The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1908-01-03
BANK
IMPOSSIBLE
OF HOUSE COMMITTEE
DECLARES SUGGESTED SYSTEM
OUT OF QUESTION

CHICAGO, December 1l.-Chairman
Fowler, of the house committee of
banking and currency, spoke before
the Illinois Manufacturers Association
last night in regard to the financial
situation He said in part
Let us settle once for all that the
only proper reserve for our banks to
hold is gold coin and that we are most
unfortunate in having to carry $780,
600 of United States notes and $780,
100000 Of silver, maintaining them up
on a parity with gold, and thereby
justifying as best we can their use as
reserve. Let us not forget that both
our silver and United States notes
are serious stumbling blocks, though
not inurmountable obstacles to our be-
coming the financial center of the
world.
"A great central bank is in my opin-
ion political impossibilty at present
do not regard great central bank as
essential to a scientific, sound and wise
banking and currency system for the
United States. provided we can unity
and coordinate our banking interests,
bring them substantially into one sys-
TEN which will secure universal CO.
operation and the strength of a COM
bination of our entire banking capital
and, even with a central bank the
same coordination must be effected.
Our reserve must be all of the same
character; gold or its equivalent; be-
cause gold is our standard OF value.
Our reserve in all of our financial
institutions must be adequate to prove
our credits and protect our depositors.
We must adopt the principle of free
interchange Of banking credits and
bank note credits
Our bank notes must spring into ex-
istence precisely as checks and drafts
do through business transaction.
Our bank notes must be related to
and based upon the consumable com
modities Of the country; going out with
productions and coming in with con-
sumption.
THE practice, will not say principle
OF finance and currency now in opera
ton in this country, Is costing the
American people at least 100000 900
annually in addition to the frightful
devastation of values incident to such
currency panlcs as the present, which
are liable to occur at any time If some
significant failure should precipate it.
THE cost to the people of $3.50, 000,-
900 arises from the fact that the use
OF all the capital represented by the
bonds deposited to secure our present
bank notes. is lost because they are
wholly unnecessary and in their pre-
sent use and relation are an unmit-
gated curse.
"The use Of the capitaI represented
by the bonds deposited to secure gov
eminent deposits Is also lost, as well
as interest at the rate of per cent
upon government deposits, which, since
the establishment Of the national bank
Ing system up to the present time has
amounted to about SIS, 900, 900, or near.
ly twice as much as the loss to depo-
sitors resulting from failures of ma
tional banks.
There Is In the pockets of the PEG,
pie $l,250,000,O00 of reserve money!
81 900, 100000 Of which at least should
be exchanged for current credit OF
credit currency.
/, "A law should be passed giving tC
the national banks the right OF exer
, cislng in the respective states where
located all the powers OF executors
administrators, guardians and trustees
Unless this step Is taken the advan
tages now enjoyed by the trust com
= Danies will gradually but lnevitabl!
!, compel the national banks to surrender
: their charters for trust company char
= tiers; for If trust company is required
: to carry only One-Gfth or one-half tn
!, reserve OF a national bank, 1t can affort
to pay a much higher rate OF interes
: upon deposits and eventually under
8 mine the national banks.
a The right should be given to ma
tional banks to issue an amount o
, credit currency equal at least to thei
= capital.
Thee two powers would have tn
effect OF bringing into the national sys
' TEN practically all the trust companie
: and state banks II our recent expert
Z ences have confirmed the public opinion
d that the required reserves Of the ma
r tlonal banksp are none too high.
IF our banks were authorized L
convert their bank credits into BAN
note credits. upon the demands Of de
positOrs, there never would be a eur
rency famine such as we are sufferin
II from now"
IL -
WAS HIS AFFINITY.