The Grenada sentinel., 1903-10-31
LEolsLAT1oN on CURRENCY.


the asset currency Fowler bill, and for |
the same reason. II the democrats carry |
the next national election. those two bills |
WILL never more be heard Of. for both are |
entirely at variance with democratic |
ideas Of finance. %<
The Aldrich bill proposes to loan to the !
banks the surplus money In the treasury
at . low rate OF interest, which the banks
VIII loan to the people at high rate Of
interest. The most obnoxious result Of |
the passage OF such a measure would be
that the banks would constantly be the
champions Of high taxation. The more
taxes collected from the people. the larg-
er the surplus and the greater amount Of
cheap money the banks would get.
The democrats would reverse the pro-
position by reducing taxes, the tariff,
and only collect enough taxes to run the
government honestly administered. The
national banks now have over $165, ,OOO,-
600 OF the surplus and the administration
Is continually increasing the amount.
The banks are crying for more, as we'll
they may, for it costs them nothing and
there Is great doubt II they will ever re-
pay what they now have. The reason for
this 1s a simple one, for banks are un-
like individuals, it is almost impossible
to make them pay their debts to the gov
ernment II they don't want to. II the
present secretary of the treasury or any
future secretary should demand from
these favored banks the money that has
been deposited with them, they would de-
clare that to repay it would bring on .
panic. The banks have loaned this vast
sum to the stock brokers and others with
railroad and trust stock as collateral and
1t would require the calling of these loans
that is, the payment by the stock brok-
ers and others-and this they could not
do unless they should be able to borrow
similar amount elsewhere. II these bor-
rowers of the banks could not pay when
called on, the collateral would be sold
and forced sales Of this character are
pretty sure to reduce the market price OF
the stock sold and, thus inaugurate .
panic. There is another provision in
the Aldrich bill that the banks are anx-
ious to accomplish. The law nova re-
Qu1res that United States bonds shall be
deposited with the United States treas
ury for these loans and the bill provides
that other security may be taken in place
of the bonds. Secretary Shaw has disre-
garded the law and in making recent
loans to the banks has been taken other
security. The intention of the law was
that all loans-deposits-s be Sc
cured by United States bonds, so that NO
loss could ever occur. 1t is unlikely that
United States bonds will go below par.
but railroad and other bonds and stocks
might depreciate far below the Is PEI
cent. of their face value that IL the re-
! Quirement at present.
The asset currency bill is hardly likely
| to be pushed at the coming congress, but
| its principal provision is to allow the
banks to isl lie their notes without any
security" other than the general assets
! OF the banks, to an amount equal to their
| capital stock. Such an imitation of the
currency of the country would result in
keeping up prices and might lead to a
! serious loss to the government il many
banks should fail, in prolonged panic.
1t is possible that some provision for
an elastic currency may be devised that
will be safe to the people and profitable
to the banks, but the Fowler bill is not
so regarded.
The democrats will oppose any bill
that favors the banks at the expense of
the people and it will be we'll for voters
to question their representatives on their
position on this important question.