The times. [volume] (Richmond, Va.) 1890-1903, 1901-02-21
THURSDAY. FEBRUARY 81. 1901.
aCoSrEssIos FROM MIR. BKosIUs

a
Congressman lsrosius. chairman of the
Banking Committee of the House of Rep
-esentatives, delivered an address several
DAYS ago at Lancaster, Pa, before the
local group of the Pennsylvania Bankers
Association on the currency question, in
the course of which lie took strong
ground in favor of a more elastic cnrren-
cy He said that the issue of the bank
note under our national barking system
has been under such conditions and 'c-
st,ictio,,s as not to admit of that degree
of elasticity desirable in such currency.
lie pointed out that the influence Which
has controlled the issue OF bank .ltcc-
lation has been the price of bonds, @td
that the higher the premium on bones the
less profit there is in circulation.
There needs no Brosius come to point
out that slaring fact. 1t has pointed it
self out time and again. in seasons of
tight money, to the distress Of many
people, particularly in the rural districts
Mr.. Brosius further contended that the
rapid growth of the commercial inter-
ests of the country would make necess:-
~ in the future an enlargement d the
banking power OF the country - IS
strenuously urged by some hnanciers,
said he, that the rental for money must
be lower in this country in the interest
of the borrower who is the producer and
organizer Of industry and employer of Ia
Dor, in order to increase his power of
competition with foreign rivals and en-
large his opportunity Of selling his goods
in foreign markets.
That is another recognized fact. AT
this time. when the country is enjoying
great prosperity and when there is more
money per capita in circulation than ev-
er before in our history, we are still
watching with very jealous eve the
New York bank statements from week to
week and there are now hints that in a
little while when more currency begins
to be required in the interior, there will
lie such an outflow from New Yorl. Us to
cause squeeze.
But why should the people in other sec
lions be compelled to look to New York
for their currency when they have ample
banking assets at home? Each and es--
cry community ought to be permitted to
bank on its own assets, in which event
each and every community could take
care of itself and there would be no
such thing as money gluts and money
famines. The need for 4 more elastic
currency is well recognized. There is
considerable doubt, however. in the minds
of the experts as to whether or not it is
possible 10 have a system which will
supply a currency both flexible ard safe.
Mr. Brosus thinks that freedom of issue
within the limit of paid-up capital with
out the investments in bonds as security
will afford all the elasticity desirable
and that the guarantee of the Govern
7nent of the ultimate redemption of the
notes as under The existing law viii rem
der the notes absolutely safe. He told
his hearers that in the opinion OF many
experienced and u,eusatfIi financiers,
among them Secretary Gags, Il sn2:.ll
safety fund made up of a tax not exceed
ing ] per cent. of the circulation OF the
tOSftLST Mill JiSI On Liz
sets OF the bank ratable with dcio,i,ors
and other creditors would constitute IA,
ample Indemnity fer the Gov eminent. a
careful investigation has bee.. mad. by
The actuary of the Treasury Department.,
said he. which shows approximately
what losses would have fallen upon such
a safety fund on account Of failed oas,Fs
since the establishment OF the national
banking system. If either of the two
modes of indemnity for the Government
guarantee had been in vogue. The resa'l
S is thus summed up:
FIRST, If the banks had been allowed Z
issue circulation to the amount OF oo i,el
cent. of their capital, and had issued tht
full amount. and been required TO pay
Into a safety fund enc per cent OF thei.
ISSUES annually, and the Government hac
a first lien upon the assets. there wonle
have been an aggregate loss Of ss9.2i1 II
be paid out of the safety fund.
Second. under the same conditions eI'