The Montgomery advertiser., 1908-06-17

tne pledge of 1898, that the national dsn den. should be assacred as the soi-
 That t has weaknesses is freely ad- Initted. The defects of the system have been recognized from the beginning by Treasury. and wiile 'Serese rsmedisl ehanses % ses nave been made as these defects have developed. yet the one giaring fault, the want of elasticity. has continued
 "As early as 1879 Hon. George 6. Boutwell,. the then Secretary of the Treasury. directed attention to this de- feet as follows:
 ".The circulation of each bank is fixed arbitarily by a rule of law. The aggregate circulation is, therefore, "a nxed sum. and consequently there is creased demand for money due @ oecas- ionaliy to extraordinary events at home or abroad and arising periodi- cally with the incoming of the harvest. .....A degree of fiexibility in the vol- une of currency Is essential for two reasons: First. the business of the De- partment can not be transacted prop to raise the circulation n aboys sns dr power yer duce 1t below that limit is denied. A rule of this nature would compel the Secretary to accumulate large cur wise the credit Of the Government in meeting the ordinary daily claims up- on 1t would be at the mercy of every serious business and political revuision
 Secondly, there Is a necessity every autumn from moving the crops without delay from the South and West to the seaboard that they may be in hand for export and consumption as wanted. Tn the summer months funds accumulate at the centers. but the renewals of bus mess in August and September gives employment for large sums and leaves little or nothing for forwarding the crops in October and November
 The problem is to find way of in- crops and diminishing it at once when
 Secretary Windom. in 1890. reiterat-
 "Tn my Judgment the gravest de- feet in ouc present financial system IS it's lack of elasticity sThe demand for money in this country is so irreg. which will be ample during ten months of the year will frequently prove so deficient during the other two months as to cause stringency and commercial disaster. Such stringency may occur without any speculative manipulatione of money. though. unfortunately, IS often intensified by such manfpulations.
 "'The crops of the country have reached proportions so immense that their movement to market, in August and September, annually causes qan- scs of a sufficient supply to meet the in- creased demand during those. months may entail heavy losses upon the agri- terests. Though financial stringency may occur at any time and from many causes. yet nearly all of the great com merciai crises In our history have oc, cured during the months named, and unless some provision be made 10 meet such contingencies In the future, ike disasters may be confidently expected
 For Emergency Currency.
 'HThe recent panic called the atten- ton of Congress to the necessity of further legislation. and measure as been passed providing for an emergen- under certain conditions and lirlita- lions, an authorization, if Is believeds which will prevent the recurrency or any such disaster as befell the country last fall. The Secretary of the Treas ury has already taken the necessary steps to give effect to this Legislation, and banking associations are already forming to avail themselves of the ben provisions of this act will ever De ln- voked. as the ability to supply SbO0,- 900 900 additional currency whenever needed will of itself have a tendency 10 make its issuance unnecessary.
 "In the meantime. however. the he- publican party is not indifferent to the necessity of a further and comprehen. banking system. and to that end the Congress just closed authorized the creation of a monetary commission, composed or e16ntGe0 metHDeIs oA tilS two Houses of Congress, clothed with l power to inquire Into and report to Congress at the earliest date practtca- 1 ble what changes are necessary or de- l sirable in the monetary system of the | United States or in the laws relating | to banking and currency, and for this purpose they are authorized to sit du- | ring the sessions or recess of Congress | at such times and places as they may | deem desirable, to send for persons and papers, to administer oaths, to sum- mons and compel the attendance of | witnesses, experts. and other assistants7 as shall be necessary to carry out the | purpose for which said commission was l created. and to make such lnvestlga- l lions and examinations. in this or oth- CT countries. of the subjects committed | to their charge as they shall deem nec- essary.
 '@rhis commission has already orga- mixed and entered upon It's Iabors and | win diligently prosecute It's duties with | the hope of formulating a monetary | system that will meet every legitimate | business need and promote the pros perity of ali of our people.
 The State Department.
 But in the broader field of the | worlds drama, where the nations are | actors. our country has taken a coil spicuous and commanding part. Hav- |