Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1902-01-11
PUGsLEYs BANKING BILL.
Considerable interest Taken in the
Measure-lts Terms.

PUGSlEY'S BANKING BILL.
Considerable interest Taken in the
Measure-lts Terms.
Washington, Jan. 11.-Considerable
Interest. is being taken in the bill intro
duced by Representative Pugsley, OF
New York, and referred to the commit
tee on banking and currency, which, il
enacted into law, viii it is said, mater
tally reduce the danger of financial col
lapse In times of paric. The title to the
bill is ITO protect ard support CONNER
cial credit, to equalike rates of interest,
to provide for the Incorporation of
clearing houses. to regulate and define
their operations. to provide a clearing
house currency, secured by pledges OF
commercial assets and the responsible
ity of the associated banks, and to pro-
vide for the circulation of redemption
there Of" The measure in its present
shape is the joint work of Representa-
tive Pugsley and Theodore Gilman, a
We'll known banker of New York and
senior member of the firm of Theodore
Gilman, Son & Co. Its chief feature of
interest is the provision for extension
under federal supervisor of the clear
ing house system, which is in its pres
ent operations is strictly local IN the
benefits it confers on the business of
the country. 1t has the hearty indorse-
ment of many of the principal bankers
of the United States, including leading
members of the American Bankers As
ISOLATION, among whom are Charles
Parsons, of st. Louis, ex-president of
the American Bankers Association: f..
G. Figelow. president of the First Ma
tional Bank of Milwaukee and chair
man OF the executive committee Of the
American Bankers Associations; Z. j.
Parker, of Quincy. president of the
association for Illinois; Charles r. Han
nan, president of the First National
bank of Council Bluffs, Iowa; Theodore
c. Stevens. of Toledo vice president OF
the American Bankers Association for
Ohio; j. NJ. Cunningham, of East Las
Vegas, vice president of the association
for New Mexico, and ]. b. Thomas. of
Albany, Mo-, vice president OF the assoc
citation for Missouri.
Defined in brief and simple form,
the effect of the bill would be to destroy
in large measure the competitive sys-
tenn in the banking business by cstab-
fishing a direct basis OF cooperation
among the banks thru a general clear
ing house for each state. 1t would also
give elasticity to the currency system
without in the least threatening infla-
ton. The bill includes in its operations
all state banks as well as national
banks. The object of the provision
which establishes a clearing house in
each state, territory or district is to
sustain commercial and banking credit
in times of lack of confidence by pro-
wiling a means by which demands for
circulating notes Of undoubted credit
may be met and commerce and trade
sustained without shock to credit. Thru
the central clearing house In its state.
each bank in the association will be au-
tfborized to issue certificates of credit to
the extent of rs per cent of its cani'~'
ization, these certificates to pe printed
under the supervision of the controller
of the currency and to be duly certified
by him. BY this system different func-
tons are bestowed on clearing houses
than can be safely possessed by COM
mercial banks Clearing houses are one
remove further away from the business
community, with their urgent appeals,
than are popular banks and their ac-
ton. therefore. would be more con-
sentative in the important matter of
the issue OF currency. AT the same time
they are so closely connected with COM
mercial banks that they can be appeal
ed to and make instant response in case
of need. 1t is contended that by the In
corporation of clearing houses under a
federal law with these special functions.
a banking system is constituted that is
cooperative instead OF competitive, eX
pansive in case of need instead II re-
strictive, and forced liquidations and
panic are avoided. The clearing
houses of the country would thus be
brought into the closest relations with
all commercial banks, and those rela-
lions would be strictly defined By law,
which is not now the case. This union
of higher and lower financial institu-
tons would bring all banking opera
lions under the supervision OF the fed
eral government and constitute a true
national banking system. 1t is believed
that the system would result in sus-
tanning and protecting commercial cred
it even under the severest strain.
Another difference between the pres
ent and the proposed SWStemS Is de-
clared to be even more fundamental and
important than that already pointed
out. 1t is that the ungraded, compete
tive and restrictive system is principal
~ constructed for the private pecu-
mary benefit of the individual banks.
while the graded system, with it's CO.
operation. expansion and ample avail
able reserve. would be chiefly for the
benefit of the public. An examination
Of the Pugsloy Gilman Dill shows that
Il does not change the banking princi-
Pile contained in and limited by the |
present national bank act. The bill
adds, however, two features not con-
tanned in that act by proposing the is
sue of reserve notes to take up govern |
nent notes, and the issuing of circulat-
ng notes gaainst bank assets in the
hands OF the banks.
Change in Pension System.
Boone, Jan. 11.-According to circu-
ar issued recently by President Marvin
1ughitt of the Northwestern railroad,