The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-12-15
ST. PAUL PHILOSOPHER AND MAN
OF AFFAIRS PLEADS FOR
CENTRAL BANK
COULD NOT BE A MONOPOLY
Forty-Five Per Cent of Reserve. Mr..
stickney Contends, Would Not
Allow 1t to Compete With
Smaller Hanks
WOULD ABOLISH TREASURY

CHICAGO, Dec 1.-THE bankers OF
Chicago were given banquet by the
Marquette club tonight. In addition to
speeches by ex-Comptroller James III.
Eckels, president of the Commercial Ma
tional bank, and President James Il.
Forgan, of the First National bank,
there was one by A. B. Stickney, presi-
dent of the Chicago Great Western Rail-
way company, who was the principal
guest of the evening.
Mr.. Stickney's subject was The Gem
trail Reserve Bank" and he contended
that central reserve bank would not
and could not become monopoly, eX-
tending it's branches to every village and
driving all other banks out of existence.
The necessity of keeping As per cent Of
reserve would render it incapable CT
competing, except in the larger transac-
tions, with the other banks, when would
carry no more than 5 to s per cent OF
reserve. The reserve, he said, Is the
regulator of the banking business AS
matter of fact, he went on to say, the
banks of England, Scotland and Wales
have 1921 branches. The banking busi-
ness outside of London is entirely in the
possession of the other banks. Some Of
the other banks, both in and out of Lon
don, in point of deposits, rival the Bank
of England, and in the matter of loans
outstrip 1t.
Would Abolish the Treasury.
''It is my conviction" he said, that
there is no safety, and can be no safety,
to financial affairs in the United States
until the treasury is abolished; but at
the same time we must not close our
eyes to the fact that 1t has become an
integral part of the banking system, and
cannot be safely destroyed until central
reserve bank has been developed. Other
-
serve from expectation would fail upon
1854 national and 5,6lS state banks and
institutions. The impossibility of more
than 5000 separate banks protecting the
gold reserve against expectation would
of itself necessitate a central reserve
bank, to which would be delegated tne
sole responsibility OF protecting the re-
serve.
.It is my conviction that if the restric-
lions, of the American banking laws were
repealed and banking made free, thers
would be developed in the United States
IA banking system substantially on the
lines of the Scotch-English system. In
process of time one of the systems OF
branch banks would demonstrate its fit
ness, and solely by reason of its superior
fitness-not by force Of legislation-it
would be selected by the other banks as
the central reserve bank. A bank thus
fit-both in respect to financial responst-
bility and in respect to the character and
capacity of its directors and managers
for the government to enter into the
ordinary relationship of customer and
bank
Free From Partisan Legislation.
such is the central bank which 1 ad-
vocate-a bank produced by evolution and
controlled by the natural laws of trade
instead of bank controlled by partisan,
ilI-conSidered and compromise legislation.
Under free banking laws maryland per-
haps a majority-of the present banks
would continue to conduct local, inde-
pendent banks for an indefinite period,
Being free they could continue their in
dependent banks as long as they saw fit.
More than IA per cent OF the banks or
England have no branches.
Candor compels me to admit that there
is, and has been ever since the destruc-
ton of the old United States bank-whjch
was an entirely different type from the
modern central reserve baIk-a strong
prejudice in the American mind against
a central bank. But it is my contention
that this prejudice grows out of mis-
conception of the modern central reserve
bank and its functions and powers, and
/ have that confidence in the intelligence
of the people which leads me to believe
unat tney are cdpdpie VI iiSlhS oDVFo
these prejudices when they understand
the facts.
"The economic propositions in regard to
the use of silver as the standard of value,
involved in the political campaign of
1896, were much more difficult of compre-
hension and ran counter to the strong
prejudices of probably a majority of the
voters; but after the fallacies were ex-
planned the cause of sound money was
easily triumphant. 1t is my conviction
that another campaign of education
would make the proposition of free bank
ing possible of realization"