The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1903-08-28
NO ASSET CURRENCY.
Bank Commissioner Albaugh Says It
Wouldn't Be Good Thing.

State Bank Commissioner Albaugh
is opposed TO the proposed asset cur
rency idea which eastern financiers are
urging that congress adopt for the
country in order to relieve the ''finan-
cial stringency." Mr.. Albaugh says
that there is no financial strinsency eX-
cept in New York, and it is caused
there by speculation and inflated
values. He says further that an asset
currency as is proposed would not be
safe. In discussing the subject edi-
toriallv he says:
1T is announced that the senate sub
committee on finance, which has been
considering a new currency measure
has given up all notion of presenting a
bill at the coming session of congress
providing for asset currency. This
question has been agitated for years
and while it meets with favor among
the leading financiers of the country it
is not likely, at an early date. to be
enacted into law. Under the provisions
OF the present national banking law a
national bank is permitted TO issue its
notes TO the par value of government
DondS that can be purchased with its
entire capital, but this is done without
uepINlns the depositiors of the protec-
t eioh OF the banks capital in case of
the Iallure of the bank. The advocates
or an asset currency propose To en-
power national banks to issue still
other Oh their notes, the same TO be-
come hrst lien, in case of failure,
L
Is proposition not likely to meet with
general FAVOR among the people While.
there would be no question relativerto
the protection given these notes issued
py the banks, yet such plan. IN Sc
OF bank failure, would detract from
the protection given the depositors of
the Dank, Just as a first lien given upon
any property detracts from the security
10 the general creditors"
The claim has been made that re-
strlctions would be placed upon this
additional bank issue so that it would
only be utilized in case of an emer-
sency or of very great demand for
currency, but such a course once en-
tered upon, In time these restrictions
would be so far removed that it would
become permanent part of our cur
rency system.
For over a year there has been a
scarcity OF money in New York City,
but there has been no scarcity in 9TH
er parts of the country. This stringency
in New York has arisen from over-
speculation, from imitation of stock
values and not from any demand from
legitimate business. A further issue of
bank currency would tend to revive
this speculation and would again lead
to inflated values and regardless of the
amount of such currency increase when
the day of reckoning and liquidation
again came there would again be a
scarcity of money in New York and
congress would be once more appealed
to for relief.
THE New York spectators got them
selves in their present predicament I'M
der existing conditions and it will have
a salutary effect upon them to permit
them to extricate themselves without
Legislative assistance. 1t will be a good
thing for the country at large to have
"a good supply of water squeezed out of
trust and other stocks that have been
selling at fictitious values, and such
process has been going on for months
past without any ill-effects upon the
business interests of the country, nor
/ is there likely to be any.
What the people of this country
want is a safe and stable currency.
They have it now and above everything
they desire every possible protection to
bank depositors. and to give note-hold-
ers in excess of the present provisions
of the law prior liens over depOsitors
on the banks assets would not be wise,
and while the banks in our money CEN
tiers may favor it the people generally
over the country will not. -