The Washington herald., 1907-11-08
HITS AT CURRENCY
Bank President Cox Says We
Need Reforms.
WORKS BY A RULE CONTRARY
Before Washington Institute Of
banking, He Expresses Wonder at
the COuntry's Success, Because Of
the InfexibiIity of Our System.
Bankers Fully Agree with Views.

1T is an evanescent dream to think
that the commerce of the world will be
ours hampered as we are with an anti
quated in1exibie currency that contracts
when 1t should expand, and expands when
IL should contract. The wonder is that
we have been so successful"
Thus spoke William V Cox, president
Of the Second National Bank. and presi-
dent OF the District Bankers Association.
at the meeting of the Washington chapter
of the American Institute Of Banking.
held in the chapter rooms last night, with
a large attendance Of men interested in
matters pertaining TO finance. Mr.. Cox
spoke on Credit Currency" He was
member of the currency commission of
the American Bankers Association, and
his address was followed with close at
tention.
THE banking system of the United
States is peculiarly American" said Mr.
Cox, and is characteristic of a new
people, with lands and crops In plenty.
but with insufficient money circulation. To
remedy defects such as these. has been
the effort OF many an able finaneier and
statesman. In fact. even before the adop-
ton of the Constitution. their constant
endeavor was 10 establish an elastic cur
rency
The paper money OF the colonies,
which was used to increase the medium OF
circulation, was a failure because 10 was
deprecated by an unrestrained issue The
paper money OF the States was likewise
deprecated. each State endeavoring TO
regulate the business OF banking in its
own way regardless of others. As a
result. chaos followed confusion. There
was little Improvement until the enact
ment OF the national banking act early
in the Civil War
New System Imperative
we are unanimously OF the opinion
that changes In the existing bank note
system are imperatively required. We
find that the present volumes of bank
notesSs wholly unresponsive 70 the de-
mands OF commerce. It does not expand
with the needs for currency In the crop
moving period. causing stringency. nor
does il contract when the uses Tor cur
rency are less extensive. causing redun-
dancy
I'VE find that the banks are under the
necessity OF parting with their reserve
money to supply the demand for currency
at certain seasons. although that demand
would be quite as we'll satisfied If banks
could supply their credit notes. instead OF
depicting their reserves and causing a
contraction injurious to business.
Believing the currency 10 be a COM
mercial, rather than a banking or politi-
l. l. 81 fFr.-f
ness men and bankers OF Washington
that there should be legislation TO this
end. on sane and practical lines. and
without delay"
"A resolution was passed indorsing the
views expressed by Mr. Cox. In the dis
cussion that followed. A. X. Paris took
a prominent part. Richard r. Claughton.
assistant cashier Of the Commercial Ma
tiOnal Bank. said that the recent diff
cultes in the money market We're due TO
a very great extent TO stock that was
not worth the paper it was printed on,
hot air. and some newspapers.
Mr.. Claughton said that with an ef-
fort on the part Of business men and
bankers OF this city, Washington could
be made a banking reserve city. Hsr-
old Pierce. first vice president OF the
National Bank OF Alexandria, Va, also
took part in the discussion.