The Birmingham age-herald., 1906-12-05

1 pressed in the report on this subject laid before the House at it's last session will l be passed. l am well aware that in for i mer years objectionable measures have
 been proposed in reference to the eneour- 1 agement of American shipping; but 1t seems to me that the proposed measure is as nearly unobjectionabe as any can l be. It will of course benefit primarily our seaboard states, such as Maine, Louis l jana and Washington; but what benefits ] part of our people in the end benfits all, 1 just as governement aid to irrigation and l forestry in the west is really of benefit, not only to the Rocky Mountain states, 1 but to all our country. If 1t prove inn practicable to enact a law for the en- couragement of shipping generally. then at least provision should be made for better communication with South Ameri- ca, notably for fast mail lines to the l chief South American ports. It Is dis l creditable to us that our business people, 1 for lack of direct communication in the l shape of lines of steamers with South America, should in that great sister con tinent be at a disadvantage compared to the business people of Europe.
 Currency Reform.
 I especially call your attention to the | second subject, the condition of our cur rency laws. The national bank act has ably served a great purpose in aiding the | enormous business development of the 1 country; and within ten years there has l been an increase in circulation per capita i from s21 fl to $33 .0S. For several years | evidence has been accumulating that aG- l ditional legislation is needed The recur- renee of each crop season emphasizes the l defects of the present laws. There must | ka nf hara11SP tO 1 leave them as they are means to incur i liability of business disaster. Since your 1 body adjourned there has been fluctua- ton in the interest on call money from 2 per cent to 30 per cent; and the huctua- l ton was even greater during the preced- l ing six months. The secretary Of the l treasury had to step in and by wise action l put a stop to the most violent period of oscillation. Even worse than such fiuc-
 tuation is the advance In commercial I rates and the uncertainty felt in the suf- ], hciency of credit even at high rates All l commercial interests suffer during eacn 1 crop period. Excessive rates for call money in New York attract money from
 the interior banks into the speculative l field; this depletes the fund that would | otherwise be available for commercial ! uses, and commercial borrowers are forced 1 to pay abnormal rates; so that each fall 1 a tax, In the shape of increased interest l charges is placed on the whole commerce l of tho country
 | The mere statement of these facts shows l that our present system Is seriously de- ] feetive. There is need of change. Un- 1 fortunately, however, many of the pro- posed changes must be ruled from consid- eration because they are complicated, are not easy of comprehension, and tend to i disturb existing rights and interests. We 1 must also rule out any plan which would l materially impair the value of the United l States per cent bonds now pledged to secure circulation, the issue of which was made under conditions peculiarly credita- 1 ble to the treasury. I do not press any 1 especial plan Various plans have re-
 gently been proposed by expert commit
 tees of bankers. Among the plans which are possibly feasible and which certainly should receive your consideration is that repeatedly brought to your attention by 1 the present secretary of the treasury, the
 essential features of which have been ] approved by many prominent bankers and l business men. According to this plan 1 national banks should be permitted to | issue special proportion of their capital | in notes of a given kind, the issue to be l taxed at so high rate as to drive the
 notes back when not wanted in legitimate
 trade. This plan would not permit the
 issue of currency to give banks additional
 profits, but to meet the emergency pre- l scented by times of strngency
 I do not say that this is the right sys- 1 tenn I only advance it to emphasize my
 belief that there is need for the adoption l of some system which shall be automatic and open to all sound banks. so as to i avoid all possibility of discrimination and 1 fayortism. Such a plan would tend to
 prevent the spasms of high money and l speculation which now obtain in the New ! York market; for at present there Is too l much currency at certain seasons or the
 year, and its accumulation at New York
 tempts bankers to lend 1t at low rates for l speculative purposes; whereas at other 1 times when the crops are being moved
 there is urgent need for large but tenn
 porary increase in the currency supply. l It must never be forgotten that this ques- | ton concerns business men generally
 quite as much as bankers; especially Is
 this true of stockmen, farmers and busi- ! ness men in the west; for at present at
 certain seasons of the year the difference l in interest rates between the. east and
 the west is from to 10 per cent. whereas 1 in Canada the corresponding difference is
 but per cent. Any plan must, of course,
 guard the interests of western and south
 
 interests of New York or Chicago bank
 ers and must be drawn from the stand-
 point of the farmer and the merchant no
 less than from the standpoint of the city
 banker and the country banker.
 The law should be amended so as spe- l officially to provide that the funds de- i rived from customs duties may be treated by the secretary of the treasury as he treats funds obtained under the internal , revenue laws. There should be a con siderable increase in bills of small de- 1 nominations. Permission should be given
 banks, if necessary under settled re-
 strictions, to retire their circulation to a l larger amount than three millions a | month.
 Philippine Tariff.
 l most earnestly hope that the Dill to
 provide a lower tariff for or else abso-
 lute free trade in Philippine products will | become law. No harm will come to any American industry and while there
 will be some small but real material
 benefit to the Filipinos, the main bcne- fit will come by the showing made as
 to our purpose to do all in our power
 for their welfare. So far our action in
 the Philippines has been abundantly ius-
 tified, not mainly and indeed not primar- fly because of the added dignity it has | given us as a nation by proving that
 we are capable honorably and efficient
 ly to bear the international burdens which
 mighty people should bear. but even
 more because of the immense benefit that
 has come to the people of the Philippige
 islands. In these islands we are steadily
 introducing both liberty and order. to a greater degree than their people have ever before known We have secured