The evening star and Newark advertiser. [volume] (Newark, N.J.) 1907-1908, 1907-12-11
FOWLER'S PLEA
TREASURY MANIPULATI0NS
SCORED IN SPEECH.
Banking and Currency Chairman Gives
Warning Against "Fathomless
Abyss of Infation.Y

and currency. delivered an address on the
currency and the lessons Of the present
financial Situation before the Illinois Manu-
facturers' Association yesterday.
After a brief reference to historical as
sociations and personal recollections, Mr.
Fowler said, in part:
Has it ever occurred to you that there
is scarcely a law upon our statute books
affecting our finances and currency which
IS clearly and purely the result Of eco
nomic thought and such as would have
been passed but for necessity, ignorance or
political. cowardice?
IAN the laws passed from 1866 sprung
from exigent circumstances and were the
natural children of necessity or ignorance
or both. All the financial and currency
laws passed as the result of the silver
madness were the natural children Of ig-
n~oraiee or political cowardice or both.
The establishment Of the gold standard,
the fixing of the unit of A,alue and its
proper certification, the provision for our
subsidiary coinage and the laws of adj
fnlnistration necessary to the conduct of
the national business mark the limits prac-
iically OF wise and proper legislation af-
our finances and currency.
Having adopted gold then as our stand
ard of value, it is the touchstone of our
credit; and ii is only by bringing our
credits into contact with gold that their
value is proved. I assert, therefore, that
there is not a dollar of money in the
Omitted States that is fit for reserve except
the gold dollar.
1T has been suggested, on the one hand.
that we allow the national banks to hold
national bank notes as reserve, and, on
the other hand, that we allow them to is
sue currency based upon bonds other than
government bonds.
-Ihe whole contention is founded upon a
false assumption and that is that the
united States note is in itself a proper
reserve-which it is not. 1t is nothing but
a demand obligation, and should have been
honored by payment and retirement forty
Years ago, precisely as France and Japan
honored and retired their demand obliga-
ions at the close Of their respective wars.
Our United States notes are tolerated
as reserves because they are currently re-
deemed in gold coin by the government;
not because of their inherent fitness for
that purpose.
The only proper reserve for any coun-
try to have is one coined out of its stand
ard of value.
with all questions of a proper kind OF
reserve settled, there are those who say
that the only mechanism through which
we can secure a scientific, sound and wise
currency system is a central bank.
Il do not regard a great central bank as
essential to a scientific, sound n wise
banking and currency system. for the
United States, provided we can unity and
coordinate our banking interests, bringing
them substantially into one system which
Will secure universal cooperafion and the
strength of a combination of our entire
banking capital. and even with a central
bank the same coordination must be eff
fectcd.
character cold ar ne ao,;volart hacausa
pold is o,r standord ~ S1oIme
~ - ~ e'oiiu"iu VI Ndlue'
Credlt IS the very soul of modern COM
merCe, ana upon the average more than
80 per cent. Of oIr b,si,.ess is dona nv
ehacl- and draft hasad 49, ~ hooy-
- ~ Ia oeseu upon u JUN
eieuita y tne country,
fractlcally all the business that dis
tinguis1les a trust company from a regular
bank today has grown IN since the mas
sage of Tho natian,l banp al
"a - sLan,s - -
"a" sirouio pe paSseu giving 10 the
natlonai banks the right of exercising in
the respective States where located all the
powers of executors. administrators. euar-
dams and trustees
sTrnlees iii - =. 90.
.ni9 s'ep ~ t"heh the advantages
gradually but inevitably compel the ma
tional banks to surrender their charters
for trust oomnanv otartoa.. 80 80
oomnonv a. lor II a urusl
company is required TO carry only one
fifth or one-half the reserves of a national
bank. il can afford ID nav a much bioha,.
,,+, - .a4.l 49, i"sfSi
AtNht - AiItlCCl rliDOu utDOSIlS HllU GVBIll-