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DECEMBER 6, 1907
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The Commoner.
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ehorter hours for their .employes. Thoreforo,
while there must be just and -reasonable regula
tion of rates, wo should be the first to protest
against any arbitrary and unthinking movement
to cut them down without the fullest and most
careful consideration of all interests concorned
and of the actual needs of the situation. Only
a special body of men acting for the national
government under authority conferred upon it
by the congress is competent to pass judgment
on such a matter.
Those who fear, from any reason, the exten
sion of federal activity will do well to study
the history not only of the national banking
act but of the pure food law, and notably the
meat inspection law recently enacted. The pure
food law was opposed so violently that its pas
sage was delayed for a decade; yet it lias worked
unmixed and Immediate good. The meat in
spection law was even more violently assailed;
and the same men who now denounce the atti
tude of the national government in seeking to
oversee and control the workings of interstate
common carriers anil business'concerns, then as
serted that we were "discrediting and ruining a
great American industry." Two years have not
elapsed, and already it has become evident that
the great benefit the law confers upon the public
is accompanied by an equal benefit to the rep
utable packing establishments. The latter are
better off under the law than they were without
it. The benefit to interstate common carriers
and business concerns from the legislation I
advocate would' be equally marked.
PURE FOOD LAW
Incidentally, In the passage of the pure
food law the action of the various state fqod
and dairy commissioners showed in striking
fashion how much good for the whole people re
sults from the hearty co-operation of the fed
eral and state officials in securing a given rer
form,. It is primarily to the action of these
state commissioners that we owe the enactment
of this law; for they aroused the people, first
to demand the enactment and enforcement of
state laws on the subject, and then the enact
ment of the federal law, without which the state
laws were largely ineffective. There must be
the closest ca-operation between the national
and, state governments in administering these
laws., . ,...,.
CURRENCY
In my message to the congress a year ago
I spoke as follows' of the currency:,
"I especially call your attention to the con
dition, of our currency laws. The national bank
act has ably served a great purpose in aiding
the enormous business development of the coun
try, and within ten years there has been an in
crease in circulation per capita from $21.41 to
-$33. Q8. For several years evidence has been
accumulating that additional legislation is need
ed. The recurrence of each crop season empha
sizes the defects of the present laws. There
must soon be a revision of them, because to
leave them as they are means to incur liability
of business disaster. Since your body adjourned
there has been a fluctuation in the interest on
call money from two per cent to thirty per cent,
and the fluctuation was even greater during the
preceding six. months. The secretary of the
treasury had to step in and by wise action put
a stop to the most violent period of oscillation.
Even worse than such fluctuation Is the advance
in commercial rates and the uncertainty felt in
the sufficiency of credit even at high rates. All
commercial interests suffer during each crop
period. Excessive rates for call money in New
York attract money from the Interior banks Into
the speculative field. This depletes the fund
that would otherwise be available for commer
cial uses, and commercial borrowers are forced
to pay abnormal rates, so that each fall a tax,
in the shape of increased interest charges, is
placed on the whole commerce of the country.
"" "The mere statement of these facts shows
thai pur present system is seriously defective.
There is need of a change. Unfortunately, how
ever, many of the proposed changes must be
"ruled from consideration because thoy are complicated,-
are not- easy of comprehension, .and
tend to disturb existing rights and interests.
We must also rule out any plan which would
materially impair the value of the United States
two per cent bonds now pledged to secure cir
culation, the Issue of which was made under
conditions peculiarly creditable to the treasury.
I do not press any especial plan. "Various plans
have recently been proposed hy expert commit
tees ot bankers. Among the plans which are
possibly feasible and which certainly should re
ceive your consideration Is that ropoatcdly
brought to your attention by tho present secre
tary of tho treasury, tho essential foatures of
which have been approved by many prominent
bankers and business men. According to this
plan national banks should bo permitted to Issue
a specified proportion of their capital In notes
of a given kind, the Issue to bo taxed at so high
a rate as to drive the notes back when not want
ed in legitimate trade. This plan would not
permit the issue of currency to give banks addi
tional profits, but to meet tho emergency pre
sented by times of stringency.
"I do not say that this is tho right system.
I only advance It to emphasize my bollof that
there Is need for tho adoption of some systom
which shall be automatic and open to all sound
banks, so as to avoid all possibility of discrim
ination and favoritism. Such a plan would tend
to prevent tho spasms of high money and specu
lation which now obtain In tho New York mar
ket; for at prosent tlfbro is too much currency
at certain seasons of tho year, and its accumu
lation at Now York tempts bankers to lend It
at low rates for speculative purposes; whereas
at other times when tho crops are being moved
there Is urgent need for a largo but temporary
Increase in the currency supply. It must never
bo forgotten that this question concerns busi
ness men generally quite as much as bankers;
especially Is this truo of stockmen, farmers, aud
business men in tho west; for at prosent at
certain seasons of the year the difference in in
terest rates between tho east and tho wcBt Is
from six to ten per cent, whereas in Canada
the corresponding difference Is but two pir cent.
Any plan must, of course, guard the interests
of western and southern bankers as carefully as
it guards tho Interests of New York or Chicago
bankers, and must bo drawn from tho stand
points of the farmer and the merchant no less
than from tho standpoint of the city banker and
the country banker."
I again urge on the congross the need of
immediate attention to this matter. Wo need
a greater elasticity In our currency; provided,
of course, that we recognize the even greater
need of a safe and secure currency. Thorc must
always be the most rigid examination by tho
national authorities. Provision should bo mado
for an emergency currency. The emergency Is
sue should, of course, be made with an effective
guaranty, and upon conditions carefully pre
scribed by tho government. Such ernorgency
issue must be based on adequate securities ap
proved by the government, and must be Issued
under a heavy tax. This would permit currency
being Issued when the demand for It was urgent,
while securing Its retirement as the demand fell
off. It Is worth investigating to determine
whether officers and directors of national banks
should ever bo allowed to loan to themselves.
