The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1912-12-06

present system lacks the indispensable
quality of elasticity.
The only part of our monetary medi-
UNI that has elasticity is the banknote
currency. The peculiar provision of
the law requiring national banks to
maintain reserves to meet the call of
the depositors operates to increase the
money stringency when it arises rather
than to expand the supply of currency
and relieve it. 1t operates upon each
bank and furnishes a motive for the
withdrawal Of currency from the chan
nels of trade by each bank to save it.
self and offers no inducement whatever
for the use of the reserve to expand
the supply Of currency to meet the ex-
ceptional demand.
After the panic Of 1907 congress real
lied that the present system was not
adapted to the country's needs and that
under it panics were possible that
might properly be avoided by legisla-
tive provision. Accordingly a mon
etary commission was appointed which
made report in February, 1912. The
system which they recommend involv-
ed a National Reserve association,
which was, in certain of its faculties
and functions, a bank, and which was
given through its governing authorities
the power, by issuing circulating notes
for approved commercial paper, by fix
ing discounts, and by other methods Of
transfer of currency, to expand the
supply of the monetary medium where
it was most needed to prevent the ex-
port or boarding of gold and generally
to exercise such supervision over the
supply of money in every part Of the
country as to prevent stringency and
a panic.
Certain it is, however, that the OBJ
jections which We're made in the past
history of this country to a central
bank as furnishing monopoly Of
financial power to private individuals,
would not apply to an association
whose ownership and control is so
widely distributed and is divided be-
tween all the banks of the country
state and national, on the one hand
and the chief executive through three
department heads and his comptroller
of the currency on the other.
There is no class in the community
more interested in a safe and sane
| banking and currency system, one
| which will prevent panics and auto
matically furnish in each trade center
the currency needed in the carrying on
of the business at that center, than
the wage Garner. There is no class in
the community whose experience bet
ter qualities them to make suggestions
as to the sufficiency of a currency and
| banking system than the bankers and
| business men.
Ought we therefore to ignore their
recommendations and reject their
financial judgment as to the proper
method of reforming our financial sys
| tenn merely because of the suspicion
which exists against them in the minds
Of many of our fellow citizens? Is it
not the duty of congress to take up
the plan suggested. examine it from all
standpoints, give impartial consdera-
ton to the testimony of those whose
experience ought to fit them to give
the best advice on the subject, and
then to adopt some plan which will
secure the benefits desired?
A banking and currency system
seems far away from the wage Garner
and the farmer, but the fact is that
they are vitality interested in a safe
system of currency which shall grad
uate its volume to the amount needed
and which shall prevent times of ar
tificial stringency that frighten capt.
| tai, stop employment. prevent the
meeting of the payroll, destroy local
markets and produce penury and want.
| The Tariff.
| have regarded it as my duty in for
mer messages to the congress to urge
the revision of the tariff upon princi-
pies of protection. 1t was my judg-
ment that the customs duties ought to
be revised downward, but that the re-
duction ought not to be below a rate
which would represent the difference
in the cost of production between the
article in question at home and abroad,
and for this and other reasons / vetoed
several bills which were presented to
me in the last session of this congress.
| Now that a new congress has been
elected on platform Of a tariff for
revenue only rather than a protective
tariff. and is to revise the tariff on that
basis, it is needless for me to occupy
the time of this congress with argu-
ments or recommendatio in favor of
| protective tariff.
Army Reorganization.
Our small army now consists OF 49,
| 500 men, excluding the 5000 Philip
pine scouts. Leaving out of considera-
| ton the coast artillery force, whose
position is fixed in our various sea
coast defenses, and the present garri-
sons of our various insular posses
sions we have today within the con-
tinental United States a mobile army
Of only about $1,000 men. This little
force must be still further drawn upon
| to supply the new garrisons for the
great naval base which is being estab-
lished at Pearl harbor, in the Hawaii
an Islands. and to protect the locks
now rapidly approaching completion
at Panama.
The forces remaining in the United
States are now scattered in nearly
| fifty posts, situated for a variety Of
historical reasons In twenty-four
states. These posts contain only frac-
tons OF regiments, averaging less than
100 men each. In time Of peace it has