The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-01-05
CHAIRMAN WALKER AND THE
SUFFOLK SYSTEM.

Chairman Walker. of the House com
mittee on banking and currency, is reported
as being very sanguine that the committee
will report to the House a bill embodying
the features of the old Suffolk system
The position which Mr.. Walker occupies
makes it important to know his views on
the general question of currency reform
and what attitude he is likely TO assume
in regard to the plan of. the monetary COM
mission He left his place in Congress to
attend the monetary convention in this city
in January last, and in a speech delivered
on that occasion he said:
The practical question for this convention
10 consiGer is what ought to be done 70 cor
rect the evils mace so clearly manifest?
1 answer we ought to be satisfied with moth
ing that does not relieve the treasury of
the United States. absolutely and forever,
from any responsibility for the current re-
demption of any form of paper money,
and that at once. The July sun must not
shine upon us until we have rescued the
country from it's peril We must Danish
bonds from any connection with the none
tary system. In the use of bonds the cost
OF the currency is never any two days alike,
and can never be. They are always above
or below par. Bankers must be allowed to
manage the banking business of the coun-
try, as the farmer. the business of farm
ing: the cotton manufacturers, the cotton
business; the wooden, the wooden business
and as every other business is managed,
and independent of the government, other
than the supervision of the banks, now.
The national bank act must be made as lib
eral as 1t is possible to make it consistently
with safe banking. No substantial relief
can come in any other way. Scarcely any
two banks in the country can be managed,
in their details, exactly alike, or safely issue
the same amount of currency. The very
largest discretion must be given the control
fhE mo set lAC
devised to furnish to the country a board
of supervisors of the whole national banking
system, as in other countries, and that
board, Also must have the widest discre-
ton. 1t seems to me the only prac-
teal solution of the difficulty is to put the
current redemption of the legal-tender notes
and of every form of currency proportion
ately upon the banks of the country, where
1t is in every other country Then, in justice
to them and to compensate them for the
service, allow them to issue currency,
against their assets, to the amount equal to
or In excess of the amount of the legal
tender notes they assume the current re-
demption of. That. probably is as far as
We can now go. Having gone that far we
must subsequently take uD the United
States notes and get them out of the way.
From this it is evident that Chairman
Walker is entirely sound on the main ques-
ton of currency reform, and that he is in
sympathy with the object aimed at by the
commissions plan and will probably APP
prove of some of it's features. He is a sue
cessful manufacturer and all-around bust
ness man. and has made a study of bank
ing and finance. In his speech here he said
he had himself prepared a bill for currency
reform, but that he would burn it if the
convention could suggest a better one.
Whether he will think the commissions
plan better than his remains to be seen.
The Suffolk system which he is report
ed as favoring, relates only to one feature
of banking. It was a redemption system
devised by the Suffolk Bank Incorporated
in Boston in 1918. At that time the notes
of country banks throughout New England
were at discount in Boston, and the work
of sending them home for redemption was
troublesome and expensive. The Suffolk
Bank adopted a rule that if any bank should
make a permanent deposit of $1,000 with the
Suffolk Bank, with such further sums rs
were necessary from time to time to re-
deem its bills taken by the Suffolk Bank.
such bank should have the privilege of re-
ceiving its bills at the same discount at
which they were purchased without any
banks generally adopted the PLAN The effect
of which was. in a short time, to bring them
to par and make of the Suffolk Bank sort
of clearing house which enabled the issues
of one bank to be set off against those of
another in making settlements. The Suffolk
system worked very well in it's time and
place. but there is no particular reason why
it should be resurrected. It's object was to
make business for the Suffolk Bank, and
its effect was to bring the notes of other
banks which adopted the redemption system
to par; but if the parity and redemption of
national bank notes can be as we'll or bet
ter maintained by other means there is no
reason why an obsolete system should be
revived. The Suffolk system, which was
simply good plan of redemption, was
adopted in other New England States, and
under it the notes of New England banks
were considered about the best paper money
in the country up to a short time before the
war, but they were not any better than the
notes of the old State Bank of Indiana.