The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1909-12-24
Governments IN OR OUT.

When Senator Aldrich was in the
set forth any scheme of currency re-
form, and especially he avoided the
advocacy of a Central National Bank.
And yet when he returned east he was
received as the special champion of
the central bank idea, and it was as
sumcd that he had made great inroads
on the western opposition TO such a
bank, crystalizing financial opinion in
favor Of it, This was an entirely
gratuitous assumption, because Aldrich
especially said when he was in the
west that he was seeking information;
that nothing had been formulated or
even agreed upon by the Monetary
Commission, and at no time did he
undertake to convert anybody, so far
as his public addresses show, to the
central bank idea, or TO anything else,
Correspondingly with respect to the
basis for the issue of currency by the
present National banks, he did not urge
the asset currency proposition in any
way Here. also, he stated that he
was on a tour of investigation, TO learn
what others thought, rather than TO say
what he thought himself; and here
again he was careful TO say that the
Monetary Commission had no plan.
The asset currency proposition is an
alluring one in way, from the
banker S standpoint; and from the pub
lie standpoint it offers relief from the
idea that we must always have a large
amount of bonds outstanding, that the
Nation must never get out of debt,
since Government bonds are necessary
as basis for the issue of currency,
But banking assets, so called, as a
basis of currency, have always been
considered unsafe; and even with the
utmost vigilance in inspecting and
passing on the fitness of assets as a
basis for currency issues, there must
always remain the fact that in time
Of panic the assets would not be avail
able for immediate use as money. They
could not be converted into money
of any kind. The disappearance of
money in panics Is the great pho
nomenon attaching to them. The money
is retired; nobody knows who has it;
nobody can get it,
Another objection TO the asset cur
emergencies were not especially taxed
it would be kept out all the time by
the bankers for the profit that is in
il, and would be disturbing factor
in the markets. But If 1t were taxed,
then the contrary tendency would pre-.
vail the banks would create and main.
tain a currency famine in order to
escape taxation on their outstanding
notes. Even now the banks are as
sailing the Government with tho propo-
sition that currency issued on the
per cent bonds that the Government
is supposed to be about to issue, should
not be taxed at all. Only upon this
condition will the banks support the
Government issue and prevent the
per cent bonds from falling below par.
The more the currency and National
bank questions are discussed, the moro
intricate the whole matter is found to
be, and the stronger the arguments are
| from those fnanciers who want the
Government to mix in banking opera.
tions, such as postal savings banks, the
upholding of the National bank system
| by Government action, the issue of
emergency currency by the Govern
ment, and the like. The banking idea
as developed in the East generally
amounts to just this, that wherever
there is n profit TO be made, the Gov.
wherever there is risk or loss, it is the
duty Of the Government to assume that
risk and loss. This, from the stand
point of the Eastern bankers, is per,
fectly straightforward proposition-fo,
them. But on the principle Of Govern
ment action, the people generally arc
Weakening up to the proper division OF
action and responsibility, and the de
mand is sure to come that the Govern
ment must either go into the currency
business by supplying the currency it
self, or keep out of the banking busi
| III
its being half in and half out-out
when there is profit to be made
and in when there is risk or loss
We are reminded of this genera
proposition by an utterance in the cur
rent number of the Bank Law Journal
which declares tho opinion that "ar
asset currency made flexible by mean,
Of a sliding scale Of taxation would q
a long way toward relieving the cur
rency situation, and would permit o.
the heavy reserves being carried by
many banks being utilized in business
channels, That is the bankin.
position, stated concisely and clearly
1t would result precisely as above sug
gestcd. The note issues on an asse
currency would be made inhexible anc