New-York tribune., 1907-11-02
CURRENCY REF0RM UP AGAIN

CT RRENCl REFORu LP AGAIN.
The financial disturbance will serve to bring
the question OF currency reform more urgently
than ever TO the attention of Congress. EX-Gov-
ernOr Herrck of Ohio was quoted in yesterday S
Tribune as saying that the movement for
asset currency was spreading throughout the
country. and there seems to us to be evidence in
our newspaper exchanges that the idea of i'm
parting some elasticity TO the currency is coming
to be better understood and more generally Ia
vOred. The realization is growing that there
business emergencies which this country
rigid system does not meet and that other ma
tiOns have currencies better adapted than ours
To the needs Of commerce which in actual opcr-
alton have proved 10 be perfectly safe
The present efforts of the Treasury author
tiles to increase the national bank note circula-
tion illustrate some of the faults of our system.
Bank reserves are low from the receni crisis
and the West is already calling upon the East
for money 20 move its crops. while after a short
interval viii begin another flow of money ia
various directions to serve the needs of the
holiday trade. In n country where a credit cur
rency is issued by the banks the relief of the
local needs of business is prompt and not at
tended by disturbance of the currency supply
in other sections. The banknuteS are issued
promptly and retired as promptly when they
have served their purpose. But when this coun-
try needs additional currency for the regular
pressing demands Of the fall trade and crop
moving the Secretary of the Treasury must call
the attention Of bankers to his willingness to
accept other bonds in place of the United States
bonds securing the government deposits In the
banks The bankers must. if they wish to issue
more currency. supply the other bonds. which
must be accepted by the Secretary. and then the
notes are put out. The process has been proved
by past experience To be slow. the emergency
often passing before the currency is issued.
Now when this extra currency is put into cir
Culation. although only for IL Temporary cner-
gency. it stays there long after the emergency
has passed. and if the need of money happens
10 be less than usual il creates a slight infla-
ton. which tends to cause an export of gold
The life of one of our national bank notes is we
believe, about two years, so that il an excess
of them is in circulation ii takes many months
TO it. The life of credit note varies with
different countries but il is at most only a few
Weeks-Only two on the average in Scotland
Thus an imitation of credit currency under the
prompt redemption provided for such notes cures
itself almost instantly. We have no disposition
to criticise the Treasury Department for its
present efforts TO increase the circulation of ma
tonal bank notes. We merely wish to call atten-
ton again to the disadvantage under which this
country iabors as regards its currency
All that Is proposed by the advocates of an
asset currency is to provide for emergencies and
give the banks all over the country the right to
make part of their credit promptly available
lor the needs OF business. 1t would prevent such
tension as exists in the bigger financial centres
when the crops are being moved and in similar
eXlgencies. Probably the attention which Con
gress will give TO the renewed efforts at currency
reform will depend to some extent on the prog
ress of events If the effects Of the present dis.
turbance seem to have passed away before the
session ends Congress may again postpone ear
nest consideration of the question, but it is
gratifying 10 see evidence that the subject is
receiving more general attention and that intaII-
gent public opinion is forming upon it,