Omaha daily bee., 1907-11-25
BOWLER CRiTIOIsEs BOND ISSUE
New Jersey Congressman Says Cow
ernment il Making n Mistake.


NEW YORK, Nov A-Representative
Charles N. Fowler. chairman of the houie
committee on banking and currency today
gave out the following statement regarding
the issue OF Panama canal bonds and treas
ury certificates:
Personally" said Mr.. Fowler, 'and from
a party standpoint, 1t is unpleasant for me
to disapprove the action of the republican
administration, but my study OF the ques-
tions involved, and my duty to the public,
compel me to set forth the reasons why the
action of the administration is surprising,
extraordinary unwarranted and most un-
fortunate.
ION Friday, November 15. the crisis Of
the present currency panic had been
reached, and successfully passed. through
the splendid achievements Of the American
banks in bringing gold to this county to
the extent Of about S75,OOOOO0, at a very
great cost to themselves, for It was pur-
chased generally at a premium of about 2
per cent; and also by responding to the
business necessities of the various locali-
ties in issuing clearing house certificates
and cashiers checks in denominations OF
81, 81, S and so, as we'll as the larger de-
nominations.
I'm the second place the government did
not need the money as 1t has $240.OO0,OOO
to its credit, which It has taken from the
people through taxation. Therefore, the
interest bearing debt OF the government
should not have increased $4,000 OOO-espe-
cially when such increase OF debt is clearly
in violation OF the intent and purpose OF
the law; and in the third place because
the action OF the treasury is a most vio-
lent violation Of economic law, for which
| the paonIa u,staf nav fha rana1ty
First, let us deal with the $50, 10000 Of
2 per cent Panama bonds, which are TO be
used as the basis OF additional bank note
circulation. The government has, as stated,
S24O, 900.
I'VE shall find when the reaction comes
and the changed condition Is reflected in
our reserves, beginning about the 18th Of
January. II not earlier and increasing rap
idly during the spring months until the re-
serves in our banks will probably exceed
those OF any preceding year since 19OO-that
this very $4,000 900, II unfortunately the
increased debt shall be converted into bank
notes, that these banknotes will not disap-
pear and be automatically retired, but that
they will find a place in the reserves OF
the state banks, in the reserves Of the trust
companies and, to some extent, though
they have no right there, in the reserves
OF the national banks
''Now. mark this. That every banknote
held as a reserve will displace Just that
amount OF gold and drive it out Of the
country. This is Just what our silver pur-
chases did from 1879 to 1894 The poorer
money always has and invariably will,
drive out the better. There will be up
wards OF l per cent profit on the circula-
tion taken out on these bonds, and so the
banks will force them out persistently, and
the counterpart will be that nearly imper-
ceptible but with absolute certainty, the
gold will give place TO the bond-secured
note to the extent that It finds it's way
into the reserves OF the various financial
institutions OF the country.
During the next few months you will
note this striking contrast between the
bond-secured and the credit currency ex-
pressed in clearing house certificates and
cashiers checks: that while all OF these
bond-secured notes will remain TO perpleN
and curse us in the future by not contract
ing 70 the extent OF a single dollar from
January TO July. every dollar OF credit cur
renoy in the form OF clearing house certifi.
Gates and cashiers checks which have come
into existence naturally with a great urgent
need, will disappear when they are required
no longer"