Arizona republican., 1907-12-04

and already 1t has become evident that the great benefit the law confers upon the public is accompanied by an equal benefit to the reputable packing es- tablishments The latter are better off under the law than they were without it. The benefit to interstate common carriers and business concerns from the legislation I advocate would be equally marked.
 Incidentally, in the passage of the pure food law the action of the various State food and dairy commissioners showed in striking fashion how much good for the whole people results from the hearty cooperation of the Federal and State officials in/securing a given reform. It is primarily to the action or these State commissioners that we owe the enactment of this law; for they aroused the people. first to demand the enactment land enforcement of State laws on the subject. and then the enactment of the Federal law. without which the State laws were largely ineffective. There must be the closest -co-operation between the Ma tional and State governments in ad- ministering these laws.
 The Currency Question.
 Tn my Message to the Congress year ago spoke as follows of the cur rency: I especially call your atten- tion to the condition of our currency laws. The nal-bank act has ably served a great purpose in aiding the enormous business development of the country. and within ten years there has been an increase in circulation per capita from s2l.4l to $33.OS. For sev- eral years evidence has been accumu- Ia ting that additional legislation IS needed. The recurrence of each crop season emphasizes the defects of the present laws. There must soon be a revision of them, because to leave them as they are means to incur lia- bility of business disaster. Since your body adjourned there has been fluc- tuation in the interest on call money from per cent to 90 per cent. and the fluctuation was even greater during the preciding six months. The Secre- tary of the Treasury had to step in and by wise action put stop to the most violent period of oscillation. Even worse than such fluctuation is the ad- vance in commercial rates and the un- certainty felt in the sufficiency Of credit even at high rates. All comme- cial interests suffer during each crop period. Excessive rates for call money in New York attract money from the interior banks into the speculative field This depletes the fund that would otherwise be available for com mercial uses and commercial borrow CTS are forced to pay abnormal rates. so that each fall tax, in the shape of increased interest charges. is placed on the whole commerce of the country.
 "'The mere statement Of these facts shows that our present system is seri- ously 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 compre- hension. and tend to disturb existing rights and interests. We must also. rule out an plan which would mater ially impair the value of the United States per cent bonds now pledged to secure circulation. the issue of which was made under conditions pe- culiariy creditable to the Treasury. l do not press any especial plan. Vari- ous plans have recently been proposed by expert committees of bankers. Among the plans which are possibly feasible and which certainly should re- ceive :'our consideration is that re- peatedly brought to your attention 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 specified propor- ton of their capital in notes of siv- en kind the issue to be taxed at so high rate as tofdrive the notes back when not wanted in legitimate trade. This plan would not permit the issue of currency to give banks additional profits. but to meet the emergency pre- scented by times of stringency.
 "I do not say that this is the right system. l Onl-- advance 1t to empha- size my belief that there is need for the adoption of some system which shall be automatic and open to all sound banks, so as 10 avoid all possi- bility of discrimination and favoritisrp. Such plan would tend to prevent the spasms of high money and speculation HnlCn HOW ODldiu III lnt .NtN 1OTh market: for at present there is too much currency at certain seasons of the year. and its accumulation at New York tempts bankers to lend it at low rates for speculative purposes; where as at other times when the crops are being moved there is urgent need for large but temporary increase in the currency supply. It must never be forgotten that this question concerns business men generally quite as much as bankers: especially 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 to 10 per cent, whereas in Canada the corresponding difference is but per cent. Any plan must, of course, guard the interests of the western and southern bankers as carefully as it guards the interests of New York or Chicago bankers, and must be drawn from the standpoints of the farmer and the merchant no less than from the standpoints of the city banker and the country banker
 The Need of Elasticity.
 "I again urge on the Congress the