New-York tribune., 1908-01-14
THE FOWLER BILL.

The currency bin introduced in Congress last
week BY Representative Fowler, of New jersey
is an ambitious and comprehensive measure a
wide departure from Mr.. Fowlers previous posi-
tion 1t contemplates the retirement OF green
backs" so-called. as we'll as the retirement Oh
bond secured banknotes and provides a govern
ment guaranteed note issue to supply their place.
United States bonds as security 1or pahh
notes are done away with; the government
guarantees the proposed notes and is protected
in turn by a redemption funu equai to pei
cent of outstanding circulation.
II is usual TO limit the maximum note issue
of bank TO the amount of its capital; this Dill
contains no limitation. 1t divides the country
into redemption districts controlled by ooards
of managers. TO be elected by the banks IN tue
several diatricts and makes the chairman oi
the hoard of managers of each district er 0Hfca0
a deputy controller of the currency. possessing
powers now exercised by the Controller; IN the
case of a failed bank the chairman also becomes
or o6fcio receiver of such bank. 1t is douDlIul
if the incumbent of any place created by
board OF managers could be made eT 0ncto
United States officer: it is still more doubtful
if the equity power of the courts TO appoint re-
ceivers can be infringed in the manner provided
The bill authorizes national banks TO do
trust company business and also savings Dank
business This Is seriously wrong. Banks OF
discount and deposit should be held strictly to
a commercial business. Their investments
should be confined to commercial obllgatlons
with due date reaching only few months
into the future, in order that their assets may
be kept in liquid condition to enable them to
respond to the varying demands of commercial
interests The business of mortgage companies,
trust companies and savings banks is foreign TO
the purpose for which discount banks are Gre
tod on6 tO
would embargo their assets. impair their moD1-
ity and defeat the purpose for which such banks
exist.
The bill taxes each bank to guarantee the de-
posits OF all. This IS premium upon laxity OF
management at the expense OF conservatism.
The speculative bank. by overbdding for de-
posits or undertaking in the rates of discount,
buys business away from the better managed
institutions. and yet by the terms OF the pro-
posed bill the conservative banks are taxed for
the protection of depostors of such institutions
are taxed to enable reckless competitors 10
induce their depositors and customers to leave
them and 90 where greater Inducements are of
fered II proposes to tax banks per cent upon
their note issues and deposits, Ito guarantee the
payment of all individual deposits, or banknotes,
cor bank deposits. and I'll government deposits,
etc-a tax upon frugality In the interest of ex-
travagance. tax in the interest of banks whlch
seek the control of large sums for speculative,
and it may be dishonest, purposes. The govern
ment by passing such law, would be pdrfIceps
crininis in any loss which might follow
Mr.. Fowler has been economically sound ana
has heretofore done good work for the reform Of
our currency This sudden change is surpris-
ing. He would have been much wiser had he
adhered to the measure he introduced in the
: last Congress. based upon the report of the
commission appointed by the American Bankers
Association and if he was resolved to make a
change he would have strengthened himself and
helped the cause of currency reform by coming
| ont in favor of a central bank of issue, which
seems to afford better and more efficient solu-
/ ton of our currency question.