The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1902-01-09


than the securities Of any other coun-
try on the face of the earth. The gov
eminent could borrow at practically IL
per cent interest II would be com
PEELED to pay , per cent-21s at least
but for the national bank system
Thus the people are saving some
thing in interest. The fact that a ma
tional bank can purchase bonds that
will yield IL per cent interest and is
sue national bank currency against it
is a very pressing inducement toward
an increase in circulation. and even an
attraction to capital toward the bank
ing business. Capital VIII be invested
in banks so long as the profits to be
derived from all sources are satisfac-
tory.
Thus the very interest which the
government pays on its bonds and
which reaches the Golfers Of the bank
tends TO reduce the rate of interest
which the people are compelled TO pay
for the use of money In this way the
people pay the interest on the govern
ment debt to themselves.
. 9 g
I am willing. however. to go on
record as in favor Of an elastic cur
rency, and if believed there was no
way to secure an elastic currency, other
than TO allow the issuance based on
assets, then 1 should advocate such
an issue.
I am mindful Of the fact that it is
claimed that an elastic currency places
the control Of the volume of our cur
rency in the hands of the bankers.
Granted. Where should it lie? ! am
willing that railroads snail determine
the number Of cars to be used. for they
VIII build cars as long as there is
demand for them. The cars of the
western railroads are all employed
when the crops are being moved but
cars have TO stand on the sidetracks,
retired from circulation, while the crops
are growing. If cars could be con-
structed as cheaply as currency can be
issued, they would be burned in the
spring and reissued in the fall.
But, as I have said, I do not be-
lieve it necessary to resort to asset
banking in order to provide an elastic
currency. / recognize a public preju-
dice akin to fear, against a currency
based on assets. and this prejudice, so
long as it exists. has an element OF
danger even of itself.
I can believe that a graduated tax
Of currency based on government bonds
would result in elasticity. Banks are
now required to hold 10 per cent cash
reserve. but the conservative banker
will sleep much better when he pays
% per cent reserve. That I may make
myself clear. permit an illustrat ton, but
do not understand me as advocating,
or so much as suggesting. the correct
ness of the scale of taxation. l make
1t only as an Illustration.
No class of our people viii purpose
" do anything to induce a panic. OF
all the men in the world bankers fear
panics. No merchant fails in business
without some bank suffering thereby.
No factory goes into the hands of a
receiver without having a banker
among its creditors. The only man
ever heard say he had profted by the
panic of 1893 was a farmer, who took
advantage of the depression in live
stock and in farm lands and drew his
money out of the bank. purchased while
its board OF directors were having mid
night sessions, devising ways and
means to escape destruction. and when
good times were restored and the bank
did not need his money he was enabled
to increase his deposit several fold He
told me frankly he wished we could
have another panic.
You may remember a certain bank
in Chicago in the summer of 1895
charged UP a clean million dollars to
profit and loss, its contribution TO the
panic through which We had just
passed. At the rate of dividends which
national banks are now paying. il will
only take fifteen years to make that
back. Personally. I want to see ques-
tons discussed. They should be talked
as occasion will permit over the coun-
try. Justly the banker has the conf
dence Of the community and no other
man has.
I'VE are the richest of nations. We
are in the best position on the map of
the world. We have more energy than
any other people, and We ought to
have the best currency in the
world. The reason why foreign
goods are marketed in pounds.
shillings and pence is because the
English pound has meant, and always
viii mean, a definite quantity Of gold
And the reason foreign balances have,
until recently, been usually settled in
drafts on London, is because a draft ola
England is always payable in gold. or
its equivalent. want those questions
discussed until our people shall fully
understand their logic, and then they
will demand an equally stable curren-
cy.
Give the American merchant as
good tools. give him equal equipment,
reinforce him with a safe banking
system, and he viii write the prices
current of this earth in United States
money and make our financial centers
the clearing houses Of the world