The Birmingham age-herald., 1907-12-02
FOWLER WANTS
 LEGISLATION Discusses Outlook FG Finance In SiStieth Congress CURRENCY SYSTEM IS FAULTY Discredits Value of State, Municipal and Railroad Bonds As Safe se-
 curity for Currency Issue.
 The Cashiers Checks.

New York, December 1.-Chairman Fowler of the house committee on bank ing and currency made the following statement today regarding the outlook in the financial situation in the sixtieth Congress-
 "There certainly should be some reme- dial legislation and l can assure you that the members of the committee on bank ing and currency will bend their ener- gies to that end. What we shall be able to accomplish no man can answer. But that there is urgent need for help no man can deny.
 At the dinner of the American Bank CTS association at St. Louis a year ago 1 predicted the thing which has hap pened and must happen unless some im- mediate action was taken; that there was not a banker in the United States who would not regret it if something were not done
 At the close of the last session of Congress I said that the condition Of our finances and currency was such that it would of necessity lead to the destruc- tion of our prosperity.
 Again now I declare that If this gov ernment continues its present policy of injection into the arteries of trade and commerce a fixed bond secured currency by exchanging securities by bond spec ulation, by manipulation by executive or der or by any other form of thirnble- rigging-we shall continue to move, but with greatly accelerated speed toward a commercial crisis to which the present panic Is only pleasant summer out ing. Our condition this fall has been onD of real prosperity. Our crops are worth about $7 ,0oo,ooo00o, the products of 70, ,iuines about s1, 100 Ooo.eoo. our rnenu- factured products about slf,0oo,Ooo,ooo a total Of s2o, ,ooo,o ooo.ooo v e-
 Prices Are Higher.
 Meanwhile we have had the advan- tage of an extraordinary consumption of foodstuffs and are enjoying exceptionally high prices. If all this were not true and on the other hand our business con ditions had been bad, our crops poor and foreign prices low. imagine what would have transpired.
 Notwithstanding all this and wholly because of the more or less administra- ton of our financial affairs, we are in a state of panic.
 We have today in the banks of this country about SIP, ,Oo0,0o0 of deposits and about the same amount of outstand- in.- loans. Against this fabulous sum the banks hold as reserve about S90O, ,0O0- OOJ, or less than per cent. And even ot this per cent reserve nearly one-quar- ter S200, GOO, Is in bank notes--a mereI credit, mere promise to pay.
 "Stating it in another way, the reserve ss held against s2,5Oo,oOo,ooO of our bank d,s- posits today are bank notes and ot gold, which is admittedly the only pro yp- CT reserve in any country with gold standard.
 "Yet if we continue our presen policy where is it going to end? Not l. ong will it be before all our bank depo' tits will rest upon credit reserves. Thi Is ob- viously the worst and widest form of imitation. Yet 1t is rumored | at sheer madness is to follow as a sche ne is now being wrought out to add to 7 is already overwhelming burden anotl sr load in the form of state. municipal and railroad bonds as the basis of our bank currency liability. No one who hs ss studied this question doubts that all ( Jf our reserves, whether for deposit or for any other form of bank liability, including bank notes, should be gold Yet amazing as it ma.- seem, at the annual meeting of the American Banker association year ago, resolution as introduced declar- ing that national 'oank notes were it reserve. The arg ument was that na- tonal bank note, being secured by gov ernment bonds, was just as good re- serve as gree back and the greenback Is q lawful rese Irve. But this is the be- ginning of the question, because the greenback itsel is only tolerated as re- serve because the government stands ready at all ines to redeem 1t in gold.
 The securif y for the bank note on the other hs nd is ? per cent govern ment bondsY payable 20 years hence, which, as ali investment based upon it's rate of interest, would sell for about 60 cents Oh the dollar. Its present price is du to specia1 demand for it, as security for tue bank note issues.
 Suggests Remedy.
 ITO suggest as 4 remedy for our financial fable that we add to the al- ready ef listing burden of about seven hundred million of bond secured bank issue, An unlimited amount of bank notes based upon state, municipal or railroald bonds will prove the last straw It will still further force gold out of our reserve and out of the count ry.
 "Tl5e Now Work city bonds arc os ths highest character and would neces- saril Y be included. Yet of ose it sho'ald be said that the per cents son q years ago sold for between 110