Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1907-11-09

that it will make it possible for the
banks generally to serve such of their
customers as may want currency
without disturbing their reserves to
the great injury of other customers
who have loans which must be paid
before the currency can be advanced,
since 1t is SO immaterial to a bank
whether 1t owes a depositor or note
holder; that 1t will almost Invariably
prevent any panic whatever, and will
always avert a ruinous crisis; If at
any time contraction of credits be-
comes necessary because too much IF
the commercial fund has been diverted
and transformed into the Investment
fund, currncy will facilitate liquida
ton without that destruction OF val
ues incident to fixed quantity of cur
rency such as the country now has.
Canada's experience Is given In con-
siderable detail by the committee, as
the conditions there are so much like
those In this country. Once a year,
says the committee, the Canadian
banks supply. each recurring season,
with facility that must challenge
the attention of every thoughtful and
fair minded man. For the years 1903,
1904 and 1905, the increase and de-
crease. or extension and contraction,
of the Canadian bank notes approxi-
mate on the average 80 per cent, while
our bank circulation was during this
time moving only in one direction.
The experience in this country in is
suinT clearinghouse certificates at,
various crises is cited. leading the
committee to assert chat at no time
England or the United States or any
other country found relief except in
the expansive principle Of issuing
notes based upon credit or the goods
in the conntrv and not upon coin.
Summarizing the situation, the COM
mittee says:
population and constantly expanding
business, provision must be made for
a large annual increase.
This Increase cannot be silver in any
form, for we shall not purchase an
other ounce Of bullion and 1t would
be unnecessarily expensive even if we
could rely upon an adequate supply IF
gold.
"Our present bond secured currency,
while safe. Is Just as expensive as
gold and bears no relation whatever
to business needs, being a bond-spec-
ulation scheme pure and simple.
1.-THE true credit currency, protect
ed as provided In this measure. being
as good as gold itself, adapts itself al
ways and under all circumstances to
the ever varying needs of the people,
and is as economical and as sound as
credit can be in any FORM"
The committee holds that examina-
ton of present and past conditions for
two hundred years leads to but one
conclusion, that we must sooner or
later have credit currency protected
by q proper reserve and redeemable on
demand in gold coin.
Holding the proposed currency is
safe beyond peradventure, the COM
mlttee says: 1.-The report of the
comptroller shows that all the credit
5ors Of the national banks that have
failed have received 70 per cent Of the
amount due them. Therefore only
one-quarter of the amount due any
note holder. who is general creditor
of the bank, would have to be paid
out of the guarantee fund. But the
records Of the comptrollers Office show
that a tax Of one-fifth Of one per cent
would have paid the notes Of the fail.
ed banks in full. Therefore the 5 per
cent guaranty fund, which would be
called upon to pay only one-fourth of
this amount, would last just one hum
dred years."
j. c.. WeIliver.