The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1900-11-26

deposit with reserve agents resulted in
panic upon the stock exchange OF. New
York.
In the abnormal demand for money ere
ated by this panic on the Stock Exchange
the ordinary credits to the legitimate
business and commercial enterprises Of
the country were necessarily curtailed
by the banks, and unquestionably great
damage would have been done to such in
terests had not the secretary of the
treasury, seeing. the possibility of evil
to the country at large, interfered to pre-
vent a rapidly increasing stringency in
the money market
1t is to be remembered. of course, that
the exchange business of the interior
banks will always necessitate large de-
post balances in New York and other
reserve cities, and that at certain sea-
sons of the year abnormally large bal
ances of idle funds may be attracted
to different parts of the country, follow
ing higher interest rates. But it is sug-
gested that public policy demands that
the banks of the country should not be
allowed to deposit with other banks so
large portion of that fund which in the
DRY is regarded as sacredly devoted to
the protection of the interest of the de-
positors. They should be compelled 70
hold larger portion of this fund in cash
be devoted to its proper use beyond per-
adventure.
In the panic of 1893 the New York
banks refused to ship currency in re-
Spouse to demand from banks in the in
terror for a considerable time, showing
in the extreme test of panic that the re .
serve which had been counted as cash
by the banks of the country was not
in fact, at all times available to enable
10 dc Of IL
positors.
1t is to be remembered that so far rs
the ability Of the banks to serve the
public is concerned it will not be mater
tally impaired by smaller balances in
reserve cities. The banks, of necessity,
must furnish exchange, and will accord
ingly keep the balance with correspond
ents necessary for that purpose.
1t is therefore recommended that sec
ton 5192 of the Revised Statutes of the
United States be amended, so that under
It's provisions but one-fifth instead of
three-fifths of the reserve of 10 per cent
required by law to be kept by banks not
reserve agents may consist of balances
due to reserve banks; and that section
5195 of the Revised Statutes of the Unit
ed States. which authorizes banks In
smaller reserve cities to keep one-half
of their lawful money reserve in balances
in central reserve cities be repealed.
AS TO FEES FOR EXAMINATIONS.
The comptroller repeats the recon-
mendation made by his predecessors that
the present law should be so amended
as to provide fixed salaries for bank eX-
aminers, to be paid from a fund collected
from the banks, to take the place of the
fee system now in force. The amount al
lowed an examiner for the examination
of smaller banks is not sufficient to COM
pensate him for the time necessary in
many cases for an extended eXamina ton.
The present system encourages, to too
great an extent, superficiality in exanlin-
ations and interferes greatly with the
proper and wise apportionment of time f
examiners among the different banks.
Among other recommendations, the
comptroller strongly urges laws regulat-
ing international and intercolonial bank
ing as distinguished from domestic bank
ing, and prints in an appendix the result
of Investigations into banking condi-
lions in Porto Rico, Hawaii, and the
Philippines.
NEWS FROM SPANISH CAPITAL,
Dispatches from Madrid received IN
official diplomatic quarters here make the
first announcement that in the debates
before the Spanish-American congress,
whose sessions have just been closed, the
system of compulsory arbitration, urged
by the Peruvian delegates, has been
adopted by an almost unanimous vote,
Chile alone holding out and protesting
against the action taken. The decision not
only favors compulsory arbitration in
disputes between American republics, but
also provides that guarantees shall be
given for the faithful performances of the
conclusions reached by the arbitration
tribunal.
Aside II ON the question of principle in
volved, the decision of the congress is
regarded in South American quarters as
significant of the alignment of the South
ern republics on the increasing differ
ences which have arisen of late, and
which are threatening to bring about d
general crisis, involving most, if not all,
Of the South American countries.
Peru has been making desperate efforts
to regain her provinces of Tacna and
africa, which are a sort of a border
hostage, held for the last ten years by
Chile. Bolivia is involved in the same
controversy, as she has lost her sea
coast to Chile, and is now seeking to
save part of it. The latter question was
recently brought to direct issue by the
presentation of demand from Chile,
generally construed as an ultimatum, re-
quiring Bolivia publicly to acknowledge
by treaty the sovereignty of Chile over
the seacoast in question. About month