Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1901-12-16
S||CKN[Y 5 BANK P|AN
President of Great Western
Speaks at Banquet Given to
Chicago Bankers.
Advocates Repeal OF the Restric.
tions Of the Present Law
in America.
Thinks Natural Result Would
Be Establishment Of Great
Reserve Bank.

ECkelS, president OIL tHe SoiiliiieiSiai va
tional Bank, and President James B.
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 Cen
trail Reserve Bank"
He began by referring to the criti-
cisms of the address he made in October
before the American Bankers Associa-
ton at Milwaukee, and said it was not
his intention to advocate the establish
ment by act of congress of a great cen
trail government bank, owned in whole
or in part by the government and exer-
cising a general control over other
banks. He agreed, he said, that the es-
Establishment of such a bank. which
would be rehabilitating the old Biddle
Bank of the United States, was practi-
cally and politically impossible. He de-
MED that 1t was ideally perfect in theo
ry, and 1t was his conviction that such a
bank not only never could, but never
should, be again established in the
United States.
His argument at Milwaukee, he said,
was intended to ne an argument in ia
vor of free banking-an argument not in
favor of the government entering into
new lines of banking, but, on the con-
trary, it was in favor Of the government
going out of the banking business alto
gether Instead of attempting to de-
velop some new and untried theory, he
confined himself strictly to principles of
banking which had already been discov-
cred and tried and proven. He pointed
out known historical facts to prove the,
efficiency of the Scotch English system.
and intended to say that IL congress
would repeal the restrictions Of the
present law and leave the individual
bankers free to adopt the best known
system of banking, practically the
Scotch English system would in the end
prevail.
He did not advocate the establishment
of this system or any system, he said,
by congressional legislation. 1T is my
conviction" he continued. that 1t is be-
yond the power of legislation to estab-
l;sh system Of banking. The bank Is
on eof the great economic machines of
commerce. and can no more be produced
by legislation than the steam engine.
The fundamental principles OF banking
are governed by as memorable and un-
avoidable natural laws as are the fun
damental principles of the steam en-
gine."
Mr.. Stickney proceeded:
at is natural law of trade that COM
merce, when free, will seek the lines of
the smallest cost This natural law has
produced the banking machinery of
Great Britain, and has produced the
same machinery in all the commercial
nations of the world where banking has
been free. In all the continental coun-
tries of Europe the entire gold reserve
of their respective systems is massed In
one huge available pile in central re-
serve bank. In the United States there
have existed, for more than half a CEN
fury. a strong prejudice against CEN
trail reserve bank, and legislation has
done all in its power to prevent the es-
tablishment of such a bank For this
purpose legislation produced the treas
ury. The natural law of credit proved
stronger than the law of congress and
in spite Of legislation the natural law
has established in the United States the
distinctive feature OF the central bank
reserve by massing the gold reserve in
one huge pile in the treasury OF the
United States.
"As the bank check Is one OF the
greatest labor and money saving instru-
ments ever invented, and as the bank
reserves held by the treasury can not be
transferred by their checks. 1t becomes
necessary for the treasury to obtain and
hold at an enormous expense a much
larger quantity Of gold than would be
necessary were the reserves held by a
modern bank 1t may be said without
fear of successful contradiction that the
quantity of gold now in the treasury of
the United States, amounting to more
than $500, 100000, Is the largest quantity
which was ever amassed together In the
history Of commerce.
From this point of view 1t is evident
that the question is not, Shall there be
central reserve institution in which shall
be massed the entire gold reserve OF all
the banks in one huge pile? for the nat
ural law Of credit has already compelled
1t. Neither the prejudices of the people
nor the laws of congress have been able
TO prevent it. Therefore, the only ques-
ton which is involved is, Shall the re-
serves be held by the treasury, OF by
modern reserve bank?"
Mr. Stickney contended that central
reserve bank would not and could not
become monopoly, extending it's
branches to every village and driving
all other banks out of existence. The
necessity of keeping As per cent of re-
serve would render it incapable of COM
peting except in the larger transac-
lions with the other banks, which
would carry no more than to 8 per
cent Of reserve. The reserve, he said,
is the regulator Of the banking bust
ness. AS matter of fact. he went on
to say, the Bank Of England has only
eleven branches, while the other
banks in England. Scotland and Wales
have 1921 branches. The banking
business outside of London is entirely
in the possession Of the other banks
Some of the other banks, both in and
out of London, In point of deposits, rival
the bank Of England, and in the matter
Of loans outstrip it. He continued:
ut is my conviction that there Is no
safety, and can be no safety, to f1nan-
cial 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 lnte-
grail part of the banking system and
~ ooeol,y a ,.pf{l no.,