Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1907-11-24
DisapprOVes Administrations
Issue Of Bonds and Treas
ury Certificates
Predicts Disastrous Reflex If
These Issues Are Made
at Present

New York, N. Y !, Nov. % Repre-
sentative Chas. N. Fowler, chairman
of the house committee on banking
and currency, today gave out a state
ment regarding the issue of Panama
canal bonds and treasury certificates.
He said in part:
Personally and from party
standpoint, it is unpleasant for me
to disapproEe the action of the re-
publican administration, but my
study of the questions involved, and
my duty to the public cohpels me to
set forth reasons why the action of
the administration is surprising, ex-
traordinary, unwarranted and most
unfortunate.
'tOn Friday, Nov. 10, the crisis OF
the present currency panic had been
reached, and successfully passed,
through special achievements of
American bankers in bringing gold to
this country to the extent of about
STA, 00o,0 o0 at a. very great cost to
| themselves, for it was purchased gen.
orally at premium of about per-
cent, and also by responding to- the
business necessities of various locali-
ties in issuing clearing house GER
tificates and cashiers checks.
'At this juncture, when the fnan-
eial and currency situation was al
ready we'll in hand, the administra-
ton interviewed against the opinion
of the best judges of the situation.
Therefore, primarily the effect of the
governments action must be a most
disturbing factor, although the bank
ers of the country may prevent any
serious consequences at the moment.
t'Let us deal with S5O,0O0,0o0 of 2
percent Panama bonds to be used as
a basis of additional bank note cir
| culation. The government has $780,
| 100000 in its treasury, or to its cred
it and therefore, it didn't need the
| proceeds to pay for the construction
| of the Panama canal. or to meet
contingent expenditures of the gov
eminent. By this hypodermic in
lection of another fifty million dol
lars of fixed immobile currency into
| our sodden mass of bond-secured
| bank note circulation, which never
responds to the varying conditions
of commerce because not directly re-
! lated to the business of the country,
| we have made bad condition worse.
| Think of pushing farther the princi-
pie of currency expansion which, al
though our business was constantly
expanding from 1882 to 1891, fell
from 1862, Oo0, 200 in 1882, to $125, 000,-
600 in 1891. Why? Simply because
it was Improbable to hold bonds for
that purpose, aye, the principle which
has proved its utter lack of adoption
to our needs since 1891, by showing
i the actual contraction during the fall
of many of the intervening years and
i actual expansion during the spring
months of many others.
\ !" We shall find when the reaction
comes and the changed condition is
\ reflected in our eyes, the beginning
/ about the 18th of January and increas-
! ing rapidly during the spring months
J until the reserves in our banks viii
probably exceed those Of any proceed
| ing year since 1900, that this very
|; $3.50, 0oo. 900 of fortunately increased
/, debt shall be converted into bank
4 notes, that those bank notes will find
II d place IN the reserves OF state banks.
I in reserves of trust companies and TO
some extent. though they have no
Il right therein, reserves Of the national
banks.
EVERY bank not held Is reserve
JContinued on page 81