The evening star and Newark advertiser. [volume] (Newark, N.J.) 1907-1908, 1907-12-03
ADVOCATES CURRENCY RE-
FORM. BUT Is NOT CON-
MITTED TO ANY SPECIAL
PLAN.

In my message to the Congress a yea
ago ] spoke as follows OF the currency:
Il especially call your attention to
the condition OF our currency laws.
Inc natlonal-bank act has ably served
~ great purpose in aiding the enormous
business development of the country,
and within ten years there has been am
Increase In circulation per capita from
s2l.41 to $33.O8. For several years evil
dence has been accommodating that addi-
tional legislation Is needed.
The recurrence OF each crop season
emphasizes the defects of the present
laws. There must soon be a re-
vision of them. because TO leave
them ms they are means to incur
liability of business disaster. Since
your body adjourned there has been a
huctuation in the Interest on call money
from 2 per cent. to 30 per cent. and tho
fluctuation was even greater during the
preceding six months. The Secretary
of the Treasury had to step in and by
wise action put a stop to the most vio-
lent period of oscillation.
g Even worse than such huctuatfon
is the advance in commercial rates and
the uncertainty felt in the sufficiency of
credit even at high rates. All CONNER
elsa 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 commercial
uses, and commercial borrowers arc
forced to pay abnormal rates, so that
each fall a tax, in the shape of In
creased interest charges, Is placed on
the whole commerce of the country.
"eThe mere statement of these
facts shows hat our present sys-
tenn is seriously defective. There is
need of u change. Unfortunately.
however. many of the proposed changes
must be ruled from consideration be-
cause they are complicated arc nnt
easy of comprehension, and tend N
disturb existing rights and interests
We must also rule ont any plan which
would materially impair the value az
the United states ? per cent bonds
now pledged to secure circulation. the
issue of which was made under CON
ditions peculiarly c%reditable to the
Treasury, ] do not press any espe-
ciaI plan. Various plans have re-
Gently ben proposed by expert COM
mittees of bankers.
Among the plans which are nos
sibly feasible and which certainly
should receive your consideration is
that repeatedly brought to your atten-
ton by the present Secretary of The
Treasury, the essential features OF
WiHcli HuNS pSth Improved Dy many
prominent bankers and business men.
According to this plan national banks
should be permitted TO issue a specl-
fed proportion of their capital in notes
Of a given kind. the issue to be taxed
at so high a rate as to drive the notes
back when not wanted in legitimate
trade. This plan would not permit the
issue of currency to give banks add
tional profits, but to meet the emer-
gency presented by times of stringency.
~ do not say that this is the right
system. / only advance it to empRa-
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 to avoid all possi-
bility OF discrimination and favoritA