New-York tribune., 1903-01-09
BANK SYSTEM.
E.r-Secreta1y Gage Compares That Of
United States zgith China

Club, held last night at the cluDHouoc. LII 'HN
course of his remarks Mr.. Gage compared the
national bank credit system of this country
with that of China, and said that it was about
as antiuuated and cumbersome as the system in
vogue in that country.
Wallace McFarlane, president of the cluo,
acted as toastmaster, and the subject under dls-
cussion by the various speakers was Asset Cur
rency" In addition to Mr.. Gage the speakers
were Congressman Charles n. Fowler, of New
Jersey: Horace White and Louis R. Enrich. of
Colorado
Mr.. Gage said:
influence in modern industry and commerce. The
banker makes credit available to the general uses
large affairs and in the greater centres OF business
County g eIst IL the the form Available for the
Of life in outlying districts. and one OF tns me
and 10 make the cost of credit burdensome.
Bank checks or transfers Of bank kbeS TFees ean
not be used pay harvest hands or cotton @ PcasFs
or an at the the ne e If 6ank 01 ored nseful in ali the
other departments of life. is to be made aEa1apde @
honora ble-that credit must be evidenced and ex.
e ih ane 1aan i in form
and Of proper issued upon Jne
under fhe name of sredt cnrEency aintain that
there is no difference whatever between the noIe
of the bank payable on demand and an obligation
The advocates of this Kind of currency insist upon
its economic value in all those fields of productivity
in the cities Cannot be made available, They de;
od nd at to Of fe anR aTITy ee snd bank nj &
support Of this contention they point to Gsrmany many;
is more largely evidenced by notes than by bank
rercy admit that as these forms of bank credit will
or may circulate far from the issuing M & bank s they oy
loss any holder into whose hands they might come
gn2rds San be tnr0wb & aFo9n1 IIe tne tn ome safe
7TO1 r+iOno of he ta1 of he
by the establishment of safety fund to be pro,
banks exercising the function of note issues. AS
fair demonstration Of the suthelency OF such tun3
the United states Treasury wherein it appears that
ing the last thirty-sx years issued unsecured
in any form except by safety fund built UP through
any ali possible deficiencies in redemption of such
with surplus in that fund Of more than twenty
seven millions on January / 1901
TOOLS AND MACHINERY NEEDED.
These yfa @ ePasze Tools the nsGssy sS6 8f es
in every department of PRODUCTIVITY They cal a.
enjoyed by our Competitors abroad and assert that
With pFopsP Td he the sssens6 disparity
In support of this they ask attention to the strk
m tbeE ergue Il for S and SS bank Such as
we now have in use The difference appears from
the bank in exchange for the satisfactory debt oh
nothing It's burden falls on the banker only when
the notes are redeemed by him IN money =, But Ut II
9fanG5gs M T The borroWer to the bank has
been ischaTged when BY payment the borrower
himself will have placed with the lending bank the
In contrast with this economic, system is our our
present system, which, before the banker can lehd @
| in United States bonds an amount OF actual
excess OF te n4ies re eS Of the tinted states
as a pledge that he will redeem the notes II Issued
Of Of redemption is no less than under the system
proposed In looking at the comparativ economics
it is to be kept in mind that the cash now required
to be invested in bonds is OF pecuar vaiue 70 1ae
! banker. One dollar Of cash or legal tender money
q 81 ms ISoiCs i 20 WIZ casb in hand therefore
Sreat On @ ms @ GSoNs Ioa by W giving credit to- borrowers
nooneI actual money too valuable to the banker to
nom1iv With the present necessary conditions to
/ note issuing Hence the fall movement of cur
restricted rigid experiences no elasticity. begets
] b dtI5s1 cash reserves of the is called
into requisiton for temporary use in the cotton ana
afiIifZ, is suddenly disturbed. Liquidao to make
good faag and ecommodties are forced downward
and the alarming symptoms OF panic apP}ea[ n
perceive and ready to adopt economic and e1eGtlTe T
n cIirrendV t system stiff awkward Inadequate,
infexibe economically expensive 1t IS olrIcuit 10
understand.
Congressman Fowler the next speaker. said
that he wished to deny that the average Con-
! eressrnan was as bad as the public belleVe0
oin, 70 he and that a Congressman was like
the Lord in one particular. that he works IN
mysterious ways his wonders to perform The
| only reason his colleagues did not agree WIN
him on the currency question was because they
had not studied it, or because they still be-
Heved in what their fathers had told them. :
A SUCCESS WHERE TRIED.
He added:
But there has been revolution in the PUBLIC
thought of the country on this sqbJect ana II VIII
! rencv has never been tried anywhere IN the WorId
as it is mere rSad ~ SeFnsiand in the West and
| in the South and every time It has proved slea'
ai5 SoIseT the cali which is made upon the finances
of this country every fall. It is necessary during
onsiness of the country something like o00oo
of business This acc4rdng 70 9Ie ,t boI s3n
| COO coo Of currency. Just at the time when you
se ea soyernment bonds as security for note issues
| IF bankers should provide these bonds. II would
& Pe 4o the VeET eocal 1a to the investment
| counts of banks. What happened here last ! ia!l;
| Tnder the present system. Just at the time when
taEen from the resources of the banks s92Co000O in
| cash and sent off into the country to move me
Of the credit Of the country to the amount Of $so9
| 00000o Thus it was necessary to take away >4oV'-
FAvoRs ASSET CURRENCY.
Horace White said that he delivered an ad-
| dress in Philadelphia ten years ago on the sub
| tect Of asset currency. He then suggested
| that the old safety fund system Of New-York
for securing circulating notes be adopted in
Mace of the bond deposit system of the Ma
tional Bank act He thought that the country
| was within haing distance Of this reform,
since the Secretary of the Treasury, the Con-
troller of the Currency, the House Banking
| Committee the New-York Chamber of Com
| merce and the leading newspapers of the coun-