Tonopah bonanza. [volume] (Butler City [i.e. Butler], Nev.) 1901-1909, 1906-12-08

talnty felt in the sufiiciency of credit
even at high rates. Excessive rates
for call money in New York attract
money from the interior banks into
the speculative field; this depletes
the fund that would otherwise be
available for compercial Uses, and
commercial borrowers are forced to
pay abnormal rates; so that each
fall a tax, in the shape of increased
interest charges. is placed on the
whole commerce of the country.
The mere statement of these facts
shows hat our present system is
seriously defective. There is need
of a change. Unfortunately, how
ever, many of the proposed changes
must be ruled from consideration
because they are complicated, are
not easy of comprehension, and tend
to disturb existing rights and inter-
ests. We must also rule out n
plan which would materially impair
the value of the United States 2 per
cent bonds now pledged to secure
circulation, the issue OF which was
made under oncidtions peculiarly
creditable to the Treasury. l do
not press any especial plan. Various
plans have recently been proposed
by expert committees of bankers.
Among the plans which are possibly
feasible and which certainly should
receive your consideration is that re-
peatedly brought to your attention
by the present Secretary of the
Treasury, the essential features of
which have been approved by many
prominent bankers and business
men. According to this plan nation
al banks should be permitted to is
sue a specified proportion of their
capital in notes of a given kind, the
issue TO be taxed at SO high a 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
presented by times OF stringency.
| do not say that this is the right
system. | only advance it to en-
phasize 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
possibility of discrimination and fa-
voritism. Such a plan would tend
to prevent 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
its accumulation at New York
tempts bankers to lend it at low
rates for speculative purposes;
whereas at other times when the
crops are being moved there is ur-
gent need for a large but temporary
increase in the currency supply. 1t
must never be forgotten that this
question concerns business MEN gem
u oAAN AulbC CO AluSi az UanhEl6y CO
pecially is this true of stockmen,
farmers, and business men in the
West; for at present at certain sea-
ons OF the year the difference in in
terest rates between the East and
the West is from 6 to 10 per cent,
whereas in Canada the corresponds
ing difference is but 2 per cent. Any
plan must, of course, guard the in
terests of western and southern
bankers as carefully as it guards the
interests of New York or Chicago
bankers; and must be drawn from
/ the standpoints of the farmer and
the merchant no less than from the
standpoints of the city banker and
the country banker.
The law should be amended so as
specifically to provide that the funds
: derived from customs duties may be
treated by the Secretary OF the
Treasury as he treats funds obtain
ed under the internal-revenue laws.
There should be a considerable in
crease in bills of small denomina-
/ lions. Permission should be given
= banks, if necessary under settled re-
: strietions, to retire their circulation
f to a larger amount than three mil
lions q month.
Philippine Tariff.
/ most earnestly hope that the bill
to provide a lower tariff for or else
absolute free trade in Philippine
products will become a law. Nc
harm will come to any American in
dustry; and while there will be SOM
small real material benefit to th'
o Filipinos, the main benefit will COM
by the showing made as to our pur
pose to do all in our power for theil
It welfare. So far our action in thu