Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1903-02-12
HOSTETTER'S
STOMACH : BITTERS
EXPAND CREDIT
NATIONAL BANKS


tive Fowler, chairman of the House
Committee on Banking and Currency.
late this afternoon reported from that
committee the bill which purposes to
allow national banks to issue credit
currency to the extent of 25 per cent Of
their capital.
The report is voluminous and goes
extensively into the question of neces'
sity for providing an elastic currency,
especially at that season of the year
when the great crops OF the country
are moved. II says:
Gold being the standard of value,
may, under given conditions and prop
er financial influences, adjust itself to
the demands of trade II the quantity
in use varies but little during the year,
as in Great Britain. But gold is too eX.
pensive. certainly unnecessarily eX.
pensive. and where the seasons de.
mand is greatly in excess of the aver.
age amount needed, the requirement
and disposition of an adequate supply
10 meet such seasonal demand would
be difficult indeed, yes impossible.
THE time has come when every one
realizes that United States Govern.
ment bonds will no longer furnish a
sufficient basis for an adequate supply
of currency, even though that form of
1prrency were profitable, which It is
not. Indeed, were II not for the policy
of force applied by the Secretary of the
Treasury. the banks would now be re-
firing their circulation because unprof-
table, at the rate OF sS,000,O0 per
month, the minimum allowed by law,
and this, too, in the face Of constant
ly increasing demand for more bank
notes"
The report then explains the method
by which the proposed credit currency
system would operate and takes up the
various provisions of the bill, citing
reasons for the incorporation of each
safeguard. II then concludes:
The frequent redemptions of the
credit notes reflect their relation to
business transactions, while the re.
demptioh OF the national bank notes
reflects little more than the life of the
paper upon which they are printed.
That a credit note is Just as eco.
nomic in its use as a deposit which Is
received to be loaned out,no one will
deny, making the nominal allowance
for the cost OF the note and its re-
! demption.
The capital of the national banks
now amounts to 7l4,616.353, and II all
should avail themselves of the privi-
leges of this measure there would be
added to our bank currency $176,654,.
0SS, from which should be deducted
s39, ,202, ,465, the amount which 1,204
banks now have in excess of - per
cent OF their capital, which amount of
the present notes could be retired
without reference to the limit of 49,.
100000 per month. The net increase
of bank notes under this act would be
s149, $50 ,653.
'To facilitate and insure certain and
swift redemption, your committee has
thought II wise 10 establish three re-
demption cities, which, II the Issues
were larger, should be correspondingly
Increased.
"In conclusion, your committee sub
mits the following as self-eVident
truths:
"First-That there is an exigent de
mand for some provision to relieve the
present situation II our unparalleled
prosperity is not itself to prove the
source of a commercial crisis.
"Second-That neither silver mol
gold, nor United States bonds, much
less any other kind of bonds, can be @
proper source of a safe, economical ant
elastic currency.
"Third-That in the six billions Of
liquidated assets OF our national banks
banks there is an Incompatible secur
ity many times over for the credit
notes that our trade demands; ant
that no currency can be truly elastic
that does not spring into being at the
bidding of business and as certainly
disappear when that business Is finish
ed"