New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-09-01
Mr.. FOWLER REPLIES.
Sans Mr.. Hansl's Plan for Elastic
Cmrcncu Would Be Inadequate.

L
Congressman Charles y Fowler. chairman Of the
Banking and Currency Committee Of the House OF
Representatives. when his attention was called 10
the letter OF Arthur Hansl in Mondays Tribune.
said.
The We learn 20 recognize the simple ,
truth that currency Is not money ano ma osIs s
drafts and other forms q credit the more certain
rencv problems now confronting the country The
same law Of expansion and contraction. en9et
crease are sent out 70 DO special work ano are
returned nome ior sr WHICH bank currency
should De- issued and BY which II should be
tnder a properly regulated bank currency system.
debts IN TIE form Of deposits SUBJECT 70 ch 49,
would BE- constantly converted into debtS IN nc form
o. banknotes: and. conversely. debts IN the form
81 hanknotes would oe conssantE com , b IL,
debts ~ the form or deposits SGoJect 70 - ~
Tn-n this current conversion is made possible by
iet,c Currency sntomaticaiv adjusting itself 10
the demands u trade and the requirements 81 the
s. many factors are involved in determining the
Der capita cifcua'lon .e a, Ne have toaT
ZOO little currency. just enough currency, or TOO
obsck system Is uitie used. everything else being
equal. very much larger per capita clIclLa1eL
would be required but me wages IN France are
nj more than half what they are IN this country,
an1 ne people live very tr9saiE ln @ Ism
Offset the absence of a deposit and check system;
10 Demonstrate that any legislation attempting 70
determine just how much money ana currency We
Banks should be- permitted 10 issue a credit cur
rency that Is. their cashiers checks when nc Gus
currency rather than in the form Of checks. But
such privilege granted 20 the banks should Be
current and swift return ~ such notes Ior felelP
20 he notes by a heavy tax ~ per cent or 8 per
cent. and t should not be imposed for the Hollow
firyt A bank would not Ne inclined 10 issue
ylTe nc ~ interest because there would be little
profit, and. Therefore no tnoucemert 10Y II 10
second Ranks would not sgsject themselTes 81, 70
Ihe sghtnF remarks O. thflT Sqt s ti3s Der
cent or per cent upon deposits. IS such TAX
would amount 70 the same thing. ,--.
penalty ~ per cent or per GEM epGn 1ne - M
IS compelled 70 use currency instead OF che i
cen use thor checks without any burden Whatever
FoHTIbHrhe proposition 70 retire bank currency.
which IS legal tender. for the purpose OF GET
ting rid q he tax Of per cent > Per en- en- % -
Ter cent some propose. by oeposiung WIN me
United States Treasury. United States notes goa
coin. an 81 which are legal tender money would
prove most disastrous experiment. ; Or eNsIa7ce:
during the crop moving period. and suosequ .il
money - retire H. we should have 10 contract
credit by AZ least tive hundred nl,,ons or 'l .t
vi b would amount 70 The same thing. ,,- ,,,-,,
c,rrsnr, rom an economic point Of view; the life
Of the note being the exact life Of the paper upon
vbie ne ersiii note 81 scotland remains out eish
teen DAYS the credit note q Canada remains olt
thirty days and the credit note Of New England.
under the suffolk system. remained out forty-tve
dave a q time too when means or ComnlIllcatlon
-erv primitive. there being no railroads, tee-
MIN regard 10 the deposit Of public moneys, as
that the United States Government should Dc
post its excess revenues. from whatever sources
derived, precisely as great cofpofalloLS. Hl4l'is
pelitles and the other great nations Of the world
a. without any special security except a nrst lleh
upon the assets a the bank. and without burden
the government interest thereon at the rate OF
per per aunum
At my request. On January 1900 Lyman J. Gage.
then Secretary ~ the Treasury. mace al lnNeslea-
fion based upon the assumption that the govern
ment had deposited all lie receipts except a wcrk-
fng balance Of fifty millions. with the banks Of tho
ftalS vi h0ut security except that they lrst
lien upon the assets the banks paying per cent IN
fereet thereon. This calculation began with the
establishment Of The one hundred million gold fund
IN 1879, and therefore. continued for twenty one
years. but q has since been carried down 70 1872
This investigation demonstrated that the govern
nlcnt would not have lost q single cent during u
this and that II the rate OF interest paid by
sfe banks had beer ner cent il would to-day have
nearly nfry millions 10 its credit.
IN the liEht 81 these facts. one urge that
she government. contrary 10 the practice Of every
elet Eol eIi, ~ lh VIC "oIIa VI, - 80 NJ a.
patty or great corporation, should persist IN de-
nandnC special Tor its deposits the result
~ which be tho loss not only OF the nfty MILL
icrs ~ income but the great injury 20 commerce
one hundred and fifty millions Of capital as we are
doing to-day. Tho government having on deposit
thirty millions Does u require any argument 10
demonstrate he fact that provision Of law that
requires The banks 10 deposit with the goveTnnent
hundred and TWENTY-FIVE dollars worth OF bonds
Tor every hundred collars the government in turn
cenositF with them. positive injury 10 the bust
ueSa interests u the country This is particularly
eNceed its expenditures by many millions % dol
fars