The Montgomery advertiser., 1908-05-13
NEW ERA IN FINANCE
CONGRESS AocEfTs PRINCIPLE OF
ro,iew Lead of Peeple--Waiter Weh- man Says Legislators nt Last Have
 Awakened to Nations Need.

says LeKtstatbts VI 11"s h."
 Awakened to Nations Need.
 
 washington, Walter weilman's sneciai to Chicago Record -Herald.-it is d new apoch which now dawns m the financial history of the American peopfe. Currency based upon the ss ests of banks-that 1t. upon the indus tries, mobile property and as repro sented by the banks--is coming-is near at hand. It may come now Tn limited form by enactment of the cur rency measures upon which the Repuo- ltcan leaders of the House of Repre- sentatives are working. If 1t does not come now, 1t will surely come soon.
 This epoch -making departure was virtually ushered in last week, when by a vote of I25 to 21 the members or the dominant party in the popular branch of Congress decided to adopt 1t as principle. That vote was only Iegisiative acceptance and registration of a decree of public opinion As IS often the case with reforms and prog ress toward better government ana better things. The best opinion or America has. for some time. faVcreo what Is called asset currency. Con gress Is trying to echo the voice of the public.
 In some respects this step, forward Is one of, the most remarkable ever seen in our country. It shows again how quickly the thinking American people master a financial or economical prob lem once something occurs to rouse their thought. The first great example of this we have had in recent times was the adoption of the gold standard by popular vote in the presidential eiec- tion In 1896 For years we had been drifting along with an uncertain stan dard, or double standard. really fall ing between two stools. Then came the political threat that we should De plunged downward to a silver basis. The shock of this danger stimulated thought in a marvellous way. With phenomenal rapidity the people edu- eated themselves. thought 1t all out In July the country was for silver. By September it was wavering. By Ne- vefnber 1t had made up It's mind on the right side.
 Twelve months ago the American people were opposed to asset currency. They had not thought much about 1t. There had been no great need of think ing. Few understood 1t. But there was widespread prejudice against 1t. Why. we can easily understand. Only the oldest men remembered the days of wildcat money. But wildcat curren- ey was a national tradition. The peo- pie were determined to have no more of it. Having secured paper money that was absolutely safe, they were in- tuttively opposed to any innovations, They wanted no experiences. They knew their present currency based on government bonds. was absolutely safe and they feared currency based on any thing else might not be safe. There fore, the man who year ago had dared predict that within twelve month the people of the United states would actually favor asset currency would have been deemed crazy,
 Then came the panic, the needless collapse of the banking institution of a great and rich country, collapse due entirely to the insufficient stock of currency, to an ill-balanced system which throws all the work upon the currency at g time when 1t can least bear the strain. and fails to provide any adequate remedy in means of is- suing new currency supplies to meet the extraordinary demand. The shock of this great disaster set men thinking Just as in 1s9e the battle of the stand ards stimulated study, so now the storm of 1907 reused the alert and rapid intelligence of millions of Am orleans. While our ,so-called states men of Congress were fiddiing around with a pretty little relief measure wrong in principle. because based on
  coming to the conclusion that currency based on business was what business needed and the government should supply. And at last, after the waste of a precious winter, Congress showed signs of getting a half-couscious glitii- nier of a principle which Is now almost as an open book to the thinking men in all walks of life.
 If ever there was a practical object lesson in finance this country had one last fall. Business was paFalyzed, banks virtually abdieating their func- tions. exchanges among the people stopped, all because there was not enough. bond based currency in the country. To meet this emergency, vol untaFy associations of banks called clearing houses issued currency with out the form or sanction of law and certificates. Some individual banks issued cashiers checks. All this pass ed as money, was money, and upon no such issue, unreeognixed in law as 1t was, was a dollar lost Such money was not fiat, 1t was not unsoand, it was not dangerous. It was money behind which stood promises to pay, promises of merchants, manufacturers, all sorts of men of affairs. to pay within thirty, sixty or ninety days. Behind their promises was their property of all sorts--the commodities and goods go- ing to market. the activity and resour- ces of the country as a going, pros porous and solvent concern.
 It would seem that the lessons to be learned from all this were so obvious that even the chairman of the Senate | finance committee and the speaker of the House of Representatives could
 read them. The lessons, of course. were:
 1. Power to issue as much safe and sound currency as the country may at any time require should exist some | where.
 2. Government should not surrender it's prerogative of currency issue. but, since it cannot itself adjust the vol
 ume to huctating demands. should | create a system by which. under it's
 control, the people may do that for | themselves.
 3. Since business at some times re- | quires much more currency than at | others, give business the power to | pledge its commodities. it's substance. l 1t honor to create the credit instru-
 ments which 1t needs.
 i {. Business has already shown how | easily and safely 1t can do this through | the fiscal agencies 1t has created--its | banks. and its banks cooperating in
 clearing houses.
 | 5. Legalize the clearing-hous. char | ter 1t. give 1t statutory power. enable
 all the banks to act together fer all | business and with the property and sol vency of all business translated into | credit and stability with the broad
 base of the entire country under it.
 issue as much currency legalized. not | hA al