The Birmingham age-herald., 1907-12-11
Chairman of Banking and Cur- Tency Committee Talks At
 Banquet In Chicago
HEROIC REMEDIES MUST
 BE GIVEN ID FINANCES
Congressman Says That Central Bank Idea Is Not Feasible and Offers Asset Currency Plan As
 Solution of Problem.

Chicago, December 10.-Congressman C..arles N Fowler of Elizabeth, N. J., chairman of the House committee on banking and currency, and John l.. Ham, ilton of Hoopeston, H.. chairman of the currency committee of the American Bankers association, were the chief speakers tonight at the annual banquet of thu Illinois Manufacturers association. MT. Fowler spoke on ''rhe Financial Situation"
 The subject chosen by Mir. Hamilton was "The Necessity for Financial Legis- lation.
 T. was expected that Comptroller of the nCurrency Ridgely would be present, but he was detained at Washington.
 Mir Fowler said in part:
 Let us settle once for all that the only proper reserve for our banks to hold is goin coin, and that we are most unfortu- nate in having to carry $346,0O0,0VO Of United States notes and $60O,OO0O0 or silver, maintaining them upon parity with gold and thereby justifying as best we can their use as reserve. Let us not forget that both and our silver and United States notes are serious stumbling blocks, though not in surmountable ob- stacles to our becoming the finanNal cen ter of the world, provided they may be practically eliminated in time from our financial calculations.
 | great central bank is in my opinion a political impossibility at present l do not regard a great central bank as es- sential to a scientific, sound and wise banking and currency system for the United States, provided we can unify ana co-ordinate our banking interests, bring them substantially into one system which
 
 strength of a combination of our entire banking capital, and, even with central hank the same coordination must be effected
 Gold or Equivalent.
 Our reserve must be all of the same character; gold or it's equivalent; be- cause gold is our standard Of value.
 The reserve of all of our financial insti- tutions must be adequate to preserve our credits and protect their depositors. We must adopt the principle of free interchange of banking credits and bank note credits.
 our bank notes must spring into exis- tence precisely as checks and drafts do through business transactions.
 Our bank notes must be related to and based upon the consumable commodities of the country; going out with produc- tions and coming in with consumption The practice, l will not say principle, of finance and currency now in operation in this country is costing the American people at least $150,000,00O annually, in ad- dition to the frightful devastation of values incident to such currency panics as the present, which are liable to occur at any time if some significant failure should precipate it.
 Security Wasted.
 The cost to the people of sloo,oOooV1 arises from the fact that the use or all the capital represented by the bonds de- nosited to secure our present bank notes is lost because they are wholly unneces- sary and in their present use and reia- ton are an unmitgated curse.
 The use of capital represented by the bonds deposited to secure government de- posits is also lost, as well as interest at the rate of 2 per cent upon government deposits which. since the establlshment of the national banking system up 10 the present time has amounted to about s75 OoO000 or nearly twice as much as that lost to depositors resulting from failures of national banks.
 There is in the pockets of the people s1 .250 0O0OOO of reserve money, $1,O00,0 coo of which at least should be exchanged TOT
 .nt credit or credit currency.
 ny other business in the world, ex-
 our politically managed, were in-
 this waste of $150.000.O00 annually ' ,e stopped at once.
 
 American labor. Upon labor rest the entire cost of the banking business, which is a necessary evil incident to the pro duction, transportation and sale or dispo- sition of s25 900. 100000 worth of product an- nually.
 Powers To Banks. "A law should be passed giving to tho national banks the right of exercising in tbe respective states where located all inc mowers of executors, administrators. guardians and trustees. Unless this step is taken the advantages now enjoyed by the trust companies will gradually but inevitablv compel the national banks to surrender their charters for trust com- panv charters; for if trust company is required to carry only one-fifth or one-half the reserve or national bank, 1t can afford to pay much higher rate of interest upon deposits and eventually undermine the national banks.
 The right should be given to national banks to issue an amount of credit cur rency equal at least to their capital. These two powers would have the ef- feet of bringing into the national system practically all the trust companies and state banks if our recent experiences have confrmed the public opinion that the required reserves of the national banks are none too high.
 If our banks were authorized to con- vert their bank book credit into bank note credits upon the demand Of deposltors, there never would be a currency 1amine such as we are suffering from now.
 A credit currency cannot in any way lead to expansion, but it would rather tend to prevent expansion, if put upon the same footing in all respects as checks and drafts Our currency will then be perfectly co-ordinated to the needs of business. being neither too great nor too little. the cashiers checks springng into heinz with business needs. and automati- sruI1 1fCn- ri. ,funlx <+Iac .l<u and drafts do.
 No civilized country now has bond