Weekly Arizona journal-miner. [volume] (Prescott, Ariz.) 1903-1908, 1907-12-11
PRESIDENT DISCUSSES THE CURRENCY PROBLEM

extension OF Federal activity VIII 90
we'll to study the history moi only col 'h,
banking act but oi inc pui'-l.
law, and notably the meat Inspection l'"
recently enacted. The purc-i~Id Ii" W.
opposed so violently that ~ paes'k' WI,
delayed for a decade. yet II hts "'ih' -
unmixed and immediate good lh' me-
Inspection law was even NOR Nl"''",''
q ssailed. and the same men Mt' h."
nounce the attitude Of the Natiouai '''N-
eminent I'm seeking 10 Oversee anu ,''-
troll the workings - ,ntcrstit" common
carriers AMI business concerns. W." o."
serted that "" were 'dlsft'rillht .r.l''
running "A great American Industry. I"p
years have not elapsed. and already
has become evident that IN" great u'"'
ft the law COnters upon the puh''
accompanied by an equal bcntit I" ~
reputable packing establishment ne
latter are better on under the law than
they were without Il. The benefit - M
terstate common carriers and business
concerns from the legislation | ddNV, li'
would d. equally marked
Pt'RE-FOOD LAW.
incidentally, ~ the passage Of the pure
food law the action Of thv various Sitl"
food and dairy commissioners sn""'d 'h
striking fashion how much good Tor th'
whole is-prgr results from tn" hearty Coz
operation OF the Federal and state ON
Gals In securing given reform II ~
primarily to tn" action 81 these Sl'l'
commissioners that "" owe IN" tnh,'
ment Of this law for they aroused the
people, first 20 demand the enactment
and enforcement of state laws on inc
subject and then the enactment ui th'
Federal law, without which the STAT
laws were largely Ineffective Ih"N
must be- the closest cooperation between
the National and SEtatc governments In
administering these Laws.
In my Message Ia the Congress u year
ago ! spoke ~ follows OF the currency
CURRENCY.
Il especially call YOUR attention to IN"
condition of our currency laws. The
nBtional-bank act ably served great
purpose IN aiding the enormous business
development of the country. AMI within
circulation per capita from 2iil To &JH.
For several wears evidence bias been ac-
cumulatinR that additional gislstion is
needed. The recurfenc" of each crop sea-
SON emphasizes th,' defects of the pres
cnt laws. There must soon he revision
of them. becdus" to leave them as they
are means to incur liability OF business
disaster. Since your body adjourned
there hats been a iiuctuation IN the In
terest on call money from two per cent
To thirty per cent, and the nuctuatiOn
was even greater during the preceding
six months The Secretary OF the Treas-
ury had Ia step Ia and by wise action
put "A stop to the most violent period OF
oscillation. Even worse than such fiuct-
uation IL the advance In commercial
rates and the uncertainty felt In the suf-
iciecy of crcdi; even at high rates. All
comm. rcial 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 dcpetes the fund that would
otherwise be available for commercial
uses, and commercial borrowers are fore
cd To pay abnormal rates 10 that on each
TAU "A tax In the shape OF Increased IN
t"r'-st charges, II placed on the whole
commerce OF the country.
The mere statement of these facts
shows that our present system II s.ri-
ously defective. There " need of "A
| change. Unfortunately. however. many
OF the proposed changes must be r,E.d
from consideration because they are com
plicated are not easy Of compr. tension
and tend to disturb existing rights and
interests. We must also rule out any
plan which would materially impair the
value Of the United States two per cent
bonds now pledged To secure circulation,
IN. lsSu" OF which was made under con-
ditlons peculiarly creditable 10 the Treas
ury 40 not press any especial Idan
| various plans have recently been propos-
ed by expert committees uf bankers
Among the plans which are possibly
ieisable and which certainly should re-
oeivc your consideration IL that repeated
~ brought To your attention by the pres
en- secretary Of the Treasury. the esso n
tlal features of which have been approx
eel by many prominent bankers and husl
| ness men. According To this plan nation
al banks should he permitted to issue "A
specified proportion of their capital I'm
NOTES. OF "A given kind. the issue to be
| taxed AT 20 high % rate az Ia drive the
notes back when not wanted I'm lepiii.
| mate trade. This plan would not per-
| mil the Issue Of currency to Civ. hanks
additional profits. but TO meet the emcr
sempy presented by times Of stringency.
do not say that this IL the right
| system. only advance II to ,mpho i've
| my belief that there IN need for The adj
option OF some system which shall he
automatic ana open to all sound banks
80 ~ 10 avoid all possibility of dlscrim-
Ihatinn and favoritsm. Such "A pInn
would tend To prevent the spasms a.,
high money AMI speculation which now
| obtain In the New York market. 10, n,
preseh, There ~ too much currency AZ
cumulation at New York tennis h,nLa,a
10 lend II NJ low rates for sp.cula,iy.
purposes whereas 1T other times when
me crops are being moved there is mr..
ssh. heed yer large but temporary i'm
.Isase w me currency supply. II must
| never DE forgotten that this nu.s,in,,
| CONCERNS business men generally oui,.
| as much hs bankers: especially ia This
| Iue OF hlockm,n, farmers and business
lain ssosn ",s' lor.at present at GER
" s,hsuis OF the year the difference
~ interest rates between the East ana
| ,ne Wtst Is from six to ton per can,
Wnereas In Canada the corresnondin.
dinerence " but two per cent Anv Nm,
| nus', OF coufSe. guard the intcreus a.,
| WESTERN ana southern bankers as caro'
| ,uiIy az u guards the interests az NJ,
| iork or chicago bankers. and must IA.
uraWn from the standpolnis of the farm.
~ ana the merchant no less thap fror,
~ s,anupo'nts Of the city banker ana
| the country banker" "''"
| again urge on the Congress Tho na.d
~, immediate attention Ia this matt,
w ne"d greater elasticity I'm our cur
r.nyy, provided, Of course, that Voc roc'
osn'f the even greater need of a sn =,
~" secure currency. There must aIwavs
~ me most rigid examination hv ~.
Na'nhhl authorities. Provision shoui,
| ~, "Hne Tor an emergency currencv
| nc energvncy issue should of co,,r,,
oe n'ne with an effective guaranty an.
uhpn conditions carefully pres.rib.,l n,
w government Such emergency Is.,,,
MUS, be based On adequate securities 49,
| poven py the Government, and must T..
| ,sueu under heavy tax This w nj,
| permIt currency being issued whom a..
nehald Tor 1t was urgent, while sac"r
ms us retirement as the demand fol, w.,
- worth investigating to determIn,
| wheIn'f oifccrs ana directors Of na,in,'a
| BANKS should ever he allowed 10 L., :.
in'WStHNtN. Trust ~