The sun. [volume] (New York [N.Y.]) 1833-1916, 1901-10-18
The bankers At Milwaukee.

There has been renewed discussion
recently ~concerning tho wisdom OF the
policy which has so long prevailed in
this country 81 keeping the actual cash
supplies OF the Government in h Ma
tionh Treasury. a. distinguished from
the custom in all other lands, namely,
Of depositing these funds in n great
national bank. An Institution OF this
character which conducts nm ordinary
banking business. 10 able to lend money
10 the business community. so that the
money hoard Of tho General Govcrn
mcnt does not serve as a restriction of
the circulating medium OF the country.
The inquiry into this question Is fur
thered by the addresses made before
the American Bankers Association ut
Milwaukee on Wednesday 10y the Secre-
tary Of the Treasury and by MIR. A. h.
STIcKNEY, the well-known President
Of the Great Western Railway.
Secretary GAGE declared IL to he his
opinion that u present National Treas
ury system was very injurious in the
way il locks up money. While not
arguing for the establishment Of a ccn
trail national bank, he believed that
public moneys in excess Of the working
balance for daily use should be deposited
in the national banks, and that our
system Of bank note circulation should
be modified 90 as 20 mako IL more re-
sponsive 10 COMMERCIAL and industrial
requirements. Mr.. STICKNEY's funda-
mental position was that it is not the
actual amount of money In circulation
that facilitates or incommodes usine
transactions 50 much a. IL Is the willing
ness or the power Of banks 10 extend
credit. Actual money IL seldom used
nowadays, except in small transactions.
Deposits in our national banks have
recently increased 81. 500. O0O. 100. but the
actual money in the banks has only
increased s207 600 600. The increase IN
deposits means merely the extension
Of credits by tho banks. But when,
for any reason, the banks curtail their
| credits and do so rapidly, a distressing
| condition OF affairs IL produced. OF
course. tho necessity for thus curtal-
ment Of credits sometimes unavoida-
bly, arises "a does tho necessity for
a further extension OF It. All the
mechanism OF this could be performed
better. Mr.. STICKSEY thinks. by a bank
ing system like that Of England. which
at the time of the Barring failure. for
instance, stayed n most disastrous
panic in the country and actually as
sumed the liabilities Of the great Barring
concern. MIR. STIcKSKY maintained
that the banking system for a great
country like the United States ought
20 consist Of n central bank, with its
head in the chief commercial city and
branches in each Of the commercial
centres. The Sub-Treasury system
should be abolished and the central
bank should hold the gold reserves Of
all the banks Of the nation. The re-
sources Of the other banks should con-
sist Of credits upon the central banks
ledger.
Two great objections are made 20
the establishment IN this country 81 a
central Government bank like those
Of Eiroreaa countries, IL Is argued.
hnst. that the repeal Of the clauses of
our banking Law requiring deposit Of
national bonds as security for national
bank notes and prohibiting the csiab-
lishmcnt Of branch hanks would allow
the national banks Go extend and son
tract credits with just a. great case
and safety a. In the cas-. 81 a central
institution. Mr. SuCKNEY did hot refer
o. ,hp- obj~aion In his address but be
would probably answer Il bv maintain
ing that the operation - the nationul
hanks under any such amended systcm