The Birmingham age-herald., 1907-11-04

its or loans, and the present crisis would have been averted. This result could have been accomplished without increasing our bank reserves to the extent of one single dollar, without increasing the liabilities of the banks of the country to the extent of one single cent
 q challenge any man to eontrovert this statement and submit the following as ao- solutely conclusive proof of the assertion If the banks of the country, in which the $250,0o0.000 had been deposited, had been authorized. as they should have been, to create bank note credits as well as bank book credits, and they had proceeded to convert this S25O, 600, coo of bank book cred it's into bank note credits, the banks would not nave been affected in any do gree or in any way whatever, and the whole country would have been amply supplied with currency with which ta transact all the fall business.
 How could this be done? Simply by authorizing each bank to issue cashiers checks to bearer which is current ered- it. that is, credit that passes by mero delivery, requiring no indorsement By this process the S250000,000 of bank book credits would have been converted into bank note credits, and as the reserves re- quired for both forms of credits should be the same there could have been no change whatever in the situation. The bank debt is the same, the amount of the reserve is the same. It has been only a matter of bookkeeping. An issue of cur rent credit adequate to meet the require- ments of trade and currently redeemed in gold coin is principal followed by every civilized country in the world except our own.
 Banking Power.
 sHark this; The banking power Of the United States in 1890 was about $o,0000 CO., O00. and now exceeds $16.000 000,000 or equal to the entire banking power of the world in 1890. which Muihall placed at $l5.9s5000. Today the banking power of the entire world. outside of the United States, is only $21, ,952, ,O00000, and of this about 20 per cent, or more than s4,0000o0, = GOO, is in cashiers checks or current cred- it's That is, credit currency, and yet while the United States has three-sev- enths of the banking power of the entire world it has not one single dollar of current bank credit although the other four-sevenths of the worlds banking power has the advantage of $4,000 900 current credits of credit currency.
 "On the basis we are entitled to have $3. GOO, ,00O00O of current credit or credit cur rency.
 ''If this principal were broadly adopted St bank reserves might be increased by an average of 9la per cent to about 20 per cent. and our banking liabilities remain practically the same
 Gan any one give a single reason why we should lise l.. check book for credits to order and not use current credit of the bank upon which we draw our checks Is not the cashiers check just as good as our check upon the same bank? Indeed better protected it should be by a guar antee fund deposited with the United States government, many more times ample to insure it's redemption in gold coin.
 ''If the banking institutions of the coun- try could exchange s1,00O.000, GOO of cash iers' checks for 8, ,OO0 OOo.0oo of reserve now floating around in the mines, wheat, corn and cotton fields. and this $1,0Oo,000.0J0 were added to the s1.000. o0,00O in the banks on July l. 1907, our bank liabilities would be increased only about s per cent. While our reserve would be increased 100 per cent, it would be 20 per cent, and this end alone is sufficient to justify the adop- ton of the principle of current credits Tn this country"