East Oregonian : E.O. (Pendleton, OR) 1888-current, 1907-12-04


waterways, irrigation and public
lands. The president says
In my message to congress year
ago / spoke as follows on the cur
rency:
'I especially call your attention to
the condition OF our currency laws.
The national bank act has ably served
great purpose in aiding the enor-
nous business development of the
country, and within 10 years there
has been an increase in circulation
per capita from $21.41 to $33.0S. For
several years evidence has been ac-
cumulating that additional legislation
Is needed. The recurrence of each
crop season emphasizes the defects
of the present laws.
There must soor pe n revision Of
them, because to leave them as they
are means to incur liability of busi-
ness disaster. Since your body ad-
journed there has been a fluctuation
In the interest on call money from
per cent to 80 per cent and the fluc-
tuation was even greater during the
preceding six months. The secretary
of the treasury had to step in and
by wise action put a stop to the most
violent period OF oscillation.
Even worse than such fluctuatoin
is the advance In commercial rates
and the uncertainty felt in the suffic-
iency Of credit even at high rates. All
commercial interests suffer during
each crop period. Excessive rates for
call money in New York attract mon
ey from the interior banks into the
speculative field. This depletes the
fund that would otherwise be availa-
BILE for commercial uses, and CONNER
cial borrowers are forced to pay
abnormal rates, so that each fall a
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 that our present system is Sc
riously defective. There is need of
a change. Unfortunately. however,
many OF the proposed changes must
be ruled from consideration because
they are complicated, are not easy OF
comprehension, and tend to disturb
existing rights and interests. we
must also rule out any play which
would materially impair the value Of
the United States per cent bonds
now pledged to secure circulation, the
issue OF which was made under con-
ditions peculiarly creditable to the
treasury. I do not press any spec
ial plan.
Various plans have recently been
proposed by expert committees OF
bankers. Among the plans which are
possibly feasible and which certain
ly should receive your consideration
is that repeatedly brought to your at
tention by the present secretary OF
the treasury, the essential features OF
which have been approved by many
prominent bankers and business men.
According to this plan national banks
should be permitted TO issue speci-
fled 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 to legi-
innate trade. This plan would NOT
permit the issue of currency to give
banks additional profits, but to meet
the emergency presented by times OF
stringency.
ct do not say that this Is the right
system. only advance 1t to empha-
size my belief that there Is need for
the adoption OF some system when
shall be automatic and open to all
sound banks. so as to avoid all pos
sibility OF discrimination and favor
itism. Such a plan would tend TO
prevent the spasms of high money
and speculation which now obtain IN
the New York market: for at present
there is too much currency at certain
seasons Of the year, and Its accumu-
lation at New York tempts bankers
N lend Il at low rates for specula-
tive purposes: whereat .at other times
when the crops are being moved there
Is urgent need for a large but tenn
porary increase in the currency sup
ply.
II must never be forgotten that this
ouestion concerns business men gem
erally quite as much as bankers; es-
pecially is this true of stockmen'
farmers. and business men In the
west. for at present at certain seasons
of the year the difference in interest
rates between the east and the west
Is from 6 to 10 per cent, whereas III
Canada the corresponding difference
Is but per cent. Any plan must, OF
course. guard the interests of New
York and Chicago bankers, and must
he drawn from the standpOints of the |
farmer and the merchant are less
than from the standpoint OF the
city bankers and the country bank |
ers''
again urge on the congress the |
need of immediate attention to this |
matter. We need greater elasticity |
in our currency; provided, of course
that we recognize the even greater
need OF a safe and secure currency. |
There must always be the most rigid |
examination by the national author |
Ities. Provisions should be made for |
an emergency currency. The emer-
gency issue should, of course, be |
made with an effective guaranty, |
and upon conditions carefully pre- |
scrbed by the government.
Such emergency issue must be bas-
ed on adequate securities approved |
by the government, and must be issu-
ed under a heavy tax. This would |
permit currency being issued when
the demand for 1t was urgent, while |