will issue these highly-taxed notes, you have only saddled this burden upon commerce; for under the pretence of these heavy taxes, you bankers will find a way not only to get the tax back, but more with it. I assert that a graduated tax is indefensible from any point of view, and that it will completely defeat its declared purpose.

Perfect facilities for redemption and freedom from cost for transportation will place note credits side by side with checks and drafts, and effect that facile interchange and transfer from one to the other which is absolutely essential to the complete and perfect accommodation of our currency to the ever varying needs of trade.

So you want clean money? Join us, and fight for it. Do you want more one and two dollar bills, and a broader and better diffusion of the gold standard? Tell your Congressman that we must substitute five and ten dollar gold certificates for some of the $300,000,000 of five dollar silver certificates. Do you want the Government to continue to withdraw ten or twelve million of your reserves each month, and so contract our commercial credits from $50,000,000 to $60,000,000 at the same time? If not, then demand that all public moneys shall be deposited from day to day in the usual way. Do you want to prevent one per cent. and one hundred per cent. money; riotous speculation half the time, and ruinous rates and panic stringency the other half? Adopt without delay the principle of converting bank book credits into bank note credits at the will of the depositor, in accordance with the demands of trade and commerce.

REFORM OF THE CURRENCY SYSTEM

ADDRESS DELIVERED BY JAMES H. ECKELS, PRESIDENT OF THE COMMERCIAL NATIONAL BANK OF CHICAGO AND EX-COMPTROLLER OF THE CURRENCY, BEFORE THE NEBRASKA BANKERS' ASSOCIATION, AT OMAHA, NOVEMBER, 1906.

I ACCEPTED the invitation to address the bankers of Nebraska upon this occasion because it seemed to me that both time and place were opportune for a discussion of the question of a reform of the

currency system under which we are attempting to carry on the vast business transactions of our business world. I think I am quite within the bounds of truth when I say that nowhere exist serious differences as to the economic wisdom and soundness of maintaining as the fundamental basis for our monetary and currency issues the gold standard of value. It is immaterial so far as the present is concerned by what process of reasoning those who opposed such a standard have brought themselves to accept it; the important fact is that it is accepted and the error of the doctrines and theories with which it was opposed has been cast aside and buried in the grave with the hundreds of other economic heresies which have from time to time been set up in opposition to the immutable and unvarying laws of trade and commerce. The elimination of this fruitful source of bitter discussion, personal recrimination, and party fury has carried with it the destroying element of political bias and partisan desire from all that which affects the treatment of monetary and banking problems in the United States, and we can approach their solution upon the sounder basis of merit, historic accuracy, scientific truth, and economic fact. I can conceive of no happier situation in which to consider and deal with a question which easily ranks with those of the very first importance among all with which our governmental authorities have to do. The currency question ought never to be a partisan political one, and now, least of all, for the differences between contending political hosts in the arena of public affairs turn on other things which appeal more to partisan imagination and partisan cupidity.

I am not unmindful of the fact that the attacks on what are termed the evil effects of so-called trusts, the inequalities of taxation, and the wrongful follies of tariff schedules, together with the dreamy and charmingly pictured benefits of governmental and municipal control and ownership, to-day attract the attention of men in public place and more than fill the public eye; but, taken all in all, no one of them is of more far-reaching importance or affects more greatly the underlying conditions of prosperity in the country than does the less alluring subject of currency reform. It is a happy circumstance that the need of a more responsive character of banknote issue and a better adapted relation of government finance to daily business undertakings demands attention at a time when the

