The Washington herald., 1907-12-04
THE PRESIDENTS MESSAGE TO CONGRESS-

per capita from s2l.n TO Ss30s For several year
evidence has been aoeumulsting thai additions
legislation is needed The recurrence Of each erol
season emphasizes the defects Of the present Laws
There must seon be a revision of them. because {,
leave them they are means 70 incur liability o
businesc disaster. Since your body adjourned ther,
has been fuctnaton IN the interest on call none,
| from -gr cent to 80 per cent and the aucluatior
was even greater during the preceding six months
The Secretary Of the Treasury had to step IN and
by Wise action put stop "a the most violent period
OF osciilat IN. Even worse than such iuctuation Il
the advance in commercial rates and the uncertaint,
ieit IN the suiicency q credit even al high rates
| All commercial interests suffer during each croT
period Excessive rates for call money in New Y0Tk
| attract money from the interior banks into tho
speculative field This depletcs the fund that would
| otherwise be available Tor commercial uses and
! commercial borrowers arc forced to PAY abnormal
rates. so that each fall tax in the shape Of in
creased interest charges. is placed the whole com
mcTCe OF the country
! The mere statement of these facts shows tha,
our present system IS seriously defective. ThetS Is
! need OF change. Unfortunately. however many OF
The proposed changes must be rnl.d from ccnsdera.
tlon. because they complicated are not easy Of
eolnl-ehension and tend 10 disturb existing rights
ana interests. We must also rule ont any plan
which would materially impair the value Of the
\ United States per cent bonds nov pledged 10 Sc
cure circulation. the issue OF which was made under
| conditions peculiarly crpditabIe 20 the Treasury
90 not press ans especial plan. Various plans have
recently been p-oposed by expert committees Of
bankers Among the plans which are possihls FEAST
ole ana which certainly should receive yeur cousd-
Grafton that repeatedly brought 10 your attention
% ue present St-retaIy Of the Treasury the essen
1lal ieaIufes oi which have been approved BY many
prominent bankers and business men According 10
! inns plan national banks should be permitted 10
issue specified proportion II their capital in notes
| oi gwen Nnd the issue TO be taxed at 50 high
= rale as 10 dri5e the notes back wheE not wanted
III leslunAte trade This plan would not pcrIuit the
issue oi currency 20 give banks additional ,,rr,tts
stfingency.
do not say that this is the right system. I
OILY advance u 10 emphasize my belief that there is
need Tor the adoption Of some system which, sbau he
automatic and open 20 all sound banks 20 as 10
avoid all possibility Of discrimination and favori
ISM oueh plan would tend % prevent the spasms
~ hgh money and speculation which now Obtain ia
| the New York market. for az present there Il 700
| much currency at certain seasons of the Yeor and
| Us accumulation az New York ten,Dts bankers ~
eha II AZ bow rates for speculative purposes; where
as NJ other tDnes when the cropS are heinz rro,.,
there s urgent need for a large but teD,nor.-y -,
crease 10 the currency supply Il must never he
forgotten that this question concerns business men
sene4dlS quite as much as bankers: especially is
this true Of stockmen, farmers and business mon
in the West for at present at certain season. ~
ue wear the difference in interest rates between the
hast and th1 West is from 20 10 Der cent where
Is IN 'Snaaa the corresponding difference Is but 2
~ sent Any plan must. 0f course guard the in
terests Of Western and Southern bankers a. c,re-
fuly as II guards the interests Of New York or C'
cago bankers. and must be drawn flon the st,u5-
points OF the farmer and the merchant no less than
ron thc standponts Of the city banker and the
country banker"
Asks Immediate Action.
1 again urge on the Congress the need
Of immediate attention to this matter
We need greater elasticity in our Cur
rency; provided, Of course. that We rec
ognize the even greater need of a safe
and secure currency. There must always
De the most rigid examination by the
national authorities. Provision sbopld ha
made for an emergency currency. The
emergency issue should, OF course he
made with an effective guaranty. and
upon conditions carefully prescribed nv
the government. Such emergency issue
must be based on adequate securities an
proved by the government. and must no
issued under heavy tax. This would
permit currency being issued when the
demand for il was urgent, while securing
It's retirement as the demand fell of
II is worth investigating 10 determine
whe'her officers and directors Of national
banks should ever be allowed TO loan 10
themselves. Trust companies should ne
subject 10 tire same supervision as
banks. legislation 10 this effect should no
enacted for the District OF Coh1nbio
and the Territories
ct We must also remember that even
The wisest legislation on the subject can
only accomplish a certain amount. No
legislation can by any possibility guar
antee the business community against
the results OF speculative folly any more
1han II can guarantee an individual
AGAINST the result OF his extravagance
Nhen an individual mortgages his house
10 buy an automobile he invites disaster.
ana VAen wealthy men. or men who pose
as such, or are unscrupulously or foolish
~ eager 10 become such. indulge in reck-
less speculation-especi II il is accom-
panied by dishoneSty-they feopardiza
not only their own futuce, but the f,Iture
OF all their innocent fellow-citizens. for
they expose the whole business com
munity TO panic and distress.
Ihe income account OF the nation is
IN most satisfactory condition. For the
siX fiscal years ending with the LIST Of
july last the total expenditures and reve-
nues Of the national government ex-
elusive OF the postal revenues and ex
pehditures, were, in round numbers.
revenues. S465.Oo0G0O and expenditures.
SS'-'o'VoV'Voo- The net excess Of income
over expenditures. including in the latter
tne htty millions expended for the Pana-
ma Canal was Sl90000.00O for the six /
years. an average OF about eco 600 0Ao a
year This represents an approximation
between income and outgo which #
would be hard TO improve. The satisfac- |
tory working Of the present tariff law has
been chiefly responsible for this excellent
showing. Nevertheless. there Is An owl |
dent and constantly growing feeling |
among our people that the time is ran |
ldly approaching when our system of |
revenue legislation must be revised.
Revision, but Not Now.
This country is definitely committed /
to the protective system and any effort
TO uproot 1t could not but cause wide /
spread industrial disaster In other words /
the principle of the present tariff law
could, not with wisdom be changed. But
IN a country of such phenomenal growth |
as ours it is probably well that every
1ozen years or so the tariff laws should |
be carefully scrutinized so as 10 see that
no excessive or improper benefits are con-
terred thereby. that proper revenue is
provided. and that our foreign trade is
encouraged. There must always be as n
minimum tariff which will not only
allow for the collection OF an ample
revenue but which will at least make
good the difference in cost Of pro-
iuction here and abroad: that is. the
Inference in the labor cost here and
abroad, for the well-being of the wage
worker must ever be a cardinal point of
american nOlicy The cuaet;o,, r,.,,,5 !, /
approached purely from a business stand
Mint. hnth lie