Pullman herald. [volume] (Pullman, W.T. [Wash.]) 1888-1989, 1898-01-08
NEW SYSTEM FOR BANKING
IDEA OF THOMAS sHEARMAN
establishment of Branch Banks ON
n Large Scale Throughout the En-
tire Country-Refers to the En-
ample OF Canada.

New York. Jan. Gin response to re-
quest by the monetary commission for an
expression of his views on various tnan-
cial questions. Thomas Sherman of this
city has submitted to the commission a
paper ON the establishment OF branch
banks on large scale:
Il regard this plan as far more import
ant. as well as more practicable says Mr.
Sherman, than any other remedy which
has been proposed for the settlement of
the currency question
Mr.. Sherman insists that nateure has
driven conditions forward to point at
which the whole country is virtually on Il
banking basis instead of a money basis,
for exchange.
Those sections of the country which
have the fewest good banks are Just as
much upon a banking basis as the rest Of
the country" he said. THE tremendous
increase of exchange which has gone on
with advancing civilization has reached
proportions which make it hopeless to eX-
pect that such exchanges can even be car
ried on by the use of actual money how
ever that term may be defined. And
whether money consists only of gold and
silver or includes also bank and govern
ment notes, representing gold and silver,
makes practically no difference. There is
not. therefore. and never will be enough
money. even with these liberal conditions,
to enable business to be conducted by the
actual use of any such money. The dis
proportion will increase and not decrease.
Large central banks ought to be allowed
to establish branches in every part of the
country"
He continues: These branches would
be conducted with great economy and
therefore could furnish the means of eN-
change at but slight advance over the
cost of exchanges i'll the cities. They
would have practically just as good facili-
ties as the city banks have because every
morning they would be advised by tele-
graph of every change i'll affairs which the
central bank considered important in the
management of its own transactions The
amount of actual money used in each OF
these branch banks would be extremely
small, and yet the amount of actual
money available in each, in case of some
local pressure. would be 30 times as great.
since all the resources Of the central bank
would be behind it.
The effectiveness of the branch bank
system in solving the currency problem is
sufficiently proved by the example in Can
ada, where this system is in full opera
ton and the currency question is never
raised.
AS II consequence Of permission to es-
tablish branches the parent bank and
every branch thereof should be required to
accept the certified checks of any bank on
deposit as equivalent to cash, which, how
ever, they would undoubtedly do without
compulsion. If the central bank issued
bank notes. all the branches should be re-
quircd to redeem these notes up to such
a moderate amount as might be reason
able As Il further condition. every bank
establishing branches should be required
to accept ON deposit and collect without
charge checks upon any other national
bank, though not, of course, to credit the
amount of such checks as cash until col
lected.