Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1901-12-30
GAGE. SHAN AND BANKING.

GAGE, SHAM AND BANKING.
Bankers and treasury officials and the
people are conscious that while our
banking system is excellent. and the
best the country ever devised, 1t is not
perfect. Perhaps it could not be made
perfect with Imperfect agencies to OPP
crate 1t, and yet many feel that it Is
susceptible Of some Improvement. One
OF the chief faults complained of is that
the currency 1t provides is not sufficient
~ elastic, that it ought to be so ar
ranged that 1t would expand when more
money is needed and contract when not
demanded by business-like rubber
band which encircles a bundle of paper.
Secretary Gage has been conscious OF
this need and has suggested remedies.
One feature Of his plans is that Of an
amendment to the banking laws that
would enable national banks to issue
their circulating notes to an amount
equal to their capital, instead of an
amount equal to the par value of the
government bonds deposited in the
treasury. as at present. It is his opin-
ion that there could be safe expan-
sion Of the currency to about $500, 600, o00
more than the present total, while the
greenbacks could be disposed OF without
trouble.
IN a recent speech in New York he
also suggested that the four thousand
or more national banks should each sub
scribe to stock Of q central bank in
proportion Of about s per cent OF their
capital. This central bank with capi-
tai OF $50,0O0.oO0 should keep accounts
and do business with stockholding
banks only. tho 1t might be allowed to
loan its funds to the public when there
was no demand for funds on the part Of
any Of the stockholding institutions: but
It's general purpose would not be to have
dealings with miscellaneous corpora
tons or with individuals. but to be q
.'bank OF banks, It would receive the
public moneys OF the government and
thus extinguish the present sub-treas-
Try system. It could send money to diff
ferent parts OF the country where and
when money was most needed. 1t alone
should have the power to issue bank
note circulation. In time Of necessity 1t
should be allowed to issue it to an ex-
traordinary amount. very much as the
Imperial Bank Of Germany now has the
power to issue notes in unlimited guam
tity above its reserve by paying tax
OF 8 per cent thereon to the government
This is the mere outline OF his sugges-
tons and does not present features that
would be necessary in an elaborate
scheme which would guard its safety
while permitting its exercise.
1t will be noticed that Governor Shaw
IS to take up the burden where Score
tary Gage lays 1t down. 1t affords him
en- opportunity for the exercise Of fnan-
cial wisdom such as few public officials
ever had-that OF improving what hosts
Of people believe is already excellent.
Governor Shaw has just been quoted as
saying he is great admirer Of Secre-
tary Gage. and that ANY one would be
condemned who would announce devil
alton Of his policies in administering the
Office" While this does not necessarily
mean that Governor Shaw endorses
the above outlined plans, it is known
that in addressing the Northwestern
Bankers Association in Nebraska last
April he outlined scheme for an elas-
tic currency, based on the asset plan,
practically involving method OF ex-
pansion and contraction. He will now
have an opportunity OF urging his views
upon congress and the people.
The view that our present system Of
banking is too isolated Is urged by
many who seek centralized head, and
set the very isolation complained of may
be regarded by others as helpful. Each
bank is unit and as such 1t ought to
be expected to preserve its integrity and
safety under the present guarded sys-
tenn. Under fountain head that could
rush to It's assistance 1t might venture
into deeper financial seas, knowing It
would be helped when needed. Still the
nation 10 ali open field where an expert
ment might develop something better.
FIRE INSURANCE PROFITS.
"A remarkable situation is disclosed in
recent issue Of the Insurance Press
when a list OF fire Insurance. failures in
the various states Is publiehed. 1t seems
that in the last thirty years twelve hun