.
Briefly stated the problem of currency
reform is to furnish to every community in
is beyond question, ample in quantity but
not redundant, responsive to the demands
of business in each community; to equalizs
and lower the rate of interest throughout
the country; to make bank failures almost
unknown; to minimize the severity of com
mercial crises, and Danish the possibility Of
''Is it possible to bring about this condition
of affairs? Is it possible to equaliZe inter
est rates throughout our vast domain? Most
emphatically yes. In France today the in
terest rate at the foot Of the Pyrenees is
the same as that at Paris. What France
has done, America can do. But some will
say and not without reason. France is an
old country, of comparatively small area,
with practically uniform conditions through
nrY% i%1 yry1,;I
there is such diversity of conditions in the
different sections that we cannot expect any
thing like uniformity of interest rates" To
these l answer by pointing northward to
country OF much less wealth than ours but
Of territory almost as vast having, Ike
sections and sparsely-settled communities IL
others. And yet in Canada the interest rate
is only from to per cent higher in tht
than it is in the city Of Montreal. What
Canadians have done Americans can do
rs it possible to lower very materially the
interest rate in the United States? l answer
that a. commercial rate approximating 2 per
cent is for this nation entirely practicable
within the comparatively near future. Two
per cent is the usual commercial rate of
France and England today. Indeed, here in
the market report of the Minneapolis Trib-
une for Sept. 2, under the head of 'London
Money I read the following: Rate discount,
open market for three months bill, Ia to
SOur recent national loan is full of sug-
gestion as to the possibilities of interest
rates. me government wanted to borrow
$780, OOooGS ~ at per cent III issuing its bonds
treasury that 81 400 O00, 900 were offered Sew
eral railroads have recently refunded their
bonds at per cent. To those acquainted
with monetary science it is familiar prin-
ciple that the temporary bank rate Of in
terest should be lower than the permanent
investment rate and it is lower in nearly all
civilized countries except our own. For ex-
ample, in France the government loan bears
per cent interest. 1t sells IN the market
lfYrrl, fGniaY oil hnn
about rs per cent. but the commercial rate
of interest is 2 per cent British cOnSolS
bear per cent interest They sell in the
market at a premium, which causes them
to yield little more than 2l2 per cent, while,
shown by the market report above quoted,
the commercial rate is from rs to 212 per
cent The United States is the richest coun-
try in the world. 1t possesses more capital
and more cash than either France or Eng
land. With a properly organized currency
system. a per cent commercial rate in the
United States is entirely practicable in the
not very distant future.
rs it possible for us to have such Dank
system as to do away with bank failures?
Practically, yes. In Scotland only three
there have been only two bank failures within
the last ten years. Is 1t possible to have
currency and banking system so strong that
at time of commercial crisis no man in a
solvent condition need fail? Most assuredly
it is. When the great banking house of Bar
ing Brothers fell, in 1890, the crash was
affairs required a long period for liquidation,
not for a single day did any bank in Eng
land refuse its customers their usual dis
counts.
1T will always remain true that certain
communities will have more currency volume
than other communities. 1t ought to remain
true, because they have more exchanges to
perform and therefore need more currency.
But these differences will be only the normal
ones, and they will not trouble any ones
soul when our banking and currency system
is so adjusted that every community, in every
section and at all seasons has the quantity
~ yi,,d of
its business transactions, adequate to its pur-
poses and furnished on terms that are seen
TO be equitable. And such system, once
established will endure-endure by virtue
of its right to endure-endure because it will
be fortified by the intelligence and integrity
of this great people.
Senator HOar VIII Decline.
WA ASHINGTON Sent 15-Althnugh M Of