The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-09-19

merit. United States Senator Theodore
=. Burton, of Ohio addressing the
American Institute of Banking in the
Jefferson auditorium yesterday morn
ing. also found III the Glass owen cur
r"ncy bill much to "ritcize. His views
We're III many respects the exact ONO
site OF those expressed from the same
Platform later in the day by Secretary
OF State William Jennings Bryan MIR
Bryan LAID much stress on the import
nncc of keeping the proposed central
board in governmental hands, opposing
the plan to have the bankers of the
country name the board that is to con
troll tho banks. Senator Burton. on the
ether hand, feared that politics would
control the actions OF governmental
that in some future administration il
might not be used for partisan pur-
poses.
In opening his address, Senator Bur
ton gave definition OF the words
wealth. capital and credit" \ lack OF
the exact understanding of the mean
ing Of these terms. he said, accounted
for some of the present differences Of
opinion on the currency question La
Dor and capital. he continued, were
like two blades of 4 pair OF scissors
and must always cooperate.
Need for ElastIcIty
lie said:
lhoSc VINO have capital do not al
ways use it. and those who need it,
do not always have it. That fact is
the basis of all investment banking
! he intermittent use of capital at diff
le'ent seasons is at the basis of com
Inercial banking. Deposits and demand
riust tend toward all equilibrium De-
posts are not even at all seasons or
even on days Of the week. Bank men
know that there is strong tendency
To draw money out on certain DAYS
and TO deposit on o,ner days All
these are the factors Of natural de-
nand. Unnatural stress or fright
under which men draw out their money,
not Tor business use. but because they
arc panic-strickcn, are the causes OF
unnatural demand
The unequal demands Of natural and
unnatural causes create the need for
an elastic currency. Ninety-tive per
cent OF payments are made by check,
making much OF our banking mere
matter of balancing. The bank note
occupies much the same position as
cashiers check or certified check
mere paper convenience The funda-
mental defect Is a lack of elasticity
Our currency must be made to increase
and decrease In quantity with the de-
nands OF trade. In this respect no
advanced country has a system quite
so deficient as our own. 1t is just as
important that the volume OF currency
III circulation should decrease in slack
times as that 1t should be increased
IN time OF stress, and provision should
be made that in times of slack demand
those notes could be Cancelled
Per Capita Now S34.31.
The per capita currency in this
country Is $3i.34, with few exceptions
the largest per, capita circulation in
the world. England has but S1754
In France and Germany checks are not
80 much used. and the per capita cir
culation of currency Is higher New
/ Granada has the largest and Venezuela
I the smallest per head. When the None
tary Commission was organized in 1908
majority was opposed to issuing cur
rcncy based on commercial paper. In
1872 the whole commission favored that
plan. Almost every expert has come
to the conclusion that bonds are not
desirable as a basis of currency, and
that commercial paper is. would
not advocate. however giving this
privilege To individual banks There
VIII never be Il policy adopted by which
when man reads of bank failure
he viii take out his pocket book to see
If he has any bills OF that particular
bank. Two plans have been presented
one for central association, and the
other for regional banks. have no
hesitation in saying that the control
Of This matter should be centred in one
institution.
There arc insupcrable objections OF
public opinion against a central bank.
Whatever central association is organ
lied should be limited to acting as the
fiscal agent of the government and to
the issuing of notes. 1t should not re-
ceivc general deposits"
Opposes R-SiOnnI Reserve.
Senator Burton condemned the re-
gional reserve plan proposed I'm the
Glass owen bill now pending. his crit
icisms being aimed chiefly ut the pro-
vision authorizing the Federal reserve
board to control the issue OF currency.
suggesting that the selfish desire of
one locality might lead 1t to benefit it
self at the expense OF others"
The regional reserve plan is based
on an erroneous idea he said.
namely. that n government or polii-
cal organization may properly assume
the providing of a supply of paper cur
rency. directly or indirectly. 1t is pro-