Evening star. [volume] (Washington, D.C.) 1854-1972, 1902-11-12
volume of business that is being handled.

volume of business that IL being handled.
The money in circulation has been increas-
ed, and, although the amount held by the
banks has increased, as stated, 25S millions
of dollars since 1892, there Is not enough to
handle the additional business. Not only
is there more of every kind of material to
handle, but prices are higher, requiring
much larger sums OF money. Transa ctions
which ordinarily could be conducted with
comparative ease are now matters of much
anxiety.
'.The operations Of the Treasury Depart
ment In collecting moneysfor taxes and the
disposition Of the funds Of the government;
the money required for moving the crops or
eny large payments of money for interest,
dividends, or syndicate payments of IN
usual size, produce much more disturbance
than they did before the present condition
was reached.
of the railroad embarrassed by the volume
of traffic. With all the machinery of ex-
change strained to the utmost to keep up
the present rate, and with every channel
swollen to the full with the rushing tide,
the slightest disarrangement spreads at
once, and is very far-reaching in its effects.
Only One Alternative.
eve must either reduce the volume of the
traffic or add to our facilities for handling
1t. In the present condition there is not
sufficient factor of safety. and there is
danger Of the strain exceeding the limit Of
elasticity if it does not reach the point of
ultimate rupture.
sit Is unfortunate that the weakest point
of our banking system Is in it's provisions
for dealing with such a situation as seems
before us today. Nothing could better Illus
trate the necessity for a more elastic bank
ing currency than the demand for it at the
present time. Our banks have been and are
being called upon to furnish the currency
and credits necessary to move enorm Gus
crops probably the largest in volume and
value the country has ever produced
This call for currency comes at a time
when all business is being done on an enor-
nous scale. OF course, this crop does not
where it is raised, but enough of 1t to re-
quire very large amount of money must
be financed In some way within a few
weeks. Much of it is done on bank credits
not requiring actual currency, but the cur
rency required is enough in volume to be
large and difficult matter to handle each
year.
Cause Of Anxiety.
'HThis year it has been more so than usual
and has been cause of considerable anx-
iety. In the farming states where this har-
vest is being gathered there are 1926 banks,
with 5000 ,00O of capital and $40, 600, 600
of surplus. The people who want this
money advanced against these valuable and
readily salable products own lands valued
at SI3, GA, 100000, have farm implements
and machinery worth S761 .O00.eOO live stock
worth S307S, 100000 and raise over 81, OOO,-
0O0C0O worth of produce each year.
ut would not be any undue expansion or
imitation If these banks had the privilege of
issuing, IN addition to their notes, covered
by bonds, an amount of uncovered notes
equal to, say, 30 per cent of their covered
issues Call it credit currency, asset cur
rency or emergency currency or what YOU
will. A small tax will provide a guarantee
fund which will absolutely protect the note
holder and the public A gra daated tax and
ample provision for redemption will insure
the retirement of these notes as soon as the
necessity for them ceases.
Safe and Satisfactory.
such notes have been found safe and
satisfactory In other countries. They will
be more SO here, where we have abundant
basis for the credits and a great need for
such an Improvement in banking system
which. in all respects but the lack of elias
ITCHY of it's currency, is most excellent.
There has been no system Of banks in this
country as good our national system. and
no system in any country will be any better
if we make this Improvement, which Is al
most all 1t needs
''Our people believe In the national banks
and well they may: Nothing could be bet
ter than the quality of their notes, which
have never resulted in the loss of dollar
to note holder. The total loss to de-
positors since the beginning of the system
is about 34,0O00O0. This is only about
S-100 Of 1 per cent of the average amount
on deposit, and the smallest fraction of
the total amount of deposits handled. With
an elastic currency we need ask for little
more Improvement In our national banks
They would be the best banks In the world
Believes in Branch Banking.
II believe in branch banking Theoreti-
cally 1t is the best system, as it is more
economical. more efficient, will serve its
customers better and the organization can
be such as to secure in most respects bet
ter management. Owing to cooperation
between its branches, it can be made safer
than any system Of independent banks.
If 1 were outlining a new system for a