The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1903-07-09
Opposes. Change.

plans of relief.
Opposes. Change.
Mr.. Dawes said.
IA, 1900. confidence has been so completely
restored that. there is no present need
for an asset currency, nor for the retire.
ment of the greenbacks. The reason urged
on behalf of an asset currency is the need
of the business community rather than
governmental need.
my first objection to the asset cur
rency plan of Mr. Fowler is that it is an
optional system, the banks issuing cur
rency- OR not as they see fit, and there is
no way of telling beforehand how many
That makes a great deal of difference
with the amount of tax that would be re-
CURED to make the notes safe.
THE Fowler plan imposes a new tax
on bank issues and gives the holder of a
note a first lien on the bank assets. The
first lien is unfair and unjust to deposit
tors and the community generally will be
greatly, injured by the lack of confidence
in the banks that will be engendered in
the. -deposft>holding class. The import
ances of the confidence of sdepositors can
not be overestimatad Through receiving
deposits it is the chief function of the
ing power. A depoSitor- leaves ST, 900 with
the bank and checks that out. from time
to time. At5sthe same time. the bank
can issue $7509aof t1ei 81 200 to another
customer. Thus the purchasing power of
that 81 600 is increased 75 per cent. We
have built up a magnificent deposit credit
in this country amounting to over So, 000,-
100000 while all the forms of money in
the country only aggregate about one
fourth as much. 1t is by checks on the
deposit credit that 80 per cent of the bust
ness of the country is done.
IF we endanger the confidence of the
people in this deposit credit, we are face
to face with all the dangers OF panies
and contraction. And if the holders of
M ho va fret on q n q
bank, the. depositors will have little Sc
curity in the safety Of their deposits.
First Lien Is Wrong.
1.-THE first lien is moral wrong. 1t
means that you would say to tne note
holder, Your dollar will be paid in full
will not be paid at all unless there is
money left after the note-holder has been
paid in full
"The first lien is am exception in the
cur1 ency system of the world. 1t is found
only in Canada, and in qualified FORM
in the United States. In Canada the time
for the supreme test of a panic abroad.
The asset currency system of Canada is
not elastic. because it only stretches one
way. Notes are Kept af1oat by the banks
for the sake of profit all the people will
take till the crisis comes.
I'm any country~ where there is
credit system panics will come whenever
the credits outstanding become dispropor-
tionate to the cash. When that dispro-
portion comes, some I1dn sees II ana Calls
in his notes. That goes on until suddenly
the greatest creditor class In the country,
the depositors in II, 600 banks, are fright
ened and call for their money.
You can't stop panicS, but 1t may be
possible to evolve some emergency cur
rency for the period Of acute demand for
money. That is short but the suffering
and after-effeets are long. One way to
do that might be to put tax on asset
notes that would bring them out in times
of emergency and retire them again as
soon as the need should end. l would
have a repreSSive tax without a first
lien. They have it in Germany. When
interest is high the notes are. issued, and
when it falls they are called in.
'There is no chance now for branch
banking law. Under branch banking the
rates of interest would be lower on col
lateral forms of security such as grain.
There would be fewer rooms to rent and
discouraged the small banks in this coun-
try. We have let the little man grow
until our banking powereis greater than
that of the United Kingdom and within
IL per cent as great as all Europe.
Object to Water.
After some discussion the associa-
ton adopted a. resolution against the
watering of stocks. A. D. Stephens, of
Crookston, could not see that such
matters had anything to do with bank
ing, but the association thought other
| wise, and the following resolution was
adopted:
| Whereas, 1t is a well known fact that
many corporations are issuing stocks and
| bonds far in excess of the value and cost
| of the property which they represent and
| whereas, such corporations. in order to
pay dividends on such oyer-iSsue Of stocks
| and bonds, charge excessive and exorbl-
| tant prices for transportation and for
| manufactured articles. which have to be
| borne by the consumer.
Resolved, That the Minnesota Bankers
| association are opposed to and do hereby
| condemn the Issuing Of stocks and bonds
| by any corporation in excess of the value
| and we do hereby request our senators
and congressman to use their utmost en-
| deavors to secure the passage of law
/ placing all corporations, the same as
| banks, under the control and subject to
lions in the department. of commerce,
| when possible requiring said bureau to
| certify to the payment of the capital Of
/ such corporations and ito the issue of all
stocks and bonds, but not in excess of the
value of the property which they rep
resent.
Condemn Branch Banks.
Resolutions were also adopted con-
/ demning branch banking; favoring a
uniform system of bank money orders;
congrafulating the banks of Minnesota
| on the record of not a single failure
in 1902 or 1903. and disappearing the
! allowing of overdrafts by customers.
| Several of the members talked on the
/ bank money order question. favoring
| the adoption of some plan whereby
/ the banks could get the business along
this line which rightfully belonged to
/ them.
] In the afternoon. a number Of the