Arizona republican., 1913-01-21

l Sanization.
 The explanation lay in the fact that 1 many an industrious workman, sud- l denly disemplOyed, was put to the l X banking system under which such a condition is possible is q disgrace to great and powerful commercial na- | ton.
 There can be no permanent safe guard for the business men, the de- l positor, large or small, and the wage 1 earner, unless banks have a permanent market for a certain kind of asset 1 There can be no assurance that our ] banks will not have to resort to the disgraceful eXpedient of suspendng l specie payments unless they pool their reserves, so as to put the strength of 1 all the banks behind each of them. The kind of asset upon which the 1 banks should depend, and for which l they should establish a national mar ket, should be commercial paper. In | Europe this paper is regarded more 1 highly than government bonds It 1 represents actual goods in transit from 1 the producer to the consumer, and, as 1 they say in London, pays itself" | Protection for the Payroll
 Having such paper in his portfolio. i with the certainty that he could re- discount it with the central co-opera- ! tive agency, a banker need never re- 1 fuse to accommodate a customer who l offered him proper security. No em- l ploXer whose business was sound and i flourishing need ever reduce his pay ! roll or shut down his plant simply be- 1 cause he was unable to obtain accom- ] modation. The wage earner would never be thrown out of work solely | through the workings of a bad bank 1 ing system. He would always be as- sured of a steady position and regular pay as long as he was equipped to earn his living.
 Our note issues should be based on commercial paper. instead of being bond-secured as they are now. It is only by bringing about such a change that we can adjust the volume of our l currency nicely to the demands of 1 business. Currency founded on com 1 merciai paper must expand to meet l the needs of agriculture, commerce and | industry, and automatically contract when the need for expansion had l passed If we had such a currency we would not experience our seasonal 1 money strinSencceS. There would be 1 in the tills of our merchants and in l the pockets of our wOrkmen just as 1 much money as might be needed for | the exchange of our products
 A cooperative reserve agency, if one were established, should publish a discount rate, made uniform throughout the country. This would tend to equalize interest rates every where, and do away with the distinct disadvantage under which business in | small towns and sparsely settled dis tricts is carried on. owing to the high rates of interest prevalent there. If a manufacturer must pay high rates of interest for borrowed capital, he 1 must increase the price of the goods he has to sell-the interest rate is an obvious factor in the cost of produc- tiOn. The same is true of the farmer and the merchant-of every man who has to use borrowed capital.
 Where the Difference Lies.
 It may make no difference to the man of means whether he pay a little more for his shoes or his clothes or his flour. It may make great deal of difference to the wage earner It may even mean the difference to him between reasonable comfort and the pinch of povery. And here, again, as in everything else, reform of our banking system means more to him 1 than to any other man.
 I repeat that the wage earner suf- fers more than any other man from the shortcomings of our present none tary system. The man with bank account is it's most helpless victim One need not be financial expert tc perceive that the trouble arises from
 the paralysis of credit due to the lock ing up. at the first hint of trouble. oi cash reserves, and to the destruction of the ordinary market for the securi-
 ties which serve as the basis of credit
 With the greatest resources of any
 country in the world. with the largest
 accumulation of gold in the world, il
 is obvious that we need only establish
 banking system under which credit
 may be made more widely and uni
 fOrmly available, and note issues, pro-
 tected by sound securities and bl
 gold, may reasonably expand wher business conditions require it.
 Thus we might prevent the periodic
 breakdown of our credit system, witt
 the attendant trail of suffering ViO.
 lence and disgrace which every panic brings us. Thus We might best pro.
 tect the WOrkingman, who is the back
 bone of our economic system, and tc
 whom we owe so much of our pros
 perity. It is to his interest, most O
 all, that we reform our antiquateC
 banking system. And he should see t,
 it that congress passes some remedia
 legislation. What the wage earne
 wants in this country, in the way O
 legislation. he usually gets if he makes
 up his mind to it. He should see to i
 that we have an adequate and scien
 tific revision of our banking laws