The Birmingham age-herald., 1908-02-11

Il U 1ODA 1, T GDh u
 favor. In any event imports of gold can never be made in time to relieve
 an acute condition of panic
 4. Men may not be found in another emergency with the patriotism cour- age and capacity of those who in this crisis, rendered such conspicuous and | invaluable service to the financial in 1 terests of the country.
 3. The suspension of bank payments
 with its resulting strain upon the credit of the country and it's resources will
 not be tolerated again.
 Improvement Shown.
 I am quite well aware that financial conditions have vastly improved over what they were six weeks ago, and I
 think we may feel quite confident that | the prolonged period of depression which followed the panic of 1893 may be avoided It is also quite certain that in all the financial centers within a very short time there will be great excess of currency, and probably sur, plus of loanable capital.
 While the general conditions have | improved and are improving there are still many causes for disquiet in in- dustrial and financial circles. 1t is quite probable that there will be con ! siderable additions to the army of the unemployed, and it is quite impossible
 for any man to predict, with any de- gree of confidence, what the industrial and financial condition of the country will be next autumn. In any event, if the business interests of the country are left defenseless through the inac- tfon of Congress, the most serious con sequences may follow. Under these cir cumstances I believe it to be the inn perative duty of Congress, in their
 wisdom, to provide some means of es- cape from another calamitous crisis.
 The expedients which the responsible officers of the government and of the great financial institutions were obliged
 to adopt in the panic of 1907 point the way to effective curative legislation.
 One Way Out.
 1. There seems to be but one way in which this can be accomplished, name ly, by some provision for the authori- zation of additional notes to be used | only in emergencies. The committee
 on finance, with practical unanimity, | arrived at the conclusion that 1t would not be possible to secure this relief by the adoption at this session or any
 measure which sh hould provide for the
 thorough revision or reconstruction of our monetary system, however advisa- ble such a course might be from a scientific or practical standpoint. Bank CTS and students of economies are l divided in opinion as to what should | take the place of the existing system, 1 if 1t is to be condemned and super | seded. and if new, comprehensive | system, based on sclenllnc pllhelpieS' i' l to replace it. =, | Two plans for general legislation whlca 1 are nrominent in public discussion were | considered by the committee:
 | 1. That advocated by many thought
 ful students of economic history ana
 teachings, who are led by the experlense | and practice of other commercial ma | tions to favor some plan for central
 bank of issue, which would be in ef1ece | A central clearing house with very i'm
 tied banking functions, under govern
 ment control. Personally, I believe that | in time this country is likely to adopt 1 such a system, but I agree with otnef | members of the committee that it's adop- 1 ton at this time, or in the near future,
 is out of the question.
 ?. That supported by a large num- 1 Der of bankers and students who maln- | tain that our monetary system will never l be placed on the proper basis until the 1 sole power of issuing notes is lodged in
 the banks, the security for such notes | to be based upon a general pledge or 1 the assets of the banks, their convertl- | bilitv to be undertaken by the banks and 1 to depend upon an insurance fund. Inls 1 plan involves an entire change in the | character of our currency and the ultl- 1 mate retirement of outstanding united | States notes and gold and silver certlh- cates The committee were unanimous l in the opinion that this plan would not | be likely to receive the favorable con-
 sideration of Congress at this session. Simple Method.
 The problem before the committee was | to find some simple method of remedy and l prevention that was merely an extension 1 or supplement to the existing system and | that could be provided through the use | of existing machinery. The system of
 issue and redemption. which has existed 1 for 40 years, is continued by the terms | of this bill The currency is intended | for temporary use only and not to be | retained in general circulation, and we | have made the most careful provisions | for its enforced retirement when not needed. The notes to be issued are nom- | inally national-bank notes, but they are l in substance national currency of the United States. issued through the agencies of the national banks
 | The remedy we provide is simple.
 prompt and efficient. At any time within | 4S hours, if an emergency requires it,
 s500, ,00O, ,OOO of new money can be put into l the channels of trade to allay public | excitement and to meet extraordinary de-
 mands.
 The committee believes that this great | fund, placed by the government at the | disposition of the bankers and business | men of the country, will have a strong | tendency to prevent financial crises and
 to preserve public and private credit at 1 home and abroad.
 | In periods of distrust large numbers of | people are controlled by sentiment. Ex- l perience has shown that at such a time | the strongest element in allaying excite l ment and creating confidence is the knowl- | edge that a remedy exists which can and will be promptly and effectively ap- piled. The existence of this great fund | is like the creation of an ample water 1 supply with effective apparatus to check conflagrations
 Emergency Issue.
 The emergency issue we propose should enable the solvent banks of the country to meet at all times their demand oblga- tions and to respond to all unusual but legitimate business demands. It will save
 bankers and the public alike from further
 humiliating confessions of general nsol- vency. It will be used in time of trouble to take the place heretofore filled by clearinghouse certificates, and it will rem
 der the use of illegal or questionable suo- stitutes for money unnecessary.
 The obligation of the government to re-
 deem the notes of national banks is strengthened and more clearly defined A definite pledge of convertibility by the government is required by this act to be printed upon the face of every note. The
 value of the national bank notes has al-
 ways been fixed in the minds of eur peo-