The Idaho Republican. [volume] (Blackfoot, Idaho) 1904-1932, 1906-12-07
CURRENCY REFORM.
Amendments to Existing Laws Are
Badly Needed.

especially call your attention to
the second subject, the condition of
our currency laws The national bank
act has ably served great purpose in
aiding the enormous business develop
ment of the country; and within ten
years there has been an increase in
circulation per capita from $2141 to
$33.08. For several years evidence has
been accommodating that additional leg
islation is needed. The recurrence of
fects of the present laws. There must
soon be revision Of them, because to
leave them as they are means to incur
liability, of business disaster Since
f1uctuation In the interest on call
money from two per cent. to 80 per
cent; and the fuctuation was even
greater during the preceding six
had to step in and by wise action put
a stop to the most violent period of os-
cillation. Even worse than such fiuctu-
alton Is the advance In commercial
rates and the uncertainty felt in the
suficiency Of credit even at high rates.
All commercial interests suffer during
each crop period. Excessive rates for
call money in New York attract money
from the interior banks into the specu-
lative field; this depletes the fund that
would otherwise be available for com
nlercial uses, and commercial borrow
ers are forced to pay abnormal rates;
so that each fall tax, in the shape of
increased interest charges is placed
on the whole commerce Of the country
The mere statement Of these facts
shows that our present system is seri-
ously defective. There is need of a
change. Unfortunately, however. many
from consideration because they are
complicated, are not easy of compre-
hension, and tend to disturb existing
rights and interests. We must also
1n ,toI~
terially impair the value of the United
States two per cent. bonds now pledged
to secure circulation. the Issue of
which was made under conditions pc
do not press any special plan. Various
plans have recently been proposed by
expert committees of bankers Among
the plans which are possibly feasible
your consideration Is that repeatedly
brought to your attention by the pres
ent secretary of the treasury, the es-
sential features of which have been
approved by many prominent bankers
plan national banks should be per-
mitted to issue specified proportion
of their capital in notes of a given
kind. the issue to be 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-
scented by times of stringency
Need of Automatic System.
I do not say that this is the right |
system. | only advance 1t to empha-
size my belief that there is need for |
the adoption of some system which |
shall be automatic and open to all |
sound banks, SO as to avoid all pos
sibility of discrimination and favorit- |
ism Such a plan would tend to pre- |
vent the spasms of high money and
speculation which now obtain in the
New York market for at present |
there is too much currency at certain |
seasons of the year. and it's accumu-
lation at New York tempts bankers |
to lend 1t at low rates for speculative
purposes; whereas at other times when
the crops are bling moved there is
urgent need for large but temporary
increase in the currency supply. 1t
must never be forgotten that this
question concerns business men gen.
orally quite as much as bankers; es-