prosperity of the country in undoubted, its agricultural, manufacturing, and financial activities everywhere apparent and substantial, and its credit conditions healthful and sound. The demand for better things springs neither from panic nor threatened distress. It is not the far cry of the banker in the first instance, but of the men who outside the distinctive realm of finance feel how inadequate are the banks of the country, upon whom the business interests of the country rely, to meet fully and cheaply the varying demands of trade and commerce. The man who has something to exchange with his fellow, whether it be the produce of the farm or the product of the factory, whether it be daily labor, or work of less exhausting character, finds when he studies it that both in the first and in the last analysis his interest is concerned more in the extended usefulness of the bank than in any other institution in the community. It is to the advantage of all who would buy money and credit that they be obtainable when needed at no greater cost than safety and prudence make necessary, and in a form which best answers the ends to be accomplished. We are apt to lose sight of the fact that the bank was the outgrowth of the necessities of the business world and that through the activities of this "handmaid of commerce" the innumerable transactions of barter and trade in every portion of the globe have been made not only possible, but an accomplished fact. I sometimes believe the very number of banking institutions and the close relations which exist between them and the daily movements of trade have caused the public to look upon them as a matter of course, classing their field of endeavor and their sphere of usefulness with that of every other avenue of undertaking. This failure to differentiate between the pre-eminent position of the bank as the potential factor in the upbuilding of a community, by intelligently fostering and usefully directing the investment of credit, which a bank buys and sells, and general business operations, has not been wholly free from harmful effects. It, at least, has not infrequently caused both the people and the people's representatives in legislative and executive places to be wholly indifferent to the granting of such extension of powers to banks as would enable them to be of greater service, in wider fields, at a less cost to the public. And, after all, it is to the interest of the public at large more than the banker in particular that

banks should increase in strength, become far reaching in influence, and more capable of granting, on safe and conservative lines, the credit which is so much an essential necessity in the maintenance of the complex machinery of a world-wide as well as a local exchange of the things which are to be sold upon the one hand and bought upon the other.

The usefulness of the bank finds its fruition in the growth and success of the farmer not less than that of the merchant, the manufacturer not less than that of the corporation which controls the country's transportation lines. It is as essential to labor as it is to capital, and through its instrumentality adds to the efficiency of both. I am certain no banker fails to appreciate, though the public too often seems to, that the bank is the one place where the idle money and credit of every locality where a bank exists find lodgment-not for idle purposes, but that they may become active forces in the daily affairs of such locality. It takes the dollar of the single transaction and makes it bear the burden of many transactions with more direct benefit to those who buy its use by payment of interest thereon than to the bank which in its turn borrowed it from the depositor. The impossibility of there being sufficient capital at any time in any one person's possession, or in any place, to carry on a single day's exchanges must suggest itself to the person who will give the subject even the most casual investigation. The manufacturer must needs have the intervening power of purchased money and credit from the banker to make possible the meeting of a multiplicity of expenditures that are made between the period of the obtaining of the raw material and the manufacture, sale of, and payment for the finished product; so, too, the merchant, between the receipt of the finished product and the distribution of it to the jobbing or individual customer. And so on through all the gradations of the world's business life, the control and utilization of money and credit through the organized methods of the modern bank grow more and more important to every person, no matter how rich or how poor, and take a commanding position in the affairs of every intelligent, industrious, and prosperous people. The nation which is unmindful of the far-reaching force and unconquerable power of a carefully guarded, efficiently equipped, and fairly treated banking institution cannot but at the critical time fall be

hind and ultimately fail in every contest with a people who value and foster them. If it be true that in the arbitrament of war the government which commands money and credit beats down its adversary, it is not less true that upon the fields of peaceful endeavor amid the forces of trade and commerce, the nation of great banks, utilizing every refinement of credit, will gain the vantage ground and ultimately triumph in all that goes to make up that prestige which springs from accumulated wealth, industrial supremacy, and financial power.

It is because of a full faith and an unshaken confidence in the truth of these assertions, coupled with the thought that the American people have been almost wholly unmindful, in the past, of how essentially necessary is a wise consideration of legislation which touches upon banks, money, and credit, that I am here to urge an awakening of the nation's legislative body to the vast importance of it all and an insistence that it be given precedence over mere expenditure of public funds, the creation of official place, or the formulating of issues for future political campaigns. The importance of legislative action, both as regards the note issues of the nation's banks and the better and more scientific handling of the nation's public funds on the part of the Treasury Department, has been emphasized by the recent action of the country's greatest commercial body, the Chamber of Commerce of the City of New York, and the country's most important banking body, the American Bankers' Association, who jointly, through representative men of high character, wide experience, extensive research, and practical knowledge, have formulated and presented a plan, enunciating principles which, if crystallized into law, it is believed will remedy existing defects in our treasury and currency system and be productive of general good. I accept the judgment of these men as sound and the principles enunciated as a basis of legislative enactment, as being as nearly correct as is possible under conditions where ideals cannot be attained and perfection cannot be had. It is possible that a great central bank might better accomplish results more satisfactory, but a great central bank is an impossibility in this country where political issues always prevail and where individuality in every part of the country will not surrender itself to concentrated power in the field of banking, no matter how carefully