The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1910-07-28
EMERGENCY

OFrlclAL cOUNTY PAPER
EMERGENCY CURRENCY.
For the first time since the passage
q the emergency currency law b,
congress two years ago, 1t is propos.
q TO take advantage of the measure
4 meeting OF New York bankers is to
b held within the next week for the
purpose Of considering the advisable.
~ Of forming an association in that
city for the issuance of this currency
Under the law banks in groups OF
ten or more may organize and put
ont emergency paper.
The emergency currency must pay
! progressive tax which is expected
~ force It into retirement as soon
90 the emergency passes.
The plan IL admittedly a make
ehift attempt to protect the banks
against soma OF the dangers OF our
currency system. When the currency
nust be secured by government
bonds and those bonds must be pur-
chased at . premium. 1t is obvious
That if banks are short Of cash 1t
would not help them to deplete their
reserve still Tor by turning 1t into
currency that costs them more than
par. Under our currency system, it
a easy to issue more money when
money is plentiful. but very difficult
when money is short. Currency. In
fact. is n form Of the banks re-
serve and the bank is given no use Of
tho credit to be found in its securi-
aties. Money is . mere evidence Of
property and property stands behind
al credit. IL we had a central bank,
- have all the other most enlighten-
q nations Of the world, this bank
would. n Its discretion, issue cur
rency against not only It's own credit
but against the vast quantity Of se-
scurities held by the banks. BY manip-
mating the interest rate. this central
abanlk could discourage over-specula-
ton and II this way do a great deal
to keep the country out Of financial
extremes.
emergency currency associa-
Stion a 9 haphazard attempt to do.
what8the central bank would do. The
law virtually recognizes the prin-
sciple 81 asset currency, as advocated
~ the most enlightened bankers,
md that means taking into ac-
count more than the actual money re-
serve Of the banks. But these %associa-
tons cannot act for more than their
localities and, while IT is true that
money seeks Its level the country
over and that the banks are indie
pendent. It would be Impossible to
sobtain through them the unity Of ac-
ton or the consideration for general
slnterests. that would be possible with
acentral bank.
Some oneSmust act 10 our financial
9aaardian. At present this duty must
~ performed by the banks. Their
number and the variety OF interests
md localities with which they must
dsal.makes this somewhat difficult
1orsthsm. And vet the banks are
kkesping . close watch Of business
Seonditions than ever before. The
bankpanic Of 1907 has made them
3 cautious than they ever were
bsfore. ThiS s. altogether a salutary
Tlstate Of afairs. For, without re-
striction somewhere. speculation,
SWhether 4 be In stocks or lands or
lNsth,laltnot, viii run Wild. Speculation
q careless Of credit and 60 the banks
must deal strictly with speculative
business. a wisely managed central
bank would support them In suoh eff
1ortsAnd itwould therefore con-
tribute toward sanity In the business
dealings OF the whole country.
RAILROAD TAXATION IN SOUTH
DAKOTA.
A elaborate statement has been