The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-03-02
CLARKE'S BANKING IDEA
Is Endorsed by the Chamber of Conn
meFce.

meFcH.
The chamber Of commerce yesterday
declared itself as being one with e. W
Morphy on the latter's position regard
ing the homestead law. The chamber
recommended faVOrablv the proposed
amendment 60 the homestead eXemp-
ton law. Col. w. P. Clough submitted
a report upon the Ross Clarke banking
law as follows:
Your committee on banking has had under
consideration the resolution introduced nv
Director Ross Clark, which is as follows:
RESOLVED, That the chamber of commerce
or st. Paul faYors the speedy enactment of
law giving to the officers of any bank doing
commercial business the right to require
OF their depOsitors sixty days notice before
the Wlthdrawal OF their deposits, when it be-
comes evident to the officers Of such bank
that number Of their depositors are sud
denly seeking to withdraw their money not
for use, but on account of undue alarm and
panicky feeling for it's safety
The proposition contained in this resolution
is to permit the banker to convert into time
deposits all moneys left with him by his Gus
toners, which he may find inconvenent to
repay upon demand Your committee need not
suggest that in practically every bank ar
rangements already exist for all deposits OF
this character which bank customers see fit
to make. If any bank depositor wishes to
part with the right to call for repayment at
MS own pleasure, no additional legislation is
required to enable him to do so. Any bank
will accept his money under such conditions
Large deposits Of this kind already exist in
practically every bank. Ii may be safely as
sumed that the bulk of all money owned by
bank patrons, for which they do not expect
TO have use until after the lapse of a con-
siderable period of time are hahitually de-
posted under such arrangements. The inter
est offered by most bankers for deposits of
that kind attract to the banks practically all
money which the owners feel sure of being
able to spare for definite periods, and which
| are not otherwise invested, But a very large
proportion of the money held by the COM
munity is not of that class. very great pro-
portion of it is money which the owner either
wishes to use, or must use, for carrying on
his own business, or for meeting his own OBJ
legations within very short periods of time.
Much of it, and practically all of it, belong
ing to men in business, is, or may be- needed
at any time within a days notice. Very
much Of it which comes in on any given day
must be paid out the next day. It has been
procured by Its owner for that very purpose:
without it his obligations could not be met
and loss or even bankruptcy would unavoid-
ably follow This class of money may con-
Veniently be called commercial money" It
lions of PRODUCTION and distribution. It's ag-
gregate amount is always large. 4 mode of
doing business that would require its owners
to keep 1t in their personal possession would
result in great Inconvenience to them and to
the public as WELL for it is Of general ad-
vantage that the currency of the country
should be locked up in private hands as little
as possible. This floating money, received
one day and paid out the next day, or the
next following, IS StlI able to perform a
large amount of work for others than the
owners when collected in the banks and
becomes, to limited extent, loanable through
their agency. Any mode of doing business
that would check the flow of this class Of
money to the banks would necessarily greatly
contract the general volume of money and
the bank credits based upon 1t, that are now
available for the business of the country.
Any arrangement tending to impair the GER
tainty that the owner of this class of money
can recover it at pleasure would unavoidably
| hnxvO 10 Ns,,rv
and locking it up in private safes and vaults.
A man receiving $1,000 today and having a
1000 note to mature tomorrow or the next
day, would be sure to keep his money in his
own safe if he imagined that by any device
his banker could refuse to give it back when
needed to meet his obligation. Such a plan,
therefore, that suggested in Mr.. Clark's
resolution would necessarily destroy all bank
ing with commercial money, and no class of
funds would go into banks save those which
could be spared by the owners as time de-
posits. In other words, under such plan
only savings banks and investment banks
could be expected to remain In the field
This plan Is not only proper but valuable,
when applied to deposits of money which the
owners can afford to leave for a lengthy and
definite time. Such deposits are received by
the banker as the investing agent of the de-
positor, who will necessarily expect that they
will be used in time investments. 1t may
always rightly be considered that the deposit
or Of such money leaves it with the banker
| for that purpose. Hence, it is a fair and
prudent arrangement that The banker should
have sufficient time to realize upon the Sc
curities in which the depositor has procured
him to invest the money But the application
to commercial deposits of method perfectly
! legitimate when applied to time deposits would
be so dangerous and detrimental that it
should not be permissible. 1t is true that in
| cases of general panic temporary suspensions
| of payment by the banks have in all countries
| and at many periods been advantageous to
| bank depositorS. Suspensions of this character
! have happened on several occasions in this
! country. But whenever such suspensions
I have been followed by early resumption of
! business by the banks, they have been oc-
casioned wholly by great business cyclones
| that have swept the entire country at the
! same time. During the money panic of the
! banks of the country practically suspended
! payment. However, they could have been
! solvent at that time, or at any other time
| but for a general state of fear in the business
| community. Those suspensions were very
! different from the failures of individual banks
! in the same and following years. Those fail
ures were not caused by panic but in every
| instance by bad or unlawful management Of
| the business of the bank, that had resulted
| in the permanent destruction Of a large part
| of its assets. When assets have been per-
| manently reduced to a point where they fall
\ below liabilities to customers, the refusal for
! sixty days or six months, or any other length
1 of time, to repay commercial deposits could
be of no use to anybody. Such cxigencies
demand more radical treatment.
Your committee is therefore unable to rec
| ommend the enactment into law Of Mr.
| Clarks proposition.
E. ]. Hcdgson was in favor Of the
! law as protection to both 0epcsitors
| and banks. Mr.. Anderson. Of the ST.
Paul National bank. said such a law
| would ruin the banking business, and
would prevent depositors from deposit
| ing. The report Of the committee was
adopted.
The committee OH streets, roads and
parks reported the amounts recovered
against the city by reason Of damage
suits or settlements as being 81, 439,
a marked falling off from 1895.
On motion of Mr.. Dorr, a committee
was asked to report the best system
for disposing Of garbage. Randall II
Leonard and III. w. Phillips were elect
cd members Of the chamber.