Omaha daily bee., 1907-12-29
'Outh American People Will Be Given
Fine Object Lesson.
Impression in other Hemisphere that
Uncle Sam Could Not Make Good.
CURRENCY
BANKERS
PLAN
Davis r. Dewey Explains Proposed
scheme 60 the American Science
Association at Madison,
wisconsin.

MADISON, Wis, Dec. 2S.-The beneficial
effect of the Pacific cruise now being made
by Admiral Evans big fleet on the rels-
tions of Latin-American republics to the
United States was pointed out by John
Barrett in an address before the American
Science association in session here today.
Mr. Barrett. director general of the Inter
national Bureau of American Republics
spoke on the new South America and its
relations with the United States.
He said in part: zone of the important
effects, IL not the principal result, of the
sailing Of the battleship fleet to the Pa
cific has been almost overlooked in the
constant discussion of the effect on Japan,
and that is the impression created in South
America.
1--WE have failed to note that the great
newspapers and leading men Of our sister
republics are giving even more attention
to the movement of the armada than are
those of our oriental neighbors.
The powerful republics of South Amer
ica like Brazil, Argentina, Chile and Peru
which are fast becoming world powers, are
not only welcoming the coming of the ships
and applauding this vast and unique naval
undertaking. but are planning to give the
fleet a reception that will not be surpassed
in cordiality enthusiasm and extent by
any reception that may be accorded them
later on either our own Pacific coast or
in the ports of the orient.
AT Rio de Janeiro In Brazil, and again
at Callao in Peru, Admiral Evans fleet
will be greeted and treated as the repre-
sentative of naval strength, as Secretary
Root was the true envoy of the new d.
plomacy of the United States which, po-
litically, commercially. historically and
geographically. is the natural ally and
friend Of all South America.
In short, the voyage around south
America of this fleet. while not in any
way intended OF planned to impress South
American countries, and therefore all the
more appreciated by them, win establish
beyond bubble or issue one point often
discussed in South America With doubt
about the strength and capacity Of the
United States as compared with Europe II
ever the necessity should come which God
forbid, the United States could enforce
| and maintain its position that the Monroe
doctrine is a strong living issue never to
be forgotten in the competition Of nations
for power and influence on this hemi-
/ sphere.
| At the afternoon session George A.
/ Thacher of Portland. Ore. spoke on the
Oregon initiative and referendum.
j. Allen Smith of the University of
! Washington discussed recent institutional
legislation and James w. Garner of the
| University of Illinois and Jesse Macy of
| Iowa college discussed various phases of
| primary election legislation. w. s. U'Ren
Of Oregon also spoke on the initiative and
! referendum OF that state.
Bankers Currency Plan.
/ ID 80 ttu
Institute of Technology delivered speech
setting forth the asset currency plan of
| the American Bankers association. He
said in part:
The plan before us for consideration
today Is that proposed by the currency
| commission of the American Bankers
| association. The plan of the American
Bankers association is frequently spoken
| of a plan for asset currency. II will
be observed however. that It is simply
| a proposition for the issue of notes equal
to l25 per cent of value OF bonds deposited,
| 100 per cent OF which shall be, as at pres
! ent, taxed one-hah OF l per cent and Is
per cent shall be taxed 21f per cent. The
ostensible object OF this plan is to pro-
vide a certain portion Of currency which
viii adjust itself to the periodic move
ments of the money market The plan
I
| confessedly a compromise. II is believed
by many. however. to be a step toward
asset banking. II the bond circulation
should decrease. the plan provides that
the authorized issue of credit notes shall
be increased to a correspondingly greater
percentage OF its bond-securing notes. We
must therefore, face this contingency and
pass judgment upon the wisdom of in
| directly introducing the banking principle
into our money circulation.
Defects I'm Present Plan.
Again It may be asked whether It is de-
sirable to adopt any new currency plan
before certain reforms in our banking sys-
tern have been put in operation. Some of
these seem 50 obvious and pertinent TO the
ends which the bankers commission desires
that they fall within the scope of a dis
cussioq on the currency. Among these de-
feets may pc mentioned the question Of:
First-Insuficient reserve. particularly
/ OF country banks and the centralizing OF
such reserves In New York.
se1ond-The inadequacy Of redemption of
Third-The Over-investment of banks In
stocks and securities which cannot be
! rapidly hquidated, and the tying I'D of the
funds of the bank for too long period.
companies.
Fifth-The speculative character OF the
call loan market In New York.
SiNth-The absence of any system whereby
negotiable paper can be easily rediscounted
so that loanable funds Will flow to the
place where they are most needed for COM
mercid purposes
Seventh and Finaly-The rigidity of bank
reserves.
might Il not be possible to permit ouI
national banks, In accordance with a sug-
gestion of Mr Schiff. 10 encroach upon their
reserves, say up to one-hfth OF such re-
serves. by payment Of a tax Of 6 per cent
This would let loose about a25. 10000 which
might be as serviceable for emergency cir
culation as the credit notes Of the Amerl.