The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1907-12-09
Henry CIeWs Says That Finan-
ciaI Markets Are Becoming
Easier and Panicky Condi-
lions Disappearing.
a CURRENCY SYSTEM
BASED ON BANK ASSETS.
National Banks Should In
crease Emergency CircuIa-
ton to 20 Per Cent of Paid
Up Capital on Securities.

New York, Dec. 9.-Another week of
gratifying recovery has been expert
enced, and since the panic security val
mes show an advance of 10 points and
over on the leading issues.
Gradually, but surely the money
market is working back to normal con-
ditions. The disposition to hoard is
abating and bank reserves are rising,
having been materially assisted by the
engagement of about S1OO.OOO,OOO of
gold, the bulk of which has already ar
rived. Fortunately our interior banks
are rapidly getting over their fright
now that the situation in New York
Is improving, and within a few weeks
money will probably be abundant and
much easier than at present.
Considering the lessened volume of
business and the lower prices at which
It Is being transacted, it is evident that
we are rapidly running into a condi-
ton Of monetary redundancy; fact
which has been wisely recognized by
the government and is reflected in it's
decision to modify it's recent relief
measures. 1t Is now believed that Mr..
Cortelyou will not issue more than
So, 600 900 of Panama bonds, and that
the issue of new certificates will not
exceed $15,OOO,OOO, or total of about
100000 for both classes of securi-
ties, instead of $15,OOOOOO as originally
intended. From all parts of the coun
try there come reports Of steady i'm
provement In the money situation, and
It is confidently believed that the COM
plete resumption of specie payments
d only a matter Of comparatively short
period.
Mills temporarily shut down owing
to the monetary stringency are restart-
ing, and merchants are conducting
their operations extending into the fu-
ture with visibly greater confidence
than a month ago. 1t is not to be ex-
pected that business will go back to
the old scale of activity and profits.
Nevertheless, business conditions are
generally sound; and we now see no
reasons for serious apprehensions in
this respect. Quite possibly some fur
Their decline in the commodity mar
kets will have to be experienced, and
this will prove inconvenient to con-
Germs olready overextended; but no
serious curtailment in the. consumption
OF the necessities of life seems proba-
BILE, and the reaction will fall chiefly
upon what may be classed as luxuries,
which are largely obtained from
abroad and already show a marked de-
cline in importations. A shrinkage
in imports, however, under present
conditions will not be harmful, since
It promises to be accompanied by free
exports and will, therefore, assist us
In retaining as much of the foreign
gold recently imported as seems desir-
able. We have still as a backbone an
unusual degree of prosperity amongst
our farm classes. Corn, cotton, and
nearly all agricultural products con-
tinue to bring good prices to the grow
er and this, it should not be forgotten
Is strong element Of support. There
is little doubt but that the strong finan-
cial sondition Of our agricultural Sec
lions resulting from long series of
profitable harvests, not only had much
to do with the boom which recently
from extreme effects of that collapse.
Secretary Wilson estimates that our
farmers produced crops this year val
ued at 81, 412 100000, an amount 10 per
cent greater than the total for 1906; II
per cent greater than 1905; 20 per cent
greater than 1904, and 81 per cent
above 1899. These records are, of
course, in values and not quantities.
Nevertheless, they show that the Amer
lean farmer is in an exceptionally
strong financial condition, and this has
Internationally greatly mitigated the
effects of the panic.
My preference is for a scientific and
elastic currency system based upon
bank assets, or something like the fol
lowing. to provide for periods of great
money demands: Authorize national
banks to increase their circulation to
~ cslled emergency circulation to the