Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1914-11-19


State Vermont and elsewhere if consider some
of the basic principles underlying banking and currency We
must begin carefully distinguishing between currency and
credit.
Currency merely the medium of exchange and there
time it would be interesting to trace in detail the de-
vepment of this instrument of trade beginning with cattle
the standard of value the ancents Indian wam-
pum America seashes in the world of barbarism,
and passing through iron nails standard in Scotland
tobacco as legal tender in colonial Virginia
of in early Massachusetts, and the evolution of
paper currency in South Carolina by virtue Of legislative act
May g. 1903 providing bills of credit continue until
17O5, with of 1000 English pounds "to sink them"
Many of us have assumed that currency the
chief need whereas credit is the ebood of trade industry
and development By credit fundamentally the
that money promised
borrowed will be paid Our credit system in general based
upon the honesty of tho poor and the ability to collect
from the rich he to be honest with honesty
the chief and most sacred asset Of ALL and sound banking
knows other maxms regards safety.
Credit in connection with banking largely the
ability to borrow That credit is what enables city like
Burlington to build water works and make other public i'm
povements otherwise could provide the young farmer
to buy land he forego merchant begin business
for himself number of men to build railroad which other
wise would help develop great stretch of country
steamships to connect continents by moving bridge
and great nations to terrific Of destruc
ton like that devastating only the Old World but
also part of the
1t follows that he who the credit nation
State holds the key to its progress commonwealth
well to the industry trade transportation and
other form of activity in which credit is prime
sity 1t makes difference to a a community
whether the medium of exchange is gold dollar piece
of paper printed either government greenback
commercial check with the of the desiring credit
written at the bottom the back unless there is
something behind which will help put that medium to work
for individuals and communities Without credit gold and
other precious metal locked up in government and private
vaults would command high premium and rate of inter-
est that most people could not do business.
Fear of the ability of single institution a group of
control nations credits lay behind the bitter oppos
ton of the republican democrats the beginning of
ona to the creation of that long deferred national
bank recommended by Alexander Hamilton and other fed
erast; the killing of the first Bank of the United States in
1911 the opposition the second Bank of the United States
created under adsons lead the close of the War Of 1872
the overthrow of this bank and the fight against centralized
financial control by the democrats under the leadership Of
President Jackson who stood for national bank founded
the credit of the federal government and its the
evolution Of State banks following that stugge and var
other developments leading up to the substitution of
twelve bank system in day for the great
central bank idea involved in the Adrich plan.
In passing it should be noted that whatever may have
been the real facts the the popular belief that the
financial panic beginning 1907 had its root in the desire Of
the United States Steel Corporation to absorb the Tennessee
Coal and Iron company its chief rival and the necessity of
squeezing the knickerbocker bank in New York until it
should drop of that held is largely
courabe for the uprising of the American people in favor of
system Of banking and currency that should decen
ize the financial power Of the American metropolis
The location Of twelve banks many regional
throughout the United States the of the Will
administration to this demand which the republicans
made egregos not promptly meeting while they
in power If this fufs the promise of its
parents, will not only credits for industry and
but it will also sufficient
rency all possible demands Of the country in
of peace
The nation to-day enters period of test of this
currency system The control Of that system is centralized
certain degree with in Washington and with
tica influence the chief menace but effort has been
made counteract that possibility by establishing adj
vsory representing regional banks in addition to the
board of control Of members including the secretary of
the treasury and the controller of the national currency.
Apparently ample supply of currency for all parts of
the country assured for the board of control already
stated be made any part of the country
needing additional funds 1t has been ntmaed that this
might be used for sectional purposes for instance
force the purchase Of southern cotton and the like but the
administration would hardly be unwise to mper the