Arizona republican., 1912-12-26

business bill becomes in itself credit instrument. The bank accept ng it stamps ii as d banking instru ment. |; is good at any other bank
 in that country. it may be redis counted at the central bank of all these banks, or it may travel to other European countries
 Now aside from the ready elasticity of credit that such a discount and rrdiscount market gives to business
 at home it must be apparent that it has also direct effect upon foreign trade Today our local credit instru-
 ments do not pass current in the worlds markets. As d consequence the American shipper is forced to
 buy foreign exchange. Aside from
 the fact that for this unnecessary I accommodation we pay annual trib ute to Europe of millions of dollars, l it must be apparent that the whole period of our foreign trade eNpan- 1 m has been seriously hampered by ] banking accommodations which are l necessarily worked upon limited scale and which assuredly have no ] reference to the broader needs of i this country
 The general and further result of i the workings of our discredited mon etary system is the isolation. in a 1 measure of the whole American ] market.
 l 1907 2 Disgrace.
 ] International enterprises prefer to ! establish their headquarters in coun- | tries whose banking systems are up i on d more stable basis They can not afford the risks of such occur ! rences as cur disgraceful panic of i 1907. with it's suspension of payment, i shortages of accommodation and gen ]; eral financial disturbance. Again. be- cause we have no uniform system
 or standard for financial transac- actions. such as exist abroad. Amer ] ican securities are naturally looked upon with doubt by foreign invest ors and are listed only with hesita- tion by foreign exchanges.
 Our national monetary commission ] recently presented a plan of reform. : The object is to preserve the inde- pendence and usefulness of our eN- cellent banks, but also to give them a system based upon economic laws and the needs of the nation The plan proposes the formation of a re
 serve agency. not in any way q Eur Opean central bank. but Coopera tion association of all our banks. The banks individually shall be permitted to discount bills drawn for agricul-
 tural. commercial and industrial pur-
 poses-in other words prime day-to
 day business bills-iust as is now done in Europe. The reserve agency will hold the bank reserves of all
 the banks and use them for the re- discount for the individual banks oi this commercial paper-this instead
 of holding this reserve money idle ol
 sending it to New York for specula i tive loans, as at present.
 Here. then. we have what we now
 Ia lack-namely. GD perfect elasticity ot
 credit. @ standard banking instru-
 ments which will pass curreh throughout the world and (3) , great uniting banking resource helc : ready and sufficient to control anC
 regulate any threatened financial cri- sis.
 A Great National Issue. ; The benefits of this reform to thu , American shipper must be apparent 5 In the first place he would be spar. } ed the losses of our recurrent money | panics. l co not know what per centage of the hundreds of millions 2 lost by American business houses II T the panic of 1907 fell upon the eN I port and import trade. But in tn ! aggregate they must have been ver. X great Every shipper will recal } clearly enough his individual losses 2 and he is cognizant, too, of the dul D market that followed for seVera
 years this financial upheaval. q Secondly. standardized bushes