The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1903-10-09
FRIDAY, OCTOBER 9, 1905.
A BANKERS VIEW.

In the October number of the North
american Rcvicw, Mr.. William a. Nash,
president of the Corn Exchange Bank Of
New York, contributes an article on
Congress and the Currency" In which he
contends that there Is plenty OF money
in the country, and that very slight
changes are necessary In our financial
system to make 1t adequate He shows
that whereas the per capita circulation
in 1896 was 2l.10; in 1901 it is s29.Ol. III,
these figures evinced tendency to de-
cline" says Mr.. Nash that might well
create a disposition to remedy and meet
the loss; but with a conceded growth OF
the country there Is also material IN
crease Of the money necessary to handle
and encourage that growth. lie holds
that the recent liquidation in the stock
.market has been perfectly proper and
that 1t has been conducted on lines OF
high ability and financial strength, the
question of money playing but small
part in the drama. He declares that the
panic of 1903 has been the best behaved of
any of our business cyclones evincing
a growing soundness of American me-
thods, and an approach to that ideal con-
servatism, which works towards COR
rection of excuses and over trading.
Coming then to speak directly of the
currency question, he says, that the
events of 1905 are an object lesson in cur
,rency matters; that, to his mind, stamps
asset currency as something not 10 be de-
sired by. the conservative because tend
ing, If adopted. to create an era of in
flation, from which dignified retirement
would be impossible, and to invite
financial collapse. In his opinion. if the
present basis of national bank currency
could be maintained. and the present vol
umc assured. nothing better could be ask
ed He holds with the home maxim, that
a national debt is national blessing"
when it becomes the basis of currency
SO confidently relied upon by the people
as that issued by the national banks"
Mr. Nash thinks that the only trouble
with our system Is the process by which
money is taken by taxation out of the
channels of trade and boarded in the
treasury, and that the removal Of this de-
feet at this time is the only action re-
quired. With some show Of cgotism, he
says that Wail, Street understands bet
monetary question and the needs of the
country In currency matters. But IL he
should go out into the rural districts and
study the situation from that point Of
view he would probably come to diff
ferent conclusion. 1t was the lack OF
currency In the rural districts that
created the demand for more money"
which started back in the early '90s. and
resulted in the free silver agitation of
1896. But that is now history, and that
phase of the question need not be dis
cussed, except so far as to say that
whenever there comes another money
pinch, there will be another demand from
these same districts for more money. and
another agitation in kind Of free silver.
But we have yet come to the most In
teresting part of Mr.. Nash's article. He
says that It has not escaped attention
= that the people themselves are taking a
hand in currency expansion to an ex-
tent with which bankers more than any
other class are familiar. lie refers to
the immense increase in bank accounts
and tho use of checks as a substitute
for currency. and he commends the
system 1t Is true that the number of
bank accounts has great yincreased and
there has been larger increase In tho
OF business, although this system Is large.
~ confined 10 the cities anu is not in
general use throughout the rural dis
tricts. But that is neither here nor there.
II is surprising to hear a banker say
that the check system Increases the cur
rency ii is true that checks are a sub
stitute for money. as that term is popu-
larry applied. but We do not see how the
check system increases the supply OF
currency, II makes easy change, but
every good check which passes current
must be represented by an equal amour,
Of money in bank.
But the strange part Of Mr.. Nash s
argument Is that he commends the CHECK
system of currency and yet is on.
posed to an asset currency issued by the
bank. In our view. one OF the best ar.
currents In favor OF asset currency 1:
the check system. check IS nothini
but demand upon bank. and Its valu
depends first upon the credit of IN.
drawer and second upon the credit o
she bank But, IN sp!ts q, this, check