Arizona republican., 1908-03-11

them, the best of all securities. Our people would never agree to accept bank notes without this. Other nations have not this undobuted security Let us look into this Take Canada as an example. which has a proper manner of banking modelled after the Scotch system. Canadian banks issue notes based upon assets. These are se- cured in the following manner:
 First They are d first lien upon all the resources of the bank.
 Second. Every stockholder is liable to an amount equal to the par value of his stock to meet the debts of the bank-upon this the notes have also a first lien.
 Third. The government taxed the banks five per cent of their average circulation until fund was obtained. the proceeds of which are ample to pay any reasonable loss upon the notes and this fund the government now holds. If it should ever be found in sufficient, the tax is promptly to be increased. This special fund, however. has never yet been called upon for d dollar. The interest upon it is now returned to the banks as superfIous security.
 No bank note in Canada or in any of the other countries possessed of proper banking has ever failed to be pafd upon demand.
 Compare this with the security we have for our currency from govern ment bonds which have been sold in OnlH fnF a shade frl face value (greenbacks fell to thirty six cents). and they may sell so again should we be drawn into a serious war. They are at a fictitious price to- day equal to twenty per cent. It is not true, therefore, that these are the best security
 The government secures the legal tender notes by keeping in Washing ton reserve of nearly fifty per cen- in gold Q5J as against c46 millions), but the only redemption fund against our currency is five per cent in legal tender paper money. which the banks are required to maintain in Washing ton against their circulation.
 There is only one substance in the world which cannot fall inS value, be- cause it is in itself the worlds stand ard of value? and that is gold, which the banks of civilized nations have as their reserve.
 There never was a time, and there never can be a time. as far as We can see. when a million dollars worth of sold will not redeem a million dol lars worth of deb1 Hence the cur Tency of European nations is absolute ly secure, being based on gold. while the currency of our country is not A serious war would affect it. because our bonds would fall in value. Other nations go through wars. their bark notes never affected, because the re- serves held in their own vaults are .n gold. Their business world goes on much as usual. Ours would be in con stant danger of collapse
 Men have railed against gold as if it had received some adventitious advan- tage over other articles. Not so: gold has made itself the standard of value for the same reason that the North Star is made the North Star-it is the nearest star to the true north, around which the solar system revOlves l. wanders less from, and remains near
 
 It changes its position less To ob- ject to gold as the standard of value. therefore, is as if we were to refuse tp call the star nearest of ar stars to the true north, the North Star Man found that gold possessed many advantages as metal and Was the one that fluc- tuated least in value; therefore its merits have made it the standard of value. That is all. If another metal appears that keeps truer to uniform value, it will displace gold and make itself the standard, as the star Lyra under the present conditions, will fin ally displaoe the present North Star.
 Some men high in authority these days seem to be haunted and af- frighted by the dread spector of war and clamor for four baf1leships this year when last year the president an- to the world that no increase of our navy was required. but only one battleship per year 10 keep the present navy effective. Those thus af- flicted should ponder upon the conse- quences that would befall our whole fi- nancial fabric if. under the strain of war. its banks crumbied even in a small degree compared with that which occurred durin the civil war. France, when overcome, the enemy besieging her capital. moved on in all peaceful business departments in perfect se- renity. Gold commanded one per cenr premium for few days. owing to the reigning in Paris which ren- dered il difficult for people to attend to business needs. With this eXcep- ton all went on as before from staTr io finish. As a war measure, the pres dent should not delay asking congress before it adjourns to lay the founda tiOn-the only possible fOundation-for i safe and perfect banking system. by the banks from the govern mcnt and requiring them to keep re- serves in gold coin as European banks |. do. A beginning might be made by