The Indianapolis journal., 1903-08-16

there is a speedy unification of opinion
among the bankers this matter it is not
probable that an effort to have the State
Bankers Association take a definite and
well-defined stand upon the currency reform
question would be in any measure success
full.
II am watching this matter pretty close
ly, said a leading banker of this city,
'and / think the general opinion of the
banking interests of Indianapoli is that
asset currency Is not what we want TO
change currency system. That the
currency of the United States is not elastic
enough almost every banker in the city
viii admit. But there doesn't to be a
consensus OF opinion as to what means
of reform would be best"
BETTER MEANS OF REFORM.
Said who is prominently connected
with one of the larger trust companies: For
long time | have thought that asset cur
rency. as expounded by Mr. Fowler. would
be the best way to change the currency sys-
tenn. But in the last few weeks have be-
gun TO notice things that are tending to
change my views upon the matter And
now L don't know but what there can be
devised better means of reform than as
set currency"
The central idea of asset currency is that
the banks themselves hold all assets, which
the basis and security on which circu-
lation-or bank notes-is issued. Asset cur
rency is phrase peculiar to this country
All bank notes are really asset currency, as
their value is based upon the assets of the
bank issuing them. The bonds deposited
by the banks with the Treasury Department
rffx-f for. FL
issuing bank. Banks are required to de-
posit government bonds in the Treasury
Department for their circulation to guard
against bad investments and other means
of making the circulation worthless. Asset
currency prevails In all civilized countries
except the United States and that part of
Great Britain called England. The Fowler
bill provided that there should be created
in the Treasury Department department.
of banking and currency. to be under the
direction of board of three controllers.
This department of the treasury is now un-
der one controller.
Asset currency ought to be better than
government notes because the assets of the
banks consist of the circulating property of
the country" said Horace White. editor OF
the New York Evening Post, than whom
there are few, If any. more profound stu
dents of currency. "If these assets are not
good nothing is good If they were not good
the government could not long exist The
assets of the banks partly cash and
partly claims upon the holders and pro-
ducers of the country's wealth of every de-
scription- The government has nothing but
the right to tax, and this Is effectual only
i'm far the producing power of the
country, in which the capital and deposits
Of the banks are invested. is profitably in
vested. There other reasons why the
banks are more fit 10 supply the Nations
currency. They credit-dealing institu-
tions. lending institutions. business insti-
tntions. The treasury. when IL issues cur
rency. is simply a borrower. and il can
never be anything else unless il attempts
To discount commercial paper. which no
body has yet produced aud which no sane
banker would consider possible under our
form OF government
INDIANAPOLIS PLAN.
OF the currency reform plan adopted by
1898 Mr.. White says: "One feature of the
indianapolis plan of asset currency has
not attracted the attention that il deserves
1t provides that the government shall hold
a per cent. redemption fund for all bank
notes. now; also per cent. guarantee
fund with the power TO replenish IL by tax
alton when needful also paramount lien
on the assets of failed banks and on the
shareholders liability for the redemption Of