The herald and news. [volume] (Newberry S.C.) 1903-1937, 1907-12-06
ELASTIC CURRENCY NEEDED
DECLARES THE PRESIDENT.
Thinks Provision Should Be Made
for an Emergency Issue Upon
Conditions Carefully Pre-
scribed by the Govern
ment.

rency reform President Roosevelt in
his message to congress says:
In my message TO the congress Il
year ago I spoke as follows Of the
currency:
Il especially call your attcation
to the condition of our currency laws.
The national bank act has ably serv-
ed great purpose in aiding the cnor-
nous business development Of the
country, and within ten years there
has been an increase in circulation
per capita from $2l.4l to $33.0S. For
several years evidence has been ac-
cnmulating that additional legiSla-
tiol * needed. The recurrence Of
eaeh crop season emphasizes the de-
rccts Of the present laws. There
must soon be Il revision Of them, be-
cause to leave them as they arc
means TO |incur liability Of business
disaster. Since your body adjourn
ed there has been fluctuation in
the interest Oh call money from :
per cent. to 30 per cent, and the
| fluctuation was even greater during
the preceding" six months. The sec
! rctary Of the treasury had to step in
and by wise action put Il stop to The
most violent period Of oscillation
Even worse than such rluctuation is
the advance in commercial rates and
the uncertainty felt in the Suflicicncy
of credit even at high rates. All
commercial interests suffer during
each crop period. Excessive rates
for call money in New York attract
money from the interior banks into
the speculative field. This depletcs
tne fund that would otherwise be
available for commercial uses, and
commercial borrowers are forced to
pay abnormal rates, so that each fall
tax, in the shape of increased inter
est charges, is placed on the whole
commerce Of the country.
" The mere statement Of these
facts shows IT, our present system
is seriously defective. There is need
of Il change. Unfortunately, how
ever, many of the proposed changes
must be ruled from consideration be-
cause they arc complicated, are not
easy Of comprehension, and tend to
| disturb existing rights and interests.
We must also rule ont any plan
which would materially impair the
value of the United States 2 per
celt. bonds now pledged TO secure
circulation, the issue Of which was
made under conditions peculiarly
creditable to the treasury. 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 repeatedly
| brought TO yt%r attention by the
present secretary of tne treasury,
ihc essential features; Of which have
been approved by many prominent
bankers and business men. Accord
ing to this plan national banks
should be permitted TO issue a spcci-
fed proportion of their capital in
, notes Of given kind, the issue to be
taxed at SO high rate as to drive
the notes back when not wanted in
legitimate trade. Tnis plan would
not permit the issue Of currency to
rive banks additional profits, but TO
meet thc emergency presented by
times Of Strin"cncy.
"'I do not say that this is the
right system. ! only advance it to
emphasize my belief that there is
need for The adoption Of some system
which snail be automatic and open to
all sound banks. so as to avoid all
possibility of discrimination and
| favoritism. Such plan would tend
10 prevent the SpaSlns Of high molcy
and speculation which now obtain in
| the New York market: for af pres
| cnt there is too much currency at
certain seasons Of the year, and its
! accumulation at New York tcmpts
baIkcrS to lend il at low rates for
| speculative purposes; whereas at
other times when the crops arc being
moved there is urgent need for a
large temporary increase in the cur
| rcncy supply. 1t must never be