The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1902-05-14

4 = !. 5 y
currency was as safe and sound al that UNI
der the national banking Jaws of to-day.
Those who can remember back to. the period
of wildcat currency Of those years, with its
discounts and losses, VIII be sururised and
astonished at Mr.. Fower,s general statement
and conclusion. During those years there
was issued bank note deteetor, giving an
account Of each new bank that was .orgsnized
and Of the standing or each Of those previous
ly in operation, with a list OF discounts
ranging from ! or per cent up to those Of
no value. A man during those times started
with teams from ST. Cloud with money to
buy $500 worth OF -four til Minneapolis. Upon
his arrival here he could purchase only $3.50
worth, as in the meantime the currency had
shrunk in value TO that amount. MI. Chaul-
cey Lamb Of Clinton Iowa, had occasion to
| drive out into the interior Of Illinois: He
| took with him money that was worth III Gins
| ton 80 cents on the dollar When he had
| Travelled thirty-fve miles, they were4not will-
ing to take one OF these dollars for q IS cent
| dinner. He found the same conditions during
| the whole trip. Such was the common expe,
rience of those days. No one could rely on
his, money being good tomorrow. The dis.
counts on the notes OF the different banks
were changing and new banks established,
SO that the bank note monthly or weekly was
most essential addition to every business
Office as we'll as to the banks.
The local issues of money without central
guarantees fund will necessarily restrict the
currency to the eighborhood In which it is
issued to very large ext ent, and the, in
creased speculative fever will soon boom up
property and speculative devices until 1t will
carry us into a financial storm the end OF
which no one can determine,
More Money Necessary.
It is evident that under the present drift
of affairs, it will be necessary to increase the
amount of currency In this country. 1t is
admitted By all that currency with the gov
eminent bonds back of Il is the best and SAT-
est circulating medium, next to gold and gov,
eminent greenbacks. AS this is not suficient,
it becomes necessary to take the next best de-
vice that can be adopted: Suppose a con-
servative bank commission. to- occupy, the
place of the controller Of the currency, with
authority to receive state and municipal tonds
to an equal amount with the government
bonds as a collateral security on the part OF
the national banks for issue OF currency to
the extent of 80 per cent or par, or such other
limit as might be considered safe When 1t
comes to pass that the bonds OF the st ates
and cities. especially those who are mot in q
particularly hazardous condition. shall be
considered unsafe. will the men wha claim
this affirm that it is not Infinitely better than
| bank assets and stockholders' iiability7 state
and municipal bonds are held BY many OF the
safest and soundest Institutions In this coun-
| try and Europe There has feen Ia the past
no loss whatever on any bonds that would be
accepted by the most superficial, commission
that would ever be appointed. And II they are
not as readily convertible as national bonds,
they are next to 1t. And while a steel beam
will hold a larger weight than iron, If we
cannot secure the former. the latter may be
made to answer the purpose by taking one 4
fraction larger, Pacific. coast fir, posts are
used very largely in snumberless hrst class
! buildings in place of steel or iron, and with
| equally good results. II we are to, take the
next best, this is certainly far preferable to
the assets Of speculative corDorations.' such
as would be in existence under-this proposed
Fowler law, In fact. the whole asset and
stockholders liability would be hack of the
currency issues and deposits In addition to
! the bonds But should be made to protect
the depositors equally with the bill holders
after the latter had exhausted the direct Sc
curity If any balance was left unpaid. r. 81.
| The Fowler till may be set down as an un-
safe banking. schemss7 A great central bank
and branches will not be tolerated by public
sentiment, although 1t might be made prac-
ticable banking system. A, greater issue Of
greenbacks would meet the opposition of pub
lie sentiment from a different course from,
! that (which would oppose the central bank
system. The national bank system, the best
| ever yet devised for this country, under its
political and business conditions. is ,insufh-
| cient to meet the future requirements of trade
| with the limitations xcd upon It's issuance
of currency. If this H.. tation continues until
a stringency5 OF currency hrings financial trou-
bles, the populstic sentiment will control and
provide for greater issues Of greenbacks.
| An amendment to-. the national bank act
! authorizing additional issues OF currency upon
the security of state and municipal bonds.
| jointly with general government bonds under
such regulations and restrictions as would be
necessary, seems to be the most practica BILE
way to supply additional currency as the
| government bonds are called In and the de
mand for currency increases. en- - IS
| Not to release the government bonds. but
permit All equal amount OF STATE and national
to be used. Those who favor bank assets
currency and affirm that state and municipal
bonds are unsafe and unreliable as security,
are not in any manner consistent Bank as
sets and stockholders liability would 80 With
this additional security, and the public could
and would feel safe under it. 80 $.@
1 During the last panic, municipal obnds
proved to be available next to cr sufficiently
near equal to government bonds to prove mos,
i available. State and nlnnicical bonds ara
held by the strongest trust companies and
savings banks in the country They are safe
and available assets In tim ee when they are
not good, asset currency and banks built on
them will be in q helpless condition
i -=~5s1 - IT. 3. Walker