The Montgomery advertiser., 1903-12-20
OUR CURRENCY SYSTEM
SENATOR ALLISON SPEAKS TO
 IOWA BANKERS.
Says Banks should Have the. Power to Decrease Their Circulation
 As Well As to Tn-

Chicago. Dec. 1s.-Senator William B. Allison of Iowa tonight spoke at the Bankers Club on Our Currency System and Our National Finances"
 After reciting the history of the vari- ous financial lava that have been enact cd by Congress since 1879 the Senator took up the Bland d-Allison and the Sher- man acts. which. together provided for all the silver dollars coined and in circu- lation or represented by silver certificates. s'I regarded in 1890 and regard now the act of, that year as a mistake" said he. ''but it was the best attainable then, as respects the coinage of silver dollars and 1t ought not to be forgotten in the reconsideration of the silver dollar that there has been turned into the treasury as profit ncoinRge about s130. 900 in the aggregate. This Creates moral obliga- ton on the part of the government to maintain these silver dollars at a parity with gold coin outside of specific provis- ions of law directing it to be done, twice passed by Congress and emphaszed in the act of 1900.
 Our national banking system lacks elasticity in one respect National banks cannot curtaii their circulation at will although they can increase it at will. This can easily be remedied by a modifi- cation of the law prohibiting the retire. ment at the rate of more than $3.000.0 600 month. But that there Is elasticity in the other direction as shown by the fact that our national bank circulation has largely increased in recent years.
 Under present banking methods there Is constant tendency to concentration of money in the great money centers at cer- tain periods of the year, 1t not being re- quired for use in rural portions of the country. This money cannot well remain idle in these centers, interest being paid on deposits when 1t is needed at the more distant points there is difficulty in its withdrawal from these central parts of trade and business. It is possible that this system of concentration might be checked in some degree by bankers them selves.
 ''I have not discussed what is known as the system of asset currency do not see that this proposed radical change in our laws in respect to our circulation is possible so long as our present system Of direct government issues prevails, as 1t would result in Q large expansion of the total volume of the currency: and this expansion cannot be checked by means Of rapid redemption because there is no motive to press redemption. Nor can rapid redemption be secured under an asset system by requiring redemption in gold because so long as these Govern ment issues continue in so large a vol tune the Government would be called on to provide the gold for the banks through redemption of its own issues and would be the store house from which the banks would draw the gold to redeem their is- sues. Thus would be created a needless, endless chain, which might result in em- bassassment to the Government"
 The Senator. in closing, declared that ne did not think any changes in the pres- ent monetary system would be made dur ing the present Congress.