The Washington herald., 1907-12-09

the business prospects and extraordinary
equities OF the Reading Company in the
shape that they are
It is remembered that. quite aside from
the profits OF current earnings, financial
transactions that viii inure TO the great
benefit of the Northern Pacific Railroad
Company must before very long be con-
summated. The AFFAIRS Of the Brooklyn
Rapid Transit Company have emerged
unscathed from the searching investiga-
tion made OF them by the Public Serv-
ice Commission. and the way in which
the general position OF the United States
Steel Corporation has become entrenched
with supplies Of cash and through money
spent out OF earnings upon improvements
is beginning 70 be popularity understood.
Whether or not the ingathering OF cash
reserves by so many Western institutions
was In any way related 70 the imminence
Of the Kansas City difficulty is a matter
. thar may be open 10 discussion, but Il is
not probable that this influence was espe-
cially noteworthy because the movement
Of money westward from the Eastern
seabOard has been so general and wide
spread, and the result OF this movement
Is that the reports as informally pub
lished Of the condition Of Western banks,
made in response 70 the Comptroller OF
the Currency's call for a statement OF
condition on December 3. show strength
of the banking position in the West that
has never before been equalled
National banking reserves running be-
tween 20 and 30 per cent in many os the
great Western cities seem altogether COM
mon. There was another reflection con-
cerning this development beyond that OF
qualification over the banking strength
that was exhibited. and that IS that what
has been carried on in the West has been
a needless and selfish boarding Of money.
Lending a safety Valve.
The unchecked lending Of money. but
with the maintenance Of high current
rate of interest. is the one sure safety
valve under such conditions as have been
witnessed IN our country during the last
two months; and # is in their failure to
regard this truth that our Western bank
ing friends have incurred no small meas
ure Of responsibility for the disasters that
have happened. They chose 10 let the
New York city banks do al the lending
that was done. and 10 keep IN their own
vaults their Unnaturally large reserves
idle and unlent. Ike misers' crooks Of
gold.
All these considerations viii presumably
play = part IN the debates in Congress
and elsewhere this winter on the meas
ures OF currency reform that have been
multitudinously proposed How difficult
and intricate the present situation IS IN
this regard and with what caution new
laws on the subject should be passed
seems happily TO be generally realized.
1t Is not a subject for snap legislation
As a general proposition the greater dif-
fculty likely 10 be encountered in future
IN maintaining bank note circulation upon
the basis OF government bond issues Is
becoming apparent. People are coming TO
see that this means that the quantity OF
bank note circulation hUctuates with the
price OF the government bonds and not
with the real needs OF the country FOR
currency.
A bill has been introduced in Congress
providing for the ultimate issue OF s500-
10000 Of government bonds for the pur-
pose Of completing national waterways
throughout the country, and il is prob
able that large appropriations OF public
money for this purpose viii be made.
Is the currency Of the country 70 De en-
larged in q degree proportionate with the
new bonds2 This Is a question that must
be answered alike by those who are urg-
ing these appropriations and BY those
who are pondering over plans Of currency
revision.