Kansas City journal. [volume] (Kansas City, Mo.) 1897-1928, 1899-12-07
EXCELSIOR TRUNK FACTORY.
N, M. FREElNG,
7Os Main 7(17 delaware St

fectve way to do this would be to declare that the
credit obligations Of the government itself, whether
PAYABLE on demand or at future period, shall be
paid in gold coin or present weight anu nheness'
it would be equally effective H. oy pos.'e s .aw'
ment SO TO pay and receive the two kinds OF money
silver and gold-as to maintain their parity unaer
formity to what already been established as the
policy of the government. To the end conten-
plated, the treasury should be clothed With sum
cieut power meet all emergencies The establish
ment Of ample fund. separate and apart from the
general funds, be held specifically as redemption
fund for demand liabilities, must be an Important
Incident to such legislation. The recommendations
of the president this particular. If formulated Into
law, seem to be adequate.
On the subject of the fexibility OF the
currency the secretary says:
While stability in the currency should be safely
guarded nexiblity-the power OF needful expansion
with proper limitations and restrictions must be in
trusted to the bank 1t is popular deluslon tnat
the bank deals In money Money is an iheiaent IN
truly speaking. incident only. The bank deals
in credits The constant interchange OF credits be-
volume OF checks and drafts constantly passing be-
tween buyer and seller. constitutes in the broad
est the currency of the country. 1t Is these
instruments which trade much the larger part
Of its operations Money-real money, gold or sill
ver-plays but small part in the multitudinous ex-
changes The total money of the conference.-the
and paper-is less than 81. .ooo. 900 coo. while the
deposits of the commercial banks. state and ma
tional. aggregate more than 81 GOO OO0, 600.
Whence comes this excess of 100000 on deposit?
1t represents as indeed does the whole deposit
fund. the unused credits belonging to the bankers
public temporarily at rest in the bankers hands.
But the period of such rest is extremely short.
Through the clearing houses of the country this
great fund is each month invaded by checks and
drafts to the total of than s. 900 00o BY this
calculation In one-half Of one month the whole de-
post fund would be exhausted: and so 1t would.
were 1t not that the recipients Of these checks them
selves prefer credit upon their bankers books. Thus
struments for the transfer of property and credit
than for the realization of money. They. however
| perform in our domestic commerce and trade the
same function that the dollar note of the govern
ment or the fractional silver coin performs-that Is
| to say. they are the agency by which goods Are
passed from one to another and by which trade
| counts are settled. Thus 1t would appear that in
the department of commercial life. where checks
and drafts and bank credits constitute the real cur
is now governed by the mutual action of the bank,
and the business public.
The scarcity of currency in convenient
DENOMINATIONS - move crops, which was
1e!t SO seriously by Kansas City and other
| western banks last August, is referred to
, by the secretary as follows:
1t must be recognized that in the larger affairs Of
| our commercial life the currency supply is as a
| rule. equa! to the demand. In other words when
the operations Of trade are in their usual and
| lar groove bank credits. with the accessories Of
checks and drafts. furnish all the mechanism Of
change that trade requires. With periodical regu-
larity however clearly marked, occurring year after
year with the autumnal season. these instruments Of
exchange are proved to be inefficient for the
then required. Then the crops are to be harvested
! the labor cost paid The grain and the cattle are
| to be marketed. The Western bankers and mer-
| chants who have funds credit at rest with the
bankers in the financial csnters find that checks and
drafts are not suited to the purposes in ques-
tion The bank credit is all right per Sc. but the
form In which that credit is evidenced is not con-
| venient- Their need is for paper money or hard
| cash.
| Now subject to one linitation-that of safety to
the note holder, qualification never to be disre-
| Garded-it is impossible for anyone to name good
reason why the Indebtedness Of the banker in this
field OF the exchanges should not be expressed as
freely in his notes of hand OF convenient size. in
one consolidated entry to the credit Of his DEALER
| upon his books Of account In a state Of freedom
the extraordinary wants Of the country at harvest
| time would be largely, IL not wholly. met BY the
conversion of bank balances. not available for these
! general purposes. into bank notes paper money.
These performing their function. would again
when their service was ended. to be again trans
formed Into balances in bank. where, through the
| medium Of checks and drafts the larger commercial
uses would be the better served.
| l have said that the present inhbitions and re-
strictions of the law make this natural i'm
possible. The prohbitve tax of 10 per upon the
notes Of state banks and the unreasonable restrictions
and conditions imposed upon national banks as
| condition Of note issues by them pointed to in
justification Of this statement.