The Montgomery advertiser., 1907-11-04
A PLAN IS
 SUBMITTED To Solve the Financial
 Situation. SYSTEM OF CREDIT CURRENCY Congressman Fowler Gives Out
 Some Sound Advice. Cause of Currency strinscncy is Due to Money Scattered Broadcast Throughout Country When
 Banks should Have it.
SYSTEM OF CREDIT CURRENCY


 relief from the present monetary strin- tenn of credit currency. adequate to meet the requirements of trade and re- deemable in gold coin. was the opinion expressed today by Representative Charles N. Fowler. of New Jersey. chairman of the banking and curren- cy committee, which will, at the coming session of Congress. endeavor to have a law passed providing for credit cur- rency issued by the national banks.
 Until such permanent relief is made possible by legislative enactment, Mir. Fowler asserted, the situation must be met by the issuance of clearing house certificates, cashiers checks and due bills of business houses and manufac- turers.
 "The underlying business conditions" he said to the Associated Press today, 'tare especially sound as evidenced by the increased earning of the railroads and the fact that the value of our agrf- cultural products this year are $500,- 000,00Q more than last year (which was the highest year in our history). and are bringing to our people about ST. 900 ,000, 600. But public confidence has been greatly shaken and credit seri- ously affected; therefore, every patriotic citizen from the President down, should do all his power. to restore that confidence which Is essential to na- tional prosperity"
 The cause of the currency stringen- cy is that there are scattered broadcast throughout the country at the mines, in the wheat, corn and cotton fields, in the pockets of the people or locked up, about $1,30O, 100000 of the reserve money of the United States, most Of which under a proper condition would be in the banks. serving as reserve. Temporary relief will be through the forced use of current credit in the form of clearing house certificates, cashiers checks and due bills of business houses and manufacturers during the next ninety days.
 Credit Currency Needed.
 The permanent cure must come through q system of credit currency expanding and contracting with the ordinary demands of the smaller trade, precisely as cheeks and drafts do in the broader field of commerce.
 We have now proceeded far enough into the present financial crisis to get a pretty clear perspective of the real situation
 'Tirst-The condition is now general, reaching every nook and corner of the country.
 'second-If the gold certificates. the West and Southwest into the cotton
 
 the banks of the country have sent into the wheat fields of the West and Northwest, into the corn fields of the West and Southwest; into the cotton fields of the South and Into the coun- try districts of all sections to settle up the years business, l say-if these reserves now scattered broadcast over the land were in the banks where they properly belong-there would have been no money panic this fall.
 "The proof of this assertion Is con elusive. During the past four months there has been sent from the banks into the country districts approximate amount $250.000.000 approximately was reserve money which, if 1t were now in the banks, would serve as basis of more than $1.250,000,oO0 credits or loans. and the present crisis would have been averted. This result could have been accomplished without in- creasing our bank reserves to the ex- tent of one single dollar, without in- creasing the liabilities of the banks of the country to the extent of one single cent
 Challenges Controversy.
 q challenge any man to controvert this statement and submit the follow ing as absolutely conclusive proof of the assertion. If the banks of the ". NSpNtNNNfNNN been deposited, had been authorized, as they should have been,A to create bank note credits as well as bank hook credits and they had proceeded to convert this $250.0OO.Ooo of bank book credits into bank note creditsthe bands would not have been affected Tn any degree or in any way whatever, and the whole country would have been amply supplied with currency with which to transact all the fall business.
 How could this be done? Simply by authorizing eachN bank to issue cash ier's checks to bearer. which is a. cur rent credit, that is. a credit that passes by mere delivery, requiring no endorse ment By this process, the $25O,OO0,OOO of bank book credits would have been converted into bank note credits and AS the reserves required for both forms of credits should be the same there could have been no change whatever in the situation. The bank debt is the same: the amount of the reserve is the same. It has been only a matter of bcokkeeping An issue of current credit adequate to meet the reduire- ments of trade and currently redeemed In gold coin Is a principle followed hv every civilized country in the world except our own.
 Current Bank Credit.
 "Hark this: The banking power of the United States in 1890 was about S5. .O0O. 900 ,000 and now exceeds $i6 .eOo.- 900 .000-Lor equal to the entire banking power of the world In 1890, which Null hall placed at $15.9S5,OOo,OOO. Today the banking power of the entire world. outside of the United States, is only S21,952 900 OOO, and of this amount. 20 per cent. or more than $4.00O. 900 000. Is in ca sh Iers' checks or current cred it's. That Is. credit currency--and yet. while the United States has three sevenths of the banking power of the entire world. 1t has not one single dol lar of current bank credit, although inc other our-sevenths of the worlds banking power has the advantage of S40OO, GOO, 900 current credits or credit currency.
 "On the same basis we are entitled to have $s,0O0. 100000 of current credit or credit currency
 If this principle were broadly adopt
 Tf ah kA