The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1908-03-07
PROPOSED CURRENCY LAW,

We have not seen copy of Mr.. John
Sharp WilIiams's bin for the eorrec-
ton of the errors of orr currency sys-
tenn. but we doubt very much II 1t has
the merits of the Fowler bill. and it
seems that 1T was an unwlsc thing TO
introduce any bill which would divide
allegiance to the only hope OF sup
planting the proposed Aldrich bin with
something satisfactory. Our whole ma
tional bank-nose currency system is on
an entirely wrong foundation. The only
true basis for the issue of notes rs
gold, which is the only money of nnl-
versal and international acceptance
There may be any amount of security
hut If the note is not instantaneousiy
convertible into gold. 1t has not the
essential qualities of currency. Our
present system. as is we'll known. grew
out of the purpose on the part OF the
TREASURY of the United states to make
Irnited states bonds salable during the
war. in order TO get funds for lighting
fine Southern confederacy. 1t was
very ably conceived plan for that pur-
pose. and it has been kept UP ever
since. along with the "battle-eorn'
rroenback. BY this system. II there We're
no bonds there would be no national
bnnk-upte currency. If the United
states should ever pay Its debts, cur
rencv would have to be furnished In
some other way. Even when there Is
an extraordinary demand for currency
there is no adequate provision for
issuing it, or, after ii is slowly ana
painfully issued. there Is no provision
for speedily retiring it when il
is not necessary. The Aldrich bill
merely aggravates the situation by adj
hitting as bases OF currency other
bonds than those of the United States
In each case banks arc required to in
vest their capital in bonds in order t
issue no1es. when it would be nfinitel!
better to take a portion. say as muct
as one-third, of the capital invested II
bonds and put it IN gold in their vaults
and then lend out the other two-thirds
and issue notes based both upon TIL
gold in their vaults and the assets
their possession, tlse gold in thei'
vaults backing the general assets o
the bank. In this way each bank be
comes primarily the custodian of 1t
own credit and secures its own gold,
A. notable instance OF that occurre
here in Richmond in October. durln
the recent panic, when some banks Sc
cured 100000 of gold from London
,,t
the United States had anything
do. In the same way banks q
over the United States would FORTH
themselves with gold, and would
prepared to redeem any notes that Tho
issued themselves
The Fowler bill not only, in its scor
contemplates each bank taking care
itself. but it has a further snarant
fund which the government holds a
which makes tho security of the not
that may be issued against assets a
the gold in local banks absolutely co
plete. Currency can be extended
contracted according to necessity
ways based upon gold assets and
guarantee fund deposited with the s.
eminent The argument i'll favor
the Fowler bill may be elaborated
beyond the scope of such an article
this.
The greatest service that the Del
cratic party could render the coun
would be TO drop all other cross tn
and unite upon the Fowler bill I
fight for it faithfully until it is ado
cd. such an achievement would
worth countless millions OF dollars
this country.