The San Francisco call., 1908-03-15
BURTON CONDEMNS
THE FOWLER BILL
Presents Minority Report From
Congressional Banking and
Currency Committee
Right in Principle but Danger.
Gus in Practice" Declares
Ohio Representative

WASHINGTON. March i4.-Repre-
~>ntative Burton OF Ohio submitted to
:. house today his minority report as
member Of the banking AID currency
committee, dissenting from the major
ity report which recommended the
passage Of the Fowler currency bill.
Burton's report concerns itself wholly
with the Fowler bill and his reasons
for opposing ii, and makes no refer
erce 10 either the Aldrich bill or the
Williams bill. the latter measure hav-
ing been recommended by the demo-
cratic members in minority report.
Burton says in his report that he
does not regard the passage OF the
Fowler bill as either practicable or
desirable at this time.
The bill" he says. makes elabo-
rate provisions for the changed condi-
tiOns which would exist by reason OF
the adoption of its provisions IL has
many features which will meet with
very general cOmmendation, and no
doubt If legislation should be framed
for the creation OF q banking system
many OF them would be adopted.
PRINCIPLE Is CORRECT
1t contempIates the issue Of bank
notes against assets, in accordance
with the demands of business. thereby
giving elasticity to the currency and
adjusting its volume 10 The require
ments Of trade II may be conceded
that this is the most correct principle
for the issuance Of currency"
After citing further provisions OF the
bill and admitting the soundness of
their theory. Burton says:
At the same time the measure is
most revolutionary in its character.
The changes contemplated are quite as
radical as have ever been ATTEMPTED
in any advanced country save under
the stress or highly exceptional cir
cumstances, such as are exacted by
war or a change in the form Of gov
ernment For more than 30 years
there has been a currency system
which. however. unsatisfactory IL ma
be in important particulars. has pos
sessed the quality OF undoubted secur-
ity. The people will not readily con-
sent 10 so marked 4 departure as
would be involved in the substitution
OF guaranty fund which is expected
10 secure not only s.. 200, 000, 600 OF
bank notes, but $l3.000.0o0.Oeo of de-
pOsits.
DANGEROUS AND UNPRECEDENTEr
While the voluntary agreement OF
banks for the guarantee of common
deposits is worthy Of universal ap-
proval. a compulsory guaranty is dan
gerous and unprecedented" says the
representative.
Such a provision" he continues
places upon the same level the banker
Of prudence and honesty ana the one
who is careless and ready 10 resort tc
questionable methods II there is any
line Of business in which care and con-
servatism is essential il is banking
This proposed regulation places those
very qualities at a disadvantage and
gives q premium to those who are
guilty OF reckless and dishonest man
sgement
Under a guaranty Of deposits, the
money OF depositors would inevitabIy
." gravitate to banks or financial institu-
lions in speculative centers. because
higher rates OF interest could be OBJ
tained, though the result would be
that capital would be invested in z
manner which would be sure to leac
10 speculation and to unsuccessful un-
dertakings- In the long run the pub
lie, as IN the case of all oppressive ol
unnatural legislation, would be com
PEELED 10 bear the loss. either in the
form Of higher rates Of interest or o,
lower return upon deposits