Arizona republican., 1907-12-11

by the quantity of their paper in cir culation. The quantity can never be too great or too little. while it pre- serves the same value as the stand ard.
 What is expansion? It Is increas-
 ing the liabilities of a bank without correspondingly increasing its reserves. The reserves may all be in gold coin. | and yet the bank may expend to a dangerous point. even to the point of destructlon; for it could expand its liabilities until it's reserve was only one per cent. But such expansion would ordinarily be fatal even though
 the one per cent was in gold coin. When the management of a bank con- siders the question of increasing its l liabilities. the onlX important matter is
 whether its reserves will justify it. It is matter of no practical importance whether the increased debt is a ledger i credit to be checked against. or a cashiers check, payable to bearer.
 which is current credit or credit cur rency.
 Therefore. I assert that a credit
 currency cannot in any way lead to
 expansion; but that it would rather
 tend to prevent it, as appears in what follows.
 Credit Currency Not Initiation. What is imitation? It is passing one
 credit upon another credit; that is.
 passing banks liabilities upon credit such as our present bank-notes which
 are in turn based upon another credit.
 a government bond. which is due in
 about twenty-five years.
 Now. would any banker hold
 cashiers check payable to order.
 whether of the weakest or the strong
 est bank in the United States. as a part of his reserves? You answer, No Under no circumstances. He would
 send it home as directly and swiftly as
 he does checks and drafts for immedi-
 ate redemption.
 But the cashiers check. payable to
 bearer, is a current credit. or it is credit currency.
 Therefore. I assert that credit cur
 rency cannot under any circumstances
 lead to imitation. On the other hand.
 1t will be a distinct prevention of in-
 flation such as We are suffering from today by using bank notes as reserves
 Because the banks obligations in the form of cashiers checks or credit cur rency. will be sent home with the same directness and swiftness that checks and drafts are. always keeping the cur rency of the country down to the low est point of necessity. and yet always meeting the largest demands of trade and commerce. l challenge anyone 1o deny and contravene these foregoing propositions with regard to expansion and imitation"
 Making Matters Worse.
 NN4T.aw
 bond-seeured currency is not co-ordi- mated to business; that no other civ ilized country than the United States has such a currency and that no other civilized nation ever did have such a currency except Japan. which copied it from us and afterward repudiated it. He then addressed himself as fol- lows to the late issue of Panama bonds and treasury certificates
 With these astounding facts press ed upon your attention. can any man. any honest. intelligent. fair-minded man. deny that there must be some- thing radically wrong. fundamentally wrong. disastrously wrong, with our present currency making devices; and that to it can be traced with unerr- ing certainty the inexcusable calamity that has darkened our commercial sky. this fall. in the very midst of abound ing prosperity?
 Yet while We are still in the thrOes of our commercial catastrophe there are those who. ignorant of the causes and thOughtless of the future, would have us take another plunge in the same direction by adding to our over whelming load of fixed. immobile, bond secured notes another mass of bank notes based upon state, municipal and railroad bonds. Could any one con- ceive and plan a more gigantic scheme of imitation?
 "I now declare that if this govern ment continues it's present policy of injecting into the arteries of trade and commerce of fixed. bond-secured currency, by swapping securities. by bond speculations, by treasury manip- ulations. and by executive orders. we shall continue to move only with an accelerated speed, and with the direct ness of a musket groove. and the ab- sOlute certainty of passing time. to- ward q commercial break -down-a commercial crisis, a commercial trag- ledy-compared with which the pres ent currency panic is only a pleasant summer outing.
 Are we such business fools, such economic idiots, such political towards that we will not move even though the heavens fall? And if perchance We do move, shall we jump into the fath- omless abyss of passing credit upon credit of passing all bank credits.
 whether deposits or note-issues. upon gold coin?'
 Responsive to Trade. Of the chief advantage of a credit currency, Mir. Fowler said: When we come to compare a credit currency and bond secured currency | in their relation to the business of the
 country. the advocate of bond secur-
 ed note is compelled to admit that for
 forty years it has failed utterly. in-
 deed has never failed to show~the. slightest variation because of the
 changing conditions Of trade. As I have before stated. the circulation tell from s365 .000 900 in 1882 to s122. .000. 900
 in 1891. and just as strange and anom- alous circumstances are attending it
 every month of the year.
 Indeed there has not been a single fall during all these forty years when
 we have not been hanging over the