Kansas City journal. [volume] (Kansas City, Mo.) 1897-1928, 1898-12-07
Bounties for Merchant Marine.

Bounties for Merchant Marine.
In discussing the question of increasing
| the American merchant marine the secre-
| tary says: War with Spain and the annex
| alton of the Hawaiian archipelago. which
have changed the political and commercial
| relations of the United States not only with
Cuba, Porto Rico. Hawaii and the Philip
pines, but also with the continents between
which and North America those islands
| are stepping stones, require the prompt
adoption of an affirmative maritime policy
| by the United States'
The secretary recommends:
The establishment of a system of graded
registered American vessels while engaged
IN the foreign carrying trade as compen-
sation for the training of seamen available
Tor the national defense.
Extended application of the principle cf
| the act of May 10, 1892. by virtue of which
the st. Louis and st. Paul We're construct
foreign built steamships New York and
Paris, this extension to continue for "A
short term of years and to be SO guarded
as to preserve the coasting trade to Amer
lean built vessels.
a moderate increase in the rates of ton
mage taxes, equalizing them for the cor
responding charges at present imposed at
London. Liverpool and Hamburg
The restriction of the trade between the
United States. Porto Rico and Hawaii and
the coasting trade of those islands to yes
sells of American registry.
American Money in Porto Rico.
On the subject of money in Porto Rico,
Secretary Gage says:
1T is highly important that American
capital should find no obstacles in its trans
fer to and from Porto Rico. wide differ
ence in the rate of exchange, occasioned
by the use of differing and unrelated cur
rency. is n serious obstacle to the transfer
of capital. as it is to legitimate industry
The obstacles can and ought to be removed.
1t Is therefore suggested that, at the
proper time, action be taken by congress
to assimilate the currency of Porto Rico
to that of the United States, SO far and
so rapidly as this can be done without un-
duly disturbing existing conditions and
contract relations in Porto Rico. This it is
believed. can be accomplished by making
pesos and ceIftavos at a fixed relation to
our dollar Tie limited amount of Porto
Rican money would thus find an important
avenue where a uniform value on the basis
arranged would be realized This avenue
would probably be broad enough to give
the assurance needed to keep the peso and
its minor subdivisions current through the
island at the custom house valuation. If
any doubt should arise to the sufficiency
of such a provision, it could be made the
duty of the secretary of the treasury to
give American coin in direct exchange for
tn the e. Porto @ Rican coin at the custom house
ratio whenever In his opinion it should
be necessary to do so in order to maintain
the ratio established
Bank Note Currency,
The subject of currency and banking is
treated at length. The secretary says: In
submitting my report, I feel it my duty to
impress upon congress as best 1 may, the
important subject of currency and banking
reform.
The arguments against government is
sues or paper money as u medium for COM
and need not be repeated in detail Its rig
idity. its failure to meet demands where
demand is most urgent, the dependency of
the whole industrial structure upon the
state of the revenue and public expenditure
these are important links in that chain of
argument The menace to our domestic af-
threatened change in the standard under
which they are carried on, and our foreign
trade settled. has been a companion evil
perhaps the greater of the two
The proposal to substitute bank issues
for government notes is opposed with
many many honest prejudicss: and assailed by
a failure to comprehend the true philos-
ophiy Of PAPER and must he
the question by reckless statements. charg-
ing that all propositions for currency re-
form are bank .conspiracies to exploit the
people. Referring TO such proposals, an
eminent speaker recently warned his unin-
These banks will become cormorants
to eat up your substance. control your
politics and warp the political views in
all the communities Send a man to con-
gress to help defeat this great evil Such
Trades against reason, and such appeals
to prejudice and ignorance. the statesman
must oppose by simple truth: Is Il sys-
to meet the various wants of an Industrious
commercial people, superior TO the issues
of government paper money? If that fues-
ton be answered af!irmitiVely ii may be
safely left to time TO show that the nature
of the banker differs not at all from the
generai nature fo Of m men ,nn in other eangs
1t is not for the benefit of the banker,
or any particular class. that the plea for
currency reform is urged it is urged on
behalf of the whole people. who will be
the recipients of the benefits thereof. And
it is on this ground only that the claim
is entitled TO consideration.
Advantages to Poorer Districts.
Il shall not be outside of my duty If
venture TO point out, III at least one i'm
portant respect, the advantages 10 the
poorer districts of the country of a proper
ly constituted bank currency. 1t may be
done by fairly describing the course of
the financial movement as it now goes on.
and by presenting in contrast the move
ment it would go on under the condi-
tions advocated. 1t is a familiar fact that,
in the period of harvesting and crop mov-
ing, the currency is strongly drawn from
the centers to the country districts. When
this movement is over, the currency again
tends toward the centers. The currency
flows to the centers TO pay loans occa-
stoned by its use and other indebtedness.
and also TO secure the benefit of interest
funds which in dun period would other
wise be unemployed in his hands. At pres
ent the currency so sent consists almost
entirely of legal tender notes and treas
ury notes-that is to say. in the money
which the law recognizes as lawful re-
serve. Thus received by the banks in the
money centers, it becomes reserve. for
deposits in the relation of one to four.
Now. deposits may be increased by loans
as well as by the deposit of cash; \ loan
for ten thousand or hundred thousand
goes to the borrowers credit upon the
banks books and swels the deposit ac-
count by so much.
True the borrower may check against
this fund, but his check may also be de-
posted in the same bank, in which case
it is u mere transfer to another account:
or. if it be deposited in another bank and
paid in money by the lending bank, it is
still a transfer. The total deposits of all
the banks are sweled by this original loan.
The efforts of the banks at the centers
to increase their loans cause interest to
fall. The fall In the rate of interest causes
interest and dividend paying securities to
rise. The rise in securities induces specua-
tive buying. The speculative buyer be-