Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1911-06-23
SPECIAL NOTE OF MONETARY
COMMISSION REFORM PLANS,
Inadequacy OF Present System-=-Personal
Profit as Measure of Public Needs-=Tem=
porary Relief Against Stringency Now
Flimsy and Very Unsatisfactory.

legisation-I care not what it is-tar-
lift, railroad, corporation, or of a gem
eral political character, that all equals
in Importance the putting of our bank
ing and currency system on the sound
basis proposed in the National None
tary Commission plan"
So declared President Taft tonight
to big gathering of bankers and men
of prominence in the financial and
business world at the banquet of the
New York State Bankers Association
which is in session at Manhattan
Beach.
MIR. Tafts address was careful
elueifation of the Aldrich national re-
serve association plan which he warm
~ commended
President Taft discussed currency
problems with especial attention to the
National Monetary Commission reform
plans He said;
Financial questions are perplexing
and elusive ones. They are aluring as
well. do not know any subject which
in the past has involved so bitter a
discussion, has prompted so many diff
ferent opinions among men, skilled and
unskiIled. learned and unlearned. as
that concerning the currency and
banking
THE business disturbances to which the
country was subjected. due to the dis
cussion, first, of the greenback question,
then of the free silver question. are in
stance of what l say. While, however.
the opinions as to the proper methods
for improving our banking and currency
system have in times past been as nu-
merous and as various as possible, II has
been nearly the unanimous opinion that
the present system is utterly inadequate
to the needs of a commercial nation like
ours and that some sort of drastic e.
form is essential il we are not to sacri-
flee a very substantial part Of our bus
mess energy and ability in periodic eff
forts to minimize and recover from mon
etary panies.. which could be entirely
avoided under reasonable plan in which
the available reserve currency of the
could be controlled and used by
an intelligent and responsible agency to
avoid the stringency.
I'VE have not more than 1000 national
banks, with a requirement that each
bank shall hold Is per cent of its de-
posits to meet its obligations to its de-
positors The minute that the call for
currency becomes greater, and the prob
able difficulty of securing 1t threatens.
each bank prepares to weather the storm
and enters into competition with every
other bank to increase its available cash
resources, and thus there it at once added
to the original cause for inadequacy of
Alrrency the necessarily embarrassing
demand for more currency by each bank
not because it is needed for the COM
munity at lasge, but in order to add to
the cash strength of each bank and this
probably quite beyond its necessities.
Another difficulty is in the making
of the money in circulation correspond
to the actual and conservative needs
of trade. We have a certain fixed
amount of silver and of gold and of
greenbaeks and, then, in addition to
that a national bank circulation secur-
ed on bonds deposited with the gov
eminent, the varying profit upon which
to each bank, it is supposed will en-
large or decrease the circulation ae-
cording to the demands of trade. I'm
der the present system the elasticity of
such a system has not equalled the
public necessities.
The personal profit of each bank un-
der the system now in vogue in the
increasing and reducing of the bank
circulation is not sufficiently correct
measure of the public needs in this
regard The lack of correspondence
between the general public need for
issue or withdrawal of bank notes, and
the snecial motive and profit of each
bank in issuing such notes is perhaps
not so great as that between the pub
lie need for the concentration of re-
serve currency at particular places and
for particular purposes and the actual
result in respect to the reserve as in
fluenced by the interest of particular
banks under the present system; but
there is substantial variance between
a central and responsible control OF
the note issuing power in response to
the legitimate demand for money and
that exercised un1ar our present sys-
tenn by 1000 different national banks.