Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1907-11-20

stringency are of such sweeping char
acter that If they fail to produce the
desired results it will be because the
disease is great deal more deeply
seated than any one imagines.
Prominent members of the house
and senate who already have been COM
municated with say that in their opin-
ion the issue of the Panama canal
bonds and the certificates of indebted
ness. If properly handled by the banks
and treasury department. surely will
put an end to the present unusual
conditions
The congressional leaders therefore
insist that ample time must be taken
to digest any form Of currency legisla-
ton which may be proposed.
Leaders Flop in Sentiment.
Before the issue of the certificates of
Indebtedness and bonds was decided
upon by the president these same
leaders assured him that congress
would take up the matter as an emer
gency measure and act promptly.
Now however, they are reporting to
the white house that there is no longer
any emergency, and that it would be
extremely dangerous to tinker with
the currency system, except after a
most cautious investigation.
AT the outset there is a serious diff
ference of opinion on the bankers
scheme Of an elastic currency and that
which the president is likely to recon-
mend. There was one great defect in
the scheme suggested by the COM
mittee of the American Bankers as
tlx, iofr
in the house in the form of bill
That scheme for currency reform
provided that any bank might issue
an amount of credit currency equal to
371s per cent of its capital 1t was not
provided that banks should be required
to deposit any specific securities be-
fore issuing these notes.
The notes. like deposits, were Sc
cured by nothing except the general
credit of the bank. The holder of the
notes had no more and no less security
than the depositors, except that
graded taxation on these asset notes
is made to form guarantee fund for
the redemption of all banks which fail.
In practice the guarantee fund,
amounting at the minimum of per
cent of the total circulation of this
kind, would be the chief security of
the note holder
BANKERS Plan" Not Favored.
This form Of elastic currency, based
on unsecured assets of banks, which
is known as the "bankers' plan." is not
popular with congress. The legislators
prefer some system which would re-
quire banks to deposit specific secur-
tiles, other than United States bonds.
UP to the par value of the notes is
sued.
1t is understood that President Roose-
welt is committed to this type of asset
banking, and does not at present, see
his way clear to recommending the is
suance of notes based on the general
assets of bank.
There is feeling in congress that
in times of stress the weakest bank
would be the first to issue credit notes
based on their uncovered assets, the
result being, Of course, to diminish the
security of every depositor of that
bank.
BY stroke of his pen President
Roosevelt has provided national banks
with new elastic currency, which may
aggregate $10O,00O,000. The new GER
of indebtedness bear interest
for only one year.
1t is provided that they may be reg
istered and used as a basis for national
bank circulation. No bank could afford
to keep them on deposit after the in
terest had ceased to run, because the
transaction would no longer be a profit
able one.
I,x> ,,1k ir hot tl,o r,f
which may be put out by
national banks as a result of this new
issue would have to be recalled in one
year. On that account congress will
be asked to legislate in such way |
that in the fall and winter of 1908 |
banks may have some means of re-
placing this temporary circulation with
other notes, so as to avoid sudden
and extremely dangerous contraction
of the currency at that time.