Trust companies should bo subject to tho same
supervision as banks; legislation to this effect
should be enacted for the District of Columbia
and tho territories.
Yet we must also remember that even the
wisest legislation on the subject can only ac
complish a certain amount. No legislation can
by any possibility guarantee the business com
munity against the results of speculative folly
any more than It can guarantee an Individual
against tho results of his extravagance. When
an Individual mortgages his house to buy an
automobile ho invites disaster; and when
wealthy men, or men who pose as such, or are
unscrupulously or foolishly eager to become
such, indulge in reckless speculation espe
cially if It Is accompanied by dishonesty they
Jeopardize not only their own future but the
future of all their Innocent fellow-citizens, for
they expose the whole business community to
panic and distress. .
THE TARIFF
This country is definitely committed to the
protective system and any effort to uproot It
could not but cause widespread Industrial dis
aster. In other words, the principle of- the
present tariff law could not with wisdom be
changed. But in a country of such phenomenal
growth as ours it Is probably well that eye.ry
dozen years or so the tariff laws should be care
fully scrutinized so as to see that no excessive
or improper benefits are conferred thereby, that
proper revenue is provided, and that our foreign
trade Is encouraged. There must always bo as
a minimum a tariff whjph will not only allow
for the collection of an ample revenue but which
will at least make good the difference in cost
of production here and abroad; that is, the dlf
ferenqe in the labor cost here and abroad, for
the well-being o'f the wageworker must evervbe
a cardinal point of American policy. The ques
tion should bo nppronchod purely from a busl
noun standpoint; both tho time and tho manner
of tho chango being such as to arouse the mini
mum of agitation and disturbance In the busi
ness world, and to give the loast play for selfish
and factional motives. Tho solo consideration
should be to see that tho sum total of changes
roproHont tho public good. This moans that
tho subject can not with window be dealt with In
tho year procodlng a presidential election, bo
causo as a matter of fact cxporlonco has conclu
o yoly shown thnt at such a tlmo it Is Impos
sible to got men to treat It from the standpoint
of tho public good. In my Judgment tho wlso
tlmo to deal with tho matter Is Immediately
aftor such election.
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(Continued on Page M)
WASH I.N GT OX LETTISH
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Washington, IX C, Docomber 2. Tho vig
orous criticisms, oxprosHod ,or Implied, made
within two days by a Justice of tho supromo
court of tho United States, Mr. Justice Brewer,
and by former Senator Spooncr upon tho attitude
and tho actions of President Roosevelt aro to
day Uio talk of all Washington.
Justlco Brewer based his criticism upon the
eligibility of tho president for a socond torm,
and said that If he were declared Ineligible wo
would not now havo "tho spectaclo of a presi
dent playing hide and seek in politics." Senator
Spoonor followed tho noxt day with this asser
tion: "It was not tho federal govorrfment
came to the aid of tho country during tho crisis
encountered, but a few days ago. It was the
financial leadors who took tho burden on their
shoulders and they were lod by tho uncrowned
king of them all, J. Plornont Morgan. Never
in tho history of this country has tho standard
of business mon been hlghor or puror than to
day." Continuing Sonator Spoonor snoorod at tho
Roosovolt assertion that tho administration und
the treasury had saved the day In Wall Street,
lie applauded Secretary Cortolyou for posses
sing the gift of silence, "which I havo begun to
think Is a very Important gift in a public official.
It gives him tlmo to think." This Is regarded
In Washington as a distinct slur upon bur some
what voluble, not to say vociferous, president.
With him, as a statesman of my acquaintance
remarked today, thero is always time to spnk,
the time to think comes afterwards.
In a letter which I sent out yesterday I
outllnod Mr. Bryan's plan for tho correction of
tho admitted evils of the prosent currency sys
tom. J havo learned today that at loast three
members of congress aro preparing bills to be
Introduced In the first week of the session to give
it offect. It must bo admitted that tho chance
of the enactment ot any of these bills Is a slender
ono. Some sort of currency legislation will be
pressed vigorously upon congress as soon as It
meets. The banks would llko to purih through
what Is known as tho asset currency law. Tho
opposition to this among the people is so great
that there is no chance whatsoever of its pass
ago, but it will havo enough support, both politi
cally and financially, to mako of it a sorfbug
obstacle to tho passago of any other measure.
Possibly the serious state of banking- crcdfUrn
ho United States might force congress to act
upon any measure except that of asset currency,
that one never can be passed.
Tho president's plan for correcting the t
financial difficulty of the business world by fell
ing bonds and certificates of Indebtedness 'ha
been received with very faint pralso by banker
and public men. Coincldently with ItB announce
ment I saw a paragraph written by a mere flip
pant humorist who probably did not think him
self that he knew anything of the Currency
question. He was commenting upon the state
ment of Harry Payne Whitney who said that he
had mortgaged his Fifth Avenue house for
$500,000, not because he was hard.up, but be
cause he didn't want to draw that amount of
money out of the banks ia. which he was a de
positor and thereby add to the financial strin
gency. -' '
"Where did Mr. Whitney get the money
that ho borrowed?" said the paragraphed "Did
he meet some man on the street who Just took
$500,000 out of his own pocket and handed It
over'" '
If the banks buy $100,000,000 worth of
three per cent, certificates, where is the money
coming from? It will only lessen their reserve
and by so-doing certainly not increase the con
fidence .of (depositors. ,,.."
" WILLIS J. ABBOT.
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