The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1907-11-04
Chairman Of Banking and
Currency Committee Ex-
plains the Conditions.
SHOWS CAUSE
OF STRINGENCYs
Banks Have Sent 100000, 900 OF
Currency Into Wheat and
Cotton Fields and to Mines,
and This Amount Is
Locked Up-Urges
Use OF Checks.

NEW YORK. November a-rhat per-
manent relief from the present none
tary stringency can only be had
through system Of credit currency
adequate - meet the requirements OF
trade and redeemab1e In gold coip
was the opinion expressed to-day by
Representative Charles N. Fowler. OF
New Jersey. chairman of the Banking
and Currency Committee, which will
at the coming session of Congress-.
endcavor to have law passed proyid-
ing for credit currency. issued by tha
national banks. Until such permanent
relief is made possible by legislatiya
enactment. MIR. Fowler asserted, the
situation must be met by the issuanca
OF clearing house certificates. cashiers
checks and due bills OF business houses
and manufacturers.
The underlying business condi-
tions," lie said to the Associated Press
to-day. "are essentially SCUM as EVIL
denced by the Increased earnings OF
| the railroads and the fact that tha
value of our agricultural products this
year are S500,000,000 more than last
year (Which was the highest year III
our history), and are bringing to our
people about s7,o0o.ooc,ooo
But public confidence has been
| greatly shaken and credit seriously
1 affected; therefore. every patriotic
/
should do all in his power to restore
| that confidence which is essential to
national prosperity.
Cnuse OF Strfngency.
4 The cause of the currency stringency
| is that there Is scattered broadcast
/ throughout the country. at the mines.
/ In the wheat. corn and cotton fields, In
1 the pockets of the people or locked up
I about si,3oo.o0O0o0 OF the reserys
Z
4 which under a proper condition, would
4 be in the banks serving as reservs.
4 Temporary relief will be throuph tine
4 forced use of current credit in ths
4 form OF clearing -houae certificates
lscashier's checks and due bills OF bust
! ness houses and manufacturers durina
4 the next ninety days The permanent
II cure must come through system Of
.Hcredit currency expanding and con.
tracing with the ordinary demands oi
the smaller trade, precisely RS cheeky
A and drafts do in the broader field 81
4 commerce.
u Present Condition.
Eve have now proceeded far enough
into the present financial crisis to get
A "A pretty clear perspective of the real
4 situation,
"First The condition is now general.
y reaching every nook and corner of thu
4 country.
Il second. The gold certificates, the
4 UNITED States notes and silver certii-3
4 Gates or the reserve money which tho
banks of the country have sent into
Z the wheat fields of the West and
4 Northwest. into. the corntields of the
4 West and the Southwest. into the cotf
tonfiells of the South and into the
country districts of all sections to SET
: tie up the years business. say. if
\ these reserves now scattered broadcast
! lover the land We're in the banks where
! Ethey properly belong. there would have.
been no money panic this fall.
saOo,ooO,ooo III Four Mouths.
4.The proof of this assertion is con-
: elusive. During the past four months
r there has been sent from the banks
) into the country districts approximate
e ElY S3eo,0oo,o0o of currency:
II OF this amount. s250,000,000 approx.
: -limately, was reserve money, which, ii
1t were now in the banks, would serve
Z as u basis of moro than sl,250,0O0000s
: Slsloans, and the present crisis would have
!, been averted. This result could have
been accomplished without increasing
8 our bank reserves to the extent OF ono
8 single dollar; without increasing the
= sliabilities Of the banks of the country
Ito the extent of one single cent
:, II challenge any man to controvert
Z this statement, and submit the follow
il ing as absolutely conclusive proof OF
s the assertion: II the banks of the
8 Ecountry in which the $3.50, 100000 had
. .Eheen deposited had been authorized, as
- they should have been, to oacreate banlS
d notes credits as we'll as bank book
- credits, and they had proceeded to con-
3 Vert the amount of bank book credits
!. into bank note credits. the banks would
: not have been affected In any degree
or In any way whatever, and the whole
country would have been amply sup
piled with currency with which 10
!, transact all the fall business,
Z by Cashiers Checks.
4 ''How could this have been done
l, Simply by authorizing each bank 10
4 issue cashiers checks to bearer, which
9 is a current credit; that is, credit
=, that passes by mere delivery. requiring
i no Endorsements, by this process th4
i. $3.50, 100000 of hank book credits would
i -Ehave been converted into bank note
= Ecredits, and al the reserves required
n forsbot forms OF credits should be
SI the same, there could have been na
r. change whatever in the situation. Tile
9 bank debt is the same, the amount ot
\ the reserve Is tho same. 1t has beer
- only matter OF bookkeepine, An Is
v sue of currant credit adeqnata 10 4ineel
II requirements of trade and currantly
H. redeemed In gold coin is q, principls
of followed by every civilized country IN
= the world except our own
4 X, Ranking Power,
n. '.lIark this! The banking power g
an nI1he3 United States in $50 Was abp,'i
z, $4,000. 100000 aud now exceeds sl6.p-
~ !, 900 0O0. .00o or equal to the antt ~ ba nk,
~ ing power OF the world IN 1890, whies
v- Mulhau placed at sl5,9S5, ,00 Geo.
,.'ro-day the banking power OF ths
tentire world, outside OF the unitee
states, IL only sal,s5o 600, 0oq. aud q
Or this amount 20 per cent. I, more tfls,t
ed 81. 900. .oO0.t00. ssin cashiers cheeks e'
w Eeurrent credits, That Is credit CUT
ne reney; and Vet, while the united STA 5 ts'
q ms three seven,rs OF tllS baaAtn4
y, y, po, ,ye,, OF the entire world, II has uol
- one single dollar Of current banl