Mineral Point tribune. (Mineral Point, Wis.) 1869-1938, 1892-12-10
Prot. Kinley's ABLE Paper Before
the Contemporary
Club.
A Wisconsin University Professor
lntelligently Discussed all
Important Question
Work Uf Clearing HOuseS, Merits
Of {. S. Bonds and Many
Other Topics Treated.

ia MaC.sou few evenings since
Prof. David Klnley, Of the economic de
partnent of the Wisconsin university,
gave practical address on The Use of
National Banks in Government Finan.
cial Operations.
An unusually large and cul-
Jured audience assembled at the meet
ing Of the Contemporary club at the
Unitarian church last evening The
public had been wen informed as TO
the program, the reading of an original
paper on The Use of National Banks
in Government Financial Operations,
by Professor David Kinley, of the uni
versity, and a discussion of the paper
by Mr. n B. Van Slyke, president of
the First National b,AN, and other citi-
zens versed in finance. Mr.. Kinley's
paper was a very able production and
showed careful research.
''The opinion has been expressed"
said Prof. Kinley, that the proper in
situations for keeping the government
deposits and for managing crises are
the banks and the clearing houses.
The statement can be narrowed some
what TO the national banks and the
clearing houses 1t is not necessary to
discuss here the comparative merits of
national and state banks. But only the
national banks should be used because
they are the only ones over which the
national government can exercise di-
rect control The national banking sys-
TEN has faults, but it has served Its
purpose of furnishing a uniform and
safe currency so long that it ought to
be preserved. It's failure to make our
currency elastic is due in part to I'M
wise regulations as to the security and
redemption Of notes and to the use of
the reserve: but more so to other indie
pendent features of our currency sys-
TEN. especially the use OF government
notes, and to our silver policy. But
these are defects that can be remedicd.
"Any proposal for a more extended
Use Of the national banks as public de-
positories. and for enlarging their func.
lions as regulators of the currency
confined the speaker, 'nuSt, Of course,
have I'm view the fact that in a few
years more the system will pass out Of
existence, and must therefore, include
some suggestion for its preparation in
some form The plan about to be out
lined assumes that the national bank
ing system will be continued, There
is really no good reason why 1t should
be allowed to disappear for the only
condition affecting its existence which
will soon change in the extinction Of
the national debt. But 1t IS difficult to
see what valid objection can be made
10 hasing the circulation on other bonds.
The law permits the secretary Of the
treasury to accept other than United
States bonds as security for public de-
nosits; II there are other bonds which
are, in the opinion CT congress, sutit-
GENTLY secure for that purpose, it may
fairly he assumed that congress should
consider these same bonds a sufficient
surety for bank issues.
promising then that he national
banking SYSTEM win be continued,
Prof. Kinley said that the Independent
treasury with its bad influence on the
money market, could be replaced with
the banks as repositories by modifying
the banking laws in accordance with
the following suggestions;
4 Make the cl airing houses Of the
four or five most important cities in
different sections Of the country agents
OF the government in its relations with
the banks, dividing the country into
departments and putting one Of the
clearing houses Mt the h al, for govern
ment business Of MI the banks in a de
parment
80 livery national bank to become
member of the clearing house in its
section or department
%. Deposit all govenm mt money
In the national banks with the excep-
tons noted below, and require all gov
erumont receipts and payments to pass
through thes, banks as far as possible,
ON these conditions:
"The bank seeking to become Il gov
ernm MT depository shall deposit with
its clearing house bonds cf the charac-
ter required as security for circulation
of such amount MS in the discr ton Of
the secretary may be required, hut
never 20 b. suffered TO become less
than tue par value Of the amount Of
public money held by the bank The
clearing house shall have the right 10
reject under general rules adopted by
all the clearing HOUSES and approved
by the secretary OF the treasury. any
Of the bonds offered that it deems un-
safe. and shall then forward those
deemed safe to the United States treas-
urrr at Washington On receipt Of
these bonds by the treasurer. the banks
shall on the order OF the treasurer. re
ceive q deposit Of public money from
its clearing house, If there is 4 surplus
there. or else by transfer from any de-
a