The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-10-08

otner chance to See II hoy can govern
themselves. There Is not the slightest rea-
son to expect that the carrying out Of
this policy will affect prices Of securi-
ties here by a hairs breadth. II there
were any developments during the week
OF a political nature they were favora-
bic from a financial point OF view IA show
ing the confusion in which the new forces
that have captured the Democratic party
in this State have ~entangled themselves.
A matter Of nc little interest was the vio-
lent rise that occurred in the price OF
cotton, and that class Of spectators who
care chiefly for rapid fluctuations in values
found more TO crafty them on the Cotto OF
Exchange last week than in the stock mar
ket. Throughout the summer a pronounced
declining movement in the price Of cotton
WINS in progress, based upon the widely
circulated views Of spectators for the fall
in the commodity that the seasons cotton
crop would be so large that the addition TO
the worlds surplus store OF cotton entailed
by it would cause the crop TO sell at low
prices. These estimates, however, disre-
garded the adverse weather that the plant
ers in the northern portion Of the cotton
belt had met with throughout the season,
and also the very low stocks OF cotton in
England and on the Continent Of Europe;
and the low quotations for cotton made in
July and August were not at all justified by
actual conditions. The cotton market was
slowly righting itself when the great storm
on the Gulf coast occurred, with it's impair
ment OF the crop by, as was estimated
800 900 bales. A bear panic in dealings in
cotton futures therefore naturally hap
pened, sending these quotations up. in
some instances. more than two hundred
points. The Importance of this in a finan-
cial sense is that it has stimulated purchases
of the staple by the English and foreign spin
ners for the purpose Of replenishing their
diminished stocks and must result inevi-
tably in an increase OF cotton bills in the
foreign exchange market. There is very
little doubt that the years record of sales
Of cotton to Europe will be in excess Of
even last years enormous total Of $780,
100000. With the report made last week
to the Chamber of Commerce by the COM
mittee OF bankers asked some time since
TO submit recommendations for an amend
ment Of the existing currency system OF
the country there was very little dissent
anywhere in financial circles. The COM
mittee rave preference, as an ideal system,
to the plan Of a central reserve national
bank in the country, following the general
lines already enforced in the other great
civilized nations of the world, but recog-
nized, as do all our bankers and public
men, that political and financial ~prejudices
are such in III country. and will probably
remain such for years TO come. hat the
establishment of a Bank OF the United
States is impossible. They therefore
suggested. first. the repeal Of the law limit
ing to 81, 1000, 900 the quantity Of national
bank notes that can be retired in any one
month, since it is well established that a
bank will hesitate to take out such ~circula-
tion as is needed in times of money strin-
gency il facilities are wanting for prompt
redemption Of this currency when occasion
for its Use has passed, and, secondly, that
there should he no further locking up Of
money by the national Treasury, but that
all receipts Of the Government as they ac-
cumulate beyond a fair working balance
should be deposited in the national banks
The utility OF such a departure from
the present custom has been emphasized
time and again in our cOuntry's history,
and notably in recent weeks. The
committees main recommendation, how
ever, is that those national banks that
have taken out circulation based on Gov
eminent bonds to the extent Of 50 per cent.
OF their capital shall have authority 10
issue additional notes equal in amount TO
SIS per cent. of their capital under a gradu-
ated tax running up as high at the last as
Q per cent. The experience Of other coun-
tries with such a system has abundantly
proved that the issue Of circulation in this
way as an emergency measure is abso-
lutely safe and that it has dispelled many
a monetary stringenoy. 1t may perhaps
open to question whether any improve
ments that may be devised will ever serve
to wholly prevent in our country such re-
spasms Of monetary stress az have
been witnessed, for instance, in the last
few months, In a land whose development
gone on with such prodigious strides
as has our own and where the tempera-
ment OF the population is so sanguine
must always be active and will
occasionally run to excess. All classes Of
our community. even u bank officers
themselves, are apt to become so infected
with the desire Of making money rapidly
as TO act at times with lack Of prudence q; and
whatever may he the checks supplied by
to an undue extension Of credit or the
facilities granted by the law to an ~emer-
gency circulation" Of money nothing can
supply the place Of due conservatism
the part Of those charged with the duties
of lending money for the business needs
Of the community or avert the penalties Of
recklessness in financial operations. Beyond
any question, however, u present currency
system is in need Of immense and thorough
going reform, and the suggestions as made
by the Chamber Of Commerce committee
the subject certainly embody the con-
sensus Of the best people in the country
who nave thought about the matter in re-
cent years.
FINANCIAL AND COMMERCIAL.