The Montgomery advertiser., 1907-11-23
Letfers fo The Editor
HOME CURRENCY.
4 Prepositicn That Has ! Great Deal
 of Merit.

The probability that Congress Will early in the next session, undertake and carry out some measure Of cur.
 rsncy reform makes @ !, ipossont 9hs so,,tn shs. hs come alive to the peculiar necessities of their people who, living in q ssc- Ition where the growing season is long for constant hard labor are obliged to rely upon credit for larger amount and longer period In order to carry their agricultural operations Tor the year to q successful completion.
 The absence of any facilities for the use of the public credit in the south l ern States as a basis for note circu@
 lation forces a dependence on sa- eign) sources which is extended usu-
 ally in insufflcient amounts and at luxurious rates, and the planter Wno
 buys his supplies from the neisnoersnSS Il to cover the risk of the crop. Usu- ally at the end of the season 1t IS found | that the balance is against the farmer making the prospect for release from debt less and less as time passes. AS
 a result we have . condition in the cotton States something like the peon- The security for national bank cir culation is now based solely on Gov | ernment bonds.
 This operates specially against the | reason here given, are high, and capi- tai scarce, rendering it impossible for
 the people prontably to own such hign class securities. Other hardships on the South (and indeed equu1iy on the
 west) is the fact that all the paper circulation is made practically redeem-
 able in New York city, and further the capitalists in that city have cum nineiy contrived to concentrate the money supply of ths country in their | city by the statute which enables na- tional banks to count the balance Tn
 the New York reserve as part or the
 would have to be held in their own vaults.
 The small interest earned on the de-
 Ss Sew ,sPs Pek bseks us secars the handling of the funds of the entire country and are enabled thereby 10 create a flow of interest and profits
 in their direction which tends to They have a situation which forces | the people in all other sections when needing borrowed capital to go to New
 York and virtually borrow over and
 over again their own money, each time creating a flow of interest to New York which In the aggregate transfers
 { large share of the annual increment of wealth from the hands of those pro-
 ducing 1t to those who merely manip- ulate. As an example. Suppose the city of Montgomery decides to expend a million dollars to construct a system The idle labor is on the streets and anxious to work. The brick and nor | tar are home made. Absolutely noth- | ing used in the work Is bought abroad | the men cannot be put to work until
 the { per cent. bonds are sold in New York.
 How are the banks in New York able I It is because they have a million dollars of Montgomery bank deposits on hand. When they buy those bonds gomery? No. they merely send credit
 No reduction of the Montgomery
 money on hand in New York follows keep the million dollars for another | like operation. They merely lend to | the Montgomery people a temporary credit based upon their own money. but | for each million delIar performance | thus concluded. $4e.00U of cotton or other Alabama product Is sold each lyear and the money Is sent to New i York, to meet the interest charge This
 process here Qocalised for easier ex- planation) is constantly working to I the advantage of New York and against l the South and West and explains the enormous wealth concentrated at the | financial center for the purchaser of railroads street car lines. gas compa- nies and other public and private bonds
 and properties running Into the thous-
 and of millions of dollars. which pur- chases enables the New York owners l to start so many new avenues Of ex- | ploitation that they now own nearly
 everything worth owning in the United Staets. Another indirect evil is that the pro-
 ducing sections are affected injurious- | ly by the local conditions in New I York. If stock gambling there pe-
 absorb the floating capital and through | the increased interest rates an addi- | tional burden is imposed on other le- | gitimate borrowers, and #. as recently was the case. this gambling forced the banks in New York to suspend pay
 ments, the banks throughout the South and West were forced to do likewise
 at the great loss and inconvenience or There is obviously no use passing
 antitrust laws so long as New York
 controls the money and the supply or lcredit based on that money.
 The question is. how can the evil be
 remedied? This is very simple.
 Congress should so amend the bank l ing act to permit national and State
 posit ostS with if 'Sl the t5 T s. Treasurer of ap- | proved State, county and city tonds
 of the State in which the bank is To-
 cated and further provide that these
 designated central point in the state of issue. Thus in Alabama Montgon- l cry would be the redemption point and | all the banks in the State would keep their redemption funds and reserves l in Montgomery banks instead of New | In this manner the public credit of | the State municipalities would become available for the creation of home cap | ital for the use of the planters who would be able at reasonable rates to make cash purchases instead of buying supplies on credit.
 1t is an invariable law of finance that paper money will always flow toward
 the proposed system would speedily
 retire any redundancy of issue and make the currency truly elastic. be- cause in Alabama, for instances. as soon
 as there was no employment for notes,
 they would De presented to the several redemption banks for the gold or greenback legal tender.
 Another advantage of the State seg- regation is that the financial troubles
 in one State would not affect another
 resulting hard times in New York or Illinois and not be felt in Alabama l or Texas General pantcs would cease ] in the United States.
 The supreme advantage in the state
 currency system would be that 1t would impound the public bonds in the state
 of issue and the interest would be paid
 at home for local expenditure.
 It would put a stop to the enorm-
 aud aud G eountries % sS.'t for the " AiSbama banks would through the use of the local
 currency be able to buy up, not only | the municipal bonds, but all forms oI l public and private obligatiods and keep 1 that interest also at home.
 They would thus secure the pronts now going from Alabama to New York. l The railroad systems of the South
 would then cease 10 be the foot oalIs -N.V A. AA