Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1898-12-07

As the Secretary Of the Treasury Sees
Them-Why the Money OF the Country
l. Not Elastic and How Cog l. Slipped
In the Wheels of Commerce Semi-Occa-
sionaIIy- Says That the Remedy Is Plain
and Easy of Application.
Washington. Dec. The most gener-
ally interesting part of the report of
Secretary OF the Treasury Gage is at
the end and deals with the currency.
He says in part: In submitting my re-
port. / feel IL my duty 70 impress upon
congress, as best / may. the important
subject of currency and banking re-
form. 1t is the misfortune of evil con-
Giti0ns TO produce arrangement and
hinder progress. which II long contin-
ued so accustom the subject Of them
to their existence as to create in MIN
ap1thetic Indifference to needful and
hcaIthfuI reforms. Indeed, it is a ia
miliar fact that Individuals. families.
and notions irnorantly suffer under the
illusion that the very source of their
amiction IS Itself an agency for good.
Something Ike this has marked our
financial history Tor thirty years.
Public Makes a Zig Mistake.
Making progress in spite OF all OBJ
stacles AID advertisements to COM
merCe and Industry. we ascribe the ad-
Eancement to the causes which have
really hampered and disconnected the
forward and upward movement.
The cure for these evils is not difficult
to find. 1t lies within the easy range OF
congressional action. The proposal to sub
Etitute bank issues for government notes
3 opposed with many honest prsjudiCes
and assaiIed by bitter denunciatio1s.
no = a TO
prehend the true philosophy of paper
currency. and must be patiently con-
sidered. The latter obscure the qUes-
ton by reckless statements, charging
that all propositions for currency re-
form are bank coEsp!racies to exploit
the people.
Banker Is Like the Fest off,.
as d system Of bank credit currency.
in its ability to meet the varying wants
CT an industrious commercial people.
superior to the issues Of government
paper money? If that question be an
swered affirHatively. il may be safely
left to time To show that the nature Of
the banker differs not at all from the
general nature OF men in other callinGs.
l shall not be outside of my duty if l
venture to point out. in at least one
important respect, the advantages to
the poorer districts Of the country of Il
properly 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 movement as IL would go
on under the conditions advocated. 1t
is 4 familiar fact that in the period of
harvesting and crop moving the cur
reucy is strongly drawn from the CEN
tiers to the country districts.
Piled Up "a I;eJcrvc for Deposits.
When this movement is over the
currency again tends toward the cen
tiers. The currency flows to the center
to pay loans Cccasioned by it's use and
other general Indebtedness. and also to
secure the benefit of interest To the
country banker for a portion Of his
funds which in dull period would 9th
erlyise lie unemployed il his hands. At
present the currency So sent Consists
almost entirely q Legal tender. notes
and treasury notcs-thCt is to say. Of
the money which the law recognizes as
lawful reserve. Thus received by the
banks in the money Ccnters II becomes
n reserve Ior deposits in the relation of
one to four. Now. deposits may be in
creased by leans as well as by the de
post of cash. \ loan for $1,000 or SlCC.-
OCO goes To the borrowers credit upon
the banks books, and swells the deposit