Evening star. [volume] (Washington, D.C.) 1854-1972, 1902-09-17
THE MONEY FURRY.
Lesson Drawn From High Loan Rate
Asked by Banks.

From the New York Herald.
South and west are drawing funds from
this center to meet demands in connection
with the gathering and moving of bountiful
harvests. At the same time the govern
ment Is drawing 81 900 900 a day from the
channels of trade through payment of
duties on the unusually large imports of
foreign merchandise stimulated by the in
creased purchasing power of the American
people. With these drafts upon their re-
serves the banks have naturally been i'm
PEELED to call In some Of their loans. Hence
the furry among Wall street borrowers.
The situation is one which with more or
less intensity recurs at this season, and
now, as in the past, appeals are being made
TO the treasury to come to the relief Of
the business community"
1t Is a renewed and vivid object lesson in
the grotesque defects of our monetary sys-
tenn, with its inelastic fiduciary circula ton
based upon government bonds-a system
which periodically places the commercial
and financial interests Of the country in de-
pendence upon the Intervention of Wash
ington officials in matters with which they
Snouid nave no concern, and through eX-
cessfve absorption of funds into the treas
ury makes the very prosperity of the coun-
try a cause of financial disturbance. Moth
ing but the wonderful resources of the
country and their stiu more wonderful de-
velopment have enabled 1t to get on with
such a thoroughly vicious and dangerous
system.
The lesson of the situation is impressive.
ms country is now prosperous and has in
sight splendid crops-corn in particular
promising record-breaking yield-and our
credit is so good that we can probably draw
gold from abroad to- relieve any threatened
serious stringency. But it has not always
been so in the past, nor can We expect that
it will invariably be so in the future. The
last six years of prosperity have induced
the people to take the advice of those who
n at Cya OH a ~
with the experience of 1893 and ensuing
years fresh in mind, elected in 1896 an ad-
| ministration pledged to the reform of our
monetary system have become carelessly
Indifferent to the fact that the pledge has
not been kept In time Of peace prepare
| for war; in dry weather mend the roof; in
time of prosperity and general confidence
make stable the foundations, that they may
not be shaken when evil days arrive. The
act of March A. 1900 reasserted the gold
standard and at the same time provided
scheme for refunding government bonds,
which merely perpetuated the vicious sys-
tenn of making the countrys note circua-
ton dependent upon these.
We need what all other civilized nations
possess-some coordination between the
public expenditure and the revenue. At
present we tax the people needlessly, with
draw the money from trade to pile 1t in the
treasury, and must then resort to nefarlous
official devices to get 1t out again. We
need a currency based on assets and re-
spending promptly to the demands of in
dustry and trade We have got a system
that makes the contraction and expansion
of currency dependent, not upon the coun-
try's needs, but upon the price Of govern
ment bonds. We should get the govern
ment out of the banking business and leave
these commercial interests to regulate their
own complex machinery. We have an in
terminable intermeddling of government
finances with the business affairs, with re-
sulting commissions, and public officials
constantly intermeddling in private affairs
with power that should not exist in any
nation. much less this republic.