Arizona republican., 1908-02-23

ment of a western banker that he would get what bonds were needed if they were not already on hand. We do not believe in an asset currency, writes this bank president. but believe all money should be secured by bonds and issued by the government in order to keep the currency. silver and gold. on equality as the people will insist on currency. or gold An asset cur renew in my opinion, would put a premium on gold unless the govern ment stands back of the currency. We are perfectly willing to supply our selves with such bonds as the govern ment will accept
 Reverting again to the N. W. Har- ris report. as the most authoritative and dispassionate analysis Of the sit uation that yet has appeared. the in- terests of state and savings banks. of which there are over 1000 in the country. are given. together with some sidelight facts on the recent furry that are highly interesting. The re- port says
 During the late panic a large amount of currency was sold aAS per cent premium. Hence, the price paid for the use of bonds was very small, as compared with the amount paid for currency. The market value of bonds. as class. of the kind which were ac- cepted by the government to secure government deposits by the national banks, did not advance during the panic Many issues fell materially, but perhaps they did not fall in mar ket value as much as they would have done if they could not have been used by the government; but certainly the fact that they could be used by the government did not strengthen the market over fraction of one per cent.
 When it is considered that under the Aldrich bill the amount of bonds in the country available for basis of cir culation is. as above stated, upwards of $3.5OO, 900. GOO. the possibility of temporary use of S250.0O0.00O to S500.- 0OO, ,OO0 of bonds at an average of only once in ten yeats certainly will ad- vance their value but very little: and as the municipal bonds are nearly one half of the total amount, the munich palities of the country. which so di- rectly represent the people. will get whatever benefit there may arise from the increase in the market value of the securities that they issue.
 NATIONAL BANKS DIVIDE BENE-
 FITS.
 "The trust and savings banks of Chicago own over SIP .000. 900 of bonds, and during the late panic we were loaners of bonds to the national banks to enable them to obtain United States government deposits. Our rule was to loan the bonds to national banks. We receiving in return one-half of the currency that they received from the government as a deposit and such was the policy adopted by the largest trust and savings banks of Chicago Hence. the benefit of the currency obtained from the government was thus secured to the trust and savings banks. and other state banks. as well as to the national banks.
 ''The Aldrich bill makes no provi- sions for currency to be issued to state banks. However. as they are large holders of the bonds, they can secure their proper benefit from the Aldrich bill by furnishing bonds to the national banks who do not own them. along lines similar to those above mentioned. Certainly, the large state banks of the country should be provided, in case of a panic. with em- ergency currency, as well as the na- tional banks; and. as indicated above they can secure the benefit directly under the Aldrich bill as now drafted.
 FAVORS CENTRAL BANK PLAN.
 Personally, I would prefer to see Congress provide for the organization